Hong Kong Ordinances

TRUSTEE ORDINANCE - SECT 9

Loans and investments by trustees not chargeable as breaches of trust

(1) A trustee lending money on the security of any property on which he can
properly lend shall not be chargeable with breach of trust by reason only of
the proportion borne by the amount of the loan to the value of the property at
the time when the loan was made, if it appears to the court-

   (a)  that immediately prior to the making of the loan the trustee obtained
        a report as to the value of the property made by a person whom he
        reasonably believed to be an able practical surveyor or valuer
        instructed and employed independently of any owner of the property,
        whether such surveyor or valuer carried on business in the locality
        where the property is situate or elsewhere; and (Amended 48 of 1968 s.
        3)

   (b)  that the amount of the loan does not exceed one half of the value of
        the property as stated in the report; and (Amended 48 of 1968 s. 3)

   (c)  that the loan was made under the advice of the surveyor or valuer
        expressed in the report.

(2) A trustee lending money on the security of any leasehold property shall
not be chargeable with breach of trust only upon the ground that in making
such loan he dispensed either wholly or partly with the production or
investigation of the lessor's title.

(3) A trustee shall not be chargeable with breach of trust only upon the
ground that in effecting the purchase, or in lending money upon the security,
of any property he has accepted a shorter title than the title which a
purchaser is, in the absence of a special contract, entitled to require, if in
the opinion of the court the title accepted be such as a person acting with
prudence and caution would have accepted.

(4) This section applies to transfers of existing securities as well as to new
securities and to investments made before as well as after the commencement of
this Ordinance. [cf. 1925 c. 19 s. 8 U.K.]