New South Wales Consolidated Acts

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TRUSTEE ACT 1925 - SECT 39B

Validation of certain payments by trustee-mortgagee in possession

39B Validation of certain payments by trustee-mortgagee in possession

In any case in which, prior to the commencement of the Conveyancing, Trustee and Probate (Amendment) Act 1938 , a trustee was entitled either severally or as a co-mortgagee to a debt secured by a mortgage of land in trust as to the whole or part of such debt for persons by way of succession and the trustee, having entered into possession of the mortgaged property, has, before such commencement, applied or shall, after such commencement apply bona fide the net income of the mortgaged property received by the trustee before such commencement in payment of any rents, rates, taxes, insurance premiums, outgoings or annual sums on the mortgaged property or of the interest on prior incumbrances on the mortgaged property, or in executing necessary repairs thereto, then--

(a) the trustee shall not be liable for breach of trust by reason of the trustee's having so applied the income of the mortgaged property and shall not be liable personally to make any recoupment in respect of any income so applied by the trustee before or after such commencement, and
(b) the person entitled to the income of the mortgage debt--
(i) shall not be entitled to any recoupment out of the capital of the mortgage debt of any moneys payable to the person as interest and so applied by the trustee prior to the twenty-sixth day of May, one thousand nine hundred and thirty-three, except such part of such moneys as were applied by the trustee in payment of any rents, rates, taxes, insurance premiums, outgoings or annual sums accrued due prior to the trustee's possession, but such moneys, except such lastmentioned part (if any), shall as between the persons respectively entitled to the income and capital of the mortgage debt be deemed to be arrears of interest and the amount of moneys secured by the mortgage recovered by the trustee whether by repayment or on realisation of the security or otherwise shall be apportioned accordingly,
(ii) shall be entitled to recoupment out of the capital of the mortgage debt of any moneys payable to the person as interest and so applied by the trustee after the twenty-fifth day of May, one thousand nine hundred and thirty-three.



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