Trusteeship

Rule Prohibiting delegation of functions

Duty to not profit from the trust

Remuneration

Profit

Self-dealing rule

Craddock v Piper if solicitor acting as a trustee entitled to be paid legal fees for your work on the trust concerning some litigious matter in court

Hayton - dont want trustees swayed by personal interest

no automatic right to remuneration (Default position no pay) can contract to pay - s24 1893 Trustees Act

fair-dealing rule

Basic Rule

Keech v Stanford established rule

Holder v Holder farmed died and made son executor of will, son wanted to purchase main asset of will and wanted to renounce executorship, unable to do so - asked beneficiary any problem with him purchasing farm - bought farm - 7 years later 1 beneficiary tried to have it set aside on self-dealing rule - no special knowledge from position as trustee as came by knowledge working and living on farm - made it clear throughout intended to purchase farm

Tito v Waddell

if trustee purchase beneficial interest of property - transaction can be set aside unless trustee can show taken no advantage of his position, full disclosure to beneficiary, transaction fair and honest

if power delegated trustee, trustee can't delegate that power to someone else

O'flanagan and Ryan appointed wife as trustee, she wanted to apoint someone else - can't do that

s17 Trustees Act 1893 - can entrust funds to professionals such as Solicitors and Barristers

duty to distribute in accordance with trust instrument

s49 Succession Act 1965 - if make distribution under will, publish intended distribution notice and don't distribute for 6 weeks

Duty to invest

prudent care

authorised investments

Rule in Hastings v Bass

Sieff v Fox advisers to trustees wrongly advised about tax conseqeunces, tax liability arose- when trustee acts under discretion given to them by terms of trust and free to decide discretion, but effect of act is different from what was intended - court intervenes if clear had they not taken into account wrong considerations

duty to properly exercise discretion

Green v Cobham purpose to avoid tax implications

Pit v Holt only applies where breach of trust, mere misunderstandings of effect of an action not sufficient (UK SC) - major limitation

Greene v Coady pension plan in deficit, decision to wind it up, options to wind up now and employer contribute or wait till deficit gone - trustees voted to take contribution now, court - look through vision of trustee and not with benefit of hindsight (Irish HC) - not liable acted honestly, reasonably and in good faith for best interests of the beneficiaries

trustee powers

Power to compromise actions

power of maintenance for minors

Trust for Sale

power to insure property

Power of sale

Trustee

Appointment

termination

resignation

removal

remedies

defences

not a power - obligation to invest

a number of acts of statute that sets authorised investments

Stacey v Branch act honestly as a prudent man, in selecting investments take as much care as a prudent business man - duty to avoid investments potentially hazards

*Learoyd v Whitely - standard of care - invest in authorised investments - behave as an *ordinary prudent man of business - acting for those morally obliged to provide for

Spencer v Kinsella trustee given absolute discretion in how to deal with trust property - held - even with absolute discretion still need to carry out care with reasonable care and prudence

investments separate - if make 2 investments 1 a big success the other a loss, can take benefit and sue for the loss - Dimes V Scott

Bartlett v Barclays Bank used trust mone to build 2 unauthorised construction projects, 1 made money other lost, successfully argued connection between both

Knott v Coffee can be personally liable as a trustee for lossess

when performing duties or exercise power consider everything that is relavent and exclude everything that is irrelevent - if actions has unintended consequences can reverse it

Hastings v Bass

s50 Succession Act 1965 - can sell property for purpose of paying debts of deceased person

Howe v Dartmouth - power to sell may become duty to sell - preserving trust property not always practical - for example if assets of wasting nature like stable of race horses

s14 1893 act empowers trustee to sell any property he holds under trust which is subject to depreciation

s21 - trustees power to compound liabilities (settle them) provided acting in good faith

ensure mainteance payments to minors till they reach age

s18 Trustees Act 1893 entitled to insure 3/4 of property - take it from trust income

assets can't be substantially diminished by taking it from trust property

may give power to appoint to a truste or another party nominated in trust document

s10 Trustees act 1893 - trustee may be appointed in writing - exercised by person nominated for purpose appointing new trustees

can be provided for by trust instrument

court has inherent jurisdiction to remove trustees

Arnott v Arnott could be removed by plaintiff if trustee uncooperative and making trust basically inopperable - persistent non-cooperation , - can also apply to situations of dishonesty, incompetancy - could remove if welfare of the beneficiaries demanded it

personal liability when act in breach of trust

can be sued for breach of trust and beneficiary can claim any profit gained from breach of trust

consent

honest mistake

statute of limitations

trustee fiduciary - owes fiduciary duties to beneficiaries under the trust

no automatic right - Hutton v West Cork Railway

can be authorised in a few ways

trust instrument

statute

direction of court

contract with beneficiary

1893 s24 can be reimbursed for reasonable expenses incurred / Courtney v Rumley

in practice professional trustee will ensure express provision made for remuneration

Protheroe husband legal owner of lease, he and wife beneficial owners - used legal title to buy freehold reversion - sold property - held - constructive trust arisen - not entitled to profit from office - not able to profit from position

absolute rule, prevents trustees from purchasing trust property - purchase voidable - intention not important

onus of proof on trustee to show did not breach fair dealing rule Thompsons Settlement

Delany - not inflexible rule can delegate in situations of legal or moral necessity

s24 trusteess act 1893 - trustee indemnified for any acts or ommissions by fellow trustees or bankers or bankers unless guilty of wilful default

Duty to Distribute

Delany - trustee obligation to identify those entitled under trust and take necessary steps to ensure trust distributed in accordance with terms

s49 -succession act 1965 - immune from liability if he public notice of intended distribution 6 weeks prior to distribution

Re Benjamin testators son disappeared, entitled to share in fathers estate - court held - son presumed dead and gave trustees liberty to distrbiute share- allowed after 7 years

invest in authorised securities only and exercise ordinary prudence

first thing to look at is terms of trust instrument

if no express investment clause may invest in accordance with Trustees 1893

Minister may vary list

Trustee Authorised Investments Acts 1958k 1998, 2002

Delany even within authorised investments has to observe certain standards

Bartlett higher duty of care expected of a professional trustee

Hudson - Rule acted as a kind of magic eraser

make decision based on what trustees knew or ought to have known, trustees exclude irrelevant matters

no inherent power to sell trust property but to preserve trust

exceptions

trust instrument confers power

court orders sale

power to sell pursuant to statute

s20 - can issue receipts for purchasers which exonerates purchaser from acting in breach of trust

s43 conveyancing act 1881- absolute discretion to pay minors - parent or guardiance income for benefit of maintenance, education or other benefit

settlor appoint trustee when creating the trust

s25 1893 act - court power to appoint trustee when expedient to do so

inherent power in all beneficiaries to appoint trustee where they are all sui juris

Re Wheeler doesn't apply if person deemed unfit to act doesn't mean incapable

beneficiaries off age give unanimous agreements

s10 or 25 applicable

may disclaim appoint and refuse to take office at outset - preferable expressed by deed

if accepted office and failed to disclaim only retire in limited circumstances

if provided for in trust instrument

if all beneficiaries sui juris and agree

s11 1893 - if at least 2 co-trustees left and agree

if s10 or s25 applies

Moore v McGlynn defendant discharged from performacne where set up rival business in competition to what he was a trustee of - personal interests and and duty to trust may conflict (conflict of interest)

LRC recommendations from 2005

general statutory duty of care - objective reasonable care and skill - take into account special knowledge or expertise trustee may have

modifications for charitable trustees- must act in interests of charity

certain persons not elgible - minor, ward of court, bankrupt person, corporate trustee of trust in liquidation or wound up, person convicted of indictable offence or sent to prison, person disqualified or restriction

recommends expansion of trustees powerss of delegation

remove restriction on insurance to 3/4 of value

no changes to authorised securities - and no statutory provision for payment of trustees

Wyle - position of trustee extremely exacting one and frequently a thankless one

Ormsby not an automatic entitlement

*Boardman v phipps* solicitor for family trust, bought shares, made personal profit - not allowed - acting in fiduciary capacity

Speight v Gaunt duty to act like an ordinary man of business

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