Introduction & General Principles

Question 1

Re Brockbank 1948:

Answer 1

Limits of Trusts

A new trustee was to be appointed. The beneficiaries, all of full age and capacity wanted the remaining trustee to appoint someone they nominated. The trustee purported to exercise the discretion given to him in the trust deed and appointed someone else. Held: The court would not interfere in the exercise of a discretion properly exercised by a trustee. ‘It is said that where all the beneficiaries concur, they may force a trustee to retire, compel his removal and direct the trustees, having the power to nominate their successors, to appoint as such successors such persons or person corporate as may be indicated by the beneficiaries, and it is suggested that the trustees have no option but to comply. I do not follow this. The power of nominating a new trustee is a discretionary power, and in my opinion is no longer exercisable and indeed can no longer exist if it has become one of which the exercise can be dictated by others

Question 2

Saunders v Vautier

Answer 2

Limits of Trusts

eldest beneficiary upon reaching age 21 was able to call for the immediate winding up and transfer of the trust fund to them

Question 3

Drimmie v Davis

Answer 3

Contracts v Trusts

Father and son dental practice. Son agreed to pay brothers and sisters after father died, but subsequently refused to do so upon father’s death. Could executor sue? Held: Father acted as a trustee for his children, and so they could sue. This is still good law today, but evidence of a trust must be strong.

Contracts involve agreements and obligations between parties, while trusts involve the holding and management of assets for the benefit of others, typically established through a fiduciary relationship.

Question 4

Cadbury Ireland Ltd v Kerry Co-operative Creamy Ltd

Answer 4

Trusts v Bailments

Dairy disposal was owner of a number of creameries which supplied milk for Cadbury’s choc factories. Dairy agreed to supply milk to facilitate Cadbury expansion. Dairy subsequently sold a number of creameries to Kerry Co-Op but made an agreement with Kerry that it would continue to supply Cadbury’s. Barrington J held that the relevant clause was not binding because it was at best a commitment that Kerry and Cadbury’s would enter negotiations in future.
Dispute arose in relation the clause 17 and 18 of the contract
Held
The court held that they will not enforce a trust as an exception to the law of privity where it is no more than a commitment to enter into honest negotiations and not a commitment to create a trust in favor of the third party. (Bailment)