Section 36: Dealings with third parties

36. Dealings with third parties (1) Notwithstanding any enactment, where, in a transaction or matter affecting a trust, a trustee informs a third party that he is acting as trustee, a claim by the third party in respect of the transaction or matter shall, subject to subsection (3), extend only to the trust property. (2) If the trustee fails to inform the third party that he is acting as trustee, he shall— (a) incur personal liability to the third party in respect of the transaction or matter; and [Issue 1] T22 – 20 Revised Laws of Mauritius (b) have a right of indemnity against the trust property in respect of his personal liability, unless he acted in breach of trust. (3) A bona fide purchaser for value without notice of a breach of trust— (a) may deal with a trustee in relation to trust property as if the trustee were the beneficial owner of the property; and (b) is not affected by the trusts on which the property is held. (4) A third party paying or advancing money to a trustee is not concerned to see that— (a) the money is needed in the proper exercise of the trust functions; (b) no more than is needed is raised; or (c) the transaction or application of the money is proper. (5) In this section “third party" means a person other than a settlor, enforcer, protector, trustee or beneficiary of the trust. PART V – DUTIES OF TRUSTEES