Section 213 CAMA 2020

Liability of trustees for debenture holders

(1) Subject to the provisions of this section, anything contained in a trust deed for securing an issue of debentures, or in any contract with the holders of debentures secured by a trust deed, is void if it would have the effect of exempting a trustee from or indemnifying him against liability for breach of trust, where he fails to show the degree of care and diligence required of him as trustee, having regard to the provisions of the trust deed conferring on him any power, authorities or discretion.

(2) Subsection (1) does not invalidate—
(a) any release validly given in respect of anything done or omitted to be done by a trustee before the giving of the release ; or
(b) any provision enabling such a release to be given—
(i) on the agreement of a majority of not less than three quarters in value of the debenture holders present and voting in person or, where proxies are permitted, by proxy at a meeting summoned for
that purpose, and
(ii) either with respect to specific acts or omissions or on the trustee dying or ceasing to act.

(3) Subsection (1) does not operate to—
(a) invalidate any provision in effect at the commencement of this Act in any such trust deed or contract, provided that any person entitled to the benefit of that provision, or afterwards given the benefit thereof under subsection (4), remains a trustee of the trust deed in question ; or
(b) deprive any person of any exemption or right to be indemnified in respect of anything done or omitted to be done by him, while any such provision was in effect.

(4) While any trustee of a trust deed remains entitled to the benefit of a provision exempted by subsection (3), the benefit of that provision may be given—
(a) to all trustees of the deed, present and future ; or
(b) to any named trustee or proposed trustee, by a resolution, passed by a majority of at least three-quarters in value of the debenture holders present in person or, where proxies are permitted by proxy at a meeting summoned for that purpose in accordance with the provisions of the trust deed or, if
the trust deed makes no provision for summoning meetings, a meeting summoned for that purpose in any manner approved by the Court.