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Property Law - Trustee Duties Flashcards

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1
Q

VC Nicholls in Harries v Church Commissioners

A

Two circumstances to fetter discretion - (1) business runs directly contrary to charity purpose OR (2) likely to lose donors. balancing exercise

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2
Q

When there is a breach of fiduciary duty, what can T not rely on?

A

A clause which excludes his responsibility for such a breach - would allow T to take personal advantage of S’s confidence

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3
Q

Schmidt v Rosewood general

A

Late father, object of PoA

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4
Q

Re Arnott judgment

A

Where there is a second ‘sleeping T’ for the purposes of formalities, no liability if they act in good faith and follow direction of the ‘proper’ T

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5
Q

Downes v Graysbrook general

A

Selling

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6
Q

Breakspear v Ackland

A

Briggs J held letters of wishes are generally subject to Londonderry principle - predominant purpose is to help decisions, so should be confidential

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7
Q

Jeffrey v Gretton

A

when assets include real estate, s.4 TA2000 requires Ts to consider if property should be sold

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8
Q

Millett LJ in Armitage v Nurse

A

‘irreducible core of obligations’, showing a right is meaningless unless B is aware of their rights

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9
Q

Section 3 TA2000

A

T can make any investment as if he were absolutely entitled to the property

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10
Q

What two cass are examples of Bs using injunctions to prevent T from acting in an unauthorised way?

A

Fox v Fox; Buttle v Saunders

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11
Q

What case rejected the proprietary analysis from Re Londonderry’s?

A

Schmidt v Rosewood

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12
Q

Re Whiteley

A

Higher standard of DoC in investment sphere - ordinary prudent man minded to make investment for the benefit of other people

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13
Q

Saif-Ali v Sydney Mitchell

A

Court treats Ts same as professionals when considering duty of skill and care - needs to be something no member of the profession would reasonable have done

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14
Q

What case shows the right to be provided with trust accounts is regardless of possession of trust property?

A

Armitage v Nurse

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15
Q

Bartlett v Barclays Bank judgment

A

If trust property involves a controlling interest in a private company, should use power to improve running of the company

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16
Q

What are the three main duties of a T?

A

Comply with the terms of the trust instrument and general law; act exclusively in Bs interest, and; take reasonable care

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17
Q

Fox v Fox

A

Payment to a non-B prevented through injunction

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18
Q

Failure to render trust property financially productive = BoD

A

Byrnes v Kendle

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19
Q

Schmidt v Rosewood judgment

A

Rejected proprietary analysis - right is incidence of court’s inherent supervisory jurisdiction over administration of trusts. They relied on an enforcement idea linked with supervisory action, AND likely intention of S that his son was to benefit

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20
Q

Tierney v King judgment

A

Court may allow settlor-B to forego right to information nevertheless in cases where, e.g., S holds a sensitive public office

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21
Q

Harries v Church Commissioners judgment

A

Two circumstances to fetter discretion - (1) business runs directly contrary to charity purpose OR (2) likely to lose donors. balancing exercise

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22
Q

Speight v Gaunt

A

Ts held to standard of ordinary business person dealing with their company for DoC

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23
Q

Section 4 TA2000

A

Requirement to review investments and economic portfolio theory (Langbein)

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24
Q

Section 1 Trustee Act 2000

A

T needs to exercise care and skill, with regard to special knowledge he holds himself as having (subjective) and what is reasonable to expect him to know in the course of his business (objective)

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25
Q

Brittlebank v Goodwin

A

Sui juris B needs to be told he is a B, and T owes a concomitant duty to tell B

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26
Q

‘Perhaps the most important duty of a T’ is the duty to comply with the trust instrument

A

Youyang Pty Ltd v Minter Ellison

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27
Q

How can Bs stop Ts acting in an unauthorised way?

A

Injunction

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28
Q

Nestle v Natwest judgment

A

Remarkable inactivity was not enough for BoD - needs to be a decision no reasonable T would have made

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29
Q

Companies Act 2006

A

Clearly distinguishes between duty to act within powers and duty based on loyalty without reference to fiduciary duties at all

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30
Q

Part 4 Charities Act 2011

A

Registration requirements for charitable purpose can be seen as a duty to inform AG and CC in enforcer capacity of existence of the trust

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31
Q

What case is said to have caused the ‘tortification’ of equitable rules?

A

Donoghue

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32
Q

What distinction does Hayton point to under duty of care?

A

Between gross negligence and recklessness - only liability for the former can be excluded due to positive disregard for the trust in the case of recklessness

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33
Q

Armitage v Nurse on provision of trust accounts

A

The right exists regardless of possession of the property

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34
Q

Baxendale-Walker v Middleton general

A

Lending

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35
Q

If the core duties are excluded from a trust, what happens?

A

Conceptually, S cannot have created a trust

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36
Q

Part 8 Charities Act 2011

A

Similar function by Charity Ts filing accounts with CC as Bs having access to trust accounts

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37
Q

Kemp v Burn

A

B can exercise right to inspect Ts accounts on whereabouts of trust property at reasonable intervals

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38
Q

what case shows there may be exceptions to the right of Bs to information?

A

Tierney v King

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39
Q

Hayton on Armitage v Nurse

A

Jacob J went too far - T needs to at least be under a duty to act conscious of the terms of the trust

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40
Q

Economic portfolio theorist

A

Langbein

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41
Q

Bank of Nova Scotia Trust v Ricart de Barletta

A

Give regard to letter of wishes before ANY discretionary decision

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42
Q

What are two issues with the proprietary analysis from Re Londonderry?

A

Hard to explain why any should be confidential, and suggests objects should not be entitled to disclosure

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43
Q

When lending, Ts must secure commercial rate of interest

A

Baxendale-Walker v Middleton

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44
Q

Cowan v Scargill general

A

Miners, energy products, investment policy

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45
Q

ordinary prudent man minded to make investment for the benefit of other people

A

Re Whiteley

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46
Q

What does Hayton argue the greater the reduction in T duties?

A

Greater the need for full and frank disclosure to beneficiaries

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47
Q

Hayton on notification with Bs AND objects of PoA

A

If there are both, objects have no right to info as existence of Bs means the objects rights are not crucial to the trust

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48
Q

Who said S cannot reserve an overriding power to release Ts from liability as it makes T only accountable to S, repugnant to the trust concept?

A

Hayton

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49
Q

What did Hayton argue about S reserving certain powers?

A

S cannot reserve an overriding power to release Ts from liability as it makes T only accountable to S

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50
Q

What judge and in what case thought letters of wishes are generally subject to Londonderry principle?

A

Breakspear v Ackland

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51
Q

Baxendale-Walker v Middleton judgment

A

When lending, Ts must secure commercial rate of interest

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52
Q

Re Manisty’s Settlement on several objects of PoA

A

If there are several objects, it may be that only the primary needs to be informed of his potential benefit

53
Q

Buttle v Saunders judgment

A

Prevented T from following through with the morally obligated but legally void agreement

54
Q

Re Arnott general

A

‘Sleeping’ T

55
Q

What section of what Act gives both an objective and subjective element to determine DoC of T?

A

Section 1 Trustee Act 2000

56
Q

Re Jeffrey

A

All duties of care can be excluded in relation to investment, except the duty of good faith

57
Q

Mismanagement and T inaction

A

Bartlett v Barclays Bank

58
Q

what Act clearly distinguished between a duty to act intra vires and a duty based on loyalty without reference to ‘fiduciary’?

A

Companies Act 2006

59
Q

What two cases show no BoD unless something no reasonable T/professional would have done?

A

Said-Ali v Sydney Mitchell; Nestle v Natwest

60
Q

How can we see the notification of Bs reflected in statute?

A

Part 4 CA2011

61
Q

Miners, energy products, investment policy

A

Cowan v Scargill

62
Q

Who and in what case allowed exemption of T from liability unless damage caused by ‘actual fraud’?

A

Armitage v Nurse, Jacob J

63
Q

Who wrote extra-judicially that the prohibition in Cowan v Scargill on investment policies might be defeated by professional advice confirming equal financial benefit of other investments?

A

Lord Nicholls

64
Q

What section of what Act gives a requirement to review investments and economic portfolio theory (Langbein)

A

Section 4 TA2000

65
Q

Buttle v Saunders general

A

Gazump

66
Q

Mowbray and Hayton on protectors and supply of information

A

They hold the right to obtain information solely as a fiduciary - the power cannot be purely personal to him

67
Q

Re Londonderry’s Settlement judgment

A

Material that is not either trust accounts or another trust document (e.g. correspondence) need not be disclosed - proprietary analysis of trust documents such that B equitably owns them

68
Q

Nestle v Natwest general

A

Failing to review investment suitability, 10x more if Tracker Fund

69
Q

Byrnes v Kendle

A

Failure to render trust property financially productive = BoD

70
Q

Who believes T’s duty should not be described as a fiduciary duty, as causes confusion with other fiduciary duties?

A

Mitchell

71
Q

What case gives the standard individuals are held to under DoC?

A

Speight v Gaunt

72
Q

Cowan v Scargill judgment

A

Illegitimate policy and no interest of Bs anyway in prolongation of mining because they’re retired

73
Q

what part of statute reflects common law requirement to provide trust accounts?

A

Part 8 CA2011

74
Q

B can exercise right to inspect Ts accounts on whereabouts of trust property at reasonable intervals

A

Kemp v Burn

75
Q

What type of measure is the fiduciary duty to act in Bs exclusive interests?

A

A prophylactic measure

76
Q

How does Hayton characterise gross negligence?

A

A positive disregard for the terms of the trust

77
Q

What have courts recently begun to say in the context of a fiduciary duty to act in Bs exclusive interests

A

Breach of the fiduciary duty not only results in invalidation of the agreement/contract/transfer, but also the incurrence of liability to pay compensation, following inequitable primary/secondary obligation distinction from contract

78
Q

What section of what Act allows section 1 TA2000 to be excluded by an express term?

A

Schedule 1, paragraph 7 TA2000

79
Q

How does Mitchell argue the term fiduciary duty causes confusion?

A

In a solicitor/client relationship, it suggests a duty of undivided loyalty, not just of care; it suggests acting ultra vires is itself dishonest for a T, which is not true unless solicitor/client relationship; and Companies Act 2006

80
Q

‘Unethical’, Bishop of Oxford

A

Harries v Church Commissioners

81
Q

What three things can a T do if he goes against the terms of the trust (he must do one)?

A

Return misapplied assets in specie, obtain and deliver replacement property or pay in current monetary value the missing property

82
Q

Lord Nicholls extra-judicially on Cowan v Scargill

A

If Ts gain professional advice that other investments are equally satisfactory from a financial point of view, they can choose these investments instead

83
Q

Who gave the two circumstances to allow fetter of discretion in investment of trust property, and in what case?

A

VC Nicholls in Harries v Church Commissioners

84
Q

What cases exemplify the adoption of an illegitimate investment policy by Ts?

A

Cowan v Scargill; Harris v Church Commissioners

85
Q

What was the common law position for settlors prior to TA2000?

A

Had to exclude restrictive common law limitations on Ts

86
Q

what does Mitchell argue about T’s duty being fiduciary?

A

Causes confusion with other fiduciary duties, e.g. solicitor and client

87
Q

What case gave a proprietary analysis of trust documents?

A

Re Londonderry’s Settlement

88
Q

What is the economic portfolio theory?

A

Whether or not high-risk investment is negligent depends on the proportion put into it, which is crucial to achieving purposes of the fund - 40:60 ratio for equity and property is ideal. THE NEED TO BALANCE OUT RISK.

89
Q

Failing to review investment suitability, 10x more if Tracker Fund

A

Nestle v Natwest

90
Q

Youyang Pty Ltd v Minter Ellison

A

‘Perhaps the most important duty of a T’ is the duty to comply with the trust instrument

91
Q

Who applauded the Companies Act 2006 for avoiding the fiduciary duty confusion?

A

Mitchell

92
Q

Tierney v King general

A

settlor-B, public office

93
Q

What section of what Act gives situations when a DoC applies to T?

A

Section 2 Trustee Act 2000

94
Q

If a T acts against a wish in a latter of wishes, what could this mean?

A

Although they are not legally binding, and thus T COULD ignore it, Ts exercise may be seen as capricious as he should act in accordance with S’s wishes

95
Q

Chase Manhattan Equities v Goodman

A

A letter of wishes can override trust deed exceptionally if S intends the letter to be legally binding

96
Q

How can a beneficiary use trust property to benefit B in a non-financial way?

A

Let them live in the house

97
Q

What case gives the basic rule that a B must be notified they are a B?

A

Brittlebank v Goodwin

98
Q

All duties of care can be excluded in relation to investment, except the duty of good faith

A

Re Jeffrey

99
Q

What are restrictions on the exercise of a Ts powers known as?

A

A disability - no primary/secondary obligation distinction, as in contract

100
Q

How is Schmidt different from Londonderry?

A

In Schmidt, the son was an object of a PoA, not a B already

101
Q

What case gave a higher standard of DoC in the investment sphere than given in Speight v Gaunt?

A

Re Whiteley

102
Q

What happens to T duty if the trust property only has financial value?

A

T must prioritise financial considerations of the property

103
Q

Armitage v Nurse per Jacob J

A

Allowed exemption of T from liability unless damage caused by ‘actual fraud’, which didn’t include recklessly disregarding the terms of the trust if done honestly

104
Q

what case made it clear that the decision needs to have been one no reasonable T would have made for breach of duty of care?

A

Nestle v Natwest

105
Q

When selling property, Ts must get best price possible

A

Downes v Graysbrook

106
Q

A letter of wishes can override trust deed exceptionally if S intends the letter to be legally binding

A

Chase Manhattan Equities v Goodman

107
Q

What do Ts not have to do when exercising their discretion?

A

Explain themselves

108
Q

What case show that Where there is a second ‘sleeping T’ for the purposes of formalities, no liability if they act in good faith and follow direction of the ‘proper’ T?

A

Re Arnott

109
Q

Give regard to letter of wishes before ANY discretionary decision

A

Bank of Nova Scotia Trust v Ricart de Barletta

110
Q

Harries v Church Commissioners general’

A

‘Unethical’, Bishop of Oxford

111
Q

Bartlett v Barclays Bank general

A

Mismanagement and T inaction

112
Q

What does Hayton believe about notification?

A

Is a core, non-excludable duty, as well as supplying Bs with enough info that they can actually enforce their rights

113
Q

When is T not liable for loss?

A

When actions are authorised and she performs managerial/administrative functions with skill and care

114
Q

what happens to a letter of wishes if it is made legally binding?

A

It is able to be disclosed to Bs

115
Q

What case shows Court treats Ts same as professionals when considering duty of skill and care?

A

Saif-Ali v Sydney Mitchell

116
Q

Downes v Graysbrook judgment

A

When selling property, Ts must get best price possible

117
Q

What section of what Act enforces that T can make any investment as if he were absolutely entitled to the property?

A

Section 3 TA2000

118
Q

what is the proprietary analysis of trust documents?

A

Any trust docs created by expenditure of trust property is equitably owned by B

119
Q

How does Hayton characterise recklessness?

A

A negative state of lack of attention

120
Q

Re Londonderry’s Settlement general

A

B wanted to challenge small sums proposed to be distributed to her

121
Q

What specific duty of care does Hayton say cannot be excluded?

A

Duty to act in good faith

122
Q

What case stated that if assets include real estate, s.4 TA2000 requires Ts to consider sale of property?

A

Jeffrey v Gretton

123
Q

Who said Jacob J in Armitage v Nurse went too far?

A

Hayton

124
Q

Section 2 Trustee Act 2000

A

Schedule 1 highlights when DoC applies to T - e.g. investing/buying land

125
Q

what does a lack of a duty to explain on the behalf of Ts mean in practice?

A

Ts may sometimes do things for a reason inconsistent with S’s desire, but lack of transparency may be what S intended to avoid disputes over desires of S told to T

126
Q

Gazump

A

Buttle v Saunders

127
Q

Why do H&M believe the courts have started to adopt a primary/secondary obligations distinction?

A

Due to Donoghue - ‘tortification’ of equitable rules so that judges believe that breach of a duty in private law automatically leads to compensation

128
Q

Schedule 1, paragraph 7 TA2000

A

Section 1 TA2000 can be excluded by an express term in the trust deed

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