s 82 Duties of trustees
(1) The trustee of a trust deed that is entered into under section 67— (a) shall exercise reasonable diligence to ascertain whether the assets of the borrower and of each guarantor which are or may be available, whether by way of security or otherwise, are insufficient or are likely to become insufficient to repay the amount secured or payable under the debenture to which the trust deed relates as and when it becomes due; (b) shall satisfy itself that the provisions of a prospectus relating to the debenture do not contain any matter which is inconsistent with the terms, provisions and covenants of the debenture and the trust deed; (c) shall exercise reasonable diligence to ascertain whether the borrower or each guarantor has committed any breach of the terms, provisions or covenants of the debenture or the trust deed or has contravened any of the provisions of this Act; (d) shall do everything in its power to ensure that the borrower or each guarantor remedies any breach known to the trustee of the terms, provisions or covenants of the debenture or the trust deed or any contravention of the provisions of this Act unless the trustee is satisfied that the breach or contravention will not materially prejudice the debenture holder’s interest or any security for the debenture; (e) shall, where the borrower or the guarantor fails to remedy any breach of the terms, provisions or covenants of the debenture or the trust deed or any contravention of the provisions of this Act, call for a meeting of debenture holders and place before the meeting proposals for the protection of the interests of the debenture holders as the trustee considers necessary or appropriate and obtain their directions; (f) shall ensure that the borrower and each guarantor complies with Division 7 of Part IV of the Companies Act 1965, to the extent that it applies to the debenture; (g) shall notify the Commission as soon as practicable if— (i) the borrower has contravened section 74 or 75; or (ii) a guarantor has contravened paragraph 80(1)(d); (h) shall notify the Commission as soon as practicable where the trustee discovers that it is not eligible to be appointed or to act as trustee under section 69; (i) shall give the debenture holders a statement explaining the effect of any proposal that the borrower submits to the debenture holders before any meeting that— (i) the Court calls in relation to a scheme of arrangement or compromise under subsection 176(1) of the Companies Act 1965; or (ii) the trustee calls under subsection 87(1); (j) shall comply with any directions given to it at a debenture holders’ meeting referred to in sections 86, 87 and 88 unless— (i) the trustee is of the opinion that the direction is inconsistent with the terms, provisions or covenants of the debenture or the trust deed or the provisions of this Act or is otherwise objectionable; and (ii) the trustee has either obtained, or is in the process of obtaining, an order from the Court under section 91 to set aside or vary that direction; (k) shall apply to the Commission for a direction under subsection 89(1) where the trustee upon due inquiry is of the opinion that the assets of the borrower and the guarantor which are or should be available, whether by way of security or otherwise, are insufficient or are likely to become insufficient to repay the amount secured or payable under the debenture to which the trust deed relates when it becomes due; (l) shall apply to the Court for an order under section 91 where— (i) the trustee upon due inquiry is of the opinion that the assets of the borrower and the guarantor which are or should be available, whether by way of security or otherwise, are insufficient or are likely to become insufficient to repay the amount secured or payable under the debenture to which the trust deed relates when it becomes due; or (ii) the borrower has failed to comply with a direction made by the Commission under subsection 89(1); and (m) shall, where the prospectus relating to the debenture contains a statement as to the particular purpose or project for which such amounts are to be applied and— (i) it appears to the trustee that the purpose or project has not been achieved within the time stated in the prospectus or where no time is stated, within a reasonable time; or (ii) it is the trustee’s opinion that notice is necessary for the protection of the interests of debenture holders, give a notice in writing to the borrower requiring it to repay the amounts secured or payable under the debenture to which the trust deed relates within one month after the notice is given and deliver a copy of that notice to the Commission, unless the trustee is satisfied of any or all of the following: (A) that the purpose or project has been substantially achieved or completed; or (B) that the interests of debenture holders have not been materially prejudiced by the failure to achieve or complete the purpose or project within the time stated in the prospectus or within a reasonable time. (2) For the purposes of paragraphs (1)(k) and (1)(l), a trustee in making any application to the Commission or to the Court— (a) shall have regard to the nature and kind of security given when the debentures were first issued or, if no security was given, shall have regard to the position of debenture holders as unsecured creditors of the borrower; and (b) may rely on any certificate or report given or statement made by any advocate, auditor or officer of the borrower or the guarantor if it has reasonable grounds for believing that the advocate, auditor or officer was competent to give or make the certificate, report or statement. (3) A trustee who contravenes subsection (1) shall not be guilty of an offence.