Section 185. Liability of trustee for debenture holders

(1) Subject to this section, any provision contained in a trust deed relating to or securing an issue of debentures, or in any contract with the debenture holders secured by a trust deed shall be void so far as the trust deed would have the effect of exempting a trustee from or indemnifying the trustee against liability for breach of trust where the trustee fails to show the degree of care and diligence required as trustee.

(2) Subsection (1) shall not invalidate—

(a) any release of the trust deed otherwise 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 the release of the trust deed to be given—

(i) on the agreement of a majority of not less than three-fourths in nominal value of the debenture holders present and voting in person or, where proxies are permitted, by proxy at a meeting summoned for the purpose; and

(ii) either with respect to specific acts or omissions or on the dissolution of the trustee or on the trustee ceasing to act.

(3) Subsection (1) shall not operate—

(a) to invalidate any provision in force at the commencement of this Act so long as any trustee then entitled to the benefit of that provision remains a trustee of the trust deed in question; or

(b) to deprive any trustee of any exemption or right to be indemnified in respect of anything done or omitted to be done by the trustee while any such provision is in force.