Commonwealth Numbered Acts

TRUSTS (HAGUE CONVENTION) ACT 1991 No. 50 of 1991 - SCHEDULE

                       SCHEDULE                        Subsection 3 (1)

Convention on the law applicable to trusts and on their recognition The States
signatory to the present Convention, Considering that the trust, as developed
in courts of equity in common law jurisdictions and adopted with some
modifications in other jurisdictions, is a unique legal institution, Desiring
to establish common provisions on the law applicable to trusts and to deal
with the most important issues concerning the recognition of trusts, Have
resolved to conclude a Convention to this effect, and have agreed upon the
following provisions -
CHAPTER ONE - SCOPE
Article 1 This Convention specifies the law applicable to trusts and governs
their recognition.
Article 2 For the purposes of this Convention, the term `trust' refers to the
legal relationships created - inter vivos or on death - by a person, the
settlor, when assets have been placed under the control of a trustee for the
benefit of a beneficiary or for a specified purpose. A trust has the following
characteristics - a) the assets constitute a separate fund and are not a part
of the trustee's own estate; b) title to the trust assets stands in the name
of the trustee or in the name of another person on behalf of the trustee; c)
the trustee has the power and the duty, in respect of which he is accountable,
to manage, employ or dispose of the assets in accordance with the terms of the
trust and the special duties imposed upon him by law. The reservation by the
settlor of certain rights and powers, and the fact that the trustee may
himself have rights as a beneficiary, are not necessarily inconsistent with
the existence of a trust.
Article 3 The Convention applies only to trusts created voluntarily and
evidenced in writing.
Article 4 The Convention does not apply to preliminary issues relating to the
validity of wills or of other acts by virtue of which assets are transferred
to the trustee.
Article 5 The Convention does not apply to the extent that the law specified
by Chapter II does not provide for trusts or the category of trusts involved.
CHAPTER II - APPLICABLE LAW
Article 6 A trust shall be governed by the law chosen by the settlor. The
choice must be express or be implied in the terms of the instrument creating
or the writing evidencing the trust, interpreted, if necessary, in the light
of the circumstances of the case. Where the law chosen under the previous
paragraph does not provide for trusts or the category of trust involved, the
choice shall not be effective and the law specified in Article 7 shall apply.
Article 7 Where no applicable law has been chosen, a trust shall be governed
by the law with which it is most closely connected. In ascertaining the law
with which a trust is most closely connected reference shall be made in
particular to - a) the place of administration of the trust designated by the
settlor; b) the situs of the assets of the trust; c) the place of residence or
business of the trustee; d) the objects of the trust and the places where they
are to be fulfilled.
Article 8 The law specified by Article 6 or 7 shall govern the validity of the
trust, its construction, its effects, and the administration of the trust. In
particular that law shall govern - a) the appointment, resignation and removal
of trustees, the capacity to act as a trustee, and the devolution of the
office of trustee; b) the rights and duties of trustees among themselves; c)
the right of trustees to delegate in whole or in part the discharge of their
duties or the exercise of their powers; d) the power of trustees to administer
or to dispose of trust assets, to create security interests in the trust
assets, or to acquire new assets; e) the powers of investment of trustees; f)
restrictions upon the duration of the trust, and upon the power to accumulate
the income of the trust; g) the relationships between the trustees and the
beneficiaries including the personal liability of the trustees to the
beneficiaries; h) the variation or termination of the trust; i) the
distribution of the trust assets; j) the duty of trustees to account for their
administration.
Article 9 In applying this Chapter a severable aspect of the trust,
particularly matters of administration, may be governed by a different law.
Article 10 The law applicable to the validity of the trust shall determine
whether that law or the law governing a severable aspect of the trust may be
replaced by another law.
CHAPTER III - RECOGNITION
Article 11 A trust created in accordance with the law specified by the
preceding Chapter shall be recognized as a trust. Such recognition shall
imply, as a minimum, that the trust property constitutes a separate fund, that
the trustee may sue and be sued in his capacity as trustee, and that he may
appear or act in this capacity before a notary or any person acting in an
official capacity. In so far as the law applicable to the trust requires or
provides, such recognition shall imply, in particular - a) that personal
creditors of the trustee shall have no recourse against the trust assets; b)
that the trust assets shall not form part of the trustee's estate upon his
insolvency or bankruptcy; c) that the trust assets shall not form part of the
matrimonial property of the trustee or his spouse nor part of the trustee's
estate upon his death; d) that the trust assets may be recovered when the
trustee, in breach of trust, has mingled trust assets with his own property or
has alienated trust assets. However, the rights and obligations of any third
party holder of the assets shall remain subject to the law determined by the
choice of law rules of the forum.
Article 12 Where the trustee desires to register assets, movable or immovable,
or documents of title to them, he shall be entitled, in so far as this is not
prohibited by or inconsistent with the law of the State where registration is
sought, to do so in his capacity as trustee or in such other way that the
existence of the trust is disclosed.
Article 13 No State shall be bound to recognize a trust the significant
elements of which, except for the choice of the applicable law, the place of
administration and the habitual residence of the trustee, are more closely
connected with States which do not have the institution of the trust or the
category of trust involved.
Article 14 The Convention shall not prevent the application of rules of law
more favourable to the recognition of trusts.
CHAPTER IV - GENERAL CLAUSES
Article 15 The Convention does not prevent the application of provisions of
the law designated by the conflicts rules of the forum, in so far as those
provisions cannot be derogated from by voluntary act, relating in particular
to the following matters - a) the protection of minors and incapable parties;
b) the personal and proprietary effects of marriage; c) succession rights,
testate and intestate, especially the indefeasible shares of spouses and
relatives; d) the transfer of title to property and security interests in
property; e) the protection of creditors in matters of insolvency; f) the
protection, in other respects, of third parties acting in good faith. If
recognition of a trust is prevented by application of the preceding paragraph,
the court shall try to give effect to the objects of the trust by other means.
Article 16 The Convention does not prevent the application of those provisions
of the law of the forum which must be applied even to international
situations, irrespective of rules of conflict of laws. If another State has a
sufficiently close connection with a case then, in exceptional circumstances,
effect may also be given to rules of that State which have the same character
as mentioned in the preceding paragraph. Any Contracting State may, by way of
reservation, declare that it will not apply the second paragraph of this
Article.
Article 17 In the Convention the word `law' means the rules of law in force in
a State other than its rules of conflict of laws.
Article 18 The provisions of the Convention may be disregarded when their
application would be manifestly incompatible with public policy (ordre
public).
Article 19 Nothing in the Convention shall prejudice the powers of States in
fiscal matters.
Article 20 Any Contracting State may, at any time, declare that the provisions
of the Convention will be extended to trusts declared by judicial decisions.
This declaration shall be notified to the Ministry of Foreign Affairs of the
Kingdom of the Netherlands and will come into effect on the day when this
notification is received. Article 31 is applicable to the withdrawal of this
declaration in the same way as it applies to a denunciation of the Convention.
Article 21 Any Contracting State may reserve the right to apply the provisions
of Chapter III only to trusts the validity of which is governed by the law of
a Contracting State.
Article 22 The Convention applies to trusts regardless of the date on which
they were created. However, a Contracting State may reserve the right not to
apply the Convention to trusts created before the date on which, in relation
to that State, the Convention enters into force.
Article 23 For the purpose of identifying the law applicable under the
Convention, where a State comprises several territorial units each of which
has its own rules of law in respect of trusts, any reference to the law of
that State is to be construed as referring to the law in force in the
territorial unit in question.
Article 24 A State within which different territorial units have their own
rules of law in respect of trusts is not bound to apply the Convention to
conflicts solely between the laws of such units.
Article 25 The Convention shall not affect any other international instrument
containing provisions on matters governed by this Convention to which a
Contracting State is, or becomes, a Party.
CHAPTER V - FINAL CLAUSES
Article 26 Any State may, at the time of signature, ratification, acceptance,
approval or accession, or at the time of making a declaration in terms of
Article 29, make the reservations provided for in Articles 16, 21and 22. No
other reservation shall be permitted. Any Contracting State may at any time
withdraw a reservation which it has made; the reservation shall cease to have
effect on the first day of the third calendar month after notification of the
withdrawal.
Article 27 The Convention shall be open for signature by the States which were
Members of the Hague Conference on Private International Law at the time of
its Fifteenth Session. It shall be ratified, accepted or approved and the
instruments of ratification, acceptance or approval shall be deposited with
the Ministry of Foreign Affairs of the Kingdom of the Netherlands.
Article 28 Any other State may accede to the Convention after it has entered
into force in accordance with Article 30, paragraph 1. The instrument of
accession shall be deposited with the Ministry of Foreign Affairs of the
Kingdom of the Netherlands. The accession shall have effect only as regards
the relations between the acceding State and those Contracting States which
have not raised an objection to its accession in the twelve months after the
receipt of the notification referred to in Article 32. Such an objection may
also be raised by Member States at the time when they ratify, accept or
approve the Convention after an accession. Any such objection shall be
notified to the Ministry of Foreign Affairs of the Kingdom of the Netherlands.
Article 29 If a State has two or more territorial units in which different
systems of law are applicable, it may at the time of signature, ratification,
acceptance, approval or accession declare that this Convention shall extend to
all of its territorial units or only to one or more of them and may modify
this declaration by submitting another declaration at any time. Any such
declaration shall be notified to the Ministry of Foreign Affairs of the
Kingdom of the Netherlands and shall state expressly the territorial units to
which the Convention applies. If a State makes no declaration under this
Article, the Convention is to extend to all territorial units of that State.
Article 30 The Convention shall enter into force on the first day of the third
calendar month after the deposit of the third instrument of ratification,
acceptance or approval referred to in Article 27. Thereafter the Convention
shall enter into force - a) for each State ratifying, accepting or approving
it subsequently, on the first day of the third calendar month after the
deposit of its instrument of ratification, acceptance or approval; b) for each
acceding State, on the first day of the third calendar month after the expiry
of the period referred to in Article 28; c) for a territorial unit to which
the Convention has been extended in conformity with Article 29, on the first
day of the third calendar month after the notification referred to in that
Article.
Article 31 Any Contracting State may denounce this Convention by a formal
notification in writing addressed to the Ministry of Foreign Affairs of the
Kingdom of the Netherlands, depositary of the Convention. The denunciation
takes effect on the first day of the month following the expiration of six
months after the notification is received by the depositary or on such later
date as is specified in the notification.
Article 32 The Ministry of Foreign Affairs of the Kingdom of the Netherlands
shall notify the States Members of the Conference and the States which have
acceded in accordance with Article 28, of the following - a) the signatures
and ratifications, acceptances or approvals referred to in Article 27; b) the
date on which the Convention enters into force in accordance with Article 30;
c) the accessions and the objections raised to accessions referred to in
Article 28; d) the extensions referred to in Article 29; e) the declarations
referred to in Article 20; f) the reservations or withdrawals referred to in
Article 26; g) the denunciations referred to in Article 31.
IN WITNESS WHEREOF the undersigned, being duly authorized thereto, have signed
this Convention.
DONE at The Hague, on the 1st day of July 1985, in English and French, both
texts being equally authentic, in a single copy which shall be deposited in
the archives of the Government of the Kingdom of the Netherlands, and of which
a certified copy shall be sent, through diplomatic channels, to each of the
States Members of the Hague Conference on Private International Law at the
date of its Fifteenth Session.