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Removal of trustees, Trustee retirement, Trustees

The smell of Jasmine

Where a trustee wishes to retire, the first inquiry as to how to do so, must be to the terms of the trust.  If the trust instrument is silent, then the provisions of the Trustee Act 1956 will prevail.  However, what might the position be if the trust instrument provides for retirement, but does not sufficiently specify how?  This question was considered by the High Court of Singapore in Chan Chi Cheong v Chan Yun Cheong.  As the relevant provisions of the Singapore Trustee Act are almost identical to the New Zealand Trustee Act 1956, the decision is of interest given the unresolved issue in New Zealand as to whether a trustee can retire if this will result in less than two natural person trustees or a trustee corporation if there was originally more than one trustee.  See So close to Jasmine you can smell it, Exit stage left and Two trustees go down to the woods … one is discharged and one is not.

In Chan Chi Cheong v Chan Yun Cheong a trustee retired, on the basis that the trust instrument (in that case a will) allowed this.  However, importantly there was no specification as to how.  The view of the Singapore High Court, which traversed a range of relevant authorities, was that absent a mechanism for retirement, the legislation would prevail over the instrument.  However, all was not lost as the Court then compelled consent to the trustee’s retirement on the basis of the inequity (in the circumstances of the matter) should the trustee be incapable of retiring without consent.  As noted in the decision:

82 In summary, Clause 3 allows the trustee to resign but it does not prescribe the mode of resignation. The effect of s 2 of the Trustees Act is that s 40 of the Trustees Act supplements Clause 3. This means that any trustee who is desirous to resign will have to comply with the requirements under s 40 of the Trustees Act. Therefore, the Defendant’s Letter of Resignation is invalid as it fails to comply with the requirements under s 40 of the Trustees Act.

83 Section 14 of the SCJA does not require the Plaintiff to have a pre-existing order or judgment at the time he files OS 703/2019 seeking the court to direct the Defendant to execute the Deed of Retirement and Confirmation and the Plaintiff’s Retirement Deed. In addition, the court also has the powers under s 18 of the SCJA and the inherent powers under O 92 r 4 of the Rules of Court to direct the Defendant to execute the Deeds. The facts disclose that the Defendant attempted to beat the Plaintiff to the resignation by trying to circumvent s 40 of the Trustees Act so that he does not have to face the inconvenience of seeking a replacement trustee as required under s 40 of the Trustees Act. The Trustees Act prescribes that after the discharge of the trustee there will be either at least two remaining trustees or a trust corporation. The Defendant has unreasonably and unjustly withheld his consent to allow the Plaintiff to resign. The Plaintiff was desirous of being discharged way before the Defendant tendered his Letter of Resignation.

84 Accordingly, I order the Defendant to execute both the Plaintiff’s Retirement Deed and Chan Fatt Cheung’s Deed of Retirement and Confirmation within 14 days of the date of this order , failing which the Registrar of the Supreme Court is hereby directed to execute the Deeds on the Defendant’s behalf.


45 Retirement of trustee

(1)   Where there are 2 or more trustees—

(a) if one of them by deed declares that he is desirous of being discharged from the trust; and
(b) if his co-trustees and such other person (if any) as is empowered to appoint trustees by deed consent to the discharge of the trustee, and to the vesting of the trust property in the co-trustees alone—

then, subject to the provisions of subsection (3), the trustee desirous of being discharged shall be deemed to have retired from the trust, and shall by the deed be discharged therefrom under this Act without any new trustee being appointed in his place.


(2)   Any assurance or thing requisite for vesting the trust property in the continuing trustees alone shall be executed and done.


(3)    Except where only 1 trustee was originally appointed, a trustee shall not be discharged under subsection (1) unless there will be either a trustee corporation or at least 2 individuals to act as trustees to perform the trust.



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