Hong Kong Ordinances

TRUSTEE ORDINANCE - SECT 11

Powers supplementary to powers of investment

(1) Trustees lending money on the security of any property on which they can
lawfully lend may contract that such money shall not be called in during any
period not exceeding 7 years from the time when the loan was made, provided
interest be paid within a specified time not exceeding 30 days after every
half-yearly or other day on which it becomes due, and provided there be no
breach of any covenant by the mortgagor contained in the instrument of
mortgage or charge for the maintenance and protection of the property.

(2) On a sale by trustees of land for a term having at least 60 years to run,
the trustees may, where the proceeds are liable to be invested, contract that
the payment of any part, not exceeding two-thirds, of the purchase money shall
be secured by mortgage of the land sold, with or without the security of any
other property, but such mortgage, if any buildings are comprised therein,
shall contain a covenant by the mortgagor to keep such buildings insured
against loss or damage by fire to the full value thereof.

(3) The trustees shall not be bound to obtain any report as to the value of
the land or other property to be comprised in such mortgage, or any advice as
to the making of the loan, and shall not be liable for any loss which may be
incurred by reason only of the security being insufficient at the date of the
mortgage.

(4) Where any securities of a company are subject to a trust, the trustees may
concur in any scheme or arrangement-

   (a)  for the reconstruction of the company;

   (b)  for the sale of all or any part of the property and undertaking of the
        company to another company;

   (c)  for the amalgamation of the company with another company;

   (d)  for the release, modification, or variation of any rights, privileges
        or liabilities attached to the securities or any of them, in like
        manner as if they were entitled to such securities beneficially, with
        power to accept any securities of any denomination or description of
        the reconstructed or purchasing or new company in lieu of or in
        exchange for all or any of the first-mentioned securities; and the
        trustees shall not be responsible for any loss occasioned by any act
        or thing so done in good faith, and may retain any securities so
        accepted as aforesaid for any period for which they could have
        properly retained the original securities.

(5) If any conditional or preferential right to subscribe for any securities
in any company is offered to trustees in respect of any holding in such
company, they may as to all or any of such securities, either exercise such
right and apply capital money subject to the trust in payment of the
consideration, or renounce such right, or assign for the best consideration
that can be reasonably obtained the benefit of such right or the title thereto
to any person, including any beneficiary under the trust, without being
responsible for any loss occasioned by any act or thing so done by them in
good faith: Provided that the consideration for any such assignment shall be
held as capital money of the trust.

(6) The powers conferred by this section shall be exercisable subject to the
consent of any person whose consent to a change of investment is required by
law or by the instrument, if any, creating the trust.

(7) Where the loan referred to in subsection (1), or the sale referred to in
subsection (2), is made under the order of the court, the powers conferred by
those subsections respectively shall apply only if and as far as the court may
by order direct. [cf. 1925 c. 19 s. 10 U.K.]