Category: Trusts

Wrexham Association Football Club Ltd v Crucialmove Ltd: CA 14 Mar 2006

There is no longer an absolute bar against obtaining summary judgment when fraud is alleged, but the fact that a claim is based on fraud is a relevant factor. The risk of a finding of dishonesty may itself be a strong reason for allowing a case to proceed to trial, even where the case looks strong on the papers.

Citations:

[2006] EWCA Civ 237

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Nigeria v Santolina Investment Corp and others ChD 7-Mar-2007
The federal government sought to recover properties from the defendants which it said were the proceeds of corrupt behaviour by the principal defendant who had been State Governor of a province. The claimant sought summary judgment.
Held: . .
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 05 July 2022; Ref: scu.239112

Donohoe v Ingram: ChD 20 Jan 2006

The appellant had lived with the bankrupt for several years, and sought an order delayng sale of the house they had lived in until their children had grown up. She said the circumstances were exceptional.
Held: The fact that the delay might put at risk the payment of the creditors in full and with interest made it not sufficient to require them to wait. There was no human right violated.

Citations:

[2006] EWHC 282 (Ch)

Links:

Bailii

Statutes:

Insolvency Act 1986 335A

Jurisdiction:

England and Wales

Citing:

Cited – Harman v Glencross 1986
On the divorce, the wife applied for a property transfer order in relation to the jointly owned matrimonial home. A creditor of her husband then obtained a charging order on H’s interest. She sought its varation. The creditor said that there was . .
Cited – In re Holliday CA 1981
A property adjustment order cannot be made against a bankrupt former spouse because the property of the bankrupt vests in the trustee in bankruptcy against whom an order under section 24 cannot be made. It was highly unlikely that postponement of . .
Cited – Claughton v Charalambous 1998
What is required of the court in applying section 335A(3) is, in effect, a value judgment. The court must look at all the circumstances and conclude whether or not they are exceptional. That process, he considered, left ‘very little scope for the . .
Cited – Re Citro, Lloyds Bank plc v Byrne and Byrne, Abbey National plc v Moss and others and Barclays Bank plc v Hendricks CA 1991
Trustees in bankruptcy of bankrupt husbands successfully appealed for the removal of provisos delaying the operation of orders for sale made under s30 in respect of each husband’s matrimonial home for the benefit of that husband’s wife who had been . .
Cited – Barca v Mears ChD 2005
While the categories of exceptional case which might allow delay in the sale of a bankrupt’s property are not circumscribed by the previous case-law, the only cases subsequent to In Re Citro in which orders for possession and sale have been withheld . .
Cited – London Borough of Harrow v Qazi HL 31-Jul-2003
The applicant had held a joint tenancy of the respondent. His partner gave notice and left, and the property was taken into possession. The claimant claimed restoration of his tenancy saying the order did not respect his right to a private life and . .
Cited – Price and others v Leeds City Council CA 16-Mar-2005
The defendant gypsies had moved their caravans onto land belonging to the respondents without planning permission. They appealed an order to leave saying that the order infringed their rights to respect for family life.
Held: There had been . .
Lists of cited by and citing cases may be incomplete.

Insolvency, Trusts

Updated: 05 July 2022; Ref: scu.238692

The Magistrates and Town Council of Edinburgh v M’Laren and Others: HL 21 Jul 1879

Trust – lmmixing of Charity Funds – Increased Value of Estate – Proportional Division of Profits.
The funds of a specific mortification which were made over to a corporation for certain purposes about the year 1700 were immixed with other funds held by the same corporation in trust for the same object, and they were administered in common. The accounts were kept and payments were made in a mixed and unseparated form. In various other particulars the conditions of the bequest were not complied with, but not from any improper motive. Held (1) that no lapse of time could interfere to prevent the testator’s intention from receiving effect, and that the bequest fell to be administered upon that footing; (2) that the mortification fund had become so immixed with the other fund belonging to the corporation that it must be taken to have participated proportionally with them in the increase of value of the aggregate funds which had taken place since the date in question.

Judges:

Lord Hatherley, Lord Blackburn, and Lord Gordon

Citations:

[1879] UKHL 828, 16 SLR 828

Links:

Bailii

Jurisdiction:

Scotland

Trusts

Updated: 05 July 2022; Ref: scu.637967

Costine’s Trustees v Costine: HL 20 Mar 1879

Succession – Parent and Child – Power to Revoke – Jus quiesitum tertio.
A father and son entered into a deed of agreement by which the father agreed to pay his son pounds 7000 as the price of his consent to the disentail of an estate. pounds 4000 was to be paid absolutely, the remaining pounds 3000 was to be paid to trustees, ‘to be held by them in trust for the use and behoof of the son, but under the declaration that it should be lawful for the father to limit the power and control of the son over the said sum to such extent and in such way as he should think proper, and in particular to direct the trustees to hold the sum for behoof of the son in liferent only, and for the issue of his body in fee, whom failing to his nearest heirs and assignees.’ The father thereafter executed a deed of declaration of trust, which was also signed by the son, who therein expressly declared his concurrence and acquiescence, providing inter alia that in the event of the son dying without issue the trustees should hold the pounds 3000 for the father’s sister and her heirs. The trustees paid the income to the son. After his father’s death the son married, and at his death he was survived by his wife, to whom shortly before, in a deed of revocation of the declaration of trust, he had bequeathed the pounds 3000. Held (affirming judgment of the Second Division of the Court of Session) that the deed of revocation was effectual, the destination in the deed of trust being truly a testamentary destination by the son, and no jus quaesitum therefore having arisen to the beneficiaries under it.

Judges:

Lord Chancellor (Cairns), Lord Hatherley, and Lord Selborne.

Citations:

[1879] UKHL 496, 16 SLR 496,

Links:

Bailii

Jurisdiction:

England and Wales

Trusts

Updated: 05 July 2022; Ref: scu.637955

Scott v The National Trust: CA 1998

Trustees, in the exercise of their fiduciary discretions, are under constraints which do not apply to adult individuals disposing of their own property. Walker LJ said: ‘Certain points are clear beyond argument. Trustees must act in good faith, responsibly and reasonably. They must inform themselves, before making a decision, of matters which are relevant to the decision. These matters may not be limited to simple matters of fact but will, on occasion (indeed, quite often) include taking advice from appropriate experts, whether the experts are lawyers, accountants, actuaries, surveyors, scientists or whomsoever. It is, however for advisers to advise and for trustees to decide: trustees may not (except in so far as they are authorised to do so) delegate the exercise of their discretions, even to experts. This sometimes creates real difficulties, especially when lay trustees have to digest and assess expert advice on a highly technical matter (to take merely one instance, the disposal of actuarial surplus in a superannuation fund).’

Judges:

Walker LJ

Citations:

[1998] 2 All ER 705

Jurisdiction:

England and Wales

Citing:

See Also – Regina v National Trust for Places of Historic Interest Or Natural Beauty ex parte Scott, Summerskill and others Admn 16-Jul-1997
. .
Appeal from – Scott v The National Trust ChD 12-Nov-1998
The Trust applied to be joined in an application by the plaintiffs. . .

Cited by:

Cited – Futter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .
Lists of cited by and citing cases may be incomplete.

Equity, Trusts

Updated: 04 July 2022; Ref: scu.509121

Scott v The National Trust: ChD 12 Nov 1998

The Trust applied to be joined in an application by the plaintiffs.

Judges:

Neuberger J

Citations:

[1998] EWHC 318 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Appeal from – Scott v The National Trust CA 1998
Trustees, in the exercise of their fiduciary discretions, are under constraints which do not apply to adult individuals disposing of their own property. Walker LJ said: ‘Certain points are clear beyond argument. Trustees must act in good faith, . .
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 04 July 2022; Ref: scu.263756

Upton v National Westminster Bank Plc and others: CA 14 Nov 2005

The claimant said that he had been disinherited from his grandfather’s will being illegitimate.

Citations:

[2005] EWCA Civ 1479

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

At Admn – Upton v United Kingdom ECHR 11-Apr-2006
Admissibility – the claimant said that he had been disinherited from his grandfather’s will, being illegitimate. The will made in 1930 was in favour of the testator’s children and grandchildren. The applicant’s father was the testator’s eldest son, . .
Lists of cited by and citing cases may be incomplete.

Wills and Probate, Trusts

Updated: 04 July 2022; Ref: scu.235534

Henry v Hammond: KBD 1913

Channell J said: ‘It is clear that if the terms upon which the person receives the money are that he is bound to keep it separate, either in a bank or elsewhere, and to hand that money so kept as a separate fund to the person entitled to it, then he is a trustee of that money and must hand it over to the person who is the cestui que trust. If on the other hand he is not bound to keep the money separate, but is entitled to mix it with his own money and deal with it as he pleases, and when called upon to hand over an equivalent amount of money, then, in my opinion, he is not a trustee of the money, but merely a debtor.’

Judges:

Channell J

Citations:

[1913] 2 KB 515 DC

Jurisdiction:

England and Wales

Cited by:

Cited – Aluminium Industrie Vaassen B V v Romalpa Aluminium Ltd ChD 11-Feb-1975
The plaintiffs sold aluminium to the defendant and by a clause in the contract retained their title in the materials sold until payment was received. The purchaser went into insolvent receivership, and the seller sought recovery of the equipment and . .
Cited – DP Mann and others v Coutts and Co ComC 16-Sep-2003
The claimants were involved in litigation, They took certain steps on the understanding that the respondents had had deposited with them substantial sums in accounts under binding authorities. The bank had written a letter upon which they claim they . .
Cited – Williams v Central Bank of Nigeria QBD 8-Apr-2011
The claimant had been defrauded by a customer of the defendant bank. He brought a claim against the bank, saying that they knew or ought to have known of the fraudster’s activities, and were liable. The Bank denied that the UK courts had . .
Cited – Williams v Central Bank of Nigeria QBD 24-Jan-2012
The claimant asserted involvement by the defendant bank in a fraud perpetrated against him. Jurisdiction had already been admitted for one trust , and now the claimant sought to add two further claims.
Held: ‘None of the gateways to English . .
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 04 July 2022; Ref: scu.179873

Gordon Gordon’s Trustees: HL 26 Jul 1882

A truster conveyed his estates to trustees with directions to entail them upon a person named, ‘and his heirs whatsoever,’ whom failing to another person named, ‘and his heirs whatsoever,’ whom failing to any persons that might subsequently be named by him, and then to his own heirs whatsoever and their assignees. This deed revoked eight previous deeds, ‘in so far as the same are or may be inconsistent with these presents.’ No deed of nomination was executed, and the second person named in the deed predeceased the truster. The trustees executed a deed of entail conveying the estates to the person first-named, and his heirs whatsover, whom failing to the heirs whatsoever of the truster and their assignees. The institute having on his death disposed of the estates as belonging to himself in fee-simple, the truster’s heir of line sought to reduce the deed of entail, and have a new deed executed, on the grounds that by ‘heirs whatsoever’ of the truster was meant, looking to the tenor of the truster’s intentions as shown in the series of deeds previously executed, the pursuer, who should have been substituted nominatim, and the heirs of his body. Held (aff. judgment of the Court of Session) that no such meaning could be put upon the term ‘heirs whatsoever’ of the truster-on the grounds, first, that it was inadmissible to refer to previous deeds for an interpretation of well-marked words of technical conveyancing; and second, that a reference to these deeds did not support the contention of the heir of line-and that therefore the estates belonged to the institute in fee-simple.

Judges:

Lords Blackburn, Watson, and Fitzgerald

Citations:

[1882] UKHL 899, 19 SLR 899

Links:

Bailii

Jurisdiction:

Scotland

Trusts

Updated: 04 July 2022; Ref: scu.637743

Black v Pastouna and Another: CA 31 Oct 2005

The appellant occupied a property now belonging to the two respondents who had had it transferred to them by their father. The appellant had been in a relationship with him. The respondent daughters had asserted that she occupied it it under a documented assured shorthold tanancy in respect of which she was in arrears of rent. The appellant sought to appeal against rejection of her claim to a trust in the property saying that the tenancy agreement had been a sham. She had however paid him andpound;20k.
Held: Leave to appeal was refused. It would be wrong to overturn a judgment based so firmly in the view taken by the judge of the evidence and parties appearing before him.
The court noted that the representatives had travelled from Liverpool to attend when a video conference may have been equally effective, and drew attention to the need for such matters to be considered.

Judges:

Brooke LJ VP, Carnwath LJ

Citations:

[2005] EWCA Civ 1389

Links:

Bailii

Jurisdiction:

England and Wales

Housing, Trusts

Updated: 04 July 2022; Ref: scu.235334

Gartside v Inland Revenue Commissioners: HL 13 Dec 1967

Before his death, the deceased had advanced sums to his sons. The House was asked whether they were liable to Estate Duty.
Held: Lord Reid said: ‘no object of a discretionary trust has, as such, any legal right to or in the capital’, although he may possess limited equitable rights against the trustee; ‘mere expectancy or hope of consideration by the trustee” and ”In possession’ must mean that the interest enables you to claim now whatever may be the subject of the interest. For instance, if it is the current income from a certain fund your claim may yield nothing if there is no income, but your claim is a valid claim, and if there is any income you are entitled to get it. But a right to require trustees to consider whether they will pay you something does not enable you to claim anything. If the trustees do decide to pay you something, you do not get it by reason of having the right to have your case considered: you get it only because the trustees have decided to give it to you.’
Lord Wilberforce said that the circumstances in which a beneficiary under a discretionary trust may seek protection, and the nature of the protection he may expect to obtain, will depend on the court’s discretion.

Judges:

Lord Reid, Lord Wilberforce, Viscount Dilhorne

Citations:

[1967] UKHL 6, [1968] AC 553, [1968] 1 All ER 121, [1967] TR 309, [1968] 2 WLR 277

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Regina v Stannard CACD 1-Nov-2005
The defendant had been convicted of offences in which he had operated to purchase companies and use false debentures to evade corporation tax. Compensation had been sought under the 1988 Act. It was argued that the confiscation order should be . .
Lists of cited by and citing cases may be incomplete.

Trusts, Inheritance Tax

Updated: 04 July 2022; Ref: scu.234398

Downing v Lissimore: CA 6 Nov 2002

Application for order to reflect interest of cohabiting partner in house.

Citations:

[2002] EWCA Civ 1698, [2003] 2 FLR 308

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

See Also – Lissimore v Downing ChD 31-Mar-2003
The claimant asserted an estoppel in land registered in the name of the defendant.
Held: Unspecific statements made by the defendant that ‘she would never want for anything’, or that ‘he would take care of her’, or that ‘he had looked after . .
Lists of cited by and citing cases may be incomplete.

Trusts, Land

Updated: 03 July 2022; Ref: scu.217812

Andrews and Others v Ewart’s Trustees: HL 29 Jun 1886

Trust – Personal Liability of Trustees – Application by Trustees of Capital of One Trust to Restore that of Another where Income of Both Applicable to Same Purpose.
James Ewart by his will appointed funds to be employed in founding a ragged school. John Ewart subsequently died, and left pounds 7000 to the trustees of James for the same object, but with power, if they considered that the funds of James were sufficient for the ragged school, to apply part, not exceeding pounds 500, of the pounds 7000 in building and fitting up adjoining it a school for the middle classes, and to apply the interest ‘of all or any part of the balance of the said sum of pounds 7000 in the maintenance and support of said last mentioned school.’ Thereafter Agnes Ewart died leaving money to be paid over to the trustees of James on trust for the maintenance and support of the ragged school, and with power, if the funds of it were sufficient, to apply the interest of the whole or part of the funds in the maintenance and support of John’s higher class school.
Before the death of Agnes the trustees had erected a higher class school adjoining the ragged school, as directed in John’s settlement, but pounds 500 being quite insufficient to build it, had spent more than that sum in building it, and had also spent more than the income in administration and maintenance of it, and when the money of Agnes was paid over to them, they, on the ground that the trusts were substantially the same, applied it in replacing the debit which had thus arisen on John’s trust. An action was brought against them as trustees of Agnes by persons interested in the schools to have the money taken from the trust of Agnes replaced and separately invested.
Held (aff. Second Division) (1) that the trustees being gratuitous charitable trustees acting in the bona fide endeavour to execute the trust, and not having diverted the funds from the trust objects, but only at most erred as to the way of carrying them out, were not personally liable to make good money they had so applied; but (2) ( alt. Second Division) that it was competent in the action, though brought against them as trustees of Agnes, to inquire also into the administration of John’s trust, and case remitted for inquiry as to whether, if at all, the encroachments in question ought to be replaced by the future revenue of the school.

Judges:

Lord Chancellor Hersehell, Lords Watson, Blackburn, Fitzgerald, and Ashbourne

Citations:

[1886] UKHL 822, 23 SLR 822

Links:

Bailii

Jurisdiction:

Scotland

Trusts

Updated: 03 July 2022; Ref: scu.637733

Dhingra v Dhingra: CA 13 Aug 1998

Claim by son that National Savings Account in joint names with his father was held in trust for himself alone.

Citations:

[1998] EWCA Civ 1395

Jurisdiction:

England and Wales

Citing:

See Also – Sumir Singh Dhingra v Surjit Singh Dhingra CA 20-Jul-1999
. .

Cited by:

See Also – Sumir Singh Dhingra v Surjit Singh Dhingra CA 20-Jul-1999
. .
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 03 July 2022; Ref: scu.144874

Singh v Bhasin and Others: ChD 21 Aug 1998

A trustee who defended a claim would always be at risk of an order to pay the costs personally even if advised by counsel to defend if he did not seek a protective Beddoe order before defending.

Citations:

Times 21-Aug-1998, Gazette 16-Sep-1998

Jurisdiction:

England and Wales

Citing:

Cited – In re Beddoe, Downes v Cottam CA 1893
In case of doubt as to the desirability of the intended proceedings (whether as plaintiff or defendant), trustees may apply to the court for directions. This will protect the trustees from adverse costs orders. If given leave to sue or defend by the . .
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 03 July 2022; Ref: scu.89271

Gencor ACP Ltd v Dalby: ChD 2000

The plaintiff made a large number of claims against a former director, Mr Dalby, for misappropriating its funds. These included a claim for an account of a secret profit which Mr Dalby was said to have been procured to be paid by a third party, Balfour Beatty, to a BVI company under his control called Burnstead.
Held: Mr Dalby was accountable for the money received by Burnstead.
‘Burnstead was an offshore company which was wholly owned and controlled by Mr Dalby and in which nobody else had any beneficial interest. Everything it did was done on his directions and on his directions alone. It had no sales force, technical team or other employees capable of carrying on any business. Its only function was to make and receive payments. It was in substance little other than Mr Dalby’s offshore bank account held in a nominee name. In my view this is the type of case in which the court ought to have no hesitation in regarding Burnstead simply as the alter ego through which Mr Dalby enjoyed the profit which he earned in breach of his fiduciary duty to ACP. If the arrival at this result requires a lifting of Burnstead’s corporate veil, then I regard this as an appropriate case in which to do so. Burnstead is simply a creature company used for receiving profits for which equity holds Mr Dalby to be accountable to ACP. Its knowledge was in all respects the same as his knowledge. The introduction into the story of such a creature company is, in my view, insufficient to prevent equity’s eye from identifying it with Mr Dalby’

Judges:

Rimer J

Citations:

[2000] 2 BCLC 734, [2000] EWHC 1560 (Ch), [2000] 2 BCLC 734

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Doubted – Prest v Petrodel Resources Ltd and Others SC 12-Jun-2013
In the course of ancillary relief proceedings in a divorce, questions arose regarding company assets owned by the husband. The court was asked as to the power of the court to order the transfer of assets owned entirely in the company’s names. The . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .
Cited – Ben Hashem v Ali Shayif and Another FD 22-Sep-2008
The court was asked to pierce the veil of incorporation of a company in the course of ancillary relief proceedings in a divorce. H had failed to co-operate with the court.
After a comprehensive review of all the authorities, Munby J said: ‘The . .
Lists of cited by and citing cases may be incomplete.

Company, Trusts, Torts – Other

Updated: 01 July 2022; Ref: scu.230346

Vyse v Foster: CA 1872

James LJ: ‘This Court is not a Court of penal jurisdiction. It compels restitution of property unconscientiously withheld; it gives full compensation for any loss or damage through failure of some equitable duty; but it has no power of punishing any one. In fact, it is not by way of punishment that the Court ever charges a trustee with more than he actually received, or ought to have received, and the appropriate interest thereon. It is simply on the ground that the Court finds that he actually made more, constituting moneys in his hands ‘had and received to the use’ of the cestui que trust.’

Judges:

James LJ

Citations:

(1872) LR 8 Ch App 309

Jurisdiction:

England and Wales

Cited by:

Appeal from – Vyse v Foster HL 1874
Where a person already has contractual relations with another, his assumption of a fiduciary role in relation to that other will not necessarily require him to abandon his own contractual interests. . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 01 July 2022; Ref: scu.230349

Imperial Mercantile Credit Association v Coleman: HL 1873

Where a company director puts the benefit of a company contract into a partnership, he is fully accountable even if his partners are entitled to part of the profit and are ignorant of his breach of fiduciary duty.

Citations:

(1873) LR 6 HL 189

Jurisdiction:

England and Wales

Cited by:

Cited – CMS Dolphin Ltd v Paul M Simonet and Another ChD 23-May-2001
The claimant asserted that the defendant had, having at one point been a creative director of the claimant, left to set up an alternate competing business, and diverted business from the first company to the new one. There had been disagreements . .
Lists of cited by and citing cases may be incomplete.

Company, Trusts

Updated: 01 July 2022; Ref: scu.230347

Timber Engineering Co Pty Ltd v Anderson: 1980

(New South Wales) The manager and a sales representative of TECO set up separate competing business. Anderson with his wife, began a new company Mallory Trading Pty Ltd which acted as a a fraud on TECO. On learning of each others acts, they joined forces and diverted business and profits from TECO. In July 1977 Toy resigned from TECO to work full time for Mallory Trading; and in November 1977 Anderson was dismissed, whereupon he, too, began to work full time for Mallory Trading. In February 1978 they incorporated another company, Mallory Timber Products Pty Ltd (‘Mallory Timber’) to which they transferred the business of Mallory Trading. TECO sought an account of profits and declaration of trust of the businesses of Mallory Trading and Mallory Timber and of the shares in both companies held by Anderson, Toy and their respective wives.
Held: Kearney J approved this statement by Dr PD Finn in Fiduciary Relations: ‘The fiduciary’s liability for gains is a liability as trustee and for trust property. It is, as will be seen, one which can give rise to personal actions against a fiduciary. It can give rise to actions in rem to recover extant trust property.’
The trust property was extant: ‘It is clear that the business had its genesis in the resources and facilities of TECO which were available to Anderson and Toy. It is also clear that they did take advantage of such resources and facilities so as to cause life to be breathed into the mere shell of Mallory Trading, bearing in mind that the business of Mallory Trading was built upon cash flow and sales. The whole substance of Mallory Trading as a viable business enterprise stemmed from the resources of TECO which were utilized in Mallory Trading. The outstanding features of the nurturing of Mallory Trading are that its executives were being paid by TECO, its customers were TECO customers, and its products were significantly derived from TECO products . . the whole of the TECO business (including, not only physical facilities such as telephones, motor cars and expense accounts) were used; but also its intangible elements such as marketing methods, knowledge of customers and goodwill were also resorted to in building up Mallory Trading. Another significant feature is that the inevitable result of the defendants using TECO as the vehicle to establish Mallory Trading as a going concern was that TECO was gravely harmed. It not only lost the orders that were misappropriated, but this in turn led to the loss of customers and substantial damage to its goodwill . . There can be no doubt that the creation and development of Mallory Trading dealt a crippling blow to the business of TECO.
Every opportunity which Mallory Trading has received is directly traceable to resources and benefits provided by TECO, even of time and efforts expended by Anderson and Toy for which TECO was paying. Every advance made by Mallory Trading was also due to the advantages of the tangible and intangible resources and facilities provided from TECO. In truth, the business of Mallory Trading was carved out of the business of TECO, and thus ought to be treated as being, as at July 1977, held on trust for TECO.’
July 1977 was the date when Toy resigned from TECO. Kearney J then dealt with a number of arguments relating to subsequent events. The real issue was whether the trust property represented by the business of Mallory Trading remained extant. The defendants’ first submission was that the business of Mallory Timber was a fresh unrelated business free from any trust. The judge described that as ‘insupportable’: ‘I regard the business carried on by Mallory Timber products as representing the trust property of which Mallory Trading was originally the trustee.’ The defendants submitted that if there was any liability after July 1977, the liability should be limited to an account of profits, and should not extend to a declaration that the business was itself held on trust; whatever the position might have been in July 1977, the continued carrying on of the business had been wholly due to the defendants’ own efforts; and that any benefit attributable to the trust as it existed in July 1977 had been displaced. Kearney J dealt with this submission as follows: ‘The fact that the trustee carried on a business and improved it by its own exertions did not, in my view have the effect of extinguishing the trust property as so to terminate the trust. The business, as a trading enterprise, continued to subsist as an identifiable item of property. The fact that the business may have been enhanced through the efforts of the trustee cannot affect the continued existence of the trust.’ The defendants ‘ submitted that any account should be limited to former customers of TECO, and that the extent of sales to those customers could be readily ascertained from the accounts. Kearney J rejected that submission too. He said that this submission took: ‘too limited a view of the extent of the benefit represented by the existence of the business of Mallory Trading as a going concern. While its attributes included the connection with former TECO customers, it also had the inherent capacity as an established business to expand the range of its customers and products.’
He concluded: ‘It seems to me that the present case falls within the second example stated by Upjohn J [in Re Jarvis], namely that the Mallory companies are accountable as constructive trustees of the business. The contribution of skill and industry by all the defendants to the continued carrying on of the business can be adequately provided for by the making of proper allowances, as indicated by Upjohn J I consider that, in determining the form of relief to be granted, not only is Upjohn J’s first example inappropriate to the facts of the case, but also that justice can be done, in the circumstances of this case, by making the declaration of trust as to the business on the footing of all just allowances.
. . The trust property remains identifiable in the hands of the trustee, and TECO is entitled to have the benefit of it, subject to the efforts of the defendants being duly remunerated.
Additionally, although there is no evidence at present, the defendants may be able to establish upon the taking of accounts of profits, that assets comprised in the business have been contributed by them from sources other than those generated by the business itself. If so, it may further be possible to show that consequently a proportionate interest in the business exists in favour of the defendants, or that they are entitled to a specific item of property, or to a charge upon the trust property as a whole.’

Judges:

Kearney J

Citations:

[1980] 2 NSWLR 488

Jurisdiction:

England and Wales

Cited by:

Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Lists of cited by and citing cases may be incomplete.

Commonwealth, Trusts

Updated: 01 July 2022; Ref: scu.230345

Hunt and Another v McLaren and others: ChD 4 Oct 2006

Land had been given to a football club under a trust for its exclusive use as such. That land was sold and a new ground acquired and a stadium built, but the land was subject to restrictive covenenats limiting its use to sports, which considerably reduced its value. The trustees sought clarification of their duties.
Held: A gift on trust must have a cestui que trust and must be for the benefit of individuals, unless charitable. It must have a definite object, and there must be someone in whose favour the court can enforce it. In general, in order to be valid, a non-charitable trust must have an ascertainable beneficiary in whose favour performance of the trust may be decreed.

Judges:

Lawrence Collins J

Citations:

[2006] EWHC 2386 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Conservative and Unionist Central Office v Burrell (Inspector of Taxes) CA 10-Dec-1981
An unincorporated association is defined as ‘two or more persons bound together for one or more common purposes, not being business purposes, by mutual undertakings each having mutual duties and obligations, in an organisation which has rules which . .
Cited – Saunders v Vautier 7-May-1841
A direction in a will stated that the income from certain shares was to be accumulated and invested until the beneficiary attained the age of 25. On attaining his majority at 21 years, the beneficiary sought termination of the trust, and transfer of . .
Cited – Morice v Bishop of Durham HL 1805
The court was asked whether a gift of residue to be applied ‘to such objects of benevolence and liberality as the Bishop of Durham in his own discretion shall most approve of’ was valid as being confined to purposes that were charitable.
Held: . .
Cited – Neville Estates Ltd v Madden ChD 1962
A charitable trust was created for the benefit of the members of Catford Synagogue.
Held: The court considered three categories of valid non-charitable purpose gifts: (1) an absolute gift to members of an association at the date of the gift, . .
Cited – Re Nottage CA 12-Jul-1895
A testator bequeathed a fund in trust to provide annually for ever a cup to be given to the most successful yacht of the season, stating that his object in giving the cup was to encourage the sport of yacht-racing.
Held: (affirming the . .
Cited – Elvridge v Coulson ChD 15-Jul-2003
An unregistered friendly society was dissolved. The governing instrument provided that the votes should be counted according to value, and that a vote of five sixths of such members by value were need to dissolve the company. Members claimed to be . .
Cited – Re GKN Bolts and Nuts Ltd etc Works Sports and Social Club ChD 1982
There was a sports and social club associated with GKN, whose members were all employees of GKN. The main issue in the case was whether the club had ceased to exist. But one subsidiary issue was whether a meeting had been validly convened. The club . .
Cited – Re Lead Co.’s Workmen’s Fund Society 1904
. .
Cited – Leahy v Attorney-General of New South Wales PC 20-Apr-1959
leahy_agnswPC1959-4
A gift to an unincorporated association simpliciter, i.e. where neither the circumstances of the gift nor the directions given nor the object expressed impose on the donee the character of a trustee, is nothing else than a gift to its members at the . .
Cited – Re Endacott CA 12-Oct-1959
The will had left the residue to a parish council for the purpose of providing some useful memorial to myself, subject to the proviso that if my wife outlives me they must during the lifetime of my wife pay to my wife the interest which may accrue . .
Cited – Neville Estates Ltd v Madden ChD 1962
A charitable trust was created for the benefit of the members of Catford Synagogue.
Held: The court considered three categories of valid non-charitable purpose gifts: (1) an absolute gift to members of an association at the date of the gift, . .
Cited – In re Denley’s Trust Deed ChD 1969
The trustees of land in Gloucestershire were to maintain the land as a sports ground for the benefit of the employees of a company and also for ‘such other person or persons (if any) as the trustees may allow to use the same . . .’ The Deed . .
Cited – Whishaw v Stephens (on appeal from In re Gulbenkian’s Settlement) (No 1) HL 31-Oct-1968
Parties disputed the effect of clauses describing the beneficiaries of a trust.
Held: The clause did not make sense as it stood. In a fixed non-charitable trust (as opposed to a discretionary trust) the court must be able to draw up a list of . .
Cited – Re Grant’s Will Trusts ChD 1980
The deceased left property to the Labour Party property committee.
Held: A trust created by making a gift to the members of an unincorporated assoication as at the date of the gift can be wound up only if under the rules, the members could, at . .
Cited – McPhail v Doulton (on appeal from In re Baden’s Deed Trusts) HL 6-May-1970
The settlor asked whether the test for validity, in point of certainty of objects, is the same for trusts and powers, or whether the test for trusts is more demanding.
Held: The test is the same. The context was a provision, held to be a . .
Cited – In re Bucks Constabulary Widows and Orphans Fund Friendly Society (No 2) 1979
In the absence of any contractual obligation otherwise, the funds of a mutual society must be distributed equally on a dissolution. . .
Cited – Re Recher’s Will Trusts ChD 1972
The deceased gave a share of the residue, to ‘The Anti-Vivisection Society, 76 Victoria Street, London S.W.1.’ She died in 1962 and her husband died in 1968. Until the end of 1956 a non-charitable unincorporated society, known as the ‘London and . .
Cited – Re Lipinski’s Will Trusts ChD 1976
Harry Lipinski bequeathed his residuary estate on trust as to half for the Hull Judeans (Maccabi) Association to be used solely to construct and improve the new buildings for the association. The executors sought a determination whether the bequest . .
Cited – Sharab v Salfiti CA 12-Dec-1996
No amendment was to be allowed to a claim introducing an allegation of a foreign criminal offence. The claim in contract failed for insufficient certainty or on some other ground, but a claim nonetheless succeeded as a quantum meruit. . .
Cited – Way v Latilla HL 1937
Mr Way (W), the plaintiff, was employed by Ariston, which had mining operations in Africa, as a consulting engineer and manager. He met the respondent (L) in England. He was asked to seek options to acquire concessions the respondent might acquire. . .
Cited – Becerra v Close Brothers ComC 25-Jun-1999
ComC Claim for fee for introducing successful bidder at a controlled auction – no express contract – no implied contract based on City practice – claim for quantum meruit failed because no express or implied . .
Lists of cited by and citing cases may be incomplete.

Trusts, Land

Updated: 01 July 2022; Ref: scu.245176

Ultraframe (UK) Ltd v Fielding, Northstar Systems Ltd, Seaquest Systems Ltd etc: ChD 27 Jul 2005

Lewison J considered the nature of the duty to provide an account: ‘The taking of an account is the means by which a beneficiary requires a trustee to justify his stewardship of trust property. The trustee must show what he has done with that property. If the beneficiary is dissatisfied with the way that a trustee has dealt with trust assets, he may surcharge or falsify the account. He surcharges the account when he alleges that the trustee has not obtained for the benefit of the trust all that he might have done, if he had exercised due care and diligence. If the allegation is proved, then the account is taken as if the trustee had received, for the benefit of the trust, what he would have received if he had exercised due care and diligence. The beneficiary falsifies the account when he alleges that the trustee has applied trust property in a way that he should not have done (e.g. by making an unauthorised investment). If the allegation is proved, then the account will be taken as if the expenditure had not been made; and as if the unauthorised investment had not formed part of the assets of the trust. Of course if the unauthorised investment has appreciated in value, the beneficiary may choose not to falsify the account: in which case the asset will remain a trust asset and the expenditure on it will be allowed in taking the account.’

Judges:

Mr Justice Lewison

Citations:

[2005] EWHC 1638 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Intellectual Property, Torts – Other, Trusts

Updated: 01 July 2022; Ref: scu.236219

Re Grant’s Will Trusts: ChD 1980

The deceased left property to the Labour Party property committee.
Held: A trust created by making a gift to the members of an unincorporated assoication as at the date of the gift can be wound up only if under the rules, the members could, at any time, resolve to terminate the trust and distribute the fund to themselves. The gift therefore failed. It could not be construed as a gift to existing members (i.e. it did not fall within category (1) of Neville Estates Ltd v Madden), and that in order to fall within category (2) it was essential that the members of the association for the time being should be free to dispose of it in any way they thought fit, including distributing it amongst themselves.

Judges:

Vinelott J

Citations:

[1980] 1 WLR 360

Jurisdiction:

England and Wales

Citing:

Cited – Neville Estates Ltd v Madden ChD 1962
A charitable trust was created for the benefit of the members of Catford Synagogue.
Held: The court considered three categories of valid non-charitable purpose gifts: (1) an absolute gift to members of an association at the date of the gift, . .

Cited by:

Cited – Hunt and Another v McLaren and others ChD 4-Oct-2006
Land had been given to a football club under a trust for its exclusive use as such. That land was sold and a new ground acquired and a stadium built, but the land was subject to restrictive covenenats limiting its use to sports, which considerably . .
Lists of cited by and citing cases may be incomplete.

Trusts, Wills and Probate

Updated: 30 June 2022; Ref: scu.245260

Re Lipinski’s Will Trusts: ChD 1976

Harry Lipinski bequeathed his residuary estate on trust as to half for the Hull Judeans (Maccabi) Association to be used solely to construct and improve the new buildings for the association. The executors sought a determination whether the bequest was valid.
Held: Whether a gift was treated as a purpose trust or an absolute gift to a unincorporated non-charitable body with a superadded direction, the gift was valid if the beneficiaries were ascertainable; that the specified purpose of the gift to the Hull Judeans was within the power of that association and its members were the ascertained or ascertainable beneficiaries, and were therefore the persons who were entitled to enforce that purpose, or notwithstanding the use of ‘solely’, to vary that purpose. The association was not a charity.
Oliver J: ‘If the gift were to the association simpliciter, it would, I think, clearly fall within the second category of Cross J.’s categories. At first sight, however, there appears to be a difficulty in arguing that the gift is to members of the association subject to their contractual rights inter se when there is a specific direction or limitation sought to be imposed upon those contractual rights as to the manner in which the subject matter of the gift is to be dealt with . . .
There would seem to me to be, as a matter of common sense, a clear distinction between the case where a purpose is prescribed which is clearly intended for the benefit of ascertained or ascertainable beneficiaries, particularly where those beneficiaries have the power to make the capital their own, and the case where no beneficiary at all is intended (for instance, a memorial to a favourite pet) or where the beneficiaries are unascertainable . . If a valid gift may be made to an unincorporated body as a simple accretion to the funds which are the subject matter of the contract which the members have made inter se – and Neville Estates Ltd. v. Madden [1962] Ch. 832 and In re Recher’s Will Trusts [1972] Ch. 526 show that it may – I do not really see why such a gift, which specifies a purpose which is within the powers of the association and of which the members of the association are the beneficiaries, should fail. Why are not the beneficiaries able to enforce the trust or, indeed, in the exercise of their contractual rights, to terminate the trust for their own benefit? Where the donee association is itself the beneficiary of the prescribed purpose, there seems to me to be the strongest argument in common sense for saying that the gift should be construed as an absolute one within the second category – the more so where, if the purpose is carried out, the members can by appropriate action vest the resulting property in themselves, for here the trustees and the beneficiaries are the same persons.
Directly in point is the more recent decision of Goff J. in Re Denley’s Trust Deed [1969] 1 Ch. 373 . . Goff J held that the rule against enforceability of non-charitable ‘purpose or object’ trusts was confined to those which were abstract or impersonal in nature where there was no beneficiary or cestui que trust. A trust which, though expressed as a purpose, was directly or indirectly for the benefit of an individual or individuals was valid provided that those individuals were ascertainable at any one time and the trust was not otherwise void for uncertainty . . . I respectfully adopt this, as it seems to me to accord both with authority and common sense.’ and ‘This is a case in which, under the constitution of the association, the members could, by the appropriate majority, alter their constitution so as to provide, if they wished, for the division of the association’s assets among themselves. This has, I think, a significance.’ Finally: ‘. . . whether one treats the gift as a ‘purpose’ trust or as an absolute gift with a superadded direction . . all roads lead to the same conclusion.’

Judges:

Oliver J

Citations:

[1976] Ch 235

Jurisdiction:

England and Wales

Citing:

Cited – Leahy v Attorney-General of New South Wales PC 20-Apr-1959
leahy_agnswPC1959-4
A gift to an unincorporated association simpliciter, i.e. where neither the circumstances of the gift nor the directions given nor the object expressed impose on the donee the character of a trustee, is nothing else than a gift to its members at the . .
Cited – Neville Estates Ltd v Madden ChD 1962
A charitable trust was created for the benefit of the members of Catford Synagogue.
Held: The court considered three categories of valid non-charitable purpose gifts: (1) an absolute gift to members of an association at the date of the gift, . .

Cited by:

Cited – Hunt and Another v McLaren and others ChD 4-Oct-2006
Land had been given to a football club under a trust for its exclusive use as such. That land was sold and a new ground acquired and a stadium built, but the land was subject to restrictive covenenats limiting its use to sports, which considerably . .
Lists of cited by and citing cases may be incomplete.

Wills and Probate, Trusts

Updated: 30 June 2022; Ref: scu.245267

Speight v Gaunt: CA 20 Jan 1883

A trustee must act for the beneficiaries as a prudent person of business would act in his own affairs. Sir George Jessel MR said: ‘It seems to me that on general principles a trustee ought to conduct the business of the trust in the same manner that an ordinary prudent man of business would conduct his own, and that beyond that there is no liability or obligation on the trustee.’

Judges:

Sir George Jessel MR

Citations:

(1882) 22 Ch D 727, [1883] EWCA Civ 1

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Appeal from – Speight v Gaunt HL 26-Nov-1883
A trustee is required to use the same degree of prudence and diligence as a person of ordinary prudence would have done if he had been conducting his own affairs. . .
Lists of cited by and citing cases may be incomplete.

Trusts, Negligence

Updated: 29 June 2022; Ref: scu.222686

Leedale (Inspector of Taxes) v Lewis: HL 14 Oct 1982

The statute called for the apportionment of capital gains made by non-resident trustees where resident beneficiaries had ‘interests’ in the settled property, with the apportionment to be made ‘in such manner as is just and reasonable between’ them. The persons in question only had discretionary interests in the settled property.
Held: Such discretionary beneficiaries did have ‘interests in settled property’ for the purposes of s 42(2) of the 1965 Act.
The House considered the argument that interpretation of a taxing statute might cause hardship.
Lord Scarman characterised the term ‘beneficiary’ as: ‘a term which everyone is agreed includes persons who are the objects of the discretionary trusts’.
Lord Wilberforce said: ‘I would only refer to one other argument, that based on the alleged ‘hardship’ of accepting the Revenue’s contention. I do not think that this is a relevant consideration at all. If there were two equally possible constructions of this subsection, it might be correct to choose that which is the more favourable to the taxpayer, on the basis that subjects can only be taxed by clear words. This principle cannot apply where there are decisive legal reasons for preferring one construction rather than another. Once this step has been taken considerations of ‘hardship’ do not enter into the discussion.’ and ‘Settlors, after 1965, make their settlements with knowledge of the legislation and of its consequences.’
. . And ‘The key question is as to the meaning of the word ‘interests’ in section 42(2) of the Finance Act 1965, the alternatives being whether this word refers only to such interests as can be assigned a value, or whether it is a word of more general significance capable of covering any interest, quantifiable or non-quantifiable, of a beneficiary under a trust. That either of these is a possible meaning in fiscal legislation is made clear (a) by the general observations of Lord Reid in Gartside v. Inland Revenue Commissioners [1968] A.C. 533 [sic], 603 (see also those of Stephen J. and Wills J. in Attorney-General v. Heywood (1887) 19 Q.B.D. 326) and (b) by a comparison of the cases just cited. In Heywood, which arose under section 38 of the Customs and Inland Revenue Act 1881, and where the question was whether the settlor had reserved ‘an interest’ by including himself among a discretionary class of beneficiaries, the word ‘interest’ was given the more general meaning. To require that it meant something to which an ascertainable value could be assigned would, it was held, be contrary to the scheme of the statute. In Gartside, on the other hand, which arose under section 43 of the Finance Act 1940, and where the question was whether estate duty would be charged in respect of the determination of a discretionary interest, this House held that the word must bear the narrower meaning because the statute necessarily required ascertainment of the quantum of the interest. In Gartside I expressed the opinion, from which the other members of the House did not dissent, that these two cases could stand together. The word ‘interest’ is one of uncertain meaning and it remains to be decided on the terms of the applicable statute which, or possibly what other, meaning the word may bear. The appellant contends for the narrower meaning, and can find some support in section 42 of the Act of 1965. There is the reference to ‘values’ in subsection (2). There is subsection (3) which, he contends, sets out a code for assigning values to discretionary interests in income or capital – an exclusive code within one of whose provisions a case must fall if a charge to tax in respect of a discretionary trust is to arise. There is, thirdly, the reference, in subsection (2), to a life interest or an interest in reversion, but, in my opinion this does not survive a first critical look: the reference is clearly illustrative and nothing more. The two main arguments are by no means negligible, but they are, in my opinion, greatly outweighed by those on the other side. I simply state them, as they impressed me; they are developed in discussion in the Court of Appeal’s judgment. 1. The initial words of subsection (2) are ‘any beneficiary’. Unless clearly directed otherwise, I would assume that ‘persons having interests’ was correlative to these words. Discretionary objects are clearly ‘beneficiaries’, so I would suppose them also to be included in ‘persons having interests.’ 2. The apportionment to be made under the subsection is mandatory. The amount of the gains – i.e., the whole amount – must be apportioned in the relevant year of assessment. This can only be done if discretionary objects, who may be the only ‘beneficiaries’ in that year, can be the objects of apportionment. 3. The words, in subsection (2), ‘in such manner as is just and reasonable’ and ‘as near as may be, according to the respective values of those interests’ suggest a broad rather than an actuarial approach in which all relevant considerations may be taken into account. They permit, inter alia, consideration of the settlor’s letter of intent which shows, at least, that the settlement was to be regarded as for the benefit of the grandchildren, not of the settlor’s two children. 4. That subsection (3) represents an exclusive code is in my opinion not supported by the form of the section. On the contrary, the structure of it suggests that subsection (2) is the main and general charging provision, subsection (3) being auxiliary and confined to particular cases. These considerations together convince me that an apportionment in respect of ‘interests’ under a discretionary trust can, indeed must, be made. ‘
HL Capital gains tax – Gains accruing to trustee resident outside the UK – UK – resident beneficiaries being both potential objects of discretionary power and having interests contingent on surviving to a specified day – Whether apportionment of gains amongst beneficiaries mandatory – Whether relevant to consider hardship – Manner of apportionment – Finance Act 1965, s 42.

Judges:

Lord Wilberforce, Lord Scarman, Lord Roskill and Lord Brandon

Citations:

[1982] 1 WLR 1319, [1982] 3 All ER 808, [1982] UKHL TC – 56 – 501

Links:

Bailii

Statutes:

Finance Act 1965 42(2)

Jurisdiction:

England and Wales

Cited by:

Cited – Trennery v West (Inspector of Taxes) HL 27-Jan-2005
The House considered the application of the section to ‘flip-flop trusts’. The section allocated liability to charge on gains within a settlement under certain circumstances onto the settlor, and at his rate of tax. Assets were allocated to two . .
Lists of cited by and citing cases may be incomplete.

Capital Gains Tax, Trusts

Updated: 29 June 2022; Ref: scu.222085

Hulbert and Others v Avens and Another: ChD 30 Jan 2003

The claimant sought damages for breach of trust against the defendant solicitors, who had acted as trustees under deeds of trust. They claimed for losses incurred by way of penalties for the late payment of capital gains tax. The defendants said that there should be offset the sums earned by the unpaid tax by way of interest.
Held: Whether a breach of trust had occurred was to be decided as at the date of the alleged acts constituting the breach, but the damages fell to be caculated with respect to the situation as at the date of the hearing. Accordingly the sums received could be set off. Courts of equity did not award damages, but ordered restitution.

Judges:

Richard Seymour QC, J

Citations:

Times 07-Feb-2003

Jurisdiction:

England and Wales

Citing:

Cited – Target Holdings Ltd v Redferns (A Firm) and Another HL 21-Jul-1995
The defendant solicitors had acted for a purchaser, Crowngate, which had agreed to buy a property from a company called Mirage for andpound;775,000. Crowngate had arranged however that the property would first be passed through a chain of two . .
Lists of cited by and citing cases may be incomplete.

Damages, Trusts, Equity

Updated: 28 June 2022; Ref: scu.179023

Robinson v Murdoch and Others (Fraser’s Trustees): HL 3 Aug 1881

Trust – Powers and Duties of Trustees – Bank Stock
A truster directed her trustees to pay the interest of two sums of pounds 2000 to each of two legatees, and thereafter to divide the residue among certain persons. She empowered her trustees to continue to hold any or all of such shares or stocks as should belong to her estate, ‘with power to lend out on such security or securities, heritable or moveable, as they shall consider advantageous, the foresaid legacies of pounds 2000 and pounds 2000 respectively.’ Held (1) that the terms of the deed authorised the retention of certain bank stock as part of the capital, to be set apart for payment of one of the said legacies, and that the trustees, although of opinion that such an investment was not suitable for trust funds, did not act in breach of duty by continuing to hold the bank stock after consulting with the beneficiary and obtaining her approval; but (2) ( rev. judgment of the Court of Session) that the trustees having allocated and appropriated certain investments to each of the two capital funds from which the legacies were to be paid, and having held the funds as separate and distinct, were not entitled to recoup themselves for calls paid by them upon the bank stock belonging to one of these funds out of the other capital fund.

Judges:

Lord Chancellor Selborne, Lord Blackburn, and Lord Watson

Citations:

[1881] UKHL 740, 18 SLR 740

Links:

Bailii

Jurisdiction:

Scotland

Trusts

Updated: 28 June 2022; Ref: scu.636799

Regina v Inner London Education Authority ex parte Brunyate: HL 1989

A trustee with an unlimited power of appointment has an unfettered discretion in his use of the power, but the trustee once appointed owes no duty to the appointor, and must act independently as a trustee.

Citations:

[1989] 1 WLR 542

Jurisdiction:

England and Wales

Cited by:

Cited – Cardinal Vaughan Memorial School, Regina (on The Application of) v The Archbishop of Westminster and Another CA 14-Apr-2011
Parent Governors of the School disputed the appointment by the defendant of representatives to the school governors, saying that they were ineligible in that parents of current students should have been appointed in their stead if available.
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 28 June 2022; Ref: scu.432933

Ulrich v Treasury Solicitor and Others: ChD 28 Jan 2005

A fund was set up before the 1954 Act. Its objects were not entirley charitable, being for the employees of a company. The trustees appealed refusal of a declaration that it was charitable.
Held: The intention was to apply the funds for the benefit of the company’s employees and their dependants who were in difficulties. The trust would be applied exclusively for charitable purposes rather than for the non-charitable ones of benefitting employees of the company generally. Declaration granted. The case of re Wykes was to be preferred to the Gillingham Bus case.

Judges:

Hart J

Citations:

Times 23-Mar-2005

Statutes:

Charitable Trusts (Validation) Act 1954

Jurisdiction:

England and Wales

Citing:

Cited – In re Wykes, deceased; Riddington v Spencer 1961
When looking a the definition section of a statute, the presumption in law that Parliament would be especially precise and careful in its choice of language, is stronger. . .
Cited – In re Gillingham Bus Disaster Fund 1958
. .
Lists of cited by and citing cases may be incomplete.

Charity, Trusts

Updated: 27 June 2022; Ref: scu.224375

Whishaw v Stephens (on appeal from In re Gulbenkian’s Settlement) (No 1): HL 31 Oct 1968

Parties disputed the effect of clauses describing the beneficiaries of a trust.
Held: The clause did not make sense as it stood. In a fixed non-charitable trust (as opposed to a discretionary trust) the court must be able to draw up a list of beneficiaries before a trust can be recognised. The modern approach of a court is not to reject any part of a legal document as meaningless without first trying hard to give it a sensible meaning.

Judges:

Lord Upjohn, Lord Reid, Lord Hodson, Lord Guest, Lord Donovan

Citations:

[1970] AC 508, [1968] UKHL 5

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Gisborne v Gisborne HL 1877
An absolute owner of property can settle his affairs in such a way and on such terms as would relieve his trustees from the responsibility to exercise the degrees of care and prudence which would otherwise be inferred. When a power has been . .

Cited by:

Cited – Hunt and Another v McLaren and others ChD 4-Oct-2006
Land had been given to a football club under a trust for its exclusive use as such. That land was sold and a new ground acquired and a stadium built, but the land was subject to restrictive covenenats limiting its use to sports, which considerably . .
Cited – Re Tuck’s Settlement Trusts CA 1-Nov-1977
By his will, Sir Adolph Tuck sought to ensure that his successors should be Jewish, and stated that the arbitrators of this must be the Chief Rabbi of his community. . .
Lists of cited by and citing cases may be incomplete.

Litigation Practice, Trusts

Updated: 27 June 2022; Ref: scu.220238

Morice v Bishop of Durham: HL 1805

The court was asked whether a gift of residue to be applied ‘to such objects of benevolence and liberality as the Bishop of Durham in his own discretion shall most approve of’ was valid as being confined to purposes that were charitable.
Held: For a non-charitable trust to be given effect at law, the beneficiaries of the trust must be identifiable.
Lord Eldon referred to the preamble to the 1601 Statute, saying: ‘where there is a gift to charity, in general, whether it is to be executed by individuals selected by the testator himself or the King as parens patriae is to execute it . . it is the duty of such trustees, on the one hand, and of the Crown, upon the other, to apply the money to charity in the sense, which the determinations have affixed to that word in this court, viz. either such charitable purposes as are expressed in the Statute . . or to purposes having analogy to those. I believe the expression ‘charitable purposes,’ as used in this court, has been applied to many acts described in that Statute, and analogous to those, not because they can with propriety be called charitable, but as that denomination is by the Statute given to all the purposes described.’ and
‘As it is a maxim, that the execution of a trust shall be under the control of the Court, it must be of such a nature, that it can be under that control; so that the administration of it can be reviewed by the Court; or, if the trustee dies, the Court itself can execute the trust; a trust therefore, which, in case of maladministration could be reformed; and a due administration directed; and then, unless the subject and the objects can be ascertained, upon principles, familiar in other cases, it must be decided, that the Court can neither reform maladministration, nor direct a due administration.’

Judges:

Lord Eldon LC, Sir William Grant MR

Citations:

(1805) 10 Ves Jun 522, [1805] EWHC Ch J80, (1805) 10 Ves 522, (1805) 32 ER 947

Links:

Bailii

Statutes:

Statute of Charitable Uses 1601

Jurisdiction:

England and Wales

Citing:

See Also – Morice v The Bishop of Durham 1789
. .
See Also – Morice v The Bishop of Durham 1789
. .
See Also – Morice v The Bishop of Durham 1789
. .
Appeal from – Morice v The Bishop of Durham CA 26-Mar-1804
Bequest, in trust for such objects of benevolence and liberality as the trustee in his own discretion shall most approve, cannot be supported as a charitable Legacy ; and is therefore a Trust for the next of kin.
Ann Cracherade by her Will, . .

Cited by:

Cited – Hunt and Another v McLaren and others ChD 4-Oct-2006
Land had been given to a football club under a trust for its exclusive use as such. That land was sold and a new ground acquired and a stadium built, but the land was subject to restrictive covenenats limiting its use to sports, which considerably . .
Cited – Gibbs v Harding and others ChD 12-Jan-2007
The testatrix left a will anticipating making another. The court was asked whether a clause leaving her estate to ‘be taken over by the Diocese of Westminster to hold in trust for the Black community of Hackney’ was valid.
Held: The gift was . .
Cited – Morice v The Bishop of Durham 20-Mar-1805
. .
See Also – Morice v The Bishop of Durham 21-Jun-1805
. .
Cited – Helena Partnerships Ltd v HM Revenue and Customs CA 9-May-2012
The company had undertaken substantial building works and sought associated tax relief. The court was asked whether, following a change in the company’s memorandum and articles of association, the company, a registered social landlord, remained a . .
Cited – Inland Revenue v Broadway Cottages CA 26-Jul-1954
Two charitable trusts appealed against decisions disallowing their claim to allowance for relief against income tax of certain incomes.
Held: To be valid, a trust must be one which the Court can control and execute. In this case, the . .
Lists of cited by and citing cases may be incomplete.

Trusts, Charity

Updated: 27 June 2022; Ref: scu.220236

Curley v Parkes: CA 25 Oct 2004

The claimant sought leave to an appeal an order dismissing his claim for an interest in the property owned by his former partner and in which they had co-habited. This was the second such house. He sought an interest under a resulting trust, having contributed to the purchase costs.
Held: Though the judge had not addressed the issue now raised as to whether a resulting trust had arisen, had he done so, it would not have affected the order. Leave refused.

Judges:

Lord Justice Peter Gibson Sir William Aldous

Citations:

[2004] EWCA Civ 1515

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Marsh v von Sternberg QBD 1986
In a constructive trust case, a discount from the open market price given to a sitting tenant by the landlord selling a flat was treated as a relevant contribution by the sitting tenant. . .
Cited – Huntingford v Hobbs CA 1-Mar-1992
The parties lived together in a property transferred to the woman after her divorce. That house was sold and the defendant contributed the capital. There was a joint mortgage, but the plaintiff alone had an income from which to make payments. The . .
Lists of cited by and citing cases may be incomplete.

Trusts, Land

Updated: 27 June 2022; Ref: scu.219664

Wright v Johnson: CA 24 Oct 2001

Dispute between an unmarried couple as to the beneficial ownership of a house in which they formerly lived together – cross appeals against order made.

Judges:

Potter LJ, Sir Martin Nourse

Citations:

[2002] 2 P and CR 15, [2001] EWCA Civ 1667

Links:

Bailii

Jurisdiction:

England and Wales

Trusts, Land

Updated: 27 June 2022; Ref: scu.218484

Mackie v Herbertson and Others (Gloag’s Trustees): HL 6 Mar 1884

A widow having children by her first marriage entered into a second, in contemplation of which she, by antenuptial contract with the second husband, conveyed to trustees her property, heritable and moveable, for behoof of herself in liferent only, excluding the jus mariti, and for behoof of the children ‘procreated or to be procreated’ of her body in fee, in such proportions as she might appoint, or failing such appointment equally. The trustees were infeft in the heritable property thus conveyed, and they entered into management of the estate. There were no children of the second marriage, and the wife died leaving a settlement by which she affected to exercise the power of appointment and deal with her whole property. By this settlement she left only a small legacy, payable, in the discretion of her trustees, to one of the children of the first marriage. Held ( rev. judgment of Second Division) that the marriage-contract conferred upon the children of the first marriage a jus crediti, and was not quoad them a merely testamentary provision, and therefore that their mother could not by her settlement defeat this child’s claims under it.

Judges:

Lord Chancellor, Lord Watson, and Lord Fitzgerald

Citations:

[1884] UKHL 465, 21 SLR 465

Links:

Bailii

Jurisdiction:

Scotland

Family, Trusts, Wills and Probate

Updated: 27 June 2022; Ref: scu.636744

in Re: Abrahams’ Will Trust: ChD 1969

The trustees of a 1948 settlement had advanced funds in 1957 by way of a new settlement, the terms of which did not comply with the rule against perpetuities. Not all the terms of the 1957 settlement would infringe the rule against perpetuities, but the effect of the rule was extensive. For example a child had a life interest subject to protective trusts. The effect of the rule was that the life interest was valid but that the discretionary trusts arising on forfeiture would be invalid, so that, upon a forfeiture, the property would be held on the trusts of the original 1948 settlement. The argument in favour of holding the advancement wholly void was advanced by the Inland Revenue.
Held: The revenue succeeded.
Cross J said: ‘The power which the trustees purported to exercise by setting up Carole’s fund (to take her as an example) and declaring the trusts of it which are contained in the 1957 settlement was a power exercisable for the benefit of Carole, and for nobody else. The various other persons to whom the settlement purported to give benefits were not objects of that power of advancement. The position was that the trustees had a discretion as to the manner in which they would benefit Carole, and they considered that an appropriate way to benefit her would be to create this settlement under which beneficial interests were given to other members of her family besides herself. If one looks at the matter in that way, it seems to me reasonable to hold that the effect of the invalidity of some of the limitations in the settlement by reason of the rule against perpetuities may not be the same as it would have been had the settlement been created by the exercise of a special power of appointment under which all the supposed beneficiaries were objects. It is one thing to say that if a trustee has power to appoint a fund to all or any of a class of objects and he appoints a life interest to one object which is not void for perpetuity and remainders to other objects which are void, then the life interest survives the invalidity of the remainders; but it is another thing to say that if a trustee has power to benefit A. in a number of different ways and he chooses to benefit him by making a settlement on him for life with remainders to his issue, which remainders are void for perpetuity, then A can claim to obtain that part of the benefit intended for him which is represented by the life interest. The interests given to separate objects of an ordinary special power are separate interests, but all the interests created in Carole’s fund were intended as part and parcel of a single benefit to her.’ and
‘Of course, it may well be that, if the invalidity caused by the operation of the rule against perpetuities is quite small as compared with the parts of the settlement which are unaffected by the rule, the court might be prepared to say that the valid parts of the settlement would survive intact. Thus Lord Evershed MR held in the Vestey case that the exercise of the discretion there could be upheld notwithstanding the fact that the trustees were to some extent under a misapprehension as to what its effect would be. But here there is no doubt that the effect of the operation of the rule is wholly to alter the character of the settlement. In my judgment the result of that must be that there never was a valid exercise by the trustees of the power of advancement.’

Judges:

Cross J

Citations:

[1969] 1 Ch 463

Jurisdiction:

England and Wales

Cited by:

Cited – Re Hastings-Bass; Hastings v Inland Revenue CA 14-Mar-1974
Trustees of a settlement had exercised their power of advancement under the section, in order to save estate duty by transferring investments to be held on the trusts of a later settlement. However the actual effect of the advancement was that the . .
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 23 June 2022; Ref: scu.402929

Lomax v Peter Dixon and Son Ltd: CA 1942

A substantial loan was made to be repaid on demand. An agreement was then made where the debtor issued to the creditor 680 loan notes of andpound;500 each, amounting in total to andpound;340,000 (a discount of 6%). The notes were to bear interest at a rate of about 5 per cent. 100 were to be repaid almost immediately and the rest over a period of 20 years. Each note was to be redeemed at a premium of 20% if the debtor’s profits reached a specified level. The issue was whether the discount and premium were capital or income for income tax purposes.
Held: In considering what might be a normal return, it was necessary to consider the circumstances of the transaction or the terms of the security and each case had to be considered on its own facts. Lord Greene discussed the ordinary issue of debentures by a limited company. If the credit of the company was good and the security ample then the issue could be at par at a reasonable rate of interest. If the credit and the security were exceptionally good then the issue could be made at a premium, which would be capital because the subscriber would be getting a good security. Alternatively such a company could issue its debentures at par with a lower rate of interest. If the credit or security were not good then the company could issue the debentures at par but with a high rate of interest, or issue them at a discount with a normal rate of interest, or issue them at par with a premium on redemption. However, the premium on redemption and the premium on issue were the expression of the risk in terms of capital rather than in the terms of interest. Whether income tax was payable depended on the method chosen by the company. The discount and premium in that appeal were capital.

Judges:

Lord Greene MR

Citations:

[1943] 2 All ER 255, [1943] KB 671, [1942] 25 TC 353

Jurisdiction:

England and Wales

Cited by:

Cited – Inland Revenue Commissioners v Sema Group Pension Scheme Trustees CA 19-Dec-2002
The taxpayers appealed a notice under section 703(3) to counteract the tax advantage received by them from a share buy-back scheme. The scheme was an approved pension scheme, under which the quoted company agreed to buy back its own shares.
Cited – Omega Group Pension Scheme v Inland Revenue SCIT 22-Jun-2001
SCIT TRANSACTIONS IN SECURITIES – share buy-backs – trustees of exempt approved scheme purchased shares in Powergen which subsequently bought back the shares – trustees claimed tax credit – whether the scheme . .
Lists of cited by and citing cases may be incomplete.

Trusts, Income Tax

Updated: 23 June 2022; Ref: scu.235781

Bradstock Group Pension Scheme Trustees Ltd v Bradstock Group plc and Others: ChD 17 Jun 2002

The company found itself unable to fund the pension scheme it had committed itself to. If it sought to pay the money due, the company would have to go into liquidation. It did not meet the minimum funding requirements of the Act. The company proposed a scheme of compromise with the trustees.
Held: There was no reason in law why a compromise could not be approved. In a liquidation, the pension trustees would stand as unsecured creditors, and accordingly receive a smaller sum. This was the best practical way forward, and within the powers of the trustees.

Judges:

Mr Charles Aldous QC

Citations:

Times 10-Jul-2002, Gazette 19-Sep-2002

Statutes:

Trustee Act 1925 15, Pensions Act 1995 75

Jurisdiction:

England and Wales

Financial Services, Employment, Trusts

Updated: 18 June 2022; Ref: scu.174309

Horn v Chipperfield: QBD 7 Mar 2019

Application for leave to appeal – whether property held in joint names or as tenants in common in unequal shares – joint tenancy declaration

Judges:

Freedman J

Citations:

[2019] EWHC 537 (QB)

Links:

Bailii

Jurisdiction:

England and Wales

Trusts

Updated: 17 June 2022; Ref: scu.634339

Singh and Others v Teeng and Others: ChD 20 May 2013

Five trustees of a Gurdwara challenged the validity of the election of a new committee, saying that the election had not beenconducted properly.
Held: The trust was in fact, and by concession, entirely a charity, and therefore the chosen method of challenge was not available.

Judges:

Purle C HHJ

Citations:

[2014] EWHC 4813 (Ch)

Links:

Bailii

Statutes:

Charities Act 2011 115(2)

Jurisdiction:

England and Wales

Trusts, Charity

Updated: 17 June 2022; Ref: scu.537772

Lord Walpole v Lord Orford: HL 1797

The court considered the difference between an obligation accepted in law, and what was described as ‘an honourable engagement’.

Judges:

Lord Loughborough LC, Lord Camden L.C

Citations:

(1797) 3 Ves Jun 402, [1797] EngR 489, (1797) 3 Ves Jun 402, (1797) 30 ER 1076

Links:

Commonlii

Jurisdiction:

England and Wales

Citing:

See Also – Lord Walpole v Lord Orford 1789
The court was asked, where there were two inconsistent wills, to which of them a later codicil must be held to refer.
The equitable maxim, voluntas testatoris ambulatotia est usque ad mortem, operates so that an instrument which appears to be . .

Cited by:

Cited – Goodchild and Another v Goodchild CA 2-May-1997
The deceased and his wife made wills in virtually identical form. The husband changed his will after their divorce, but his son and other wife claimed that the couple had intended the wills to be part of a larger arrangement of their affairs, . .
Cited – In re Cleaver dec’d, Cleaver v Insley ChD 1981
Cases of mutual wills are only one example of a wider category of cases, for example secret trusts, in which a court of equity will intervene to impose a constructive trust.
Nourse J said: ‘The principle of all these cases is that a court of . .
Cited – In Re Estate of Monica Dale Dec, Proctor v Dale ChD 11-Feb-1993
The claimant’s parents had made mutual wills dividing their estates equally between the claimant and her brother. After the father’s death the mother chaged her will to give the biggest benefit to the brother.
Held: The mother could change her . .
Cited – In re Dale dec’d ChD 1994
The taking of a benefit on the strength of a binding engagement is enough to create a constructive trust. For this doctrine to apply there must be a contract at law. For the doctrine of mutual wills to apply it is not necessary that the second . .
Lists of cited by and citing cases may be incomplete.

Contract, Trusts

Updated: 16 June 2022; Ref: scu.183793

Khaira and Others v Shergill and Others: CA 17 Jul 2012

The parties disputed the trusteeship and governance of two Gurdwaras (Sikh temples). The defendants now applied for the claim to be struck out on the basis that the differences were as to Sikh doctrines and practice and as such were unjusticiable.
Held: The appeal was allowed. There were no ‘judicial or manageable standards’ by which the issues could be judged, because they turned on the question ‘who is ‘the successor’ of the original founder of the temple trusts’, which was an issue which ‘depends on the religious beliefs and practices of Sikhs generally and the Nirmal Kutia Sikh institution in particular’, and which ‘is not justiciable by the English courts’
The issues were non-justiciable: ‘non-justiciability is a salutary principle of judicial self-restraint. It ensures that judges do not overreach themselves and that they abstain from deciding questions that are neither appropriate for, nor capable of decision by, judicial method. Judges are not capable of understanding and deciding everything and it is not their function to do so. Judges are not omniscient. The courts they sit in are courts of law. There are matters on which a court is not competent to speak with authority, because of the limitations inherent in the nature of the judicial process, and therefore should not speak. That is so where the questions are not matters of law at all, such as subjective inward matters incapable of proof by direct evidence or by inference . . The deeds are silent on the criteria to be applied by another person who is asked to decide the question. It is not just a legal exercise in the construction of English trust deeds. It will be necessary to investigate the doctrines and practices of Sikhism in order to determine the criteria relevant to the claim of the 9th claimant to be successor of the First Holy Saint. In my view, the question of succession is essentially a matter of professed subjective belief and faith on which secular municipal courts cannot possibly reach a decision, either as a matter of law or fact.’

Judges:

Mummery, Hooper, Pitchford LJJ

Citations:

[2012] EWCA Civ 983, [2012] WLR(D) 214, [2012] PTSR 1697

Links:

Bailii

Statutes:

Charities Act 1993 33

Jurisdiction:

England and Wales

Citing:

Cited – General Assembly of Free Church of Scotland v Overtoun HL 1904
Craigdallie stated settled law: ‘My Lords, I disclaim altogether any right in this or any other civil court of this realm to discuss the truth or reasonableness of any of the doctrines of this or any other religious association, or to say whether . .
Cited – Buttes Gas and Oil Co v Hammer (No 3) HL 1981
In a defamation action, issues arose as to two conflicting oil concessions which neighbouring states in the Arabian Gulf had granted over their territorial and offshore waters. The foreign relations of the United Kingdom and Iran were also involved . .
Cited – Regina v Chief Rabbi of the United Hebrew Congregations of Great Britain and the Commonwealth, Ex parte Wachmann 1992
A local rabbi sought judicial review of the declaration of the Chief Rabbi, following an investigation into allegations of adultery with members of his congregation, that he was religiously and morally unfit to occupy his position.
Held: Simon . .
Cited – Regina v The Imam of Bury Park Mosque, Luton and others ex parte Sualiman Ali CA 12-May-1993
The court had been asked to intervene in an internal dispute as to the role of an Imam in a mosque community.
Held: The request was denied. The case was not one of public law: ‘ the particular function which the Imam was performing affected . .
Cited – Regina v Dean and Chapter of St Paul’s Cathedral and Church In Wales ex parte Williamson Admn 22-Aug-1997
The claimant, subject to a vexatious litigant order under the 1981 Act, sought leave to bring judicial review proceedings of a decision by the respondents to appoint a woman to the position of Minor Canon in the cathedral.
Held: Permission was . .
Cited – Varsani and others v Jesani, Patel and Her Majesty’s Attorney-General CA 3-Apr-1998
A Hindu religious sect, constituted as a charity, had split into two factions.
Held: The court had jurisdiction to order that the assets of the sect should be divided under the powers in the Act, and held upon separate trusts for the two . .
Cited – Regina v Provincial Court of Church In Wales ex parte Reverend Williams Admn 23-Oct-1998
No judicial review was available of the decision of a court of the disestablished Church in Wales removing a minister for misconduct. . .
Cited – Blake v Associated Newspapers Ltd QBD 31-Jul-2003
The claimant, a former Anglican priest, sued in defamation. The defendant argued that the claim was non-justiciable since it would require the court to adjudicate on matters of faith and religious doctrine.
Held: The claim could not be heard. . .
Cited – HH Sant Baba Jeet Singh Ji Maharaj v Eastern Media Group and Another QBD 17-May-2010
The claimant, a Sikh religious leader complained of defamation in a Sikh journal in England. The defendant said the claim was non-justiciable since it required the court to pronouce on a matter of religious doctrine.
Held: The plea of . .
Cited – Shergill v Purewal and Another QBD 15-Dec-2010
The court was asked to rule that the action in defamation was non-justiciable depending for its outcome on matters of intepretation of the Sikh faith.
Held: the action was stayed. . .
Cited – Shergill v Purewal and Another CA 22-Jun-2011
The claimant’s defamation action had been stayed as unjusticiable. The second defendant now appealed against an order for costs against it.
Held: The appeal against the costs order was allowed. . .
Cited – Attorney-General v Pearson 1817
No Alteration to Charty’s Objects
A protestant dissenters’ meeting house in Wolverhampton which was declared by a trust deed to be held for ‘the worship and service of God’ was the subject of a dispute between the schismatic congregation. The issue was the nature of the worship . .
Cited – Percy v Church of Scotland Board of National Mission HL 15-Dec-2005
The claimant appealed after her claim for sex discrimination had failed. She had been dismissed from her position an associate minister of the church. The court had found that it had no jurisdiction, saying that her appointment was not an . .

Cited by:

Appeal from – Shergill and Others v Khaira and Others SC 11-Jun-2014
The parties disputed the trusts upon which three Gurdwaras (Sikh Temples) were held. The Court of Appeal had held that the issues underlying the dispute were to be found in matters of the faith of the Sikh parties, and had ordered a permanent stay. . .
Main Judgment – Shergill v Khaira and Others CA 2-Oct-2012
. .
CA Costs – Shergill and Others v Khaira and Others SC 11-Jun-2014
The parties disputed the trusts upon which three Gurdwaras (Sikh Temples) were held. The Court of Appeal had held that the issues underlying the dispute were to be found in matters of the faith of the Sikh parties, and had ordered a permanent stay. . .
Cited – Belhaj and Another v Straw and Others SC 17-Jan-2017
The claimant alleged complicity by the defendant, (now former) Foreign Secretary, in his mistreatment by the US while held in Libya. He also alleged involvement in his unlawful abduction and removal to Libya, from which had had fled for political . .
See Also – Khaira and Others v Shergill and Others ChD 23-Mar-2016
. .
See Also – Shergill and Others v Khaira and Others ChD 3-Mar-2017
The court considered the identification of one of the ancient Sikh gurus in order to ascertain the rights of current gurdwaras . .
See Also – Khaira and Others v Shergill and Others CA 27-Oct-2017
‘This appeal raises technical but important issues on the entitlement of a party who is awarded the costs of an interlocutory appeal to an immediate assessment of those costs. Two issues of general application arise. First, is the party entitled to . .
Lists of cited by and citing cases may be incomplete.

Charity, Ecclesiastical, Trusts

Updated: 14 June 2022; Ref: scu.462895

Oberman v Collins and Another: ChD 21 Dec 2020

Proceedings brought for a declaration that the claimant is beneficially entitled to 50% of a number of properties held by the Defendants either under a common intention constructive trust or a partnership and for relief under sections 994 and 996 of the Companies Act 2006 on the grounds of unfair prejudice.

Judges:

Tom Leech QC (sitting as a Judge of the Chancery Division)

Citations:

[2020] EWHC 3533 (Ch)

Links:

Bailii

Statutes:

Companies Act 2006 994 996

Jurisdiction:

England and Wales

Company, Trusts

Updated: 14 June 2022; Ref: scu.656902

LLB Verwaltung (Switzerland) Ag v Group Seven Ltd and Others: CA 11 Apr 2019

Appeals concerning the scope of liability for dishonest assistance in a breach of trust and for vicarious liability in such circumstances. The parties are a range of professionals and organisations who in one way or another became secondary actors in a very substantial fraud.

Judges:

Lord Justice Henderson, Lord Justice Peter Jackson and Lady Justice Asplin

Citations:

[2019] EWCA Civ 614

Links:

Bailii

Jurisdiction:

England and Wales

Torts – Other, Trusts

Updated: 14 June 2022; Ref: scu.635791

Binnie v Broom and Others: HL 8 Aug 1889

The beneficiaries under a trust-deed raised an action against the trustees to make good loss which it was alleged had been caused by their management of the estate, and averred that when the defenders entered office the estate was sufficient to cover the truster’s liabilities, with a substantial reversion in favour of the pursuers, and that the defenders had exceeded their powers by borrowing upon instead of selling the heritable property. The First Division remitted to an accountant ‘to inquire into the amount of the trust-estate from the date of the truster’s death, the debts due to the truster and paid by the trustees, and the yearly income and expenditure by the trust,’ and disposed of the case upon the basis of the report returned.
On appeal, held that the pursuer was entitled to a proof of his averments respecting the value of the heritable property when the trustees entered office and could have sold it, on the ground that he had never renounced probation, or agreed to accept the report as including the evidence he wished to lead, and that it was still within his right to prove in the ordinary way disputed facts which were not proper matters of accounting, but that the appeal must be affirmed without costs, as the appellant had not previously asked for the restricted proof which was ultimately allowed him.
Opinion (per Lord Watson) that a trustee who has power to sell or borrow is only required to show ordinary prudence in selecting either course, and the question whether or not he acted prudently is one of fact to be solved according to the circumstances of each case.

Judges:

Lords Herschell, Watson, and Fitzgerald

Citations:

[1889] UKHL 794, 6 SLR 794

Links:

Bailii

Jurisdiction:

England and Wales

Trusts

Updated: 14 June 2022; Ref: scu.635174

M’Culloch’s Trustees v Macculloch: HL 24 Nov 1903

A testator directed his trustees on the death of his wife to hold the residue for behoof of his children in liferent, and equally among them and their lawful issue in fee, and on the death of all his children to divide his estate among the children of his sons and daughters per stirpes. He directed that if any of his children died leaving issue, such child’s share of the income should belong to such issue. The son of one of the testator’s sons, who was dead, attained majority after the death of the testator’s widow, and thereupon claimed payment of one-third of the residue. Two of the testator’s children were still alive and had issue. It was admitted that a share of the residue had vested in the beneficiary who now claimed payment. He based his claim (1) upon the terms of the settlement, and also (2), when the case was argued in the House of Lords, upon the 17th section of the Entail Amendment (Scotland) Act 1868, he having been born after the death of the testator, and the testator having died after the passing of that Act.
Held ( aff. judgment of the Second Division) that he was not now entitled to payment or conveyance of any part of the residue, in respect (1) that the testator intended the residue to remain unsevered until the death of the last survivor of his children, and that the interests of the other present and ultimate beneficiaries might be prejudiced by severing the estate now; and (2) that the case was not within the provisions of section 17 of the Entail Amendment (Scotland) Act 1868, because the beneficiary claiming payment was not a liferenter but a fiar.
Miller’s Trustees v. Miller, December 19, 1890, 18 R. 301, 28 S.L.R. 236; and Yuill’s Trustees v. Thomson, May 29, 1902, 4 F. 815, 39 S.L.R. 668, approved, but explained and distinguished per Lord Davey.
Haldane’s Trustees v. Haldane, December 12, 1895, 23 R. 276, 33 S.L.R. 206, approved per Lord Davey.
One of the parties to a special case as to the effect of a trust-disposition and settlement having unsuccessfully appealed to the House of Lords against a unanimous judgment of the Second Division, the House of Lords found him liable in the expenses of the appeal.

Judges:

Lord Chancellor (Halsbury), Lord Macnaghten, Lord Shand, Lord Davey, Lord Robertson, and Lord Lindley

Citations:

[1903] UKHL 88, 41 SLR 88

Links:

Bailii

Jurisdiction:

Scotland

Wills and Probate, Trusts

Updated: 13 June 2022; Ref: scu.630583

JJ Harrison (Properties) Ltd v Harrison: CA 11 Oct 2001

A director had bought land belonging to the company, without disclosing its development potential.
Held: He had acquired the property as a constructive trustee for the company, and was accordingly accountable for it.

Citations:

[2001] EWCA Civ 1467, [2002] 1 BCLC 162

Links:

Bailii

Statutes:

Limitation Act 1981 21(1)

Jurisdiction:

England and Wales

Citing:

Application for leave – J J Harrison (Properties) Ltd v Harrison CA 16-Jul-2001
Application for permission to appeal, an application for permission to adduce fresh evidence on the appeal, and an application for an extension of time in which to appeal. . .

Cited by:

Cited – Newgate Stud Company, Newgate Stud Farm Llc v Penfold, Penfold Bloodstock Limited ChD 21-Dec-2004
The claimants sought damages from the defendant. He had been employed to manage their horse-racing activities, and it was alleged that he had made secret profits. The defendant denied any dishonesty, saying all matters were known to the deceased . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Cited – Halton International Inc Another v Guernroy Ltd CA 27-Jun-2006
The parties had been involved in investing in an airline to secure its future, but it was now said that one party had broken the shareholders’ or voting agreement in not allowing further investments on a pari passu basis. The defendants argued that . .
Lists of cited by and citing cases may be incomplete.

Limitation, Company, Trusts

Updated: 13 June 2022; Ref: scu.201401

Raes v Meek and Others: HL 8 Aug 1889

Trust funds which were held in terms of an antenuptial marriage-contract were lent on the security of houses in the course of erection, and were lost through the insufficiency of the security. The marriage-contract empowered the trustees to lend on heritable securities or personal securities or obligations, and contained a clause which declared that the trustees should not be answerable ‘for errors, omissions, or neglect of diligence, nor for the insufficiency of securities, insolvency of debtors, or depreciation in the value of purchases.’ An action was raised by the beneficiaries who had a contingent right to the fee of the trust-estate, against the trustees and the law-agents in the trust, ‘conjunctly and severally, or severally, or in such other way or manner’ as should seem just, to restore the money to the trust. Defences were lodged for one of the trustees and for the law-agents.
Held (affirming the judgment of the First Division) that the action as against the law-agents fell to be dismissed, on the ground that these defenders would have been liable only if they had been employed to give advice to the appellants and neglected the duty of so doing; and further, that it did not appear from the evidence that the law-agents had been employed to advise the trustees as to the sufficiency of the security, or that the latter acted upon such advice.
Held (reversing the judgment of the First Division) that the trustee was liable, as it appeared from the evidence that he had failed to show the same degree of reasonable care that a man of ordinary prudence would exercise in the management of his own affairs.

Judges:

Lords Herschell, Watson, and Fitzgerald

Citations:

[1889] UKHL 8, 27 SLR 8

Links:

Bailii

Jurisdiction:

Scotland

Trusts

Updated: 11 June 2022; Ref: scu.635176

Inglis v Gillanders: HL 30 May 1895

In his trust-settlement a testator directed his trustees to execute a deed of entail of his estate of Newmore to and in favour of a series of heirs therein specified, ‘whom failing to my nephew J F G, Esquire, of Highfield, and failing the whole persons above specified, then from respect to my deceased grandfather G G, Esquire, of Highfield, to the heir in possession of the estate of Highfield under the entail thereof for the time, and to the other heirs-substitute in said entail in the order set down in said entail successively, declaring that my object and intention is that, failing the above series of heirs named by me, then the said lands and estate hereby conveyed are to be held by the heir of entail of the estate of Highfield along with the said estate of Highfield.’
In a codicil the truster expressed the desire that it should be understood that the destination to J F G, ‘who is now in possession of the estate of Highfield under the entail thereof,’ as well as the ‘subsequent destination to the heir of entail in possession of the said estate of Highfield under the entail thereof for the time, and to the other heirs-substitute in the said entail,’ was made by him out of respect to the memory of his late grandfather G G of Highfield.
The trustees executed a deed of entail by which they disponed the lands of Newmore to the series of heirs other than the heirs-of-entail of Highfield in the words of the destination contained in the trust-deed, ‘whom failing to J F G, Esquire, of Highfield, who is the heir now in possession of the estate of Highfield under the entail thereof executed by G G, Esquire, of Highfield, . . and failing the said J F G, then to the other heirs-substitute in said entail of Highfield in the order set down in said entail respectively, viz.’ – the heirs-substitute in the Highfield entail being then enumerated in their order.
The heir of entail who succeeded to the estate of Highfield after J F G, disentailed that estate, and conveyed it to trustees for behoof of a series of heirs different from those called to the succession in the original entail.
Held (aff. judgment of Second Division) that the testator, in directing the estate of Newmore to be entailed on the heirs-substitute in the Highfield entail, had not made it a condition of their right to succeed to Newmore, that when the succession opened to them they should be in possession of Highfield as heirs of tailzie, and therefore that the trustees had acted in conformity with the testator’s directions in making the destination to the heirs of entail of Highfield in the terms above specified, and that that destination did not become inoperative when the estate of Highfield was disentailed.

Judges:

Lord Chancellor (Herschell), Lord Watson, Lord Ashbourne, Lord Macnaghten, and Lord Shand

Citations:

[1895] UKHL 478

Links:

Bailii

Jurisdiction:

Scotland

Trusts

Updated: 11 June 2022; Ref: scu.634057

Ulrich v Ulrich and Felton: CA 1968

The parties had married, but bought a house when engaged. She had paid one-sixth of the acquisition cost in cash, and he raised the balance by a mortgage in his name.
Held: It was wrong to treat a mortgage contribution as equivalent to a cash contribution.

Judges:

Lord Denning MR and Diplock LJ

Citations:

[1968] 1 WLR 180

Jurisdiction:

England and Wales

Cited by:

Cited – Stack v Dowden HL 25-Apr-2007
The parties had cohabited for a long time, in a home bought by Ms Dowden. After the breakdown of the relationship, Mr Stack claimed an equal interest in the second family home, which they had bought in joint names. The House was asked whether, when . .
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 11 June 2022; Ref: scu.251500

Wilson v Wilson: CA 1963

Citations:

[1963] 1 WLR 1470

Jurisdiction:

England and Wales

Cited by:

Cited – Goodman v Gallant CA 30-Oct-1985
The court reviewed the conflicting authorities with regard to the creation of trusts and held that the overwhelming preponderance of authority was that, in the absence of any claim for rectification or rescission, provisions in a conveyance . .
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 10 June 2022; Ref: scu.181825

Booth v Booth: 14 Nov 1838

A trustee who stands by and sees a breach of trust committed by his co-trustee becomes responsible for that breach of trust.

Citations:

[1838] EngR 922, (1838) 1 Beav 125, (1838) 48 ER 886

Links:

Commonlii

Jurisdiction:

England and Wales

Trusts

Updated: 10 June 2022; Ref: scu.312928

Collier v Kramer: CA 1 Apr 2004

Appeal from a refusal to allow an amendment to join further parties to an action by Mr Michael Collier against solicitors

Citations:

[2004] EWCA Civ 467

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

See Also – Collier v Collier CA 30-Jul-2002
Fraudulent Intent Negated Trust
The daughter claimant sought possession of business premises from her father who held them under leases. He claimed an order that the property was held in trust for him. The judge that at the time the properties were conveyed, the father had been . .

Cited by:

See Also – Collier v Collier CA 30-Jul-2002
Fraudulent Intent Negated Trust
The daughter claimant sought possession of business premises from her father who held them under leases. He claimed an order that the property was held in trust for him. The judge that at the time the properties were conveyed, the father had been . .
Lists of cited by and citing cases may be incomplete.

Land, Trusts

Updated: 10 June 2022; Ref: scu.195901

Lavelle v Lavelle and others: CA 11 Feb 2004

Property had been purchased in the name of of the appellant by her father. She appealed a finding that the presumption of advancement had been rebutted.
Held: The appeal failed. The presumption against advancement had been rebutted on the evidence. The court at first instance should keep a record of why a costs decision was made, particularly where the costs were disproportionate to the values at stake.

Citations:

[2004] EWCA Civ 223, Times 09-Mar-2004

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Chettiar v Chettiar PC 14-Feb-1962
(Malaya) A father, in registering shares in the names of his children, had transferred the beneficial interest in those shares to them. Many years later the father had treated the shares as his own. The question arose as to whether this fact . .
Cited – Finch v Finch 1808
The presumption of advancement in a gift may be rebutted but should not ‘give way to slight circumstances’. . .
Cited – Collier v Collier CA 30-Jul-2002
Fraudulent Intent Negated Trust
The daughter claimant sought possession of business premises from her father who held them under leases. He claimed an order that the property was held in trust for him. The judge that at the time the properties were conveyed, the father had been . .
Cited – Pettitt v Pettitt HL 23-Apr-1969
A husband and wife disputed ownership of the matrimonial home in the context of the presumption of advancement.
Lord Reid said: ‘These considerations have largely lost their force under present conditions, and, unless the law has lost its . .
Cited – Tribe v Tribe CA 26-Jul-1995
Illegal intent alone rebutted presumption
The plaintiff held 499 of the 500 issued shares of a company. In 1986 he wished to retire and transferred 30 shares to his son, one of four children, who was to take over the business. In 1988 he was worried about a bill for dilapidations, and, to . .
Cited – Collier v Collier CA 30-Jul-2002
Fraudulent Intent Negated Trust
The daughter claimant sought possession of business premises from her father who held them under leases. He claimed an order that the property was held in trust for him. The judge that at the time the properties were conveyed, the father had been . .

Cited by:

Cited – Kyriakides v Pippas 2004
When considering the trusts on which land is held, and where there is no declaration of trust, the court puts itself in the position of a jury and considers all the circumstances of the case, so as to arrive at the purchaser’s real intention: ‘I . .
Cited – Crossley v Crossley CA 21-Dec-2005
The claimant appealed an order that a house was to be held in equal shares with her son. The house was registered in their joint names, but the transfer contained no declaration of the interests. The house had been originally bought by the mother . .
Lists of cited by and citing cases may be incomplete.

Trusts, Costs

Updated: 10 June 2022; Ref: scu.194423

Allan’s Trustes v Lord Advocate: HL 1971

The House set out the requirements for a declaration of trust. The truster must have an intention to make himself trustee of his own property and must also do something equivalent to delivery or transfer of the trust fund. The origin of trusts in Scotland is very different and English law is not a good guide.

Judges:

Lord Reid

Citations:

1971 SC (HL) 45, [1970] UKHL 7, [1970] TR 417, 1971 SLT 62

Links:

Bailii

Jurisdiction:

Scotland

Cited by:

Cited – Burnett’s Trustee v Grainger and Another HL 4-Mar-2004
A flat was sold, but before the purchasers registered the transfer, the seller was sequestrated, and his trustee registered his own interest as trustee. The buyer complained that the trustee was unjustly enriched.
Held: The Act defined the . .
Lists of cited by and citing cases may be incomplete.

Land, Trusts

Updated: 10 June 2022; Ref: scu.194211

Cattle v Evans and Another: ChD 19 Apr 2011

The claimant the survivor of a long term relationship with the deceased claimed for provision form his estate, and an interest in the house under a constructive trust. The parties had moved several times buying and selling properties.
Held: The claim for a constructive trust failed. The parties had latterly kept their properties and financial affairs separate. The actual ownership arrangements reflected that intention. As to the claim under the 1975 Act, the claimant did fall within the class to be provided for. Under the laws of intestacy, the claimant would receive nothing at all. The actual beneficiaries did not themselves have financial needs, but the claimant would be receiving welfare benefits. Allowing for all the elements required to be accounted for, reasonable financial provision had not been made. A sum should be made available from the estate to her to allow her the purchase of a modest property.

Judges:

Kitchin J

Citations:

[2011] EWHC 945 (Ch), [2011] WTLR 947, [2011] Fam Law 809

Links:

Bailii

Statutes:

Inheritance (Provision for Family and Dependants) Act 1975 1(1)(ba)

Jurisdiction:

England and Wales

Wills and Probate, Trusts

Updated: 10 June 2022; Ref: scu.432856

Westminster City Council v Haywood and Another: ChD 12 Mar 1996

The Pensions Ombudsman may not order trustees of a pension scheme to pay compensation which was ultra vires the scheme.

Citations:

Times 12-Mar-1996

Statutes:

Pensions Act 1993

Jurisdiction:

England and Wales

Cited by:

Cited – Hillsdown Holdings plc v Pensions Ombudsman 1997
The court had to answer the question of whether the Pensions Ombudsman could make orders which the court could not.
Held: It could not, Knox J said: ‘there is a real distinction between ordering compensation for inconvenience and distress . .
Lists of cited by and citing cases may be incomplete.

Financial Services, Trusts

Updated: 10 June 2022; Ref: scu.90423

Wight and another v Olswang: ChD 18 Apr 2000

When assessing the actions of a trustee in making investment decisions, the presence of breaches of trust did not require any higher standard of decision making, and no claim by disappointed beneficiaries could succeed without showing that the decision was one which no reasonable man of ordinary prudence in that trustees circumstances of knowledge and background could have made.

Citations:

Times 18-Apr-2000, Gazette 05-May-2000

Jurisdiction:

England and Wales

Citing:

Appealed to – Wight and Wight v Olswang CA 7-Dec-2000
. .

Cited by:

Appeal from – Wight and Wight v Olswang CA 7-Dec-2000
. .
Lists of cited by and citing cases may be incomplete.

Trusts, Financial Services

Updated: 10 June 2022; Ref: scu.90491

Wight and Another v Olswang and Another: ChD 17 Sep 1998

Where a clause exempting trustees was ambiguous. the clause would be construed against the trustee. Where second such clause exempted only unpaid trustees but in limited fashion, a first clause was to be read similarly.

Citations:

Times 17-Sep-1998

Jurisdiction:

England and Wales

Citing:

Appealed To – Wight, Wight v Olswang, Peters CA 29-Apr-1999
Where a trustee sought to rely upon an exemption clause, to relieve him against a claim for a breach of trust, the exemption clause would be of no avail where the trustee was to be paid for his services. The terms of these clauses were . .

Cited by:

Appeal from – Wight, Wight v Olswang, Peters CA 29-Apr-1999
Where a trustee sought to rely upon an exemption clause, to relieve him against a claim for a breach of trust, the exemption clause would be of no avail where the trustee was to be paid for his services. The terms of these clauses were . .
Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 09 June 2022; Ref: scu.90492

Montgomery v Zarifi and Others: HL 28 Jun 1918

By a settlement executed prior to the marriage of a domiciled Scotchman to a domiciled Englishwoman it was provided-‘It is hereby agreed and declared by all the parties hereto, and particularly by the husband, that these presents shall be construed, and that the rights of all parties claiming hereunder shall be regulated, according to the law of England, in the same manner as if the husband were now domiciled in England and as if the husband and wife were to remain henceforth during their respective lives domiciled in England.’
The husband having obtained in the Scotch courts a decree of divorce for adultery against the wife, he sought declarator that a liferent in favour of the wife of certain funds held under the settlement had been lost by her and should be paid to him on the footing of her death, or alternatively that he was entitled to such an equitable modification of the settlement as would have been made by the English courts if the divorce had been there granted.
Held, sus. decision of the First Division, that the trustees under the settlement fell to be assoilzied from the earlier conclusions, and that the alternative conclusion fell to be dismissed.

Judges:

Lord Chancellor (Finlay), Viscount Haldane, Lord Dunedin, and Lord Shaw

Citations:

[1918] UKHL 597, 55 SLR 597

Links:

Bailii

Jurisdiction:

Scotland

Trusts

Updated: 09 June 2022; Ref: scu.631477