Duties Of Trustees Flashcards
Regal Hastings v Gulliver
“The liability arises from the mere fact of a profit having been made”, former directors were in fiduciary position and didn’t account to company for profits made.
Boardman v Phipps
Defendants, solicitor and beneficiary under the trust, acquired shares in a company to prevent the trust property from losing value. They made a profit. Held that the beneficiary had put himself in a fiduciary position, must account to trust for profits made.
Bristol & West BS v Motthew
If fiduciary has fully informed consent of the principle, he may make a profit.
Armitage v Nurse
There is an irreducible core of duties owed by trustees, if beneficiaries had no rights enforceable against trustees there would be no trust.
Leeroy v Whitely
Fiduciary had to display “no higher degree of diligence than a person with ordinary prudence would exercise in his own affairs”.
Nestle v National Westminster Bank
In respect of investments, take such care “as an ordinary man would take if he were minded to make an investment for the benefit of people for whom he felt morally bound to provide” - in this case there was no breach of trust even though a larger profit could have been made with a different strategy.
Staham v Groit
Higher degree of care owed by trust companies, in this case a trustee was fooled by a forged note from stockbroker, decided that he had acted in accordance to duty of care.
Cowan v Scargill
“The best interests of the beneficiaries are normally their best financial interests”. There is an impartiality requirement, duty to exercise powers whilst holding the scales impartially between the different classes of beneficiaries.
Re Londonderry Settlement
No general obligation for trustees to give full information to anyone who considers themselves entitled to an equitable interest under the trust.
O’Rourke v Derbyshire
Traditional view - information accessible to those with property rights, beneficiaries have property rights to trust property.
Schmidt v Rosewood Trust
New approach - no beneficiary has any right to view trust documents, courts must balance interests of different beneficiaries, the trustees and third parties.
Re Beloved Wilkes Charity
Trustees are under no general duty to explain the exercise of their discretion.
Keech v Sandford
No purchasing of trust property rule. In this case trustee failed to renew lease on behalf of the trust so renewed it for his own benefit. Court held the lease should have been assigned to the beneficiary and the trustee should account for any profits made from it.
Re Hastings-Bass
Courts shouldn’t interfere with actions made in good faith unless (1) what he had achieved is unauthorised by a power conferred on him, or (2) it is clear that he would not have acted as he did (a) had he not taken into account considerations which he ought to have taken into account, or (b) had he not failed to take into account considerations which he ought to have taken into account.
Mettoy Pension Trustees v Evans
“Where a trustee acts on the discretion given to him by the terms of the trust, the court will interfere with his actions if it is clear that he would not have acted as he did had he not failed to take into account considerations which he ought to have taken into account”
Pitt v Holt; Futter v Futter
Both cases concerned claims to set aside decisions under Hastings-Bass, however decisions are only voidable if there was a breach of duty to take into account all relevant matters. Neither party in this case had been in breach of duty, although Pitt v Holt decision could be set aside on mistake.
Re Honerate Settlement
Decision was held void as there had been a breach of duty as well as failure to take all relevant considerations into account.
Armitage v Nurse
There is an irreducible core of duties which cannot be excluded or there would be no trust. Administrative type duties. Case considered validity of provision that trustees would not be liable for any loss/damage to the fund unless it was caused by fraud. Held that clauses excluding liability for negligence or gross negligence can be valid.
Walker v Stones
Concerned dishonesty (liability for dishonest negligence can’t be excluded). Held that dishonesty = where no reasonable solicitor trustee would have considered it to be honest to act in that way.
