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(Standard of care required of a trustee when investing: An ordinary…
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• Summary: Court will be loathe to find a trustee in breach of his duty to invest merely bc he was a bit over-cautious in his dealings with the prop.
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• Ethical considerations in relation to investments have been held to be irrelevant in relation to the investments which a trustee can legally make.
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o The trustees’ duty = To provide for the financial interests of the beneficiaries, not their particular political or personal interests. Entitled to disregard any ethical considerations/desire of the beneficiaries in exercising their power of investment.
• BUT if trust is charitable + has a specific objective, the trustee may be restricted in what she can invest in:
o Harries v Church Commissioners for England: Trustees of a charity charged with the objective of finding a cure for cancer, could not make investments in the tobacco industry given the inherent conflict between the two.
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The final aspect of the duty to invest - most onerous aspect of the duty.
Trustees are obliged to recover all monies properly owing to the trust, even where they believe that it is not in the overall interests of the trust to do so.
A trustee only be exempt from bringing an action to recover money where they believed the action would fail.
If a trustee brings a legal action on behalf of the trust which fails, the onus is on the trustee to show that it was reasonably necessary to bring the action.
Re Beddoe: It is an objective test in deciding whether a trustee should have brought an action or not.
Re Brogden: Trustees were in breach of their duty to safeguard the assets of the trust, they should have taken every step to secure payment irrespective of their personal feelings.