MAURITIUS Law and Practice Contributed by: Johanne Hague, Ashwin Mudhoo, Medina Torabally and Yushrah Bayjou, CMS Prism in association with CMS
trustee, the trustees have to work together in accord - ance with the terms of the trust. Foundations Individuals may also make use of a foundation as an alternative to the use of a will or a trust for succession planning and wealth management. A foundation is an amalgam of a trust and a company, and is governed by the provisions of the Foundations Act 2012. As per the Foundations Act 2012, every foundation shall have a council to administer the property of the foundation and carry out the objects of the foundation. In so doing, the council must conduct the affairs of its foundation in accordance with its charter and articles as well as the Foundations Act 2012. The council also has the duty to supervise the management and con - duct of its foundation, and act honestly and in good faith with a view to promoting the best interests of the foundation. The council must also exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. 6.2 Fiduciary Liabilities Foundations The Foundations Act 2012 caters for the personal liability of officers and members of the council. The Foundations Act 2012 states that (i) nothing in the charter or articles of a foundation, if any, or (ii) in a contract between a foundation and an officer of the foundation or a member of its council, shall relieve, release or excuse that person from any liability arising from any fraud, wilful misconduct or gross negligence committed by such person. Trusts Similarly, the role of trustee is an onerous one. The duties of a trustee range from the fundamental fiduci - ary duties to act in good faith to obligations to act in accordance with the terms of the trust instrument. The Trusts Act 2001 provides that a trustee who commits or concurs in a breach of trust shall be liable for: • any loss or depreciation in value of the trust prop - erty resulting from the breach; and • any profit which would have accrued to the trust had there been no breach if the trustee is found to
have acted in breach of the Trusts Act 2001 and contrary to the terms of the trust. A trustee may not set off a profit accruing from one breach of trust against a loss or depreciation in val - ue resulting from another. Where trustees commit a breach of trust, they shall be liable jointly and sever - ally. Furthermore, the Trusts Act 2001 stipulates that noth - ing in the terms of a trust shall relieve a trustee of liability for a breach of trust arising from their own fraud, wilful misconduct or gross negligence. The Trusts Act 2001 states nonetheless that a benefi - ciary may relieve a trustee of liability for a breach of trust and also indemnify the trustee against liability for breach of trust, provided that the beneficiary: • is not a minor or a person under legal disability; • has full knowledge of all material facts; and • was not improperly induced by the trustee. The competent court may also relieve a trustee whol - ly or partly of liability for a breach of trust, where it appears to such court that the trustee has acted hon - estly and reasonably and ought fairly to be excused (i) for the breach of trust; and (ii) for omitting to obtain the directions of such court in the matter in which the breach arose. In circumstances where a trustee commits a breach of trust at the instigation of, at the request of or with the concurrence of a beneficiary, the court may, whether or not the beneficiary is a minor or a person under legal disability: • order the defaulting beneficiary to indemnify the trustee in respect of the consequences of the breach of trust; and • order the trustee to appropriate any part of the interest accruing to the beneficiary for that pur - pose. Additionally, trustees may limit their liability through exclusion clauses in the trust deed, save for breach of trust and the exclusions set out above. Trustee
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