Cap. 16 Art. 1124DRetirement of a fiduciary and appointment of his successor.

Where a fiduciary is vested with ownership of a property, has it registered in his name, holds, exercises control or powers of disposition over such property and for any reason, ceases to act as fiduciary and is thereafter replaced by another fiduciary, the latter shall continue to perform the same fiduciary obligations, as may be applicable at the relevant time:

Provided that:

(a) the transfer of rights and obligations with respect to the property subject to fiduciary obligations shall take place in favour of beneficiaries and third parties upon the execution of a written instrument between the fiduciary ceding his fiduciary obligation and the fiduciary replacing him. The written instrument shall specify the property subject to fiduciary obligations, and shall empower the new fiduciary to transfer all rights and obligations, including possession and, or, delivery of the property in favour of the beneficiary and any third party, as the case may be, except as stated in paragraphs (d) and (e);

(b) for any rights over immovable property to be validly vested in the new fiduciary, the execution of a public deed shall be required;

(c) the sole consideration for the said transaction shall be that referred to in article 958L, which shall apply mutatis mutandis in case of fiduciary obligations other than those arising from trusts, and notwithstanding any other law it shall not be required to state in the relative instrument, including any public deed, the value of the property being transferred or delivered;

(d) the provisions of this article shall also apply mutatis to the transfer of a cell from one organisation mutandis to another or the constitution of a cell as a new organisation under articles 20A or 20B of the Second Schedule, as the case may be;

(e) all rights and obligations, including any contracts which may be in force, shall continue to operate in accordance with their terms with reference to the property subject to fiduciary obligations and shall accrue and be binding on the new fiduciary upon the transfer and, or delivery to him of the property in accordance with applicable law and any written instrument regulating the fiduciary obligations and the property subject to fiduciary obligation and this without the need of any notice to or consent of any other person except as provided in this sub-article or applicable law;

(f) the fiduciary who ceases to act as a fiduciary shall no longer be entitled to all the rights and powers and, subject to paragraph (g), shall be released from all the fiduciary obligations related to the property subject to fiduciary obligations, including any obligations under any contracts, once he has carried out the transfer and delivery of the property to the successor fiduciary after obtaining all such consents as are required to terminate his engagement as fiduciary under any written instrument and observing all formalities under applicable law;

(g) the fiduciary who ceases to act as a fiduciary shall not be released of his obligations towards the beneficiary with respect to any property subject to fiduciary obligations he may not have transferred, delivered or accounted for or which may come into his possession thereafter or for any breaches of fiduciary obligations when he was acting as fiduciary;

(h) the fiduciary who ceases to act as a fiduciary shall not be released from any obligations towards third parties which:

(i) he has expressly entered into in his own personal capacity and interest and not in a fiduciary capacity; or

(ii) he is personally liable for under the provisions of this Title towards a third party who was not aware he was acting as a fiduciary, unless the third party expressly releases him from liability;

(i) the appointment of another fiduciary, as aforesaid, shall not be subject to the provisions on assignment of rights nor constitute a novation under the provisions of this Code but shall be regulated by this article and the provisions of the Trusts and Trustees Act, when applicable;

(j) any undertaking, guarantee, hypothec, pledge or other forms of security granted by the fiduciary or over or in relation to the property shall not be affected in any manner by the substitution of a fiduciary and shall continue to attach to the property in accordance with its terms and the applicable law and when property subject to a hypothec or privilege is the subject of a transaction where another fiduciary replaces a fiduciary, the fiduciary replacing the previous fiduciary and the provisions of articles 2070 to 2083 shall not apply:

Provided that this paragraph shall not apply where the retiring fiduciary is already a third party in possession in which case articles 2070 to 2083 shall apply;

(k) the fiduciary ceasing his functions or the replacing fiduciary shall:

(i) notify interested third parties of such substitution, at what time and to what extent, while abiding with any confidentiality obligations regarding beneficiaries and their interests;

(ii) where rights over immovable property are subject to fiduciary obligations, execute a public deed with the fiduciary who has ceased to perform his fiduciary obligations to record that the fiduciary obligations relating to such property have been transferred to another fiduciary. Nevertheless, if for any reason the fiduciary ceasing his functions is not able to appear on such public deed and the property is in the possession of the replacing fiduciary, the latter may state such facts as are known to him, confirm that such property is in his possession and shall declare by means of a written declaration or notification, his acquisition of title over the property and the undertaking of the fiduciary obligations. The transfer of ownership of such property shall take place upon the execution of such public deed and the same rules shall apply mutatis to other registered movable property by the mutandis execution of a private writing and any applicable registrations or notifications as may be required by law;

(iii) in so far as any security forms part of the property subject to fiduciary obligations and it is duly registered in the Public Registry, the new fiduciary shall, upon making a unilateral declaration relating to the relevant security, in accordance with the applicable law, register the substitution resulting from the written instrument between himself and the former fiduciary in the said register;

(l) in cases where the substitution is ordered or approved by a competent court or regulatory authority, then no further consent or agreements which may otherwise be required under this article, applicable law or the written instrument regulating the fiduciary obligations, shall be necessary;

(m) the fiduciary who has ceased to perform his functions shall be entitled to be indemnified for liabilities, expenses or losses he may incur with reference to the property subject to fiduciary obligations even after he has ceased to perform his functions except for any breaches thereof;

(n) where a fiduciary dies in the course of performing his fiduciary obligation:

(i) his universal heir who has reached majority and is capable at law, or if more than one, each one of such heirs severally, shall be deemed to be executors of the property and shall immediately ex lege transfer or deliver the property to a successor fiduciary or the beneficiary;

(ii) should the heir fail to perform the duties in sub-paragraph (i) within thirty (30) days, extendable by the Court, he shall be considered to be the temporary successor fiduciary and shall have the same obligations towards the beneficiaries as the deceased fiduciary until he performs his obligations as aforesaid;

(iii) should the heir be unable to perform his duties in sub-paragraph (i) for any reason not attributable to himself, he shall apply to the competent court providing the relevant information and seeking an order as stated below;

(iv) when the deceased fiduciary has appointed a testamentary executor, the above duties, and all relative powers to so act, shall bind only the executor, unless the executor is also a universal heir in which case sub-paragraph (i) shall apply, such testamentary executor shall be deemed to have all the necessary powers for the purposes solely of recovering, transferring or returning the property to another fiduciary or to the beneficiary;

(v) notwithstanding the above, a beneficiary, the heirs, the executor, as the case may be, may apply to the Court to confirm their powers or may appoint an ad hoc testamentary executor at any time, to act for the estate of the deceased fiduciary for the purposes of recovering, transferring or returning the property to another fiduciary or the beneficiary and the competent court may confirm to which property such powers refer or may accede to such request notwithstanding any contestation of the will or his appointment;

(vi) the successor fiduciary is the person:

A. designated in any instrument governing the fiduciary obligations; or

B. designated in accordance with any applicable law; or

C. appointed by the Court for such purposes, even if only temporarily for this purpose, on the demand by application of any interested party;

(o) where the fiduciary is a legal person which is declared bankrupt, dissolved or wound up, such obligations shall bind the last directors jointly and severally or, if a liquidator has been appointed, the liquidator, as the case may be, and the provisions of paragraph (j) shall apply mutatis mutandis;

(p) where there is more than one fiduciary who holds, exercises control or powers of disposition over property for a beneficiary, such property shall, by operation of law, consolidate in the ownership of the remaining fiduciary or fiduciaries on the death, resignation or removal of a co-fiduciary. The remaining fiduciary or fiduciaries shall execute a unilateral declaration by public deed or other writing in accordance with applicable law, which shall be registered in the relevant register, so as to declare the consolidation in his or their name of the title or control of such property and the consolidation shall thereon take place without the need of any other formality.