Trust 2

Question 1

Re Gulbenkians Settlement

Answer 1

A settlor/testator who entrusts a power to his trustees must be relying on them in their fiduciary capacity so they cannot simply push aside the power and refuse to consider whether it ought in their judgement be exercised

Question 2

Re Hays settlement

Answer 2

Megarry VC: ‘normally the trustee is not bound to exercise it and the court will not compel him to do so. That, however, does not mean that he can simply fold his hands and ignore it…the duties of a trustee which are specific to mere powers are threefold:
1- the trustee must consider periodically whether or not he should exercise the power
2- consider the range of objects (not a complete list)
3- consider the appropriateness of individual appointments

Question 3

Re Locker’s settlement

Answer 3

The court itself can execute such a discretionary trust if the trustees fail to do so

Question 4

Breadner v Granville-Grossman

Answer 4

Park J: ‘in cases of trust powers the trustees are bound to distribute the income, but have a discretion as to how it should be divided between the beneficiaries. In cases of mere powers the trustees have 2 discretions, whether to distribute and to whom. If in the latter case the trustees don’t exercise within a reasonable time, the discretion no longer exists and the default trust will take effect indefensibly

Question 5

Borrough v Philcox

Answer 5

Lord Cottenham: no individual member of a power can demand that the trustees execute their discretion. No individual member has an interest unless and until the trustees exercise their discretion in favour of that individual. 
[power to dispose of the property amongst nephews and nieces or their children, either all to one of them or to as many as the surviving child thing proper] 
Court will order trust property to be divided equally among the class of all potential beneficiaries

Question 6

Baden No 1

Answer 6

McPhail, Lord Wilberforce: where equal division among all may produce a result beneficial to none- i.e. Where there is a substantial, fluctuating class of potential beneficiaries 
Court would hold that the settlor intended distribution to one or some, but not all.

Question 7

Saunders v Vautier

Answer 7

Where a beneficiary with an absolute interest under a trust is sui juries, he may call for the trust property that represents that interest and the trustees are obliged to transfer the title of it to him- if he is the sole beneficiary this will result in the total collapse of the trust

Question 8

Re kayfort

Paul v Constance

Answer 8

An intention to create a trust

Paul: can create a trust even if unaware- ‘both’

Question 9

Re London wines

Answer 9

Trust uncertain as the bottles were not ascertained