Trustees' Duties Flashcards
Bristol and West Building Society v Mothew (1996)
The distinguishing obligation if a fiduciary is the obligation of loyalty - Millett LJ
Boardman v Phipps (1967)
Solicitor to a trust - restrictive nature of the trust investment powers, trustees could not make purchases. He purchased a controlling share to enable him to carry out his plans. Company made substantial profits for both himself and the trust. Courts held that Boardman held his profits on constructive trust for the trustees.
Was able to retain a portion of profits on a quantum merit basis.
Speight v Gaunt (1881)
Trustee should act as an ordinary prudent man of business
Sinclair Investments v Versailles Trade Finance [2011]
Reasserted that a beneficiary will only have a personal claim against a fiduciary in respect of property
Attorney-General for Hong Kong v Reid [1994]
Judge ruled that the money made from a bribe should be held on constructive trust - equitable maxim equity sees that which ought to be done as done
Lister and Co v Stubbs (1890)
Could only establish a personal claim against a trustee, as the monies never belonged to the company
Keech v Sandford [1726]
Trustee cannot retain any profits from breach of trust
Boardman v Phipps [1967]
Fiduciary cannot retain profits for themselves, held on constructive trust for the trustees.
Boardman was able to retain a portion of the profits on a quantum meruit basis for his efforts
Holder v Holder [1968]
Tried to renounce position as executor, however rendered ineffective. Held no conflict of interest on the purchase of the barn as the defendant had paid a fair price and had not authorized the sale.
Harries v Church Commissioners [1992]
Charitable trusts might be able to avoid investments which clashed with their ethical objectives, even if it caused a loss
Cowan v Scargill [1984]
Paramount duty of trustees is to provide the greatest financial benefits for the present and future beneficiaries
Schmidt v Rosewood Trust [2003]
Beneficiaries are allowed to see trust documents (subject to confidentiality) because beneficiaries and potential beneficiaries are entitled to protection from the court. Courts have discretion to order disclosure of documents including confidential ones, will take into account all interests when deciding whether to exercise this discretion.
Re Londonderry’s Settlement [1965]
Beneficiaries are not allowed to demand documents that contain the trustee’s deliberations on a discretion of power, as trustees are not bound to disclose their reasons. Disclosure would cause bad feelings within families and no trustees would accept office if they thought that their decisions would be ooen to challenge
Turner v Turner
Trustees must not simply do what the settler tells them to, they must exercise their own autonomy
Re Diplock [1948]
Failure to distribute the trust property in or distributing the trust property to the wrong person is a breach of trust
Bray v Ford [1896]
Fiduciary cannot retain any unauthorized profits
Nestle v National Westminster Bank plc [1991]
Trustees must treat all beneficiaries even-handedly. Trustees are to be judged on their investment policies overall rather than on individual failures -modern portfolio theory
Pilkington v IRC [1964]
Advancement or benefit must be used to to improve the material situation of the beneficiary
Re Pauling’s ST [1964]
Advancement for a specific purpose, trustees must check that the purpose has been carried out
Re Manisty’s Settlement
Court may intervene if trustees act capriously
Townley v Sherborn (1633)
Leaves running a trust to a co-trustee without inquiry
Target-holdings ltd v Redfern (1996)
Liability is fault based, D is only liable for consequences of the legal wrong he has committed
Bartlett v Barclays Bank Trust (1994)
Set-off may be permitted loss and gains arose out of some wrongful investment policy
s.61 Trustee Act 1925
Court power to relieve trustees from liability
