Celebrated for their conceptual clarity, titles in the Clarendon Law Series offer concise, accessible overviews of major fields of law and legal thought. This chapter considers the law on the modification of the duties of trustees. Express trustees' duties are in practice often modified by the terms on which the settlor establishes the trust. Depending on its particular wording, such a modification can operate either to adjust the duty itself or to adjust the liability that the trustees would otherwise incur upon breaching the duty. Section 61 of the Trustee Act 1925 provides that where trustees have breached their duty, but in doing so they acted honestly and reasonably, the court can negative their liability if it thinks it fair to do so. Trustees also incur no liability for breach of trust if they act with their beneficiaries' consent.
Chapter
10. Modification
Chapter
12. The appointment of trustees
Titles in the Complete series combine extracts from a wide range of primary materials with clear explanatory text to provide readers with a complete introductory resource. This chapter discusses the following: the different types of trustee; the number of trustees required; the general duties of trustees; trustee decision making; disclaiming trusteeship; who is eligible to be a trustee; who has power to appoint trustees, express and statutory powers; the appointment of trustees by the beneficiaries; the appointment of trustees by the court; the vesting of the legal estate in the trustees; the retirement of trustees; and the removal of trustees; protection of beneficiaries.
Chapter
15. Settled Land Act settlements
Course-focused and comprehensive, the Textbook on Land Law provides an accessible overview of one key area on the law curriculum. This chapter briefly discusses the Settled Land Act (SLA) settlement, the other form of trust which still exists in relation to land. It addresses the following three questions: who holds the legal estate in settled land? Are there trustees? What sort of property may be subject to a SLA settlement?
Chapter
12. Remedies for breach of trust
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. When property is held on trust, arising expressly or implied by law, any breach of the trustee/fiduciary obligation will lead to a remedy. This chapter explains the personal and proprietary remedies available to the claimant. A personal claim is one made against the trustee/fiduciary personally; it is not based upon the recipient having the property in their possession. A proprietary claim is based upon the defendant having the property or its replacement in their possession and being required to return it, or its substitute, to the claimant. The claimant, after identifying the breach, will often have the choice of which claim to make and there may be more than one possible remedy.
Chapter
11. Securing Performance
Celebrated for their conceptual clarity, titles in the Clarendon Law Series offer concise, accessible overviews of major fields of law and legal thought. The law advertises the express trust device as a means by which settlors can achieve their intentions. But the mere fact of making a trust — placing the property with trustees, and putting them under a legal obligation to carry out those intentions — does not guarantee that outcome. This chapter reviews the mechanisms that help to ensure its delivery. It first looks at mechanisms calculated to ensure that trusts are performed at all. It then considers mechanisms calculated to see that they are performed properly.
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13. Breach of Trust and Remedies
Celebrated for their conceptual clarity, titles in the Clarendon Law Series offer concise, accessible overviews of major fields of law and legal thought. This chapter examines when trustees can be sued for failure to perform their duties and the remedies that may be available against them. The basic remedy available against trustees is an order requiring them to perform their obligations under the trust, or to refrain from breaching those obligations. But it is impossible to make an order requiring a trustee to perform the trust obligations (or to transfer it to a new trustee, or to give over the function to a judge) if the trust property is no longer in the trustee's hands. Where this is the case, the law requires the trustee first to repair the loss to the trust fund and then to perform his duties regarding it. The trustee's liability to make up the trust fund in this way is an aspect of his duty to ‘account’. The trustee's liability to account thus allows the trust objects to demand that he make up a shortfall in the trust assets, where that shortfall stems from a breach on his part.
Chapter
16. Resulting Trusts
Celebrated for their conceptual clarity, titles in the Clarendon Law Series offer concise, accessible overviews of major fields of law and legal thought. This chapter deals with resulting trusts. A resulting trust is a trust whose beneficiary is also the person from whom the trustee acquired the trust property: a beneficial interest ‘results’, i.e. jumps back, to him. The generation of a resulting trust can be explained by the notion of proprietary inertia. Proprietary inertia holds that whenever someone has not demonstrably chosen to give his property away and succeeded in doing so, he should remain its owner. In other words, the transferee of some property should hold it on trust for the transferor whenever the transferor has not demonstrably chosen to give his property away and succeeded in doing so.
Chapter
9. Dispositive Discretions
Celebrated for their conceptual clarity, titles in the Clarendon Law Series offer concise, accessible overviews of major fields of law and legal thought. This chapter considers the questions that arise when trustees are given a dispositive discretion, i.e. the power to decide whom to pay, how much, and when. It first identifies five of the most important types of dispositive discretion: discretionary trusts; powers of appointment; powers of accumulation; powers of maintenance; and powers of advancement. It then turns to the duties and certainty requirements in trusts involving dispositive discretions. There are two main ones. The first is remaining within the terms of the disposition as laid down by the settlor (above all, paying only the right people). The other is handling the exercise of the discretion in a proper way. The chapter also discusses the proper bases for a decision and the depth of information with which trustees are required to equip themselves before making their decision.
Chapter
30. Management and delegation
This chapter explores trustees’ management powers. The management powers of trustees are concerned with looking after property or funds. They do not allow the trustees to choose who benefits. In addition, the powers of management conferred upon a trustee are not the same in every case. Quite obviously, the powers of express trustees are likely to differ significantly from those of constructive trustees upon whom a trust has been imposed because of their improper conduct. In the latter case, the question of the trustees’ powers rarely arises. They are wrongdoers, who are, by definition, acting in breach of duty. How far they are authorized to act is, therefore, unlikely to be an issue.
Chapter
31. Investment
This chapter explores the powers and duties of trustees in relation to investment. It is in the context of investment that the concept of the trust fund is at its most apparent. The beneficiaries are entitled to share in the wealth which the trust assets represent. The component parts of that wealth are very much less important to the beneficiaries than its aggregate value. Thus, the issues which have to be addressed in the context of investment are first, when trustees are permitted to dispose of existing trust assets in order to substitute new assets; second, what assets may be substituted for the original ones; and third, the principles upon which those investments must be chosen. Over these issues, the chapter addresses a fundamental question on what the purpose of investment is.
Chapter
35. Fiduciary duties of trustees and other fiduciaries
This chapter looks at the duty of the trustee to show loyalty to their beneficiaries. The duty of loyalty is owed by most trustees, but a similar duty is also imposed upon others who hold certain positions of trust and confidence, such as agents and company directors. The duty requires the fiduciary to put the interests of the principal above their own, not to put themselves in a position of a potential conflict, nor to receive any secret payment, profit, or commission. There is a degree of circularity in identifying when fiduciary duties are owed. A fiduciary is a person who owes fiduciary duties to another, but whether they can be characterized as a fiduciary depends upon whether they owe fiduciary duties. The essence of fiduciary duties is that they are duties of loyalty.
Chapter
9. Trusts of land
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses trusts of land. The creation of concurrent interests in land generally now occurs by way of a trust of land, governed by the Trusts of Land and Appointment of Trustees Act 1996 (TLATA) and replacing their forerunner, trusts for sale. Trusts of land may be expressly or impliedly created and, where implied, may be resulting or constructive trusts. Key provisions of TLATA 1996 include: ss 6–8 governing the extent of trustees’ powers over the trust property; s 11 governing the circumstances in which trustees have a duty to consult beneficiaries when exercising their powers; ss 12–13 governing the rights of beneficiaries to occupy the trust property; and ss 14–15 governing the right of an interested party to make an application to the court for an order to resolve a dispute over trust land.
Chapter
15. Settled Land Act settlements
Course-focused and comprehensive, the Textbook on Land Law provides an accessible overview of one key area on the law curriculum. This chapter briefly discusses the Settled Land Act (SLA) settlement created before 1 January 1997, the other form of trust which still exists in relation to land. It addresses the following three questions: who holds the legal estate in settled land? Are there trustees? What sort of property may be subject to a SLA settlement?
Chapter
6. Non-Charitable Purpose Trusts
Paul S Davies and Graham Virgo
All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter discusses non-charitable purpose trusts and how they are generally considered as void because there are no ascertainable beneficiaries who are able to enforce the trust. There are a variety of mechanisms that can be adopted to implement a non-charitable purpose, including the use of fiduciary powers and the appointment of enforcers to enforce the trust. In exceptional cases, non-charitable purpose trusts can be considered valid, but only if it can be shown that the purpose directly or indirectly benefits ascertained individuals. Testamentary trusts for certain recognized purposes, such as for animals, may also be exceptionally recognized as valid, in which case, the trustees are not obliged, but have the option, to carry out the trust.
Chapter
14. Dispositive Powers and Duties
This chapter examines the powers and duties of trustees relating to the distribution of trust property to beneficiaries or objects. It explains that dispositive powers enable the trustees to exercise a discretion relating to the distribution of trust assets and dispositive duties requires them to act in a particular way or to make a particular decision. This chapter also discusses the underlying principles of the duty to distribute and the powers of appointment, maintenance, and advancement. The chapter further considers a variety of principles which are applicable to determine how powers of appointment should be exercised, what happens when the power is not exercised properly, and mechanisms to assist trustees in the exercise of these powers.
Chapter
12. Trustees
This chapter examines the duties and powers of trustees. It considers how trustees can be appointed to and removed from office. It explains that trustees have a wide variety of powers but misuse of these powers will constitute a breach of trust. It also highlights the fact that, while trustees have the primary rights of ownership in trust property, they are not able to exploit the beneficial incidents of this ownership for themselves in their capacity as trustees, since they hold the property for other people or sometimes for particular purposes. This chapter also discusses the essence of trusteeship, the different types of trustees, and remuneration of trustees.
Chapter
14. Trusts of land
Course-focused and comprehensive, the Textbook on Land Law provides an accessible overview of one key area on the law curriculum. This chapter begins by discussing changes introduced by the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996). The operation of the new trust of land is regulated by Part 1 of TOLATA 1996, and the rest of the chapter deals with these provisions. These are illustrated by reference to: Mary Brown, the owner of 10 Trant Way, who needs advice about creating a settlement in her will; and six students who hold 8 Trant Way as co-owners, and are therefore subject to a statutory trust of land. Three special dispositions which would previously have created Settled Land Act settlements but now give rise to trusts of land are also identified.
Chapter
11. Trustees’ duties and powers
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the main duties and powers of trustees. Rather than rigidly separating duties and powers, it presents the duties and powers of trustees in a way which reflects how they might arise during the operation of a trust. It first addresses the initial questions of the appointment, removal, and payment of trustees. It then examines issues arising on appointment to the trust and the fiduciary nature of trustees’ duties. Finally, it examines issues likely to arise during the administration of the trust, including the trustees’ powers of investment, beneficiaries’ right to information about the trust, and trustees’ powers of maintenance and advancement.
Chapter
3. The three certainties
Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the certainties that must be satisfied by trusts: intention, subject matter, and objects. Trustees must know what their obligations are under the trust, and satisfying these certainties ensures that, if necessary, the court itself will be able to administer the trust. Certainty of intention is a question of fact and the courts will consider the whole context of the case. Certainty of subject matter requires certainty as to what property is held on trust and the beneficial interests involved. Certainty of objects relates to who are the beneficiaries of a trust. Every trust—with the exception of charitable trusts—must satisfy the certainty of objects requirement.
Book
Paul S. Davies and Graham Virgo
All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. Equity & Trusts: Text, Cases, and Materials provides a guide to the subject by providing analyses of the law of equity and trusts with extracts from cases and materials. This book provides analysis of significant recent key cases including the Supreme Court’s decision in Patel v Mirza where a new approach to determining the impact of the taint of illegality on private law claims was identified, which is of particular significance to claims for breach of trust and the recognition of the resulting trust. Other relevant decisions include: Angove’s Pty Ltd v Bailey, on the recognition of the constructive trust; Akers v Samba Financial Corp, on the nature of proprietary interests and rights under trusts; Ivey v Genting Casinos UK Ltd (t/a Crockfords Club), on the definition of dishonesty; and Burnden Holdings (UK) Ltd v Fielding, on limitation periods. Similarly, the Privy Council has heard important appeals in the area of Equity and trusts: notably Investec Trust (Guernsey) Ltd v Glenala Properties, on trustees and breach of trust and Marr v Collie, on the recognition of the common intention constructive trust. The impact of these developments has meant that there has been particularly significant rewriting of chapter 7 (constructive trusts) and chapter 9 (informal arrangements relating to land), plus significant rewriting of sections in other chapters, especially as to the nature of the rights and interests under a trust and the effect of illegality. The book is made up of nine parts that consider express private trusts, purpose trusts, non-express trusts, beneficiaries, trusties, variation, breach, and orders.
