New South Wales Consolidated Acts
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TRUSTEE ACT 1925 - SECT 42
Application of insurance money
42 Application of insurance money
(1) Where a policy of insurance against the loss or damage of any property
subject to a trust, whether by fire or otherwise, has been kept up under any
trust in that behalf, or under any power statutory or otherwise, or in
performance of any obligation statutory or otherwise, the money receivable by
a trustee under the policy shall be capital money for the purposes of the
(2) If the money is receivable in respect of property held upon trust
for sale, the same shall be held upon the trusts and subject to the powers and
provisions applicable to money arising by a sale under the trust.
(3) In any
other case the money shall be held upon trusts corresponding as nearly as may
be with the trusts affecting the property in respect of which it was payable.
(4) The money or any part thereof may also be applied by the trustee or, if in
court, under the direction of the Court, in rebuilding, reinstating,
replacing, or repairing the property lost or damaged.
(5) Any such
application by the trustees shall be subject to the consent of any person
whose consent is required by the instrument, if any, creating the trust to the
investment of money subject to the trust.
(6) Nothing in this section shall
prejudice or affect the right of any person to require the money or any part
thereof to be applied in rebuilding, reinstating or repairing the property
lost or damaged.
(7) Nothing in this section shall prejudice or affect the
rights of any mortgagee lessor or lessee, whether under any statute or
(8) This section applies only if and as far as a contrary
intention is not expressed in the instrument, if any, creating the trust, and
shall have effect subject to the terms of that instrument and to the
provisions therein contained.
(9) This section applies to trusts and to
policies created or effected either before or after the commencement of this
Act, but only to money received after the commencement of this Act.
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