Dealings by Trustees with third parties

(1) 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 sub-section (3), extend only to the trust property. (2) If the trustee fails to inform the third party that he is acting as Trustee– (a) he incurs personal liability to the third party in respect of the transaction or matter; and (b) he has a right of indemnity against the trust property in respect of his personal liability, unless he acted in breach of trust. (3) Nothing in this section shall prejudice any claim for breach of warranty of authority. (4) A bona fide purchaser for value without notice of a (a) may deal with a trustee in relation to trust property as if the trustee were the beneficial owner thereof; and (b) is not affected by the trusts on which the property is held. (5) A third party paying or advancing money to a trustee is not concerned to see– (a) that the money is needed in the proper exercise of the trust functions; (b) that no more than is so needed is raised; or 26 (c) that the transaction or the application of the money is proper. (6) In this section, “third party” means a person other than a settlor, trustee, protector or beneficiary of the trust.