Section 39Part 1 — Trusts Act
Loans and investments by trustees not chargeable as breaches of trust
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A trustee lending money on the security of any property on which that person 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 —
that in making the loan the trustee was acting upon a report as to the value of the property made by a person whom that person 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;
that the amount of the loan does not exceed two-thirds of the value of the property as stated in the report; and
that the loan was made under the advice of the surveyor or valuer expressed in the report.
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 that person 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.
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 date.