CAN A TRUSTEE DELEGATE ITS POWERS AND DUTIES?
Trustees’ powers and obligations are regulated under the Trustee Act 1949 (“the Act”) but this legislation must be read in tandem with common law principles that affect the duties of trustees and other persons acting in a similar capacity.
Section 28(2) of the Act states that: –
“Trustees or personal representatives may appoint any person to act as their agent or attorney for the purpose of selling, converting, collecting, getting in, and executing and perfecting assurances of, or managing or cultivating, or otherwise administering any property, movable or immovable, subject to the trust or forming part of the testator’s or intestate’s estate, in any place outside Malaysia or executing or exercising any discretion or trust or power vested in them in relation to any such property, with such ancillary powers, and with and subject to such provisions and restrictions as they may think fit, including a power to appoint substitutes, and shall not, by reason only of their having made such appointment, be responsible for any loss arising thereby.”
On the one hand Section 28(2) suggests that a grant of a power of attorney is permitted only where the exercise of discretion or trust or power is in relation to dealing with property outside of Malaysia. This would mean that Section 28(2) is a limiting provision and not an enabling one. However, on more careful examination, it can be argued that Section 28(2) is in fact an enabling or clarifying provision which makes clear that where a trustee is required to deal with property outside Malaysia, it may do so through an agency which is authorised to exercise discretion normally vested in the trustee himself. As there are no express prohibitions against acting through agents generally, it may be argued that this provision merely clarifies the authority of the trustee in this respect where acts are required to be undertaken outside Malaysia where the trustee may not be able to act personally.
The Maxim of Delegatus Non Protest Delagare
Notwithstanding that the Act does not expressly prohibit the exercise of a trustee’s duties through an agency, nonetheless, trustees who have personal duties foisted on them, must still adhere to the legal maxim, delegatus non protest delagare.
The literal meaning of this long-standing maxim of common law means “one to whom a power is delegated, cannot himself further delegate that power”. It prevents someone who has been specifically delegated duties and responsibilities, from further delegating those duties to another without express authorization. This would mean that a trustee may not delegate its powers and duties, generally, to another person via a Power of Attorney.
It would be illuminating at this point to refer to some judicial decisions and legal excerpts: –
In Geraint Thomas and Alastair Hudson in The Law of Trust, 2nd edition, the learned authors stated: –
(i) The office of trustee is one of personal trust and confidence. The person who holds it is required to exercise his own judgment and discretion. In the absence of express provision to the contrary, an individual trustee or the trustees collectively cannot refer or commit the trust or the exercise of trustee powers to a co-trustee or to another, or delegatus non protest delegare …
In Green v Whitehead  1 Ch D 38, it was ruled that: –
By the operation of the Power of Attorney executed by the one of the two trustees, it is to commit to the sole and absolute discretion of the grantee all those matters in which the trustee is bound to exercise his own judgment and to use his own discretion and to authorise the grantee to receive purchase and other monies representing the trust estate in the name of the grantor or otherwise in respect of trust property within the UK. This is not permissible under Section 23 of the Trustee Act 1925 (in pari materia with Section 28 of the Malaysian Trustee Act 1949).
In Allam & Co Lts v Europa Poster Services Ltd  1 WLR 638, it was ruled that: –
The relation of an agent to his principal is normally at least one which is of a confidential character and the application of the maxim delegatus non potest delegare to such relationships is founded on the confidential nature of the relationship. Where the principal reposes no personal confidence in the agent the maxim has no application, but where the principal does place confidence in the agent that in respect of which the principal does so must be done by the agent personally unless either expressly or inferentially he is authorised to employ a sub-agent or to delegate the function to another.
In summary, the employment of agents by a trustee does not, per se, amount to the delegation of a personal discretion fixed upon the trustee under his appointment in contravention of the maxim delegatus non potest delegare. Therefore, an agency granted by a trustee merely to perform specific acts which are not personal to the trustee himself would be permissible, with the exception of Section 28(2) of the Act which creates the exception of a delegation of discretion to administer property outside Malaysia.
By Loong Caesar & Aven Ching