TRUSTEE ACT 1936 - SECT 28C
TRUSTEE ACT 1936 - SECT 28C
28C—Application of income by trustee-mortgagee in possession
(1) Where a trustee is
entitled whether severally or as a co-mortgagee to a debt secured by a
mortgage of land in trust as to the whole or part of such debt for persons by
way of succession, and such trustee is at the commencement of the Trustee Act
Amendment Act 1941 or at any time after such commencement becomes
mortgagee in possession of the mortgaged land, the trustee shall apply the net
income of the mortgaged land received by him after such commencement or after
he becomes mortgagee in possession, as the case may be, as follows,
namely—
(a) in
discharge of all rents, taxes, rates and outgoings affecting the mortgaged
land;
(b) in
payment of the premiums on any insurances properly payable under the mortgage
instrument or under the Trustee Act Amendment Act 1941 and the cost of
executing necessary repairs;
(c) in
keeping down all periodical payments whether of principal or interest charged
upon the mortgaged land and having priority to the mortgage in right whereof
he is in possession.
(1a) Subject to the
rights of the mortgagor such trustee shall hold the residue of the income so
received by him upon the trusts to which such mortgage debt is subject.
(2) The rents, taxes,
rates, outgoings, premiums, costs, annual sums, payments and interest so to be
discharged, kept down and paid shall be those accruing due—
(a)
after the commencement of the Trustee Act Amendment Act 1941 where the
trustee is in possession of the mortgaged land at such commencement;
(b)
after the date of possession by the trustee, where the entry into possession
is after the commencement of the Trustee Act Amendment Act 1941 .
(2a) However, if at
the commencement of the Trustee Act Amendment Act 1941 or on the date of
possession by the trustee, as the case may be, any rents, taxes, rates,
outgoings, annual sums, payments, interest or premiums mentioned in
paragraphs (a), (b) or (c) of subsection (1) of this section were or
are due and unpaid, and such of those rents, taxes, rates, outgoings, annual
sums, payments and premiums as are periodical payments, were payable wholly or
in part in respect of any period subsequent to such commencement or to such
date of possession, as the case may be, then such last mentioned rents, taxes,
rates, outgoings, annual sums, payments and premiums shall, for the purpose of
this section, be considered as accruing from day to day and shall be
apportionable in respect of time accordingly.
(3) On the recovery of
the moneys secured by the mortgage whether in whole or in part, and whether by
repayment or on realisation of the security or otherwise, such part of the
income applied by the trustee in the payments specified in paragraph (a),
(b), and (c) of subsection (1) of this section as would otherwise have
been payable as interest to the person entitled to the interest of the
mortgage debt shall as between the persons respectively entitled to the income
and capital of the mortgage debt be deemed to be arrears of interest and the
amount received by the trustee shall be apportioned accordingly.
(4) Notwithstanding
anything in this section contained, the trustee may, if in the administration
of the trust he deems it necessary so to do, apply income of the mortgaged
property received by him after the commencement of the Trustee Act Amendment
Act 1941 in payment of any rents, taxes, rates, outgoings, premiums,
costs, annual sums, payments and interest affecting the mortgaged land other
than those specified in subsection (2) of this section but the person
entitled to the interest on the mortgage debt shall be entitled to recoupment
out of the capital of the mortgage debt of all payments made by the trustee
under the authority conferred by this subsection.