The legal process for appointing or removing a trustee in Kenya is primarily governed by the Trustee Act (Cap 167), the Trustees (Perpetual Succession) Act (Cap 164), and the provisions of the Trust Deed itself.
Here is a breakdown of the typical legal process:
1. APPOINTMENT OF A TRUSTEE
The appointment of a new trustee can occur through several ways:
(a) Provisions in the Trust Deed:
The Trust Deed (the document creating the trust) usually specifies the persons or entities with the power to appoint new or replace trustees (e.g., the Settlor, the continuing trustees, a Protector, or the beneficiaries).
This is the primary and preferred method, as it aligns with the Settlor’s original intentions.
(b) Statutory Power (Trustee Act, Cap 167):
Section 36 of the Trustee Act grants a statutory power to appoint a new trustee in specific circumstances, such as:
i. where a trustee is dead,
ii. remains out of Kenya for more than twelve months,
iii. desires to be discharged,
iv. refuses to act; or
v. is unfit to act or incapable of acting.
This power is typically exercised by the surviving or continuing trustees, or by the personal representatives of the last surviving or continuing trustee.
(c) Appointment by the Court:
The High Court has the power to appoint a new trustee if it is found to be inexpedient, difficult or impracticable to do so without the court’s assistance e.g., if there are no continuing trustees, or the process is deadlocked.
An application is made to the High Court for an order appointing a new trustee.
For trusts incorporated under the Trustees (Perpetual Succession) Act (Cap 164), the new appointment must be formally registered.
The appointment documents are lodged with the BRS. This officially updates the public record of the trust’s office bearers.
2. REMOVAL OF A TRUSTEE
The removal of a trustee can happen through:
(a) Provisions in the Trust Deed:
The Trust Deed can contain express powers for the removal of a trustee and often specifies the grounds for removal.
(b) Statutory Power (Trustee Act, Cap 167):
Similar to appointment, the statutory power to appoint a new trustee under Section 36 implies a power to remove an existing trustee in circumstances like being unfit to act or incapable of acting.
(c) Removal by the High Court:
The High Court has an inherent jurisdiction to remove a trustee, which is often done when there are disputes, allegations of misconduct, or a conflict of interest.
The paramount consideration for the court is the welfare of the beneficiaries and the proper administration of the trust.
Grounds for court removal often include:
Breach of trust or fiduciary duty.
Serious conflict of interest.
Irretrievable breakdown of the relationship between the trustee and the beneficiaries, which jeopardizes the proper execution of the trust.
Let Kenbiz Registrars handle the legal heavy lifting for you. We draft deeds of appointment or removal and handle High Court applications if needed.
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