The only proper purpose of a government is to protect man's rights, which means: to protect him from physical violence...
The only proper functions of a government are: the police, to protect you from criminals; the army, to protect you from foreign invaders;
and the courts, to protect your property and contracts from breach or fraud by others, and to settle disputes by rational rules, according to objective law.

- Ayn Rand
 

Unit Trusts Act 1960 099
Commenced: 1 Apr 1961

26 Restriction on Personal Benefits by Directors or Officers

(1)  Every person who is a director or officer of a company that is the manager of a unit trust, or of a trustee corporation or company or bank that is the trustee of a unit trust, shall be a trustee for the benefit of the unit holders of any personal profit or benefit which he gains by availing himself of his position, whether by buying or selling or joining in buying or selling investments or securities or otherwise: Provided that nothing in this subsection shall affect the right of any such director or officer to receive and retain remuneration from the trustee corporation or company or bank of which he is a director or officer.

(2)  Any such personal profit shall be transferred to the trustee of the unit trust, and may be recovered by that trustee from the person who gained it.

27 Power of Court to assess damages against delinquent directors of manager

(1)   If, in the course of winding up any company that is the manager of a unit trust, it appears that the company has misapplied or retained or become liable or accountable for any money or property of the unit trust, or committed any misfeasance or breach of trust in relation to the unit trust, the Court may, on the application of the Official Assignee or of the liquidator or of the trustee or of any unit holder, examine into the conduct of any past or present director, manager, or liquidator, or any officer of the company who has been a party to or knowingly permitted the misapplication, retention, misfeasance, or breach of trust, and compel him to repay or restore the money or property or any part thereof respectively with interest at such rate as the Court thinks just or to contribute such sum to the assets of the trust by way of compensation in respect of the misapplication, retention, misfeasance, or breach of trust as the Court thinks just.

(2)  The provisions of this section shall have effect notwithstanding that the act is one for which the offender may be criminally liable.

(3)  Where an order for payment of money is made under this section, the order shall be deemed to be a final judgment within the meaning of [paragraph (d) of subsection (1) of section 19 of the Insolvency Act 1967].

In subs. (3), paragraph (d) of subsection (1) of section 19 of the Insolvency Act 1967, being the corresponding enactment in force at the date of this reprint, has been substituted for paragraph (f) of section 26 of the repealed Bankruptcy Act 1908.

Source: KnowledgeBasket 3 June 1997

The Manager, with the permission of the Trustee, decided to "opt out" of clause 26 (see What the Manager Thinks).  However, our legal counsel says they can't do that.  So did the High Court Judge.

We are currently pursuing this matter.

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