OG 39 Custodian Trustees

Last reviewed:
Last updated:
14 March 2012

Policy Statement/Overview

IMPORTANT NOTE

  • This is an interim conversion - all the information from the original format OG has been copied over into this new format.
  • The guidance has not undergone an extensive review at this stage; it will be reviewed and renumbered at a later date.
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Summary of the guidance

This guidance explains what a custodian trustee is and the powers and duties which one has. The distinctions between custodian trustees, holding trustees and managing trustees are also dealt with.  A custodian trustee, as prescribed in the Public Trustee Act 1906, is distinct from a custodian as set out in the Trustee Act 2000 and an explanation of this point is set out in section 1.

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Casework Guidance

Please read the IMPORTANT NOTE on the front page

OG 39 A1 - 14 March 2012 

OG 39 A1 Powers and Duties

 

1  What do we mean by "custodian trustee"?

1.1 "Custodian" or "custodian trustee"?

It could be easy to confuse the terms "custodian" and "custodian trustee" and it is important to ensure we are talking about the correct term in the correct context. 

The term "custodian" used in the Trustee Act 2000 does not refer to custodian trustees, which are the subject of this OG.  The principal differences are that the powers and duties of "custodian trustees" covered in this OG are exactly prescribed in the Public Trustee Act 1906 - these do not extend to the type of custodian referred to in the Trustee Act 2000.  In addition, a custodian trustee covered by this guidance must be a body corporate and may be appointed or removed as described here - different rules apply to custodians covered by the Trustee Act 2000.

The Trustee Act 2000 provides new powers to appoint custodians and nominees and these are supported by statutory guidance from the Commission on trustees' duties when appointing them - see CC 42.

For further information about "custodians" under the Trustee Act 2000 and information about that Act in general see OG 86.

 

1.2 What is a custodian trustee?

lawyer_referThe term "custodian trustee" has a precise legal meaning.  It was introduced in the Public Trustee Act 1906.  It covers all trusts, public and private, and does not apply only to charities.  All trusts, whether charitable or not, may appoint a custodian trustee.  Charitable companies are not trusts and cannot therefore operate with a custodian trustee (see OG 39 A2).

lawyer_referIn round terms, the custodian trustee holds the title to all the property of the trust but is not involved in the day to day management of the trust. The powers and duties of a custodian trustee are set out in section 4 of the Public Trustee Act 1906.  This is reproduced in OG 39 B2.

These powers may not be altered or added to by any provision in a charity’s governing document.  It is worth bearing in mind, therefore, that a “custodian trustee” whose powers are delineated in the charity’s governing document will in fact be a mis-described holding trustee (see OG 38 B1).  The only possible exception to this is where the powers granted by the provision in the governing document are precisely those given in s.4 of the 1906 Act, in which case that provision is superfluous.

lawyer_referWhen a custodian trustee is appointed, those who are the charity trustees within the meaning of s.177 of the 2011 Act are called managing trustees.

 

stopOnly a corporation can be appointed as a custodian trustee.

 

 

lawyer_referThere are occasions when it appears that an individual is acting as a custodian trustee, but legally this can be only when the office held by that individual has the status in law of a corporation sole.  (See below for more details on who can act as a custodian trustee, also the sections on the Official Custodian for Charities, and the Public Trustee.)

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2.  Which corporations can act as a custodian trustee?

lawyer_referRule 30 of the Public Trustee Rules 1912 (as amended) (SR&O 1912/348) specifies the corporations which may act as custodian trustees under the Public Trustee Act 1906.  Rule 30 has been revised at times by six other statutory instruments (and the Coal Industry Act 1987).

The details of these statutory instruments and the amendments made by each of these statutes are given in the notes accompanying the text of this rule in Halsbury’s Statutory Instruments, Vol 21 (Trusts).  The up-to-date version of Rule 30 is reproduced as OG 39 B1 and more explanation is available in OG 38 B1.

Examples of corporations which can act as custodian trustees include:

  • the Treasury Solicitor;
  • limited companies;
  • corporations governed by Royal Charter;
  • health authorities; and
  • local authorities (district councils, metropolitan borough councils, and parish councils).

Except in the case of the Treasury Solicitor, there are restrictions or limitations affecting the rights of the stated classes to act as custodian trustee.  Some members of these classes are excluded generally, and, in some cases, the types of trust for which corporations can act as custodian trustee are limited.  Rule 30 gives the complete list of eligible types of corporation.

lawyer_refer

In the case of charities, a body corporate can be a custodian trustee only if it is empowered to act as such under Rule 30.

 

lawyer_referAny company authorised by the Lord Chancellor to act in relation to charitable, ecclesiastical or public trusts as a trust corporation (see Rule 30(1)(d)(ii)) is entitled to act in relation to such business as a custodian trustee.  It follows that the Lord Chancellor’s certificate, besides conferring status as a trust corporation, entitles the corporation to act as a custodian trustee.

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3.  Powers and duties of a custodian trustee

lawyer_referSection 4(2) of the Public Trustee Act 1906 sets out a number of powers and duties for a custodian trustee where one has been appointed.  These are explained in detail in the following sections.

 

3.1 Holding the trust property

lawyer_referThe custodian trustee has transferred to it, by way of vesting orders where necessary, all securities and documents of title relating to the trust property (eg share certificates and title deeds to land owned by the charity), subject to any rights of a third party (eg in the case of borrowing secured on a property, the title deeds will be held by the lender).  The managing trustees have rights of free access, for study and to take copies, to the documents held by the custodian trustee.

 

3.2  Assisting the managing trustees

lawyer_referThe managing trustees retain the management of the trust property and the exercise of any powers under the trust.  The custodian trustee has a duty to concur in and perform all lawful acts necessary to enable the managing trustees to administer the charity efficiently.  This would include sales from, and purchases to add to, the trust property, but may also include other matters.  In practical terms, however, it is the managing trustees who should execute a transfer document in the name and on behalf of the custodian trustee in whom the legal title to the property is vested (Trusts of Land and Appointment of Trustees Act 1996, Sch 1, para 4(3) although this Act applies only to land).

The watchword here is “assistance”.  The custodian trustee can only assist the managing trustees – it cannot have any management responsibilities itself, no matter how convinced individual members of the corporate body may be that it does.

 

lawyer_referThe custodian trustee should not, however, act if the matter in which it is requested to concur is a breach of trust, or involves it incurring personal liability.  If the managing trustees do commit a breach of trust, the custodian trustee is not liable for any act or default on the part of the managing trustees or any of them, unless it has concurred with the breach of trust.

This inevitably means that the custodian trustee will have to exercise judgement in some investment and other cases as to whether an act involves a breach of trust or not.

 

lawyer_referAll sums payable to or out of the income or capital of the trust property should be paid to or by the custodian trustee.  It may, however, allow the dividends and other income derived from the trust property to be paid to the managing trustees (or to such person, directly or by credit to their bank account, as they may direct).  If this is allowed, then the responsibility for ensuring the proper application of those funds falls to the managing trustees, and the custodian trustee is not answerable for any loss or misapplication of them.

 

lawyer_referThe custodian trustee, if it acts in good faith, is not liable for accepting as correct, and acting upon, any written statement by the managing trustees relating to any matter of fact upon which the title to any or all of the trust property may depend.  It is also not liable for acting upon any legal advice obtained by the managing trustees independently of it.

 

3.3  Appointing new managing trustees

lawyer_referThe power of appointing new managing trustees themselves, either under a provision in the charity’s governing document or under Part III of the Trustee Act 1925 remains with the persons otherwise entitled to exercise it: the custodian trustee cannot participate unless the governing document of the charity gives it the right to do so.  Although the custodian trustee shares with them the power of applying to the Court under Part III of the 1925 Act for the appointment of a new managing trustee it is not reckoned as a trustee in determining the number of trustees for the purposes of Part III of that Act.

 

3.4  Charging for their services

Custodian trustees can properly charge charities for their services, and some routinely do so.  The power to charge fees is conferred by section 4(3) of the Public Trustee Act 1906; the permitted level of fees cannot be exceeded.

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4.  The Official Custodian for Charities

The Official Custodian for Charities (OCC) is, strictly speaking, not a custodian trustee, although he has all the powers, duties and liabilities of one, except the power to charge fees.

 

lawyer_referIn Schedule 2 of the 2011 Act the OCC is stated as being “a corporation sole.”

 

A custodian trustee is necessarily appointed to be the custodian trustee of a trust in its entirety.  The OCC is, instead, merely the trustee of items of property vested in him/her, which may or may not constitute the whole of the property of the charity concerned.

 

lawyer_referThe OCC’s general investment-holding function was abolished by the Charities Act 1992.  The one exception to this is that he/she may still hold personal property (ie securities and investments) vested in him/her as a result of an investigation into a charity’s affairs and an Order protecting that property under s.76 of the 2011 Act.  He/she still retains the land-holding function inherited from the Official Trustee for Charity Lands under the Charities Act 1960.

Further information on the OCC is in publication CC13.

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5.  Corporations as managing trustees

Staff should be aware that not every corporation appointed as a trustee will be a custodian trustee - there are numerous cases of a corporation having been appointed as a (sole) managing trustee (see OG 38 B1 for details).  Obviously, these will need to be treated differently from a custodian trustee; virtually the only thing they have in common is that they are all corporations.

In such cases there would not be a need for a custodian trustee, as the corporate managing trustee can also hold all securities, investments and land in its name for the charity.  It is thus a “trustee for all purposes”, a phrase which caseworkers will see crop up regularly in Schemes or Orders relating to charities with corporate trustees.  This guidance, however, deals only with the cases where the corporation is solely a custodian trustee.

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OG 39 A2 - 14 March 2012 

OG 39 A2 Appointment and Removal, and when appointment is not appropriate

 

1  Appointment of a custodian trustee

lawyer_referThe powers to appoint a custodian trustee are contained in s.4(1) of the Public Trustee Act 1906, and appointments can be made in one of the following ways. No particular form of words is required to appoint a custodian trustee, but there must be evidence of a clear intention to do so.

The Trustee Act 2000 gives charities default power to appoint custodians (as distinct from a custodian trustee) or nominees as the case may be, subject to the charity following any general guidance we may give (see OG 86 B4 section 4.2).

 

1.1  By the testator/testatrix, the settlor or the creator of any trust

If it is the intention at the outset that a charity shall have a custodian trustee, it will usually be provided for in the governing document by which the charity is established.

If this is not the case, and the trustees subsequently decide that it would be an advantage to appoint a custodian trustee, then the appointment can be made by the settlor or the promoters of the charity, if they are prepared to make the appointment.  If they are not, then one of the methods set out below must be used.

 

1.2   By the person(s) having the power to appoint new trustees

The person(s) with the power to appoint new trustees of the charity may appoint a custodian trustee if they feel one is required, either:

  • through a power in the governing document of the charity; or
  • by relying on s.4(1) of the Public Trustee Act 1906, which refers to the person having power to appoint new trustees.

lawyer_refer

It is not essential that the person(s) with the power to appoint new trustees execute a deed to appoint a custodian trustee, but if the appointment is made by deed it can save the trouble of having a separate document to transfer the trust property to the custodian trustee.

 

1.3  Power of amendment

If there is no power to appoint a custodian trustee in the charity’s governing document, and the provisions in the Public Trustee Act cannot be used, the statutory power of amendment can be used, to give an appropriate person or persons a power to appoint new trustees, which would give that person(s) the power to appoint a custodian trustee.  All that we require in this regard is to be notified and to receive copies of the usual documents appropriate for confirming such an amendment:

  • in the case of a charity governed by a trust deed, an executed deed of variation; or
  • in the case of an unincorporated association, a copy of the amended constitution and a certified copy of the minutes of the meeting at which the change was agreed; or
  • in the case of a charity when a Scheme confers the power of amendment a certified copy of the resolution when it is passed (see OG 500 Schemes).

 

1.4  By an Order of the Court

lawyer_refer

If other means of appointing are unavailable or impractical, the Court may order the appointment of a new custodian trustee on the application of any person who is eligible to apply to the Court for the appointment of a new trustee.

 

1.5  By an Order or Scheme of the Commission

Although the Court has the power of appointment, only in the most exceptional cases is it likely to exercise it.  As we have the same powers conferred upon us by s.69 of the 2011 Act, we would generally expect an application to be made to us in the first instance.  Even so, in most cases it is not necessary for us to exercise our powers if the appointment of a custodian trustee can be made by the persons described in 1.1 or 1.2 above or by the trustees using the statutory power of amendment to adopt a suitable power to make the appointment. 

If the charity trustees wish to appoint a custodian trustee, where other means of appointing are unavailable or impractical, we would consider using our Order making powers to assist rather than expecting the trustees to apply to the Court.

In such cases the trustees will have to: 

  • give good reasons why one should be appointed; and
  • confirm that the corporation proposed as custodian trustee is eligible to be one,

before we would make the necessary Order.

It will not normally be necessary to make the appointment by Scheme.  The exception would be where the governing document specifies a particular corporate body to be the custodian trustee and the managing trustees wish to change this.  Even in these circumstances the managing trustees may have a suitable power of amendment which could be used.

lawyer_refer

A body corporate must be a trust corporation entitled to act as custodian trustee before we can appoint it as such (see OG 39 A1). 

 

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2.  Advantages and disadvantages of custodian trustees

2.1  Advantages

The advantage of appointing a custodian trustee or the Official Custodian to hold property of a charity is that, because the custodian trustee has a perpetual existence, the title to that property never has to be re-vested in a new trustee.  Where the title is held by the charity trustees, every time there is a change of trustee, the title has to be vested in the new trustee jointly with the continuing trustees.  It can also be seen from section 3 of OG 39 A1 that custodian trusteeship gives an added measure of security for the trust property.

 

Charity trustees may also benefit from the advice and knowledge of an experienced custodian trustee.

 

2.2  Disadvantages

There may be several disadvantages of the charity having a custodian trustee, for example:

  • the custodian trustee may charge for its services;
  • the role of the custodian trustee may be confused with the role of the managing trustees;
  • it may cause difficulties in the charity's investment management.

The main disadvantage is that many custodian trustees charge for their services.  Charity trustees need to look hard at whether appointing a custodian trustee is the most efficient way of dealing with holding the charity’s property or whether another method might not give better value for money.

Occasionally the role of custodian trustee can be confused with the role of managing trustees, particularly where a local authority is appointed as custodian trustee.  (See also section 6).  It is important that every trustee (custodian or managing) has their responsibilities and duties clearly explained to them.

Difficulties with discretionary investment management arrangements can also arise.  It can be helpful to hold shares in the name of a nominee but if a charity has a custodian trustee then it must hold the title of all the charity's property and investments.  Under these circumstances it would not be possible for the charity to appoint a separate trustee in the form of a nominee.  (For more information on this see OG 86 B4 section 3).

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3.  When is a custodian trustee not appropriate?

The decision to appoint a custodian trustee is one for the person(s) with the power of appointing a custodian trustee to make if they have the power to, and there are very few cases where we could object.  We can advise, however, as to whether appointing a custodian trustee is appropriate to the particular charity. 

Obviously there is no need for a custodian trustee if the charity has no land or investments for the custodian trustee to hold.  Even if the charity does have land or investments, for most smaller charities the same role may be fulfilled equally effectively in another way, for instance by:

  • (in the case of land) vesting the property in the Official Custodian; or
  • incorporating the trustee body under Part 12 of the 2011 Act so that it may hold the property; or
  • appointing one or more holding trustees - that is nominees as prescribed in the Trustee Act 2000.

We recommend that trustees of charities in such a position take professional advice from their own legal advisers as to which is the most suitable option for the particular charity.

We will not advise trustees on the suitability or otherwise of a particular custodian trustee.

For the reasons noted in section 5 of OG 39 A1, charitable companies cannot appoint a custodian trustee.

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4.  Only one custodian trustee per charity

4.1  Legal reasoning

lawyer_refer

The powers of a custodian trustee are such that there would be a conflict of duties which could not be resolved if an attempt was made to appoint two separate corporations as custodian trustees of the same trust.  In particular, s.4(2)(c) of the Public Trustee Act 1906 states that the custodian trustee shall have custody of all securities and documents of title relating to the trust property of the charity.  Clearly it is impossible for two bodies to fulfil this condition.  Our view, therefore, is that such an appointment cannot be valid.

 

4.2  Custodian trustees and CREST

CREST is a paperless electronic system for the transfer and recording of ownership of shares, which began operating in July 1996.  Normally a charity wishing to use CREST will appoint a system-participant (eg a bank) as a nominee who will hold title to the shares.  Charities which already have a custodian trustee are, in our view, not able to do this, as the title to the shares could not be vested in the nominee without cutting across the custodian's statutory responsibility to hold the title to all trust property.  (For more detail about nominees under the Trustee Act 2000, see OG 86 B4).

The way around this is for the custodian trustee itself to become a sponsored member, operating through a system-participant.  Some custodian trustees (eg bank trust companies) may be large enough for them to consider being system-participants in their own right, but for most this is unlikely.

However, some medium sized and smaller charities may not be able to afford the expense of being either a system participant or a sponsored member, especially if their investment holdings are small.  Incurring such expense merely to hold shares in CREST may not be in the best interests of the charity.  In these cases, charities may prefer to hold their shares in a paper based system of share transactions.  This will be viable whilst both the paper based system and the original company are still in existence.

Problems may arise when the original holdings are acquired by another company which uses the CREST system exclusively, and the charity’s custodian trustee is unable or unwilling to become a sponsored member or a system participant.  In this case, the shares would need to be held by a nominee of the charity who was also a CREST system participant.

As indicated above, the holding of shares in CREST in this way is incompatible with the provisions of the Public Trustee Act 1906, but the courts are likely to take a pragmatic view of such arrangements and case law suggests that the courts would not force the trustees to dispose of the shares, particularly if the situation had not been brought about by the actions of the trustees (eg the takeover of the original company).

 

lawyer_referstop

Case workers should refer all such cases to Legal Services for advice. 

 

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5.  Vesting of trust property in a custodian trustee

lawyer_referOnce a custodian trustee has been appointed, then in accordance with s.4(2)(a) of the Public Trustee Act 1906, the trust property must be vested in the custodian trustee as if it were the sole trustee, and we may make vesting Orders for that purpose where necessary.

 

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6.  Local authorities as custodian trustees

Local charities such as village halls or community associations may wish to appoint the local authority as a custodian trustee.  This has the distinct advantage of not having to execute a deed every time a holding trustee changes, as the local authority has perpetual succession.

It also avoids most of the potential pitfalls associated with appointing the local authority as managing trustee of the charity (see OG 38 Corporate Trustees and also OG 56 Local authorities and trustees), as the members of the management committee of the hall or association remain charity trustees and retain control of the charity.  The custodian trustee can only act on the lawful instruction of the charity trustees.

Even then, there have in the past been problems with local authorities misunderstanding their role as custodian trustees, so our general policy is strongly to suggest that the land be vested in the Official Custodian instead.  There are, however, circumstances where it is more advantageous to the charity to appoint the local authority.

If, therefore, a local charity which holds an interest in land, or is in the process of acquiring it, wishes to appoint the local authority as custodian trustee we should not object. We should be prepared to make an Order to appoint, if that is required, provided that the charity trustees can make a reasonable case for the appointment.

For more detail on this see OG 56 B1 section 5.

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7.  Removal of a custodian trustee

lawyer_refer

The powers and duties set out in s. 4(2) of the Public Trustee Act 1906 do not include provision for the resignation of a custodian trustee.

 

lawyer_refer

S.4(2)(i) provides that the custodian trusteeship can be terminated by an Order of the Court, on the application of either:

 

  • the custodian trustee;
  • any of the managing trustees; or
  • any of the beneficiaries;

It is unlikely, however, that it would be necessary for the Court to make the Order, because we have the necessary powers under s.69 of the 2011 Act.  It is preferable for the applicant(s) to come to us rather than for the charity to incur the expense of an application to the Court.

In most cases we would expect that a custodian trustee would be removed by our Order. However, if a charity’s trustees are satisfied that they can rely on the statutory power of amendment to change the custodian trustee clause to the extent that the custodian trustee no longer has a role (and the custodian trustee is in favour of the removal) we would not object to this.

In the event of a custodian trustee being removed without its consent, our Order would be made upon the application of the managing trustees of the charity. It would include suitable provisions for vesting trust property either in one or more of the managing trustees or, as would be more likely, in another trust corporation (which might be appointed either as a replacement custodian trustee or alternatively as a nominee or custodian under the provisions of the Trustee Act 2000). 

lawyer_refer

In these cases, we must give the custodian trustee one month’s notice of the proposal to remove it (section 89(5) of the Charities Act 2011).

 

Such cases are likely to be rare, but may occur if the charity trustees feel that retaining that particular custodian trustee is not in the best interests of the charity (eg on grounds of cost or maintaining efficient administration).

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8.  Levels of authority

Authority to make Orders appointing suitable corporations as custodian trustees or Schemes to amend the charity’s governing document in order to appoint a custodian trustee is given in accordance with our Authorised Officer policy.

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OG 39 B1 - 14 March 2012

OG 39 B1 Rule 30 of the Public Trustee Rules 1912

Below is reproduced the up-to-date text of Rule 30 of the Public Trustee Rules 1912 (as amended by a number of subsequent statutes).  This OG is reviewed every 6 months.  In cases of doubt please consult colleagues in the Information Centres.

 

30 (1) The following corporations shall be entitled to act as custodian trustees:

(a) the Treasury Solicitor;

(b) any corporation which:

(i) is constituted under the law of the United Kingdom or of any part thereof, or under the law of any other Member State of the European Union or of any part thereof;

(ii) is empowered by its constitution to undertake trust business (which for the purpose of this rule means the business of acting as trustee under wills and settlements and as executor and administrator) in England and Wales;

(iii) has one or more places of business in the United Kingdom; and

(iv) is:

          • a company incorporated by special Act of Parliament or Royal Charter; or
          • a company registered (with or without limited liability) in the United Kingdom under the Companies Act 1948 (repealed - see now the Companies Act 2006) or under the Companies Act (Northern Ireland) 1960 or in another Member State of the European Economic Community and having a capital (in stock or shares) for the time being issued of not less than £250,000 (or its equivalent in the currency of the State where the company is registered), of which not less than £100,000 (or its equivalent) has been paid up in cash,
          • or a company which is registered without limited liability in the United Kingdom under the Companies Act 1948 (repealed - see now the Companies Act 2006) or the Companies Act (Northern Ireland) 1960 or in another Member State of the European Union and of which one of the members is a company within any of the classes defined in this sub-paragraph;

(c) any corporation which is incorporated by special Act or Royal Charter or under the Charitable Trustees Incorporation Act 1872 [now Part 12 of the 2011 Act] which is empowered by its constitution to act as a trustee for any charitable purposes, but only in relation to trusts in which its constitution empowers it to act;

(d) any corporation which is constituted under the law of the United Kingdom or of any part thereof and having its place of business there, and which is either:

(i) established for the purpose of undertaking trust business for the benefit of Her Majesty’s Navy, Army, Air Force or Civil Service or of any unit, department, member or association of members thereof, and having among its directors or members any persons appointed or nominated by the Defence Council or any Department of State or any one or more of those Departments, or

(ii) authorised by the Lord Chancellor to act in relation to any charitable, ecclesiastical or public trusts as a trust corporation, but only in connection with any such trust as is so authorised;

(e) (i) any Strategic Health Authority, Health Authority or special health authority, but only in relation to any trust which the authority is authorised to accept or hold by virtue of section 90 of the National Health Service Act 1977;

(ii) any preserved Board as defined by Section 15(6) of The National Health Reorganisation Act 1973, but only in relation to any trust which the Board is authorised to accept or hold by virtue of an Order made under that section;

(f) the British Gas Corporation [or any subsidiary of the British Gas Corporation], but only in relation to a pension scheme or pension fund established or maintained by the Corporation by virtue of section 36 of the Gas act 1972;

(g) the London Transport Executive, but only in relation to a pension scheme or pension fund -

(i) which is established or administered by the Executive by virtue of section 6 of the Transport (London) Act 1969, or

(ii) in relation to which rights, liabilities and functions have been transferred to the Executive by an order under section 74 of the Transport Act 1962 as applied by section 18 of the Transport (London) Act 1969;

(h) any of the following, namely:

(i) the Greater London Council,

(ii) the corporation of any London Borough (acting by the Council);

(iii) a county council, district council, parish council or community council;

(iv) the Council of the Isles of Scilly;

(v) the Common Council of the City of London;

but only in relation to charitable or public trusts (and not trusts for an ecclesiastical charity or for a charity for the relief of poverty) for the benefit of the inhabitants of the area of the local authority concerned and its neighbourhood, or any part of that area.

(i) any of the following, namely:

(i) a metropolitan district council or a non-metropolitan county council;

(ii) the corporation of any London borough (acting by the council);

(iii) the Common Council of the City of London;

(iv) the Council of the Isles of Scilly;

but only in relation to any trust under which property devolves for the sole benefit of a person who occupies residential accommodation provided under Section 21(1)(a) of the National Assistance Act 1948 by the local authority concerned or is in the care of that authority; and a corporation acting as a custodian trustee by virtue of this paragraph in relation to any trust shall be entitled to continue so to act in relation to that trust, until a new custodian trustee is appointed, notwithstanding that the person concerned ceases to occupy such accommodation or to be in the care of that authority, as the case may be.

(j) The National Coal Board or any subsidiary of the National Coal Board, but only in relation to a scheme or arrangements established under regulations made under section 37 of the Coal Industry Nationalisation Act 1946;

(k) any corporation acting as trustee of the trusts of any pension scheme or pension fund established or maintained by the British Broadcasting Corporation, but only in relation to those trusts.

(l) any corporation appointed by the Secretary of State as a trustee of any scheme having effect by virtue of regulations made under section 37 of the Coal Industry Nationalisation Act 1946 for purposes relating to pensions, gratuities or other like benefits and in relation to which provision is, or has been, made by regulations made under paragraph 2(1) of schedule 5 to the Coal Industry Act 1994 for the scheme to continue in force notwithstanding the repeal by the Coal Industry Act 1994 of section 37 of the Coal Industry Nationalisation Act 1946 and of the enactments modifying that section, but only in relation to such a scheme.

 

(2) In this rule “subsidiary” has the same meaning as in section 154 of the Companies Act 1948 (repealed - see now ss.1159-1160 of the Companies Act 2006).

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OG 39 B2 - 13 February 2001

OG 39 B2 Extract from Public Trustee Act 1906 - Section 4

 

Section 4 of the Public Trustee Act 1906

4.  Custodian Trustees

(1) Subject to rules under this Act the public trustee may, if he consents to act as such, and whether or not the number of trustees has been reduced below the original number, be appointed to be custodian trustee of any trust -

(a) by order of the court made on application of any person on whose application the court may order the appointment of a new trustee; or

(b) by the testator, settlor, or other creator of any trust; or

(c) By the person having the power to appoint new trustees.

(2) Where the public trustee is appointed to be custodian trustee of any trust -

(a) The trust property shall be transferred to the custodian trustee as if he were sole trustee, and for that purpose vesting orders may, where necessary, be made under the Trustee Act 1893(1):

(b) The management of the trust property and the exercise of any power or discretion exerciseable by the trustees under the trust shall remain vested in the trustees other than the custodian trustee (which trustees are herein-after referred to as the managing trustees):

(c) As between the custodian trustee and the managing trustees, and subject and without prejudice to the rights of any other persons, the custodian trustee shall have the custody of all securities and documents of title relating to the trust property, but the managing trustee shall have free access thereto and be entitled to take copies thereof or extracts therefrom:

(d) The custodian trustee shall concur in and perform all acts necessary to enable the managing trustees to exercise their powers of management or any other power or discretion vested in them (including the power to pay money or securities into court), unless the matter in which he is requested to concur is a breach of trust, or involves a personal liability upon him in respect of calls or otherwise, but, unless he so concurs, the custodian trustee shall not be liable for any act or default on the part of the managing trustees or any of them:

(e) All sums payable to or out of the income of the trust property shall be paid to or by the custodian trustee: Provided that the custodian trustee may allow the dividends and other income derived from the trust property to be paid to the managing trustees or to such person as they direct, or into such bank to the credit of such person as they may direct, and in such case shall be exonerated from seeing to the application thereof and shall not be answerable for any loss or misapplication thereof:

(f) The power of appointing new trustees, when exerciseable by the trustees, shall be exerciseable by the managing trustees alone, but the custodian trustee shall have the same power of applying to the court for the appointment of a new trustee as any other trustee:

(g) In determining the number of trustees for the purposes of the Trustee Act 1893(2), the custodian trustee shall not be reckoned as a trustee:

(h) The custodian trustee, if he acts in good faith, shall not be liable for accepting as correct and acting upon the faith of any written statement by the managing trustees as to any birth, death, marriage, or other matter of pedigree or relationship, or other matter of fact, upon which the title to the trust property or any part thereof may depend, nor for acting upon any legal advice obtained by the managing trustees independently of the custodian trustee:

(i) The court may, on the application of either the custodian trustee, or any of the managing trustees, or of any beneficiary, and on proof to their satisfaction that it is the general wish of the beneficiaries, or that on other grounds it is expedient, to terminate the custodian trusteeship, make an order for that purpose, and the court may thereupon make such vesting orders and give such directions as under the circumstances may seem to the court to be necessary or expedient.

(3) The provisions of this section shall apply in like manner as to the public trustee to any banking or insurance company or other body corporate entitled by rules made under this Act to act as custodian trustees, with power for such company or body corporate to charge and retain or pay out of the trust property fees not exceeding the fees chargeable by the public trustee as custodian trustee.

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