Duty to Invest

Question 1

Re Haari’s Settlement Trusts

Answer 1

“as to them may seem fit” allows trustees to genuinely act as they seem best

Question 2

Re O’Connor

Answer 2

‘however unlimited the power of investment may be, the trustee remains subject to the jurisdiction of the court.

Question 3

Learoyd v Whiteley

Answer 3

A trustee is bound to a higher standard than the ordinary prudent businessperson - they are morally bound to the beneficiaries

Question 4

Bartlett v Barclays Bank Trust Co. Ltd

Answer 4

The duty of a trustee to conduct the business of the trust with the same care as an ordinary prudent man of business would extend towards his own affairs. The court articulated that while trustees are not obligated to avoid all risk and act as insurers of the trust fund, they must distinguish between a prudent degree of risk and hazard. The standard of care expected of trustees may rise if they are professional trustees, indicating that their expertise and experience are relevant factors in assessing their conduct.

Question 5

Nestle v National Westminster Bank plc

Answer 5

same standard as a business man. trustees should not be punished mere errors of judgment. (less strict)

Question 6

Stacey v Branch

Answer 6

Trustees must avoid investments that are attended with hazard, even if they fall within the permitted class of investments. (strict approach)

Question 7

Cowan v Sagill

Answer 7

trustees of a mineworkers pension fund breached their duty by rejecting an investment plan unless it excluded overseas and coal-related investments. The court held that trustees must prioritize financial interests and cannot let personal or political views override them if these views compromise the trust’s financial benefit.

Question 8

Harries v Church Commissioner for England

Answer 8

trustees were argued to have overstepped their powers by prioritizing the spread of Christianity over financial gain. Despite a trust deed restricting investment discretion, trustees implemented a policy to avoid investments contradicting their religious mission, even if it resulted in financial loss. The court held that trustees must prioritize financial interests and cannot further restrict investments beyond what is permitted by the trust deed when seeking maximum returns.