Cap. 16 Art. 1124AFiduciary obligations.

(1)Fiduciary obligations arise in virtue of law, contract, quasi-contract,unilateral declarations including wills, trusts, assumption of office or behaviour whenever a person (the

''fiduciary'') -

(a) owes a duty to protect the interests of another person and it shall be presumed that such an obligation where a fiduciary acts in or occupies a position of trust is in favour of another person; or

(b) has registered in his name, holds, exercises control or powers of disposition over property for the benefit of other persons, including when he is vested with ownership of such property for such purpose; or

(c) receives information from another person subject to a duty of confidentiality and such person is aware or ought, in the circumstances, reasonably to have been aware, that the use of such information is intended to be restricted.

(2) A person who is delegated any function by a fiduciary and is aware, or should, from the circumstances, be aware, of the fiduciary obligations shall also be treated to be subject to fiduciary obligations.

(3) Fiduciary obligations arise from behaviour when a person -

(a) without being entitled, appropriates or makes use of property or information belonging to another, whether for his benefit or otherwise; or

(b) being a third party, acts, being aware, or where he reasonably ought to be aware from the circumstances, of the breach of fiduciary obligations by a fiduciary, and receives or otherwise acquires property or makes other gains from or through the acts of the fiduciary.

(4) Without prejudice to the duty of a fiduciary to carry out his obligations with utmost good faith and to act honestly in all cases, a fiduciary is bound, subject to express provision of law or express terms of any instrument in writing excluding or modifying such duty, as the case may be -

(a) to exercise the diligence of a in bonus pater familias the performance of his fiduciary obligations;

(b) to avoid any conflict of interest or any conflict of trust or fiduciary obligations;

(c) not to receive undisclosed or unauthorised profit from his position or functions nor permit any other person to do so, nor enter into any transaction related to the property, directly or indirectly, unless authorised to do so by the instrument creating the fiduciary obligation or permitted by a person or authority empowered to approve such dealings under the instrument or applicable law or as otherwise authorised by the Court: Provided that any references to "the Court" shall be construed as references to the Civil Court (Voluntary Jurisdiction Section) unless otherwise indicated or unless the context refers to any court seized of any matter in which case it is the court where the matter arises;

(d) to act impartially when the fiduciary duties are owed to more than one person;

(e) to keep any property as may be acquired or held as a fiduciary segregated from his personal property and that of other persons towards whom he may have similar obligations and to affect a change in the registration of any relevant property, as may be required for such purpose;

(f) to maintain suitable records in writing of the interest of the person to whom such fiduciary obligations are owed;

(g) to render account in relation to the property subject to such fiduciary obligations;

(h) to return on demand any property held under fiduciary obligations to the person lawfully entitled thereto or as instructed by him as otherwise required by the written instrument regulating the fiduciary obligation or by applicable law, and for such purpose, execute such agreements, including any public deed, or other instruments and, or effect a change in the registration of any relevant property, as may be required;

(i) to return any property held under the fiduciary obligations upon the termination of the fiduciary obligations to the person lawfully entitled thereto, as required by the written instrument regulating the fiduciary obligation or by applicable law, and for such purpose, execute such agreements, including any public deed, or other instruments and, or effect a change in the registration of any relevant property, as may be required;

(j) to keep confidential the affairs of the person to whom fiduciary duties are owed, subject to the fiduciary’s duty to provide information to the beneficiary of the specific fiduciary obligation or to other persons in accordance with and subject to any restrictions contained in the written instrument, if any, giving rise to the fiduciary obligation with reference to this sub-article, unless the fiduciary is given consent from the person to whom fiduciary obligations are owed to disclose such information: Provided that a fiduciary has the right to declare on any written instrument or when carrying out any act, that he is acting as a fiduciary in such context and such declaration shall not be considered to be a breach of this sub-article; and

(k) to carry out the designated purpose, where property has been entrusted to him.

(5) In addition to any other remedy available under law, a person subject to a fiduciary obligation who acts in breach of such obligation shall be bound to return any property together with all other benefits derived by him, whether directly or indirectly, to the person to whom the duty is owed.

(6) The obligation to return property derived from a breach of a fiduciary duty shall apply also to all property into which the original property has been converted or for which it has been substituted.

(7) Subject to the provisions of sub-article (8), where the competent court, in any proceedings, finds that a person owns, has registered in his name, holds, exercises control or has powers of disposition over property and is bound by fiduciary obligations arising in any manner in relation to such property, the court may make any order or declaration in favour of or for the benefit of such persons and under such terms and conditions as it considers appropriate in the circumstances to protect the beneficiary of such obligations under the provisions of this Title and any special law including:

(a) to order the transfer, restitution or delivery of any property, or the change in the registration thereof, to another fiduciary or order that it be held jointly with another fiduciary;

(b) to terminate the powers of disposition of property;

(c) to order the fiduciary to give adequate security;

(d) to establish a trust in relation to property subject to fiduciary obligation and to establish the terms of such trust;

(e) to rescind any transfer or other transaction or declaring the same null and void; or

(f) imposing damages on the fiduciary.

(8) The court shall also have such powers, whether the proceedings are instituted under article 1124E or under any other provision of law, by any beneficiary, a successor in title of such beneficiary, a creditor of such beneficiary when such creditor may exercise the rights of the beneficiary under applicable law, or by any other person whom the court considers to be entitled under the relevant fiduciary obligation, as the case may be, and on the basis of the demands in the relevant proceedings. Where a third party acquires any property under an onerous title or acquires rights over any property owned, held or registered in the name of a fiduciary, he shall not be prejudiced by any remedy granted by the court to any person as aforesaid:

Provided that the third party who acquires any property pursuant to this sub-article was not aware of that he was dealing with a fiduciary.

(9) Fiduciary duties may, in particular cases, be implicitly waived or varied in certain circumstances, such as:

(a) the method of engagement of the fiduciary, in particular where the fiduciary is engaged for two or more purposes, functions or offices or where the fiduciary is engaged for a purpose, function or office at the same time as when the fiduciary is granted an entitlement;

(b) the scope, purposes and contexts of the fiduciary obligations imposed;

(c) the handing over of property, by delivery, registration in name of another person, assignment or transfer, to or for the benefit of a beneficiary’s creditor for purpose of security or other purpose which is distinct from that of the beneficiary; or

(d) the manner of the acceptance or assumption or undertaking of the fiduciary obligations.

(10) Where there is an express waiver of fiduciary obligations as stated in sub-article (4) or an implicity waiver as stated in sub-article (9), the fiduciary may, in case of doubt, apply for directions from the competent court on how to act in the circumstances. The court shall give due regard to the intentions of the person establishing or imposing the fiduciary obligations and to the interests of both the fiduciary and the beneficiary.