Sheffield v Sheffield and Others: ChD 13 Dec 2013

Trial of a claim by which the Claimant in his capacity as a beneficiary of a family trust seeks various accounts and payments of (a) a quarter of certain trust income received by the trust which he maintains should have been but was not paid to him; (b) a quarter of the income which he maintains the trustees ought to have obtained but failed to obtain from the exploitation of the trust assets and (c) restitution or compensation for benefits received or conferred by the trustees on others without his consent.

Pelling QC HHJ
[2013] EWHC 3927 (Ch)
Bailii

Trusts

Updated: 28 November 2021; Ref: scu.519349

in Re Kayford Ltd: ChD 1975

The court considered what was meant by the ‘certainty of words’ requirement necessary to create a trust. Megarry J said: ‘The sender may create a trust by using appropriate words when he sends the money (though I wonder how many do this, even if they are equity lawyers), or the company may do it by taking suitable steps on or before receiving the money. If either is done, the obligations in respect of the money are transformed from contract to property, from debt to trust. Payment into a separate bank account is a useful (though by no means conclusive) indication of an intention to create a trust, but of course there is nothing to prevent the company from binding itself by a trust even if there are no effective banking arrangements.’

Megarry J
[1975] 1 WLR 279, [1975] 1 All ER 604
England and Wales
Cited by:
CitedIn re SSSL Realisations (2002) Ltd and Another; Squires and others v AIG Europe (UK) Ltd and Another CA 18-Jan-2006
A creditor claiming an equity in a debt but who himself owed money to the debtor, could not pursue his claim without first contributing the sum due. A person could not take an aliquot share out of a fund without first contributing what he owed to . .

Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 23 November 2021; Ref: scu.416573

Gissing v Gissing: HL 7 Jul 1970

Evidence Needed to Share Benefical Inerests

The family home had been purchased during the marriage in the name of the husband only. The wife asserted that she had a beneficial interest in it.
Held: The principles apply to any case where a beneficial interest in land is claimed by a person, whether spouse or stranger, in whom the land is not vested. A common intention has to be inferred from the parties’ conduct as to how the beneficial interest is to be held. The relevant intention is that which a reasonable person would draw from the parties’ words or conduct. The court must determine what inferences can reasonably be drawn in each case.
Viscount Dilhorne said: ‘It may be that it is alleged that some time after the acquisition of the matrimonial home the spouses formed the intention of sharing the beneficial interest. It may well be difficult to establish this but if it was, for instance, proved that up to the time when such an intention is alleged to have been formed, the mortgage payments were made by one spouse and thereafter by the other, then proof of that would tend to support the allegation.’
Lord Diplock said that where the most likely inference from the parties’ conduct is that the beneficial interest was not to belong solely to the party in whom the legal title is vested, the court must determine what in all the circumstances is a fair share: ‘A resulting, implied or constructive trust – and it is unnecessary for present purposes to distinguish between these three classes of trust – is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. And he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land.’
As to the shares upon which the property was held: ‘In such a case [where the court is satisfied that it was the common intention of both spouses that the contributing wife should have a share in the beneficial interest and that her contributions were made upon this understanding] the court must first do its best to discover from the conduct of the spouses whether any inference can reasonably be drawn as to the probable common understanding about the amount of the share of the contributing spouse upon which each must have acted in doing what each did, even though that understanding was never expressly stated by one spouse to the other or even consciously formulated in words by either of them independently. It is only if no such inference can be drawn that the court is driven to apply as a rule of law, and not as an inference of fact, the maxim ‘equality is equity’, and to hold that the beneficial interest belongs to the spouses in equal shares.
The same result however may often be reached as an inference of fact. The instalments of a mortgage to a building society are generally repayable over a period of many years. During that period, as both must be aware, the ability of each spouse to contribute to the instalments out of their separate earnings is likely to alter, particularly in the case of the wife if any children are born of the marriage. If the contribution of the wife in an early part of the period of repayment is substantial but is not an identifiable and uniform proportion of each instalment, because her contributions are indirect or, if direct, are made irregularly, it may well be a reasonable inference that their common intention at the time of the acquisition of the matrimonial home was that the beneficial interest should be held by them in equal shares and that each should contribute to the cost of its acquisition whatever amounts each could afford in the varying exigencies of family life to be expected during the period of repayment. In the social conditions of today this would be a natural enough common intention of a young couple who were both earning when the house was acquired but who contemplated having children whose birth and rearing in their infancy would necessarily affect the future earning capacity of the wife.’

Lord Diplock, Viscount Dolhorne, Lord Reid, Lord Morris, Lord Pearson
[1970] 3 WLR 255, [1971] AC 886, [1970] 2 All ER 780, [1970] UKHL 3
Bailii
England and Wales
Cited by:
CitedRoy Green v Vivia Green PC 20-May-2003
PC (Jamaica) The claimant sought a declaration that he was entitled to one half of the marriage assets on divorce. They had each acquired various properties and assets both in Jamaica and the USA. The judge at . .
CitedB and Others Russell McVeagh McKenzie Bartleet and Co v Auckland District Law Society, Gary J Judd PC 19-May-2003
(New Zealand) Solicitors resisted requests to disclose papers in breach of legal professional privilege from their professional body investigating allegations of professional misconduct against them.
Held: The appeal was allowed. The . .
ConsideredSpringett v Defoe CA 1992
Partners lived together, without being married, as secure joint tenants. They exercised the right to buy, contributing three quarters and one quarter of the price respectively. At the time they intended to marry. They did not discuss he shares, and . .
CitedFoskett v McKeown and Others CA 27-Jun-1997
Various people had paid money with the promise of acquiring an interest in land in Portugal. The scheme was fraudulent. The funds had been used to purchase a life/investment policy. The policy was held in trust for the fraudster’s mother but he had . .
CitedLloyds Bank plc v Rosset HL 29-Mar-1990
The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest . .
CitedYaxley v Gotts and Another CA 24-Jun-1999
Oral Agreement Creating Proprietory Estoppel
The defendant offered to give to the Plaintiff, a builder, the ground floor of a property in return for converting the house, and then managing it. They were friends, and the oral offer was accepted. The property was then actually bought in the name . .
AppliedStokes v Anderson CA 1991
The claimant had made two payments, amounting together to andpound;12,000, towards the acquisition of the one half share of the defendant’s ex-wife in the net equity (valued at andpound;90,000) in a house in which the claimant and the respondent . .
CitedHyett v Stanley and others CA 20-Jun-2003
The couple had lived together at the property without being married for several years. The house was held in the man’s sole name, and after his death she sought a half share in it. It was established that she had been told she should have a half . .
AppliedBurns v Burns CA 1984
Long Relationship Not Enough for Interest in Home
The parties lived together for 17 years but were not married. The woman took the man’s name, but beyond taking on usual household duties, she made no direct financial contribution to the house. She brought up their two children over 17 years. . .
CitedWalker v Hall CA 1984
The court considered the way of distributing property purchased by an unmarried couple: ‘When such a relationship comes to an end, just as with many divorced couples, there are likely to be disputes about the distribution of shared property. How are . .
CitedTurton v Turton CA 1988
When ascertaining the beneficial interests in a family home purchased by an unmarried couple, those interests had to be ascertained from consideration of the intentions of the parties at the time of the purchase; they were not to be left for . .
CitedGrant v Edwards and Edwards CA 24-Mar-1986
A couple were not married but lived together in Vincent Farmhouse in which the plaintiff claimed a beneficial interest on separation. The female partner was told by the male partner that the only reason for not acquiring the property in joint names . .
CitedMcFarlane v McFarlane CANI 1972
The parties disputed their respective shares in the family home. The facts in Pettitt and Gissing ‘were not such as to facilitate or encourage a comprehensive statement of this vexed branch of the law’ and ‘much remains unsettled.’ The court . .
CitedSpringette v Defoe CA 1-Mar-1992
Property was purchased in joint names, but with no express declaration of the beneficial interests. The couple had lived together for a short time as joint tenants of the local authority. They were able to purchase at a substantial discount from the . .
CitedCobbe v Yeomans Row Management Ltd and Others ChD 25-Feb-2005
Principles for Proprietary Estoppel
A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement . .
CitedVan Laethem v Brooker and Another ChD 12-Jul-2005
The claimant asserted an interest in several properties by virtue of a common intention constructive trust or by proprietary estoppel. The parties had been engaged to be married.
Held: ‘A [constructive] trust arises in connection with the . .
CitedCollier 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 . .
CitedClarke v Harlowe ChD 12-Aug-2005
The parties lived together. They acquired between them several properties of which the last was declared to be held as joint tenants. The relationship broke down. The parties now sought a declaration as to the destination of the proceeds of sale, . .
CitedStack 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 . .
CitedEves v Eves CA 28-Apr-1975
The couple were unmarried. The female partner had been led by the male partner to believe, when they set up home together, that the property would belong to them jointly. He had had told her that the only reason why the property was to be acquired . .
CitedJames v Thomas CA 23-Nov-2007
The claimant sought an interest in the property registered in the sole name of the respondent. The respondent had inherited a share in the property, and then bought out the interests of his siblings with support of a loan. The claimant had made no . .
CitedFowler v Barron CA 23-Apr-2008
The parties had lived together for many years but without marrying. The house had been put in joint names, but without specific advice on the issue or any express declaration of trust. In practice Mr Barron made the direct payments for the house and . .
CitedKilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd and Another CA 16-Nov-2005
The defendant had brought in the claimant in order to assist in satisfying its own obligations under a lease. The joint venture was not recorded in a formal agreement. The appellant asserted that a constructive trust had been created. The judge had . .
CitedParris v Williams CA 23-Oct-2008
The parties had been business partners, but the business failed, and Mr Williams was made bankrupt. Mr Parris was offered a chance to purchase two apartments, and did so in his own name. Mr Williams asserted an interest, saying that it had been a . .
CitedThorner v Major and others HL 25-Mar-2009
The deceased had made a will including a gift to the claimant, but had then revoked the will. The claimant asserted that an estoppel had been created in his favour over a farm, and that the defendant administrators of the promisor’s estate held it . .
CitedCooper and Others v Fanmailuk.Com Ltd and Another CA 17-Dec-2009
F claimed to be the beneficial owner of shares registered in the names of the claimants. The appellants challenged a finding that the shares were held on trust for F, and the implication that the first appellant had presented a dishonest claim.
CitedClarke and Another v Corless and Another CA 31-Mar-2010
The claimants appealed against refusal of a declaration that a neighbouring access road and land was held on a constructive trust. They said that an agreement bewteeen the parties should have been effective to impose a trust on the defendants. The . .
CitedJones v Kernott SC 9-Nov-2011
Unmarried Couple – Equal division displaced
The parties were unmarried but had lived together. They now disputed the shares in which they had held the family home. It had been bought in joint names, but after Mr Kernott (K) left in 1993, Ms Jones (J) had made all payments on the house. She . .
CitedSingh v Singh and Another ChD 8-Apr-2014
The parties disputed ownership of various valuable properties. The father asserted that they were held under trusts following the Mitakshara Hindu code, under a common intention constructive trust. The son said that properties held in his own name . .
CitedLloyds Bank plc v Rosset CA 13-May-1988
Claim by a wife that she has a beneficial interest in a house registered in the sole name of her husband and that her interest has priority over the rights of a bank under a legal charge executed without her knowledge. The case raises a point of . .
CitedSen v Headley CA 28-Feb-1991
D, who was in hospital and near death, said to R (his former partner): ‘The house is yours, Margaret. You have the keys. They are in your bag. The deeds are in the steel box.’ After D’s death R discovered that D had put had put into her bag the only . .

Lists of cited by and citing cases may be incomplete.

Family, Trusts, Estoppel

Leading Case

Updated: 25 November 2021; Ref: scu.182237

William Sutherland, of Little Torbol, Esq v Alexander Gordon of Ardoch, Esq Et Alii: HL 7 Mar 1751

Provision to Heirs and Children. – Fiar absolute and limited.-
A disposition in a marriage contract to the heir of the marriage in fee, with an obligation to infeft, and absolute warrandice, imports only a right of succession, and not a jus crediti, in a question with onerous creditors.
Inhibition.-
A right of succession under a marriage contract cannot by inhibition be made effectual against onerous creditors of the father.

[1751] UKHL 1 – Paton – 493
Bailii
Scotland

Trusts

Updated: 22 November 2021; Ref: scu.558206

Cattley and Another v Pollard and Another: ChD 7 Dec 2006

The first defendant solicitor misappropriated money from an estate he was administering. The beneficiaries later commenced proceedings against his wife, alleging knowing assistance. She said that that claim was out of time. The claimant responded said that any limitation period was disapplied as ‘any fraud or fraudulent breach of trust to which the trustee was party’.
Held: The defendant was only a trustee by construction, and the section applied only to those expressly trustees. However, the running of time only began when a beneficiary’s interest in a trust ceased to be a future interst, and also only at a time when the beneficiary might with reasonable diligence have discovered the fraud. On that background, the claim was not barred.

Richard Sheldon, QC
Times 23-Jan-2007, [2006] EWHC 3130 (Ch), [2007] 2 All ER 1086, [2007] Ch 353
Bailii
Limitation Act 1980 21(1)(a)
England and Wales
Cited by:
See AlsoCattley and Another v Pollard ChD 6-Jul-2007
The estate had been defrauded by theis solicitor. The proceeds had been used toward the purchase of a property. The defendant had first been the solicitor’s secretary and had become his wife, and transferee of the property. She denied that she had . .
CitedWilliams 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 . .
CitedWilliams v Central Bank of Nigeria SC 19-Feb-2014
Bank not liable for fraud of customer
The appellant sought to make the bank liable for a fraud committed by the Bank’s customer, the appellant saying that the Bank knew or ought to have known of the fraud. The court was asked whether a party liable only as a dishonest assistant was a . .

Lists of cited by and citing cases may be incomplete.

Trusts, Limitation, Torts – Other, Equity

Updated: 19 November 2021; Ref: scu.248263

Richards v Dove: ChD 1974

[1974] 1 All ER 888
Cited by:
AppliedBurns v Burns CA 1984
Long Relationship Not Enough for Interest in Home
The parties lived together for 17 years but were not married. The woman took the man’s name, but beyond taking on usual household duties, she made no direct financial contribution to the house. She brought up their two children over 17 years. . .

Lists of cited by and citing cases may be incomplete.

Family, Trusts

Updated: 19 November 2021; Ref: scu.198162

Hazell v Hazell: CA 1972

The parties disputed the shares they should take in a family home.
Held: Shares should normally be ascertained at the time of separation – not at the date when they acquired the house. If a wife contributes directly or indirectly, in money or money’s worth, to the initial deposit or to the mortgage instalments.
Megaw LJ summed up succinctly that it would be sufficient to let the wife in to share the matrimonial home ‘if as a matter of common sense the wife’s contributions ought to be treated as being a contribution towards the expenses of the acquisition of the matrimonial home.’

Lord Denning MR, Megaw LJ
[1972] 1 All ER 923, [1972] 1 WLR 301
England and Wales
Cited by:
AppliedBurns v Burns CA 1984
Long Relationship Not Enough for Interest in Home
The parties lived together for 17 years but were not married. The woman took the man’s name, but beyond taking on usual household duties, she made no direct financial contribution to the house. She brought up their two children over 17 years. . .

Lists of cited by and citing cases may be incomplete.

Family, Trusts

Updated: 19 November 2021; Ref: scu.189967

Falconer v Falconer: CA 1970

[1970] 3 All ER 449
England and Wales
Cited by:
AppliedBurns v Burns CA 1984
Long Relationship Not Enough for Interest in Home
The parties lived together for 17 years but were not married. The woman took the man’s name, but beyond taking on usual household duties, she made no direct financial contribution to the house. She brought up their two children over 17 years. . .

Lists of cited by and citing cases may be incomplete.

Trusts, Family

Updated: 19 November 2021; Ref: scu.198161

Dunne v Byrne: PC 22 Feb 1912

Will – Construction – Charitable Bequest – Fund to be expended for the Good of
Religion – Religious Purposes.
Held, that a residuary bequest ‘to the Roman Catholic Archbishop of Brisbane and his successors to be used and expended wholly or in part as such Archbishop may judge most conducive to the good of religion in this diocese’ is not a good charitable bequest and is void. The expression used by the testator is not identical with the expression ‘for religious purposes.’
Where the purposes of a trust are expressed in plain language, it is not permissible to appeal to the nature of the trustee in order to impart a charitable character.
What the Archbishop might consider to be conducive to ‘the good of religion’ could cover activities that were not charitable in law. It was the width of the subjective view of the Archbishop and the lack of restriction to purely charitable religious activities that were fatal to the charitable status of the gift.
Lord Macnaghten said: ‘The fund is to be applied in such manner as the ‘Archbishop may judge most conducive to the good of religion’ in his diocese. It can hardly be disputed that a thing may be ‘conducive’, and in particular circumstances ‘most conducive’, to the good of religion in a particular diocese or in a particular district without being charitable in the sense which the Court attaches to the word, and indeed without being in itself in any sense religious.’
Lord Macnaghten managed to distinguish the case from the general principle that a gift for religious purposes is a good charitable gift by reasoning: ‘This is not in terms a gift for religious purposes, nor are the words synonymous with that expression. Their Lordships agree with the opinion of the Chief Justice that the expression used by this testator is wider and more indefinite.’

Lord MacNaghten
[1912] AC 407, [1912] UKLawRpAC 16, (1912) 28 TLR 257, [1911-13] All ER 1105, [1912] UKPCHCA 2, (1912) 16 CLR 500, (1912) 18 Argus LR 122
Commonlii, Austlii, Bailii
Australia
Citing:
Appeal fromJames Byrne v Robert Dunne 16-Dec-1910
(High Court of Australia) Will – Bequest for religious purposes – Charitable trust – Uncertainty – Gift of residue to Roman Catholic Archbishop and successors – ‘ To be used wholly or ‘ in part as ‘ the donee ‘ may judge most conducive to the good . .
ExemplarWhite, In re; White v White ChD 8-Feb-1893
A testator gave his property ‘to the [listed] religious societies, to be divided in equal shares among them,’ the particular objects not being named.
Held: (reversing Kekewich J) A bequest to a religious institution, or for a religious . .

Cited by:
CitedBath and North East Somerset Council v HM Attorney General, The Treasury Solicitor (Bona Vacantia) ChD 31-Jul-2002
Land was conveyed to the Council’s predecessor on condition that it be left available for use for sports and similar recreations, and left as an open space. It was now sought to develop the land as a home for a football club. The Council sought . .
CitedGilmour v Coats HL 1949
Prayers Alone did not make Convent Charitable
A trust to apply the income of a fund for all or any of the purposes of a community of Roman Catholic Carmelite nuns living in seclusion and spending their lives in prayer, contemplation and penance, was not charitable because it could not be shown . .

Lists of cited by and citing cases may be incomplete.

Trusts, Charity, Wills and Probate

Updated: 17 November 2021; Ref: scu.181218

Pink v Lawrence: CA 1977

Buckley LJ (with whom the other members of the Court agreed) said that: ‘Where there is an express declaration of trust, the doctrine of constructive trusts cannot be referred to contradict the expressly declared trust. The doctrine of constructive trusts is one which applies in circumstances in which there is no declared trust.’

Buckley LJ
(1977) 36 P and CR 98
England and Wales
Cited by:
CitedGoodman 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: 16 November 2021; Ref: scu.181827

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 declaring that the plaintiff and the defendant were to hold the proceeds of sale of the property ‘upon trust for themselves as joint tenants’ concludes the question of the respective beneficial interests of the two parties in so far as that declaration of trust, on its true construction, exhaustively declares the beneficial interests. Severance of a beneficial joint tenancy results in a beneficial tenancy in common in equal shares.
Lord Justice Slade said: ‘In a case where the legal estate in property is conveyed to two or more persons as joint tenants, but neither the conveyance nor any other written document contains any express declaration of trust concerning the beneficial interests in the property (as would be required for an express declaration of this nature by virtue of s 53(1)(b) of the Law of Property Act 1925), the way is open for persons claiming a beneficial interest in it or its proceeds of sale to rely on the doctrine of ‘resulting, implied or constructive trusts’ (see s 53(2) of the Law of Property Act 1925). In particular, in a case such as that, a person who claims to have contributed to the purchase price of the property which stands in the name of himself and another can rely on the well-known presumption of equity that a person who has contributed a share of the purchase price of property is entitled to a corresponding proportionate beneficial interest in the property by way of implied or resulting trust (see, for example, Pettitt v Pettitt [1970] AC 777 at 813-814, per Lord Upjohn). . . .’

Slade, Purchase LJJ, Sir Roualeyn Cumming-Bruce
[1986] Fam 106, [1985] EWCA Civ 15, [1986] 1 FLR 513, [1986] 2 WLR 236
Bailii
Trustee Act 1925
England and Wales
Citing:
CitedWilson v Wilson CA 1963
. .
CitedLeake (formerly Bruzzi) v Bruzzi CA 1974
The house was purchased in the husband’s sole name with a declaration of trust in favour of the husband and wife, holding the property as joint tenants. The wife had left the matrimonial home, and the husband had paid all the mortgage instalments . .
CitedPink v Lawrence CA 1977
Buckley LJ (with whom the other members of the Court agreed) said that: ‘Where there is an express declaration of trust, the doctrine of constructive trusts cannot be referred to contradict the expressly declared trust. The doctrine of constructive . .
rejectedBedson v Bedson CA 1965
The parties, a married couple disputed the shares in which the matrimonial home, formerly held by them as joint tenants would be held after severance o that joint tenancy.
Held: The wife was entitled to a half share in the property.
Cited by:
CitedStack v Dowden CA 13-Jul-2005
The parties purchased a property together. The transfer contained a survivorship restriction but no declaration of the beneficial interests. The judge had held the property to be held as tenants in commn on equal shares.
Held: In a case where . .
CitedClarke v Harlowe ChD 12-Aug-2005
The parties lived together. They acquired between them several properties of which the last was declared to be held as joint tenants. The relationship broke down. The parties now sought a declaration as to the destination of the proceeds of sale, . .
CitedPudner and Another v Pudner CA 27-Feb-2006
The parties challenged the validity of a will, and claimed the house by survivorship. The house had been conveyed into joint names, but the solicitors on registration had declared it a tenancy in common. This was said to have been a mistake.
CitedStack 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, Land

Updated: 16 November 2021; Ref: scu.181824

Bernard v Josephs: CA 30 Mar 1982

The court considered the division of proceeds of sale of a house bought by an unmarried couple.
Held: Where the trusts for which a property was purchased have been concluded, the house should be sold.
Griffiths LJ said: ‘the fact that one party paid the mortgage may indicate that it was recognised by the couple that that party was solely responsible for providing the purchase price and therefore to be regarded as the sole beneficial owner . . When the proceeds of sale are realised there will have to be equitable accounting between the parties before the money is distributed. If the woman has left, she is entitled to receive an occupation rent, but if the man has kept up all the mortgage payments, he is entitled to credit for her share of the payments:if he has spent money on recent redecoration which results in a much better sale price, he should have credit for that, not as an altered share, but by repayment of the whole or a part of the money he has spent. These are but examples of the way in which the balance is to be struck . . It might in exceptional circumstances be inferred that the parties agreed to alter their beneficial interests after the house was bought; an example would be if the man bought the house in the first place and the woman years later used a legacy to build an extra floor to make more room for the children. In such circumstances the obvious inference would be that the parties agreed that the woman should acquire a share in the greatly increased value of the house produced by her money. But this depends on the court being able to infer an intention to alter the share in which the beneficial interest was previously held; the mere fact that one party has spent time and money on improving the property will not normally be sufficient to draw such an inference.’

Griffiths LJ, Lord Denning MR, Kerr LJ
[1982] 1 Ch 391, [1982] 3 All ER 162, [1982] 2 WLR 1052
Bailii
England and Wales
Citing:
CitedPettitt 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 by:
CitedClarke v Harlowe ChD 12-Aug-2005
The parties lived together. They acquired between them several properties of which the last was declared to be held as joint tenants. The relationship broke down. The parties now sought a declaration as to the destination of the proceeds of sale, . .
CitedStack 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 . .
CitedJames v Thomas CA 23-Nov-2007
The claimant sought an interest in the property registered in the sole name of the respondent. The respondent had inherited a share in the property, and then bought out the interests of his siblings with support of a loan. The claimant had made no . .
CitedHopton v Miller ChD 31-Aug-2010
The parties had entered into partnership to open and run a restaurant, but without a formal agreement. They differed as to the values contributed by their respective efforts. After failures to disclose materials requested, the defendant we precluded . .

Lists of cited by and citing cases may be incomplete.

Trusts, Family

Updated: 16 November 2021; Ref: scu.240309

Norwich and Peterborough Building Society v Steed: CA 5 Mar 1992

The land-owner had given his mother power of attorney over his home. Her signature was forged on a transfer, and the transferee executed a charge in favour of the appellant. Transfer and charge were registered. A first line of cases restored the defendant to the title, but the original transfer had been found voidable, and the charge left in effect.

Purchas, Butler-Sloss, Scott LJJ
[1992] EWCA Civ 5, [1993] Ch 116
Bailii
England and Wales
Citing:
See AlsoArgyle Building Society v Hammond CA 1984
The registered freehold proprietor (S) of a property lived abroad, his mother having power of attorney. His sister and her husband, Mr and Mrs Hammond, had the register altered to show themselves as the freehold proprietors. The primary case was . .

Cited by:
CitedGold Harp Properties Ltd v Macleod and Others CA 29-Jul-2014
The company appealed against an order re-instating to the register leases which the company said it had forfeited for non-payment of rent. After the forfeiture, the landlord had granted new leases. It appealed saying that exceptional circumstances . .

Lists of cited by and citing cases may be incomplete.

Registered Land, Trusts

Updated: 14 November 2021; Ref: scu.262622

Hansford v Dawson (Beneficial Interests, Trusts and Restrictions : Matrimonial and Similar Disputes): LRA 17 Apr 2014

LRA Resulting or constructive trusts – respondent the sole registered proprietor of a property – parties in a relationship prior to respondent purchasing the property and becoming engaged to marry – parties live together in the property for over five years — applicant contributing to the costs of the household including the mortgage instalments – applicant carrying out works to improve the property – claim by applicant to have a beneficial interest in the property – issues as to whether the parties had a common intention as to ownership prior to the purchase of the property or as a result of the works being carried out – issue as to whether the parties agreed the applicant should have a beneficial interest in the house at the time of separation – effect of the engagement.

[2014] EWLandRA 2013 – 0388
Bailii
England and Wales

Registered Land, Trusts

Updated: 11 November 2021; Ref: scu.546258

Harries and Others v Church Commissioners for England and Another: ChD 25 Oct 1991

Trustees Investing using Wider Considerations

The applicant sought a declaration that the Commissioners were obliged to have regard to the object of promoting the Christian faith and not to act in a manner which would be incompatible with that object when managing the assets of which they were trustees. The plaintiffs said that the commissioners, in making investment decisions, attached overriding importance to financial considerations, and that they were only prepared to take non-financial considerations into account to the extent that they did not significantly jeopardise or interfere with accepted investment principles.
Held: The declarations sought were refused. The Church Commissioners were entitled to take ethical considerations into account in forming an investment policy provided there was no risk of detriment to the Trust funds. Ethical investments putting financial return at risk were not open to trustees. Investments should aim for the best return, and be chosen only not to conflict with any express aims of the charity, and should not be used to make moral statements. Trustees must find balance neither bringing their charity into disrepute, nor failing to act with prudence. Such considerations could be allowed provided they did not adversely affect the return.
When property was held by trustees for the purpose of generating money, then prima facie, the purposes of the trust were best served by the trustees seeking to obtain the best return which was consistent with commercial prudence and in most cases, the best interests of the charity required that the trustees’ choice of investments be made solely on the basis of well-established investment criteria. The circumstances in which charity trustees were bound or entitled to make financially disadvantageous investment decisions for ethical considerations were extremely limited and there was no evidence that such circumstances existed in the case before the court. The declaration was refused.
Donald Nicholls VC said: ‘the law is not so cynical as to require trustees to behave in a fashion which would bring them or their charity into disrepute . . on the other hand, trustees must act prudently. They must not use property held by them for investment purposes as a means for making moral statements at the expense of the charity of which they are trustees.’

Sir Donald Nicholls VC
Gazette 11-Nov-1991, [1992] 1 WLR 1241, [1992] 2 All ER 300, [1991] 135 SJLB 180, Times 30-Oct-1991, Independent 29-Oct-1991
England and Wales

Trusts, Equity, Charity

Leading Case

Updated: 11 November 2021; Ref: scu.81250

Cobbe v Yeomans Row Management Ltd and Others: ChD 25 Feb 2005

Principles for Proprietary Estoppel

A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement existed. Claims were made for a constructive trust, proprietary estoppel and restitution.
Held: The court set out principles for establishing a proprietary estoppel. The defendant had encouraged the plaintiff to make applications for permission, and sought later to take unconscionable advantage of them. There was no reason in principle why a constructive trust should not be as equally available as a remedial instrument in a ‘post-acquisition’ case as in a ‘pre-acquisition’ case in order to prevent injustice from the defendant’s unconscionable conduct in circumstances where the facts are capable of giving rise to a proprietary estoppel. A lien was granted in favour of the claimant over the property.

Etherton J
[2006] 1 WLR 2964, [2005] EWHC 266 (Ch)
Bailii
Law of the Property (Miscellaneous Provisions) Act 1989 2
England and Wales
Citing:
CitedWalford v Miles HL 1992
Agreement to Negotiate is Unworkable as a Contract
The buyers and sellers of a company agreed orally for the sellers to deal with the buyers exclusively and to terminate any negotiations between them and any other competing buyer. The sellers later decided not to proceed with their negotiations with . .
ApprovedJennings v Rice, Wilson, Marsh, Norris, Norris, and Reed CA 22-Feb-2002
The claimant asserted a proprietary estoppel against the respondents. He had worked for the deceased over many years, for little payment, and doing more and more for her. Though he still worked full time at first, he came to spend nights at the . .
CitedAttorney General of Hong Kong v Humphreys Estate (Queen’s Gardens) Ltd PC 1987
An agreement in principle was marked ‘subject to contract’. The Government would acquire some flats owned the plaintiff Group of companies in return for the Government granting, inter alia, a lease to the Group of some Crown lands. The Government . .
CitedLondon and Regional Investments Ltd v TBI Plc and Others CA 22-Mar-2002
TBI was a property investor and developer with several subsidiaries. It agreed to sell some to London and Regional. The agreement provided for the vendor and the purchaser to use reasonable endeavours to agree the terms of a joint venture agreement . .
MentionedPridean Limited v Forest Taverns Limited; Hipwell and Marshall CA 28-Nov-1996
The claimant owned a public house. It set out with the defendant to to acquire the premises or to take a lease of them. The defendant went into occupation, and carried out works. Negotiations continued, but broke down over the form of protection to . .
CitedBanner Homes Group Plc v Luff Developments and Another CA 10-Feb-2000
Competing building companies agreed not to bid against each other for the purchase of land. One proceeded and the other asserted that the land was then held on trust for the two parties as a joint venture.
Held: Although there was no formal . .
CitedRamsden v Dyson HL 1866
The Vice-Chancellor had held that two tenants of Sir John Ramsden, the owner of a large estate near Huddersfield, were entitled to long leases of plots on the estate. They ostensibly held the plots as tenants at will only, but they had spent their . .
CitedGillett v Holt and Another CA 23-Mar-2000
Repeated Assurances Created Equitable Estoppel
Repeated assurances, given over years, that the claimant would acquire an interest in property on the death of the person giving the re-assurance, and upon which the claimant relied to his detriment, could found a claim of equitable estoppel. The . .
CitedHoliday Inns Inc v Broadhead 1974
The parties negotiated for a lease, but never signed a contract. The plaintiff expended considerable sums to try to get planning, and once acquired it sought to buy the land, and claimed that Mr Broadhead had taken an unconscionable advantage, . .
CitedSelangor United Rubber Estates Ltd v Cradock (No 3) ChD 1968
The expressions ‘constructive trust’ and ‘constructive trustee’ are ‘nothing more than a formula for equitable relief. It is the actual control of assets belonging beneficially to a company which causes the law to treat directors as analogous to . .
CitedRavenocean Ltd v Garner ChD 19-Jan-2001
The claimant asserted a constructive trust arising from an oral agreement by the defendant to sell his land to the plaintiff. It was conditional on the claimant obtaining planning permission. Pursuant to the agreement, and relying on it, the . .
CitedShah v Shah CA 10-Apr-2001
The court was asked as to the enforceability of a document under the terms of which the defendants were to make a payment of pounds 1.5 million to the claimant. The document was described as a deed and provided for each defendant to sign in the . .
CitedKinane v Mackie-Conteh CA 1-Feb-2005
The court upheld a declaration by the trial judge that the claimant was an equitable chargee under an equitable charge of the defendant’s property, notwithstanding that the claimant relied on an oral agreement by the defendant for the grant to the . .
CitedCarl Zeiss Stiftung v Herbert Smith No.2 CA 1969
There had been long running disputes between the plaintiffs and a defendant in which the plaintiffs claimed that all of the defendant’s assets were held for the plaintiffs on trust. Before those claims had been resolved the plaintiff brought a . .
CitedGissing v Gissing HL 7-Jul-1970
Evidence Needed to Share Benefical Inerests
The family home had been purchased during the marriage in the name of the husband only. The wife asserted that she had a beneficial interest in it.
Held: The principles apply to any case where a beneficial interest in land is claimed by a . .
CitedLloyds Bank plc v Rosset HL 29-Mar-1990
The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest . .
CitedGrant v Edwards and Edwards CA 24-Mar-1986
A couple were not married but lived together in Vincent Farmhouse in which the plaintiff claimed a beneficial interest on separation. The female partner was told by the male partner that the only reason for not acquiring the property in joint names . .
CitedKilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd, Targetfollow Group Ltd ChD 9-Nov-2004
The defendant entered into an agreement for lease, incurring substantial obligations. When it could not meet them it sought assistance from the claimant, who now claimed to have an interest in a joint venture. The draft documentation originally . .
CitedOxley v Hiscock CA 6-May-2004
The parties were not married, but had brought together their resources to purchase a home in the name of one of them. Nothing had been said about the respective shares on which the property was to be held.
Held: The shares were to be assessed . .

Cited by:
CitedVan Laethem v Brooker and Another ChD 12-Jul-2005
The claimant asserted an interest in several properties by virtue of a common intention constructive trust or by proprietary estoppel. The parties had been engaged to be married.
Held: ‘A [constructive] trust arises in connection with the . .
CitedPowell and Another v Benney CA 5-Dec-2007
The claimants asserted an interest under a constructive trust in land held by the defendant.
Held: The judge had found acts of detriment suffered by the claimants. Though elements of the judgment might be criticised, the appeal failed. . .
CitedLondon Borough of Bexley v Maison Maurice Ltd ChD 15-Dec-2006
The council had taken land by compulsory purchase in order to construct a dual carriageway. It then claimed that it had left undedicated a strip .5 metre wide as a ransom strip to prevent the defendant restoring access to the road.
Held: The . .
CitedSt Pancras and Humanist Housing Association Ltd v Leonard CA 17-Dec-2008
The claimant sought possession of a garage. The defendant claimed adverse possession.
Held: The defendant’s appeal against an order for possession failed. The defendant had attended a meeting where his behaviour had allowed other parties to . .
Appeal fromYeoman’s Row Management Ltd and Another v Cobbe CA 31-Jul-2006
The defendants orally agreed to sell the claimant a block of flats for andpound;12 million if he first obtained planning permission for it on terms as to a sharing of subsequent development profits. The claimant spent over andpound;100,000 and . .

Lists of cited by and citing cases may be incomplete.

Land, Trusts, Estoppel

Leading Case

Updated: 11 November 2021; Ref: scu.223286

McCormick v Grogan: HL 23 Apr 1869

C made a will leaving his property to G, and appointed him executor. When about to die C sent for G and in a private interview told him of the will, and G asked whether that was right. C said that he would not have it otherwise. C then told G where the will was to be found and that with it would be found a letter. This was all that was known to have passed between them. The letter listed many gifts of money and annuities; and contained several expressions as G carrying into effect the intention of the testator as he ‘might think best’, and this sentence, ‘I do not wish you to act strictly on the foregoing instructions, but leave it entirely to your own good judgement to do as you think I would if living, and as the parties are deserving; and as it is not my wish that you should say anything about this document there cannot be any fault found with you by any of the parties, should you not act in strict accordance with it.’ G paid money to some of the person’s mentioned in the letter but not to all.
Held: In this case there was no Trust created which was binding on G.
If a legatee states to a testator that upon testator’s confiding his property, apparently disposing of it to him the legatee, by a regular and formal instrument, he will carry into effect all such as intentions as testator shall confide to him, then that legatee shall have fastened upon his conscience the trust of carrying into full effect those instructions which he received upon such representations period.
There is a need to prove the testator considered that the donee has accepted the obligation.
Lord Westbury said: ‘the jurisdiction which is invoked here by the Appellant is founded altogether on personal fraud. It is a jurisdiction by which a Court of Equity, proceeding on the ground of fraud, converts the party who has committed it into a trustee for the party who is injured by that fraud. Now, being a jurisdiction founded on personal fraud, it is incumbent on the Court to see that a fraud, a malus animus, is proved by the clearest and most indisputable evidence. It is impossible to supply presumption in the place of proof, nor are you warranted in deriving those conclusions in the absence of direct proof, for the purpose of affixing the criminal character of fraud, which you might by possibility derive in a case of simple contract.’
Lord Hatherley LC said: ‘a person apparently taking property by devise or bequest from a testator with this knowledge of the existence of another instrument, which he actually or impliedly undertakes to carry into effect, will be fixed as trustee with the performance of such instructions and directions as are given in that other instrument. . . But this doctrine evidently requires to be carefully restricted within proper limits. It is in itself a doctrine which involves a wide departure from the policy which induced the Legislature to pass the Statute of Frauds, and it is only in clear cases of fraud that this doctrine has been applied – cases in which the Court has been persuaded that there has been a fraudulent inducement held out on the part of the apparent beneficiary in order to lead the testator to confide to him the duty which he so undertook to perform.’
As to the maxim ‘Equity does not allow a statute to be made a medium of fraud’, the court of equity has from a very early period, decided that even an Act of Parliament shall not be used as an instrument of fraud; and if in the machinery of perpetrating a fraud an Act of Parliament intervenes, the court of equity does not set aside the Act of Parliament but it fastens on the individual who gets a title under that Act, and imposes upon him a personal obligation because he applies the Act as an instrument for accomplishing a fraud.

Lord Hatherley LC, Westbury L
(1869) LR 4 HL 82, [1869] UKHL 1, (1869-70) LR 4 HL 82, 17 WR 961
Bailii
England and Wales
Cited by:
CitedParagon Finance Plc (Formerly Known As National Home Loans Corporation Plc v D B Thakerar and Co (a Firm); Ranga and Co (a Firm) and Sterling Financial Services Limited CA 21-Jul-1998
Where an action had been begun on basis of allegations of negligence and breach of trust, new allegations of fraud where quite separate new causes of claim, and went beyond amendments and were disallowed outside the relevant limitation period. . .
CitedOttaway v Norman ChD 1971
Proof required for mutual wills claim
The testator devised his house to a Miss Hodges intending that she should dispose of the property in her will to specific individuals. He communicated his intention to her and she agreed to it. After the testator’s death, Miss Hodges changed her . .

Lists of cited by and citing cases may be incomplete.

Trusts, Equity

Leading Case

Updated: 11 November 2021; Ref: scu.223733

Banner Homes Group Plc v Luff Developments and Another: CA 10 Feb 2000

Competing building companies agreed not to bid against each other for the purchase of land. One proceeded and the other asserted that the land was then held on trust for the two parties as a joint venture.
Held: Although there was no formal agreement, the first company had allowed its position to be worsened relying upon the expectation which the second party had allowed to arise, and had not informed the claimant before the purchase of its intention not to honour the agreement. At the date of exchange: ‘It is clear, therefore, that, to Banner’s knowledge, exchange of contracts was to occur, and did occur, before the parties were signed up to any formal written agreement. It is equally clear that Luff had given Banner to understand that it was content to exchange contracts without requiring any form of separate guarantee committing Banner to contribute one half of the costs of the net site and that the reason for this was that the mutual rights and obligations of the parties would be set out in the shareholder agreement. It is also clear that both sides intended to enter into the shareholder agreement as soon as possible, the only reason for the delay being Mr. Vass’s absence on holiday. At no stage was any indication given that reasons existed why the agreement should not be entered into. Specifically nothing was said on either side to indicate that any difference of principle existed which would prevent the parties from agreeing terms.’

Chadwick LJ
Gazette 10-Feb-2000, Times 17-Feb-2000, [2000] EWCA Civ 18, [2002] 2 All ER 117, [2000] EWCA Civ 3016, [2000] 2 WLR 772, [2000] Ch 372
Bailii, Bailii
England and Wales
Citing:
CitedIsland Holdings Ltd v Birchington Engineering Co Ltd 7-Jul-1981
Two prospectively separate purchasers in a later ‘subject to contract’ arrangement between them had replaced their earlier concluded agreement as to how a property, if acquired, would be dealt with.
Held: Effect was to be given to the . .
ExaminedPallant v Morgan ChD 1952
The agents of two neighbouring landowners orally agreed in the auction room that the plaintiff’s agent would refrain from bidding at auction and that the defendant, if his agent’s bid was successful, would divide the land according to an agreed . .
CitedGrant v Edwards and Edwards CA 24-Mar-1986
A couple were not married but lived together in Vincent Farmhouse in which the plaintiff claimed a beneficial interest on separation. The female partner was told by the male partner that the only reason for not acquiring the property in joint names . .
CitedYaxley v Gotts and Another CA 24-Jun-1999
Oral Agreement Creating Proprietory Estoppel
The defendant offered to give to the Plaintiff, a builder, the ground floor of a property in return for converting the house, and then managing it. They were friends, and the oral offer was accepted. The property was then actually bought in the name . .
CitedParagon Finance Plc (Formerly Known As National Home Loans Corporation Plc v D B Thakerar and Co (a Firm); Ranga and Co (a Firm) and Sterling Financial Services Limited CA 21-Jul-1998
Where an action had been begun on basis of allegations of negligence and breach of trust, new allegations of fraud where quite separate new causes of claim, and went beyond amendments and were disallowed outside the relevant limitation period. . .
CitedTime Products Ltd v Combined English Stores 2-Dec-1974
The plaintiff and the defendant were each interested in buying a property and had agreed that one of them would make an offer, the other refraining from doing so, and that if the offer were to be accepted the purchaser would deal with the property . .

Cited by:
CitedGonthier and Another v Orange Contract Scaffolding Ltd CA 25-Jun-2003
The question of a proprietary estoppel as between landlord and tenant arose. An agreement had been reached subject to contract for the grant of a lease, with an option to purchase. The tenant was allowed into possession before the documentation was . .
CitedThames Cruises Limited v George Wheeler Launches Limited, Kingwood Launches Limited ChD 16-Dec-2003
The parties had previously worked to gether to provide ferry services on the Thames. A new tender to operate the services was not submitted. It was alleged that the Defendants had inequitably seized for themselves a business opportunity which the . .
LimitedLondon and Regional Investments Ltd v TBI Plc and Others CA 22-Mar-2002
TBI was a property investor and developer with several subsidiaries. It agreed to sell some to London and Regional. The agreement provided for the vendor and the purchaser to use reasonable endeavours to agree the terms of a joint venture agreement . .
FollowedKilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd, Targetfollow Group Ltd ChD 9-Nov-2004
The defendant entered into an agreement for lease, incurring substantial obligations. When it could not meet them it sought assistance from the claimant, who now claimed to have an interest in a joint venture. The draft documentation originally . .
CitedCobbe v Yeomans Row Management Ltd and Others ChD 25-Feb-2005
Principles for Proprietary Estoppel
A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement . .
CitedVan Laethem v Brooker and Another ChD 12-Jul-2005
The claimant asserted an interest in several properties by virtue of a common intention constructive trust or by proprietary estoppel. The parties had been engaged to be married.
Held: ‘A [constructive] trust arises in connection with the . .
CitedSainsbury’s Supermarkets Ltd v Olympia Homes Limited, Hughes etc ChD 17-Jun-2005
The claimant sought rectification of the land register. In a development deal, an option agreement had not been registered, and the land sold on. The land was required to allow the building of a roundabout necessary for the intended store. An . .
CitedYeoman’s Row Management Ltd and Another v Cobbe HL 30-Jul-2008
The parties agreed in principle for the sale of land with potential development value. Considerable sums were spent, and permission achieved, but the owner then sought to renegotiate the deal.
Held: The appeal succeeded in part. The finding . .
CitedKilcarne Holdings Ltd v Targetfollow (Birmingham) Ltd and Another CA 16-Nov-2005
The defendant had brought in the claimant in order to assist in satisfying its own obligations under a lease. The joint venture was not recorded in a formal agreement. The appellant asserted that a constructive trust had been created. The judge had . .
CitedClarke and Another v Corless and Another ChD 8-Jul-2009
The parties disputed whether one could retain for his own benefit land on an estate reserved for an estate road. A trust was claimed under Pallant saying that the parties had made an informal agreement before the property was purchased.
Held: . .
CitedNational Trust for Places of Historic Interest v Birden ChD 31-Jul-2009
The parties had entered into an old-form share farm agreement in 1994. The tenant later became a farm business tenant on other land. The claimant sought a share of the Single Payment Scheme calculated with reference to the period in which the . .
CitedClarke and Another v Corless and Another CA 31-Mar-2010
The claimants appealed against refusal of a declaration that a neighbouring access road and land was held on a constructive trust. They said that an agreement bewteeen the parties should have been effective to impose a trust on the defendants. The . .

Lists of cited by and citing cases may be incomplete.

Trusts, Equity, Company

Leading Case

Updated: 11 November 2021; Ref: scu.78169

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, under which the members take as joint tenants, and any member can sever his share; or (2) a trust for the members at the date of the gift, subject to their contractual rights and liabilities towards one another as members of the association.
Cross J said that: ‘a donor does not direct a special application of his gift unless he subjects it to a trust which prevents the governing body of the charity from using it for its general purposes. The fact that he expects it to be used – and that it is in fact used – for a special purpose is not enough.’
Cross J identified three ways in which a gift to an unincorporated association such as a sports club could take effect: ‘In the first place, it may, on its true construction, be a gift to the members of the association at the relevant date as joint tenants, so that any member can sever his share and claim it whether or not he continues to be a member of the association. Secondly, it may be a gift to the existing members not as joint tenants, but subject to their respective contractual rights and liabilities towards one another as members of the association. In such a case a member cannot sever his share. It will accrue to the other members on his death or resignation, even though such members include persons who became members after the gift took effect. If this is the effect of the gift, it will not be open to objection on the score of perpetuity or uncertainty unless there is something in its terms or circumstances or in the rules of the association which precludes the members at any given time from dividing the subject of the gift between them on the footing that they are solely entitled to it in equity.
Thirdly, the terms or circumstances of the gift or the rules of the association may show that the property in question is not to be at the disposal of the members for the time being, but is to be held in trust for or applied for the purposes of the association as a quasi-corporate entity. In this case the gift will fail unless the association is a charitable body.’

Cross J
[1962] Ch 832
England and Wales
Citing:
CitedLeahy 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 by:
ApprovedRe 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 . .
CitedHunt 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 . .
CitedRe 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 . .
CitedRe 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 . .
CitedHunt 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, Charity

Leading Case

Updated: 11 November 2021; Ref: scu.245259

Vadim Schmidt v Rosewood Trust Limited: PC 27 Mar 2003

PC (Isle of Man) The petitioner sought disclosure of trust documents, as a beneficiary. Disclosure had been refused as he had not been a named beneficiary.
Held: Times had moved on, and trust documents had taken more and more indirect ways of conferring benefits. The settlements were badly drafted, but that should not be used to excuse a court fulfilling its duties. The right to seek disclosure did not depend upon a fixed and transmissible beneficial interest. The object of a discretion may have similar rights, and the right was not dependant upon establishing a proprietary interest, but the remedy would be in equity and subject to the court’s discretion. A beneficiary of a discretionary trust has a non-assignable and non-transmissible interest in the trust, and has no entitlement as of right to any trust documents or other information relating to the trust in the possession or control of the trustees.

Lord Nicholls of Birkenhead, Lord Hope of Craighead, Lord Hutton, Lord Hobhouse of Woodborough, Lord Walker of Gestingthorpe
Times 29-Mar-2003, [2003] UKPC 26, Gazette 05-Jun-2003, [2003] 2 AC 709, (2002-03) 5 ITELR 715, [2003] 3 All ER 76, [2003] 2 WLR 1442, [2003] Pens LR 145, [2003] WTLR 565
PC, Bailii, PC
Citing:
CitedMcPhail 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 . .
CitedIn re Manisty’s Settlement ChD 1974
The court contrasted the exercise by trustees of an intermediate power with the exercise of a wide special power.
Held: A wide power, whether special or intermediate, does not negative or prohibit a sensible approach by trustees to the . .
CitedO’Rourke v Darbishire HL 1920
Sir Joseph Whitworth had died in 1887. In 1884 he had made a will appointing three executors and leaving his residuary estate to charity. By a codicil made in 1885 he altered his will to leave his ultimate residue to his executors for their own . .
CitedIn re Londonderry’s Settlement; Peat v Lady Walsh CA 3-Nov-1964
The Court considered limitations on the right to disclosure of trust documents, and in particuar the need to protect confidentiality in communications between trustees as to the exercise of their dispositive discretions, and in communications made . .

Cited by:
CitedFranses v Al Assad and others ChD 26-Oct-2007
The claimant had obtained a freezing order over the proceeds of sale of a property held by solicitors. The claimant was liquidator of a company, and an allegation of wrongful trading had been made against the sole director and defendant. The . .
CitedBreakspear and others v Ackland and Another ChD 19-Feb-2008
Beneficiaries sought disclosure of a wishes letter provided by the settlor to the trustees in a family discretionary trust.
Held: The confidentiality in the letter was, in the absence of some express term by the settlor, in the trustees, and . .
CitedDawson-Damer and Others v Taylor Wessing Llp and Others ChD 6-Aug-2015
The clamants sought orders under the 1998 Act for disclosure of documents about them by the defendant solicitors and others. The defendants said that the request would require the consideration of a very large number of documents, considering in . .
CitedTN, MA and AA (Afghanistan) v Secretary of State for The Home Department SC 24-Jun-2015
The appellants, children from Afghanistan whose asylum claims had been rejected, challenged the sufficiency of the appellate process, and the respondents obligations for family tracing.
Held: The appeals failed. An applicant could not claim, . .
CitedRoyal National Lifeboat Institution and Others v Headley and Another ChD 28-Jul-2016
Beneficiaries’ right to information from estate
The claimant charities sought payment of interests under the will following the dropping of two life interests. They now requested various documents forming accounts of the estate.
Held: The charities were entitled to some but not to all of . .

Lists of cited by and citing cases may be incomplete.

Commonwealth, Trusts, Equity

Leading Case

Updated: 11 November 2021; Ref: scu.180352

Knight v Bowyer: 7 May 1858

knight_bowyer1858

The doctrine of laches and delay did not apply to an express trust, save possibly where there was a release or abandonment by the beneficiary and that was capable of being presumed from the facts of the case.

(1858) 2 De G and J 421, [1858] EngR 673, (1858) 2 De G and J 421, (1858) 44 ER 1053
Commonlii
Cited by:
CitedPatel and others v Shah and others CA 15-Feb-2005
The parties entered into a commercial agreement for the sale and purchase of properties.
Held: The claimants had failed to meet their part of the bargain, and had failed to make mortgage payments, leaving the defendants to do so. The . .
See AlsoKnight v Bowyer 1-Aug-1859
. .

Lists of cited by and citing cases may be incomplete.

Equity, Trusts

Leading Case

Updated: 11 November 2021; Ref: scu.223436

Ogden and Another v Trustees of the RHS Griffiths 2003 Settlement and others; In Re Griffiths deceased: ChD 25 Jan 2008

A life-time transfer which had been made under a mistake as to the donor’s chances of surviving long enough for the transfer to be exempt from Inheritance Tax was set aside. Unbeknown to the donor, he had lung cancer at the time.
Held: Lewison J said: ‘It is plain in my judgment that a mistake of fact is capable of bringing the equitable jurisdiction into play. All that is required is a mistake of a sufficiently serious nature. In my judgment a mistake about an existing or pre-existing fact if sufficiently serious is enough to bring the jurisdiction into play. If and to the extent that Millett J intended to restrict the scope of the equitable jurisdiction to a mistake about the effect of a transaction, I respectfully disagree.’

Lewison J
[2008] EWHC 118 (Ch), [2008] STC 776, [2008] 2 All ER 654, [2009] 2 WLR 394, [2009] Ch 162, [2008] WTLR 685, [2008] STI 250, [2009] BTC 8027
Bailii
England and Wales
Cited by:
ApprovedFender (Administrator of FG Collier and Sons Ltd) v National Westminster Bank Plc ChD 26-Sep-2008
The administrator sought declarations as to whether to treat the bank as a secured or unsecured creditor.
Held: The court directed the Administrator to recognise the Bank as a secured creditor, as if the Deed of Release had never been . .
CitedPitt and Another v Holt and Others ChD 18-Jan-2010
The deceased had created a settlement in favour of his wife. He suffered serious injury and placed the damages in trust, but in a form which created an unnecessary liability to Inheritance Tax on his death. The wife’s mental health act receiver now . .
CitedPitt and Another v Holt and Another ChD 18-Jan-2010
The claimant sought to unravel a settlement she had made as receiver for her late husband, saying that it had been made without consideration of its Inheritance Tax implications. The Revenue said that there was no operative mistake so as to allow . .
CitedFutter and Another v Futter and Others ChD 11-Mar-2010
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .
CitedBrazzill and Others v Willoughby and Others CA 27-May-2010
The regulated bank Kaupthing Singer and Friedlander Ltd (KSF) was in financial difficulties. The Bank of England required KSF to credit to a trust account all future deposits. KSF later went into insolvency. Some deposits had been credited to the . .
CitedFutter 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.

Contract, Equity, Trusts

Updated: 11 November 2021; Ref: scu.264025

Cowan v Scargill and Others: ChD 13 Apr 1984

Trustee’s duties in relation to investments

Within the National Coal Board Pension scheme, the trustees appointed by the NCB were concerned at the activities of the trustees of the miners, and sought directions from the court. The defendants refused to allow any funds to be invested abroad.
Held: The same principles applied to pension funds as applied to other trusts. The NUM trustees were attempting to impose the prohibitions in order to carry out union policy; and mere assertions that their sole consideration was the benefit of the beneficiaries do not alter that conclusion, and the defendant had misrepresented the effect of the legal advice upon which he purported to act.
Sir Robert Megarry VC said: ‘The starting point is the duty of trustees to exercise their powers in the best interests of the present and future beneficiaries of the trust, holding the scales impartially between different classes of beneficiaries. This duty of the trustees towards their beneficiaries is paramount. They must, of course, obey the law; but subject to that, they must put the interests of their beneficiaries first. When the purpose of the trust is to provide financial benefits for the beneficiaries, as is usually the case, the best interests of the beneficiaries are normally their best financial interests. In the case of a power of investment, as in the present case, the power must be exercised so as to yield the best return for the beneficiaries, judged in relation to the risks of the investments in question; and the prospects of the yield of income and capital appreciation both have to be considered in judging the return from the investment.’
If trustees for social or ethical reasons fail to make an investement which would produce a better result, the would be subject to criticism. ‘In considering what investments to make trustees must put on one side their own personal interests and views. Trustees may have strongly held social or political views. They may be firmly opposed to any investment in South Africa or other countries, or they may object to any form of investment in companies concerned with alcohol, tobacco, armaments or many other things. In the conduct of their own affairs, of course, they are free to abstain from making any such investments. Yet under a trust, if investments of this type would be more beneficial to the beneficiaries than other investments, the trustees must not refrain from making the investments by reason of the views that they hold.’
however: ‘If trustees make a decision upon wholly wrong grounds, and yet it subsequently appears, from matters which they did not express or refer to, that there are in fact good and sufficient reasons for supporting their decision, then I do not think that they would incur any liability for having decided the matter upon erroneous grounds; for the decision itself was right.’

Sir Robert Megarry VC
[1985] Ch 270, (1984) 128 SJ 550, [1984] IRLR 260, [1984] 3 WLR 501, [1984] 2 All ER 750
Coal Industry Nationalisation Act 1946 37
England and Wales
Citing:
CitedButtle v Saunders ChD 1950
Trustees for sale had struck a bargain for the sale of trust property but had not bound themselves by a legally enforceable contract.
Held: They had a duty to consider and explore a better offer that they received, and not to carry through the . .
CitedIn re Wyvern Developments Ltd ChD 1974
An official receiver ‘must do his best by his creditors and contributories. He is in a fiduciary capacity and cannot make moral gestures, nor can the court authorise him to do so.’ . .
CitedBalls v Strutt 1841
‘It is a principle in this court, that a trustee shall not be permitted to use the powers which the trust may confer upon him at law, except for the legitimate purposes of his trust;…’ . .
CitedDuke of Portland v Topham CA 1864
Commonlii The donee of a power of appointing portions among his younger children appointed a double share to a younger child without previous communication with him. But it appeared from the instructions for the . .
CitedIn re Whiteley 1886
Lindley LJ considered the duties of a trustee in exercising his powers of investment and said: ‘The principle applicable to cases of this description was stated . . to be that a trustee ought to conduct the business of the trust in the same manner . .
CitedHarrison-Broadley v Smith CA 1964
The court has an inherent power to make declarations even though they have not been claimed in the proceedings. In order to give effect to a partnership, the partner who owns the premises on which the partnership business is carried on is taken to . .
CitedEvans v London Co-operative Society Ltd 6-Jul-1976
Rule 7 of the trust instrument of a pension fund provided for the pensions committee to make loans on certain terms to the Co-operative Society in question, and the pension fund had been receiving from the society less than the market rate of . .

Cited by:
CitedNestle v National Westminster Bank CA 6-May-1992
The claimant said that the defendant bank as trustee of her late father’s estate had been negligent in its investment of trust assets.
Held: The claimant had failed to establish either a breach of trust or any loss flowing from it, though . .
CitedLehtimaki and Others v Cooper SC 29-Jul-2020
Charitable Company- Directors’ Status and Duties
A married couple set up a charitable foundation to assist children in developing countries. When the marriage failed an attempt was made to establish a second foundation with funds from the first, as part of W leaving the Trust. Court approval was . .

Lists of cited by and citing cases may be incomplete.

Trusts, Financial Services

Leading Case

Updated: 11 November 2021; Ref: scu.222822

Ketteringham and Another v Hardy: ChD 3 Feb 2011

Two partners had together bought several properties for development, and now disputed the interests in one of them. One partneer had dies, and the refusal of development permission and the fall in property values left the land in negative equity. The court was asked to find that a partnership existed and that the estate was liable to contribute to the losses.
Held: No partnership existed. The matter was to be resolved according to the principles of equitable accounting. The real question to be determined is whether it was the common intention of the parties that Nick Ketteringham would contribute to the liability under the mortgage in the event that the net proceeds of sale were less than the sum outstanding under the mortgage. No such common contention had been expressed, and therefore the estate could not be held liable to contribute.

Behrens J
[2011] EWHC 162 (Ch), [2011] WTLR 1367
Bailii
Partnership Act 1890 24
England and Wales
Citing:
CitedClarke v Harlowe ChD 12-Aug-2005
A house was bought in the joint names of the parties. It was in bad condition. An express declaration of trust said they held as beneficial joint tenants. One tenants was earning much more than the other. He paid all the mortgage instalments. Very . .
CitedWilcox v Tait CA 13-Dec-2006
The court considered the principles of equitable accounting as between co-owners of land.
Held: The question of whether there is a liability to account depends on the intention of the parties. Jonathan Parker LJ said: ‘Moreover, it is in any . .
CitedFrench v Styring 8-May-1857
A and B were joint owners of a race horse, and had agreed that A should keep and train and have the general management of the horse, conveying him to and entering him for the different races ; that 35s. per week should be allowed for his keep ; and . .
CitedJaenicke v Schulz 1924
. .

Lists of cited by and citing cases may be incomplete.

Trusts, Equity

Updated: 11 November 2021; Ref: scu.428427

Dixon Coles and Gill (A Former Firm) v Baines, Bishop of Leeds and Another: CA 20 Jul 2021

Innocent Co-Trustee not Liable for Default

Proceedings were brought by former clients against their former solicitors. One of the partners stole money held in the firm’s client account on behalf of the claimants. The other two partners were entirely innocent of, and in no way implicated in, the frauds. Some of the losses sued for arose from transactions more than six years before the commencement of the proceedings. The issue on the appeal is whether the innocent partners, who are otherwise undoubtedly liable for the clients’ losses, can rely on a limitation defence in respect of those transactions, under section 21 of the Limitation Act 1980.
Held: The solicitors appeal succeeded: ‘A co-trustee is not to be treated as party or privy to another trustee’s fraudulent breaches of trust unless facts are alleged and proved which show the co-trustee to have been implicated in the frauds in some way, meeting the tests indicated in Thorne v Heard. It follows that DCG are not within the scope of section 21(1)(a) and they are entitled to rely on the six-year limitation period as a defence.’

Sir Timothy Lloyd
[2021] EWCA Civ 1097
Bailii, Judiciary
Limitation Act 1980 21
England and Wales
Citing:
CitedMoore v Knight ChD 18-Dec-1890
The court considered the liability of partners in a solicitors’ firm for embezzlement of client money by an employee of the firm. Once the true position became known, after many years, the client sued the surviving partners, who relied on . .
CitedThorne v Heard CA 24-Jan-1894
A first mortgagee, Heard, had sold property under the power of sale and had retained a solicitor, Searle, to act in relation to the sale. Searle received the proceeds of sale, satisfied the first mortgage debt, but retained the balance, falsely . .
CitedThorne v Heard HL 1895
Recovery was sought from the partners of a defaulting solicitor.
Lord Herschell LC disposed of the argument about concealment first, and then turned to section 8, saying: ‘My Lords, the only remaining question is, Did the statute apply? It is . .
CitedBlair v Bromley ChD 18-Nov-1846
Two solicitors having entered into partnership, each of them continued to attend to the business of his former clients, but on the partnership account; and one of the partners having proposed to invest a sum of money belonging to a client in a . .
CitedBlair v Bromley CA 3-Jul-1847
Held; . .
CitedDubai Aluminium Company Limited v Salaam and Others HL 5-Dec-2002
Partners Liable for Dishonest Act of Solicitor
A solicitor had been alleged to have acted dishonestly, having assisted in a fraudulent breach of trust by drafting certain documents. Contributions to the damages were sought from his partners.
Held: The acts complained of were so close to . .
Appeal fromLord Bishop of Leeds v Dixon Coles and Gill (A Firm) and Others ChD 28-Oct-2020
The claimants had been clients of the defendant solicitors former firmer. A partner of the defendants had stolen large sums of money in the names of the claimants from the firm’s client account. The defendants themselves were not said to have been . .
CitedHughes v Twisden ChD 1886
One partner in a firm of solicitors committed a fraud on a client by using deeds held on behalf of the client as security for a loan for his own benefit, the funds, so far as appeared, not passing through the firm’s accounts. The fraudulent partner . .

Lists of cited by and citing cases may be incomplete.

Legal Professions, Limitation, Trusts, Company

Updated: 11 November 2021; Ref: scu.666020

Ex Parte Lacey: 5 Feb 1802

Trustee Not To purchase Property of Trust

Lord Eldon held that equity imposed stringent duties on persons who were appointed trustees of trusts and that these duties were imposed with ‘relentless jealousy’ in order to ensure that trustees fulfilled their duties, and that trustees had to be ‘watched with infinite and the most guarded jealousy’
No trustee shall buy the trust property, until he strips himself of that character. Or by universal consent has acquired a ground for becoming the purchaser: ‘I say, whether he makes advantage or not, if the connection does not satisfactorily appear to have been dissolved, it is the choice of the cestui que trusts, whether they will take back the property, or not; if the trustee has made no advantage. It is founded upon this; that though you may say in a particular case that he has not made advantage, it is utterly impossible to examine upon satisfactory evidence and the power of the court, by which I mean, in the power of the parties, in 99 cases out of 100 whether he made advantage or not’
The beneficiaries of a trust can, by giving their fully informed consent, agree to authorise or permit their fiduciary to act notwithstanding a conflict of interest or to receive certain profits

Lord Eldon LC
[1802] EngR 75, (1802) 6 Ves Jun 625, (1802) 31 ER 1228
Commonlii
England and Wales
Citing:
See AlsoEx Parte Lacey 1789
. .

Cited by:
CitedLehtimaki and Others v Cooper SC 29-Jul-2020
Charitable Company- Directors’ Status and Duties
A married couple set up a charitable foundation to assist children in developing countries. When the marriage failed an attempt was made to establish a second foundation with funds from the first, as part of W leaving the Trust. Court approval was . .

Lists of cited by and citing cases may be incomplete.

Equity, Trusts

Leading Case

Updated: 11 November 2021; Ref: scu.344892

Re Bowden: ChD 1936

The settlor wished to become a nun and expected to take vows of poverty chastity and obedience. She therefore transferred her property to trustees on Trust for certain specified beneficiaries. At a later point she decided to leave the convent, and now sought to recover the property she had placed in the trust.
Held: since the trust was created the claimant I’ll settlor, lost all interest in the property and therefore could not recover it.
Bennett J said ‘ . . the persons appointed trustees under the settlement received the settlor’s interest and immediately it has been received by them, as a result of her own act and her own declaration. . it’s became impressed with the trust contained in the settlement.’

Bennett J
[1936] Ch 71
England and Wales

Trusts

Leading Case

Updated: 11 November 2021; Ref: scu.656648

Singh v Singh and Another: ChD 8 Apr 2014

The parties disputed ownership of various valuable properties. The father asserted that they were held under trusts following the Mitakshara Hindu code, under a common intention constructive trust. The son said that properties held in his own name were his own.
Held: The considerable evidence did not establish an intent that the family property should be held under the terms of the Mitakshara Code: ‘the requisite intention is to be deduced objectively from the conduct of these two persons and this involves a survey of the whole course of dealing between them, taking into account any conduct which throws light on the question. Carrying out that wide-ranging survey I am unable to find that there was such an understanding.’ The gift said to have shown that the father had acquired an interst in trust of a hotel acquired by the son was in fact a loan and had been repaid. It had been shown in the accounts as a loan, and the father had signed his approval of them.

Sir William Blackburne
[2014] EWHC 1060 (Ch)
Bailii
England and Wales
Citing:
CitedGokal Chand v Hukam Chand-Nath Mal PC 1921
While training for the ICS, the family member had been supported out of joint family resources it was held that the income earned by him from an appointment in the ICS was property of the joint family. This was a strict interpretation of the Hindu . .
CitedSurjit Lal Chhabda v Commissioner of Income Tax 1976
(Indian Supreme Court) The court defined the idea of coparceny: ‘A Hindu coparcenary is a much narrower body than the joint family. It includes only those persons who acquire by birth an interest in the joint or coparcenary property and these are . .
CitedStack 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 . .
CitedAbbott v Abbott PC 26-Jul-2007
(Antigua and Barbuda) The parties disputed the division of the family assets after a divorce. The family home was registered in the sole name of the husband. There being no provision for property adjustment, the court had to decide the division on . .
CitedGissing v Gissing HL 7-Jul-1970
Evidence Needed to Share Benefical Inerests
The family home had been purchased during the marriage in the name of the husband only. The wife asserted that she had a beneficial interest in it.
Held: The principles apply to any case where a beneficial interest in land is claimed by a . .
CitedJones v Kernott SC 9-Nov-2011
Unmarried Couple – Equal division displaced
The parties were unmarried but had lived together. They now disputed the shares in which they had held the family home. It had been bought in joint names, but after Mr Kernott (K) left in 1993, Ms Jones (J) had made all payments on the house. She . .
CitedCrossco No4 Unltd and Others v Jolan Ltd and Others CA 21-Dec-2011
The common intention constructive trust expounded in Stack v Dowden and Jones v Kernott (and similar cases) does not apply in a commercial context. . .
CitedGeary v Rankine CA 29-Mar-2012
A couple, who had previously lived together, disputed the ownership of a property held in the name of one of them and of the business that had been run from it.
Held: Lewison LJ pointed out that where the claim related to a property which had . .

Lists of cited by and citing cases may be incomplete.

Trusts

Updated: 11 November 2021; Ref: scu.523663

Keech v Sandford: ChD 1726

Trustee’s Renewed Lease also Within Trust

A landlord refused to renew a lease to a trustee for the benefit of a minor. The trustee then took a new lease for his own benefit. The new lease had not formed part of the original trust property; the minor could not have acquired the new lease from the landlord; and the trustee acted innocently, believing that he committed no breach of trust and that the new lease did not belong in equity to his cestui que trust.
Held: A trustee of a lease may not renew a lease for his own benefit but holds the renewed lease upon a constructive trust for the beneficiaries. The court forbade the trustee to take for himself a renewed term under a lease which he held for the benefit of an infant.
Lord Harcourt LC said: ‘though I do not say there is a fraud in this case, yet he should rather have let it run out, than to have had the lease to himself. This may seem hard, that the trustee is the only person of all mankind who might not have the lease: but it is very proper that rule should be strictly pursued, and not in the least relaxed; for it is very obvious what would be the consequence of letting trustees have the lease, on refusal to renew to cestui que use.’ The benefit of the lease was assigned by decree to the infant and the trustee, subject to indemnity, made to account for profits.
King L said: ‘I very well see, if a trustee, on the refusal to renew, might have a lease to himself, few trust-estates will be renewed to cestuis que use.’

Lord Harcourt LC, King L
[1726] Sel Cas 1 King 61, [1726] EWHC Ch J31, [1726] EngR 954, (1726) 25 ER 223 (C), [1726] EWHC Ch J76
Bailii, Commonlii, Bailii
England and Wales
Cited by:
CitedCrown Dilmun, Dilmun Investments Limited v Nicholas Sutton, Fulham River Projects Limited ChD 23-Jan-2004
There was a contract for the sale of Craven Cottage football stadium, conditional upon the grant of non-onerous planning permissions. It was claimed that the contract had been obtained by the defendant employee in breach of his fiduciary duties to . .
CitedUltraframe (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 . .
CitedWarman International Ltd v Dwyer 1995
(High Court of Australia) A fiduciary diverted a business in breach of his fiduciary duty.
Held: ‘The outcome in cases of this kind will depend upon a number of factors. They include the nature of the property, the relevant powers and . .
CitedFHR European Ventures Llp and Others v Cedar Capital Partners Llc SC 16-Jul-2014
Approprietary remedy against Fraudulent Agent
The Court was asked whether a bribe or secret commission received by an agent is held by the agent on trust for his principal, or whether the principal merely has a claim for equitable compensation in a sum equal to the value of the bribe or . .
CitedHalton 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.

Trusts, Equity

Leading Case

Updated: 10 November 2021; Ref: scu.192209

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 trust. Unfortunately it was done in such a way as to create an immediate liability to Inheritance Tax. In each case the trustees applied to have the ineffective deeds declared void to correct the mistakes. They were set aside, but the Court of Appeal allowed the Revenue’s appeals on the basis that the rule in Hastings-Bass (the Rule) applied at first instance.
Held: As to the appeals under the Rule, the taxpayers’ appeals failed. However P’s appeal on the basis of mistake was allowed.
The Rule applied to a failure of trustees to perform a decision making function. In such situations there had to such a serious failure as to amount to a breach of the trustees’ fiduciary duties. In each of these cases, they had acted on professional advice, but the failures of such advisers could not be transferred to the trustees so as to allow the application of the Rule. Nevertheless the Rule had to be applied respecting each different factual situation, and other results might be reache din future in settling the balance between the need to protect beneficiaries, and for legal certainty without imposing too rigid a test on trustees.
As to the rescision for mistake in P’s case, there had to be a mistake which was both of sufficient gravity and causative of the failing. Such a mistake may well be as to the legal character of the transaction, and tax consequences go as to the gravity of the error. Mere ignorance would be insufficient. The court would have to conclude that it would be unconscionable or injust to leave the situation uncorrected.
Lord Walker said: ‘Rectification is a closely guarded remedy, strictly limited to some clearly established disparity between the words of a legal document, and the intentions of the parties to it. It is not concerned with consequences.’

Lord Neuberger, President, Lord Walker, Lady Hale, Lord Mance, Lord Clarke, Lord Sumption, Lord Carnwath
[2013] 3 All ER 429, [2013] UKSC 26, [2013] WLR (D) 172, [2013] STC 1148, 15 ITELR 976, 81 TC 912, [2013] 2 WLR 1200, [2013] STI 1805, [2013] WTLR 977, [2013] Pens LR 195, [2013] BTC 126, [2013] 2 AC 108
Bailii, Bailii Summary, SC Summary, SC, WLRD
Taxation of Chargeable Gains Act 1992 2(4)
England and Wales
Citing:
At First InstanceFutter and Another v Futter and Others ChD 11-Mar-2010
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .
CitedAbacus Trust Company (Isle of Man) Colyb Limited v Barr, Barr, and Barr ChD 6-Feb-2003
The court considered the Rule in Hastings-Bass, and specifically (1) whether the trustee’s decision is open to challenge when the failure to take a consideration into account is not attributable to a breach of fiduciary duty on the part of the . .
CitedGibbon v Mitchell ChD 1990
G executed a deed surrendering his life interest in a trust fund in order to vest the property in his two children: the deed did not have that effect because of two errors (one of which was ignoring the fact that his life interest was subject to . .
CitedRe 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 . .
CitedMettoy Pension Trustees v Evans ChD 1990
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . .
CitedStannard v Fisons Ltd; Stannard v Fisons Pensions Trust CA 2-Jan-1990
The purchaser of a business said that the company had made insufficient contributions to its pensions fund before the transfer, and sought payment of the sums underpaid. The defendants argued that, applying Hastings-Bass, unless that principle were . .
Appeal fromPitt and Another v Holt and Another CA 9-Mar-2011
. .
At First InstancePitt and Another v Holt and Another ChD 18-Jan-2010
The claimant sought to unravel a settlement she had made as receiver for her late husband, saying that it had been made without consideration of its Inheritance Tax implications. The Revenue said that there was no operative mistake so as to allow . .
CitedScott 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, . .
CitedEdge and others v Pensions Ombudsman and Another CA 29-Jul-1999
The Pensions Ombudsman was wrong to set aside the decision of pensions trustees where that decision was properly made within the scope of a discretion given to the Trustees. He should not carry out an investigation where no particular benefit could . .
CitedOgilvie v Littleboy CA 1897
Lindley LJ discussed the variation of a gift for mistake: ‘Gifts cannot be revoked, nor can deeds be set aside, simply because the donors wish they had not made them and would like to have back the property given. Where there is no fraud, no undue . .
CitedOgilvie v Allen HL 1899
The plaintiff, a widow, had executed deeds founding two charities and devoting to them a considerable part of the large fortune which she had inherited from her husband, but later brought proceedings to set the deeds aside asserting that she had not . .
CitedDirector of Public Prosecutions v Hutchinson; Director of Public Prosecutions v Smith HL 12-Jul-1990
Protesters objected that byelaws which had been made to prevent access to common land, namely Greenham Common were invalid.
Held: The byelaws did prejudice the rights of common. The House was concerned to clarify the test applicable when . .
CitedMarshall v NM Financial Management Ltd ChD 10-Jul-1995
A post-termination restriction on an employment was in restraint of trade and ineffective despite a payment having been made for the restriction. The agent was not entitled to any commission after termination under the relevant clause.
Mr . .
CitedNM Financial Management Limited v Marshall CA 13-Mar-1997
The court considered a provision that a commission agent would be paid commission following the termination of his agency provided that he did not within a year become an independent intermediary or work for a competitor. Here the suspension of . .
CitedEquitable Life Assurance Society v Hyman HL 20-Jul-2000
The directors of the Society had calculated the final bonuses to be allocated to policyholders in a manner which was found to be contrary to the terms of the policy. The language of the article conferring the power to declare such bonuses contained . .
MentionedWollaston v King 1869
Rectification for mistake . .
CitedIn Re Vestey’s Settlement ChD 1950
The income of a fund was to be held on trust for the support or benefit of the members of a class as the trustees might decide in their discretion. The trustees resolved in each of three successive periods to distribute part of the income to certain . .
CitedIn Re Vestey’s Settlement CA 2-Jan-1951
The trustees of a large settlement made by Lord Vestey and his brother Sir Edmund Vestey exercised their discretion over the allocation of income with the apparent intention of income being accumulated during the minorities of a number of . .
CitedIn Re Pilkington’s Will Trusts; Pilkington v Inland Revenue Commissioners HL 8-Oct-1962
The trustees proposed establishing a new trust in respect of the share of an estate to which an infant beneficiary had a contingent entitlement. A portion of the trust fund would be allocated to the new trust.
Held: This was a lawful exercise . .
CitedSieff v Fox ChD 23-Jun-2005
The advisers to trustees wrongly advised the trustees about the tax consequences of exercising a power of appointment in a certain way. As a result a large unforeseen Capital Gains Tax liability arose. The trustees sought to set aside the . .
CitedAbacus Trust Company (Isle of Man) Colyb Limited v Barr, Barr, and Barr ChD 6-Feb-2003
The court considered the Rule in Hastings-Bass, and specifically (1) whether the trustee’s decision is open to challenge when the failure to take a consideration into account is not attributable to a breach of fiduciary duty on the part of the . .
CitedIn re Hubbard’s Will Trusts 1962
The rule that a gift may fail on the failure of a prior interest upon which it is dependent and which is void for remoteness is a ‘rule of invalidity by contagion with another and invalid limitation’. . .
CitedIn re Buckton’s Settlement Trusts 1964
. .
CitedIn re Abrahams’ Will Trusts 1969
The trustees sought to mitigate estate duty by terminating a life interest, and accelerating the interest fo the next generation.
Held: There had been no valid exercise of the power of advancement. Cross J rejected an argument approximating an . .
CitedVestey v Inland Revenue Commissioners (No 2) ChD 1979
The Commissioners of Inland Revenue do not have, any more than does any other emanation of the Crown, any power to suspend or dispense with laws. ‘It is at this point that there arises what Mr Potter, for the taxpayers, has denominated as a serious . .
CitedOgden and Another v Trustees of the RHS Griffiths 2003 Settlement and others; In Re Griffiths deceased ChD 25-Jan-2008
A life-time transfer which had been made under a mistake as to the donor’s chances of surviving long enough for the transfer to be exempt from Inheritance Tax was set aside. Unbeknown to the donor, he had lung cancer at the time.
Held: Lewison . .

Cited by:
CitedBainbridge and Another v Bainbridge ChD 22-Apr-2016
. .
CitedFSHC Group Holdings Ltd v Glas Trust Corporation Ltd CA 31-Jul-2019
Rectification – Chartbrook not followed
Opportunity for an appellate court to clarify the correct test to apply in deciding whether the written terms of a contract may be rectified because of a common mistake.
Held: The appeal failed. The judge was right to conclude that an . .
CitedBank of Cyprus UK Ltd v Menelaou SC 4-Nov-2015
The bank customers, now appellants, redeemed a mortgage over their property, and the property was transferred to family members, who in turn borrowed from the same lender. A bank employee simply changed the name on the mortgage. This was ineffective . .

Lists of cited by and citing cases may be incomplete.

Trusts, Taxes Management, Equity

Leading Case

Updated: 10 November 2021; Ref: scu.503501

Abacus Trust Company (Isle of Man) Ltd and Another v National Society for the Prevention of Cruelty to Children: ChD 17 Jul 2001

abacus_nspccChD01

The claimants were beneficiaries, trustee and protector of a trust fund. In order to mitigate Capital Gains Tax liability they sought advice, and, following that advice, entered into a deed of gift in favour of the respondent charity. The deed needed to be dated in the new tax year, but was dated for the previous year. They sought a declaration that the deed was void ab initio, the directors having failed to address a relevant consideration.
Held: The declaration was granted. The matters which could, if present, be taken into account, can include factors which might vitiate the intended legal effect of the deed, including the fiscal effect. It was unrealistic to divorce the several steps from each other. Trustees must consider the fiscal consequences of their acts, and a failure to do so was capable of leading to the application of ‘the Rule in Hastings-Bass’.

Potter J
Gazette 13-Sep-2001, Times 25-Sep-2001, [2001] EWHC B2 (Ch), [2001] STI 1225, [2001] STC 1344, [2001] WTLR 953, [2002] BTC 178, (2000-01) 3 ITELR 846
Bailii
Citing:
CitedRe 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 . .
appliedGreen v Cobham ChD 19-Jan-2000
cw The Trustees had overlooked the fact that a Will Trust and two sub-settlements together constituted a single composite settlement for the purposes of CGT with a single body of trustees. As a result of his . .

Cited by:
AppliedBurrell and Sharman v Burrell, Shore, Tyrrell, etc ChD 23-Feb-2005
burrell_burrellChD05
Shares were appointed by trustees in the mistaken belief that they attracted business property relief from Inheritance tax. They sought to set aside the appointment.
Held: Mann J applied the rule in Stannard v Fisons Pensions Trust and . .
CitedFutter and Another v Futter and Others ChD 11-Mar-2010
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .

Lists of cited by and citing cases may be incomplete.

Trusts, Capital Gains Tax

Updated: 10 November 2021; Ref: scu.163314

Barclays Bank Ltd v Quistclose Investments Ltd; etc: HL 31 Oct 1968

R Ltd were in serious financial difficulties. The company’s overdraft with the appellant bank was almost twice its permitted limit. The company sought a loan of 1 million pounds from a financier, who was willing to lend the company that sum provided the company found the money necessary to pay the ordinary share dividend, a sum of pounds 209,719-8s-6d. The company succeeded in obtaining a loan in that sum and for that purpose from the respondents. The respondents cheque was paid into a special account opened by the company with the appellants which was to be used only for the purpose of paying the dividend. The company went into voluntary liquidation, before the dividend was paid. The respondents brought an action against the company and the appellants claiming the money in the special account.
Held: This gave rise to a trust in favour of the creditors and if the trust failed, in favour of the third person. When the money was advanced, the lender acquired a right, enforceable in equity, to prevent its application for any other purpose. This prevents the borrower from obtaining any beneficial interest in the money while the designated purpose is still capable of being carried out. Once the purpose has been carried out, the lender has his normal remedy in debt. If the purpose cannot be carried out, the question arises whether the money falls within the general fund of the borrower’s assets, in which case it passes to his trustee-in-bankruptcy in the event of his insolvency and the lender is merely a loan creditor; or whether it is held on a resulting trust for the lender. This is determined by the particular facts.
Lord Wilberforce observed: ‘The mutual intention of the respondents and of Rolls Razor Ltd, and the essence of the bargain, was that the sum advanced should not become part of the assets of Rolls Razor Ltd, but should be used exclusively for payment of a particular class of its creditors, namely those entitled to the dividend. A necessary consequence from this, by process simply of interpretation, must be that if, for any reason, the dividend could not be paid, the money was to be returned to the respondent: the word ‘only’ or ‘exclusively’ can have no other meaning or effect.’

Lord Wilberforce, Reid, Morris, Guest, Pearce LL
[1970] AC 567, [1968] UKHL 4
Bailii
England and Wales
Cited by:
CitedSir Graham Stanley Latimer and others – Trustees for the Crown Forestry Rental Trust v The Commissioner of Inland Revenue PC 25-Feb-2004
PC (New Zealand) The Crown created a charitable trust for certain Maori people. Upon exhaustion of the purpose, the fund was to revert to the Crown. The trustees appealed a finding of liability to income tax.
CitedPotter v Potter PC 22-Jul-2004
PC (New Zealand) The parties’ relationship failed. They had bought a house together and entered into a trust deed.
Held: ‘Defeasible interests in land are certainly conceptually possible. In England such . .
CitedAbouRahmah and Another v Abacha and others QBD 28-Nov-2005
Claims were made as to an alleged fraud by some of the respondents. . .
CitedLeisure Employment Services Ltd v Revenue and Customs CA 16-Feb-2007
The company appealed a finding that it had been paying workers at less than the minimum hourly rate. Its workers resided at their places of work, and deductions were made toward the cost of providing accomodation etc. The company claimed that the . .
CitedAnnabel’s (Berkeley Square) Ltd and Others v Revenue and Customs CA 7-May-2009
The court considered whether tips paid at a restaurant by means of a credit card or cheque thus becoming the employer’s money could properly count toward the minimum wage when paid on to the employee. The revenue contended that the money received . .
CitedPower and Another v HM Revenue and Customs and Another ChD 23-Oct-2009
The company had collected savings from consumers toward ‘christmas packs’. It went into liquidation. The revenue asserted claims for unsecured creditors saying that no trust had been created in favour of the savers.
Held: No Quistclose type . .
CitedRegina v Common Professional Examination Board, Ex Parte Mealing-Mcclead CA 19-Apr-2000
A party was required to pay money into court before pursuing an appeal. She borrowed money for this purpose but on the express condition that it should be used for this purpose only and was not to become part of her general assets. The money was . .
CitedRegina v Common Professional Examination Board, Ex Parte Mealing-Mcclead CA 19-Apr-2000
A party was required to pay money into court before pursuing an appeal. She borrowed money for this purpose but on the express condition that it should be used for this purpose only and was not to become part of her general assets. The money was . .
CitedNeste Oy v Lloyd’s Bank Plc ChD 1983
A shipping agent (PSL), a client of the defendant, had become insolvent. The defendant sought to combine the accounts. PSL settled on behalf of their shipowner clients bills payable to harbour authorities, pilots, fuel merchants, and other providers . .
CitedBailey and Another v Angove’s Pty Ltd SC 27-Jul-2016
The defendant had agreed to act as the claimant’s agent and distributor of the claimant’s wines in the UK. It acted both as agent and also bought wines on its own account. When the defendant went into litigation the parties disputed the right of the . .
CitedRevenue and Customs v The Investment Trust Companies SC 11-Apr-2017
Certain investment trust companies (ITCs) sought refunds of VAT paid on the supply of investment management services. EU law however clarified that they were not due. Refunds were restricted by the Commissioners both as to the amounts and limitation . .
CitedLB Holdings Intermediate 2 Ltd, The Joint Administrators of v Lehman Brothers International (Europe), The Joint Administrators of and Others SC 17-May-2017
In the course of the insolvent administration of the bank, substantial additional sums were received. Parties appealed against some orders made on the application to court for directions as to what was to be done with the surplus.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Company, Trusts

Leading Case

Updated: 10 November 2021; Ref: scu.194638

Soar v Ashwell: CA 1893

Trustees under a will had entrusted the trust fund to a solicitor for investment. The solicitor exercised all of their administrative and investment powers for them and distributed part of the fund invested to the beneficiaries under the will but retained part in his own hands. Some 12 years later, the surviving trustee brought an action claiming an account of the money retained by the solicitor.
Held: The solicitor must be considered as having been in the position of an express trustee of such money with the consequence that lapse of time did not bar the action.
A de facto trustee is subject to the same duties as an actual trustee.
Lord Esher MR said: ‘If there is created in expressed terms, whether written or verbal, a trust, and a person is in terms nominated to be the trustee of that trust, a Court of Equity, upon proof of such facts, will not allow him to vouch a Statute of Limitations against a breach of that trust. Such a trust is in equity called an express trust. If the only relation which it is proved the defendant or person charged bears to the matter is a contractual relation, he is not in the view of equity a trustee at all, but only a contractor; and equity leaves the contractual relation to be determined by the common or statute law. If the breach of the legal relation relied on, whether such breach be by way of tort or contract, makes, in the view of a Court of Equity, the defendant a trustee for the plaintiff, the Court of Equity treats the defendant as a trustee become so by construction, and the trust is called a constructive trust; and against the breach which by construction creates the trust the Court of Equity allows Statutes of Limitation to be vouched.’
Lord Esher continued: ‘There was an express trust created, but Ashwell was not at any time nominated as a trustee of that trust. He was the solicitor of the nominated trustees. As such solicitor he was entrusted by the nominated trustees to take and have in his hands the trust money, with a direction on their behalf to deal with it according to the terms of the trust. Assume that he misappropriated that money to his own use, and that that was all; the misappropriation would at once of itself make him the holder of the money in trust for the rightful owner, but, if that were all, only a trustee by construction of a constructive trust. But the questions in this case are whether Ashwell was not, in view of a Court of Equity, a trustee of the money before the alleged breach by misappropriation, and, if he was, under which class of trust he was with regard to limitations. The moment the money was in his hands, he was in a fiduciary relation to the nominated trustees; he was a fiduciary agent of theirs; he held the money in trust to deal with it for them as directed by them; he was a trustee for them. He was therefore a trustee of the money before he committed, if he did commit, the alleged breach of trust, and was in possession of and had control over the money before he committed, if at all, the alleged breach of trust.
The cases seem to me to decide that, where a person has assumed, either with or without consent, to act as a trustee of money or other property, ie, to act in a fiduciary relation with regard to it, and has in consequence been in possession of or has exercised command or control over such money or property, a Court of Equity will impose upon him all the liabilities of an express trustee, and will class him with and will call him an express trustee of an express trust. The principal liability of such a trustee is that he must discharge himself by accounting to his cestui que trusts for all such money or property without regard to lapse of time.
There is another recognised state of circumstances in which a person not nominated a trustee may be bound to liability as if he were a nominated trustee, namely, where he has knowingly assisted a nominated trustee in a fraudulent and dishonest disposition of the trust property. Such a person will be treated by a Court of Equity as if he were an express trustee of an express trust. I am of opinion that the present case is within the description of that which is treated as and is called in equity an express trust, and that the inquiry as to the alleged breach cannot be stopped by the Statute of Limitations.
I am clearly convinced by the evidence that Ashwell became on receipt of the money a trustee of it, and that, as he has not been shewn to have accounted for it, the defendant, his executrix, is liable as such for a breach of trust by him. ‘
Bowen LJ said: ‘It has been established beyond doubt by authority binding on this Court that a person occupying a fiduciary relation, who has property deposited with him on the strength of such relation, is to be dealt with as an express, and not merely a constructive, trustee of such property. His possession of such property is never in virtue of any right of his own, but is coloured from the first by the trust and confidence in virtue of which he received it.’
Recognising that the authorities were irreconcilable, he identified three cases where a constructive trustee would be treated for limitation purposes like an express trustee, namely the case of de facto trustees, which was the case before the court; the case of a stranger to the trust knowingly assisting the fraud of a trustee; and the case of a stranger knowingly receiving trust property in breach of trust.
Kay LJ said: ‘The result seems to be that there are certain cases of what are, strictly speaking, constructive trusts, in which the Statute of Limitations cannot be set up as a defence. Amongst these are the case where a stranger to the trust has assumed to act and has acted as a trustee, and the case where a stranger has concurred with the trustee in committing a breach of trust, and has taken possession of the trust property, knowing that it was trust property, and has not duly discharged himself of it by handing it over to the proper trustees or to the persons absolutely entitled to it.
I think that the present case comes within one or both those categories. I think that Ashwell did assume to act and acted as trustee of the funds which he received, and that he has not duly discharged himself from the plaintiff’s share of those funds, and must therefore be treated as an express trustee.’

Lord Esher MR, Bowen LJ, Kay LJ
[1893] 2 QB 390
England and Wales
Cited by:
CitedUltraframe (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 . .
CitedPeconic Industrial Development Ltd v Lau Kwok FAI 27-Feb-2009
Hong Kong Court of Final Appeal. The limitation period for a claim in dishonest assistance is 6 years. For limitation purposes a distinction is to be made between two kinds of constructive trustees: those who are fiduciaries and those who are . .
CitedWilliams 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 . .
CitedWilliams v Central Bank of Nigeria SC 19-Feb-2014
Bank not liable for fraud of customer
The appellant sought to make the bank liable for a fraud committed by the Bank’s customer, the appellant saying that the Bank knew or ought to have known of the fraud. The court was asked whether a party liable only as a dishonest assistant was a . .
Dicta appliedIn re Gallard 1897
. .
Dicta appliedHeynes v Dixon 1900
. .
Dicta appliedIn re Eyre-Williams 1923
. .
CitedHenchley and Others v Thompson ChD 16-Feb-2017
The Claimants sought an order directing the Defendant to provide a full account of his dealings with the assets of the two trusts as a trustee or as a de facto trustee.
Held: The court has a discretion whether or not to make an order for an . .

Lists of cited by and citing cases may be incomplete.

Limitation, Trusts, Legal Professions

Leading Case

Updated: 10 November 2021; Ref: scu.230273

Foskett v McKeown and Others: HL 18 May 2000

A property developer using monies which he held on trust to carry out a development instead had mixed those monies with his own in his bank account, and subsequently used those mixed monies to pay premiums on a life assurance policy on his own life, vested in trustees for his children. After his death, the life assurance company paid out on the policy. The beneficiaries of the development monies trust made a proprietary claim to a share in the monies paid out by the life assurance company.
Two groups of innocent parties disputed the rights to a death benefit of about 1m pounds paid by insurers pursuant to a whole life policy. A trustee had misappropriated trust funds and used them in part to pay premiums on life insurance policies for the benefit of his own children.
Held: The misappropriated funds could be traced through the insurance policies into the hands of the beneficiaries of the policies. Where part of the premiums had been paid properly, a mixed fund, akin to a bank account, was created, and the interest was according to the proportions. The interest was a property interest in the fund, and the court had no discretion as to its distribution. There is no rule in English law that in the case of a mixed substitution the beneficiary is confined to a lien. ‘Where a trustee wrongfully uses trust money to provide part of the cost of acquiring an asset, the beneficiary is entitled at his option either to claim a proportionate share of the asset or to enforce a lien upon it to secure his personal claim against the trustee for the amount of the misapplied money. It does not matter whether the trustee mixed the trust money with his own in a single fund before using it to acquire the asset, or made separate payments (whether simultaneously or sequentially) out of the differently owned funds to acquire a single asset.’
Lord Millett said: ‘Following is the process of following the same asset as it moves from hand to hand. Tracing is the process of identifying a new asset as the substitute for the old. Where one asset is exchanged for another, a claimant can elect whether to follow the original asset into the hands of the new owner or to trace its value into the new asset in the hands of the same owner . . Tracing is thus neither a claim nor a remedy. It is merely the process by which a claimant demonstrates what has happened to his property, identifies its proceeds and the persons who have handled or received them, and justifies his claim that the proceeds can properly be regarded as representing his property. Tracing is also distinct from claiming. It identifies the traceable proceeds of the claimants’ property. It enables the claimant to substitute the traceable proceeds for the original asset as the subject matter of his claim. But it does not affect or establish his claim.’
Lord Millett set out the distinction between a claim to enforce property right and a case of unjust enrichment: ‘A plaintiff who brings an action in unjust enrichment must show that the defendant has been enriched at the plaintiff’s expense, for he cannot have been unjustly enriched if he has not been enriched at all. But the plaintiff is not concerned to show that the defendant is in receipt of property belonging beneficially to the plaintiff or its traceable proceeds. The fact that the beneficial ownership of the property has passed to the defendant provides no defence; indeed, it is usually the very fact which founds the claim. Conversely, a plaintiff who brings an action like the present must show that the defendant is in receipt of property which belongs beneficially to him or its traceable proceeds, but he need not show that the defendant has been enriched by its receipt. He may, for example, have paid full value for the property, but he is still required to disgorge it if he received it with notice of the plaintiff’s interest.’
Lord Steyn said: ‘In truth tracing is a process of identifying assets: it belongs to the realm of evidence. It tells us nothing about legal or equitable rights to the assets traced.’

Lord Browne-Wilkinson, Lord Steyn, Lord Hoffmann, Lord Hope of Craighead, Lord Millett
Times 24-May-2000, Gazette 08-Jun-2000, [2000] UKHL 29, [2000] 3 All ER 97, [2000] Lloyd’s Rep IR 627, [2001] 1 AC 102, [2000] WTLR 667, (1999-2000) 2 ITELR 711, [2000] 2 WLR 1299
House of Lords, Bailii
England and Wales
Citing:
CitedIn re Diplock’s estate CA 1948
After considering a situation in which trust money had been applied in making alterations to the property of an innocent third party but had not added to the value of the property,
Held: The origin of the equitable rules of tracing were . .
Appeal fromFoskett v McKeown and Others CA 27-Jun-1997
Various people had paid money with the promise of acquiring an interest in land in Portugal. The scheme was fraudulent. The funds had been used to purchase a life/investment policy. The policy was held in trust for the fraudster’s mother but he had . .
CitedIn re Leslie; Leslie v French ChD 1883
The court gave guidance as to the circumstances in which an individual who had paid a premium on a policy belonging to someone else could claim an interest in the policy: ‘In my opinion a lien may be created upon the moneys secured by a policy by . .
CitedIn re Tilley’s Will Trusts ChD 1967
The court considered the rights of a beneficiary to participate in any profit which resulted where a trustee mixed trust money with his own money and then used it to purchase other property. . .
CitedScottish Co-operative Wholesale Society Ltd v Meyer HL 1959
Valuation of Shares on Order for Purchase
The Co-operative Society had formed a 51 per cent-owned subsidiary to manufacture rayon at a time of strict post-war controls. The other shares were owned by two outside directors with skill and experience in the trade. When these directors declined . .
CitedFalcke v Scottish Imperial Insurance Co CA 1886
The owner of a policy of life assurance mortgaged the policy to secure repayment of a loan. Subsequently the owner, now the owner of an equity of redemption in the policy, paid two annual premiums which became due under the policy. The policy was . .
CitedD’Avigdor-Goldsmid v Inland Revenue Commisioners HL 1953
A contingency which makes money payable under a chose cannot affect the proprietary interests in the chose in action and therefore in its proceeds. No fresh beneficial interest in a policy of life assurance accrues or arises on the death of the life . .
CitedSandeman and Sons v Tyzack and Branfoot Steamship Co Ltd HL 1913
The House described the doctrines of English law which are applicable to cases where goods belonging to different owners have become mixed so as to be incapable of either being distinguished or separated: ‘If the mixing has arisen from the fault of . .
CitedEdinburgh Corporation v Lord Advocate HL 1879
Competing claims to a mixed fund were resolved by the application of equitable principles. Funds had been contributed by a benefactor of a hospital for particular trust purposes and had for more than 170 years been held, administered and applied as . .
CitedTrustee of the Property of F C Jones and Sons (A Firm) v Jones CA 13-May-1996
A bankruptcy order was made in 1984. Under the 1914 Act the trustee in bankruptcy got title to all the assets of the bankrupt as of the date of the act of bankruptcy. So, the trustee owned the partnership assets. The wife drew andpound;11,700 out of . .
CitedEl Ajou v Dollar Land Holdings Plc ChD 1995
The tracing of assets into the hands of a third party depends upon a notional charge. There are no inflexible rules. The essential elements of ‘knowing receipt’ are: ‘For this purpose the plaintiff must show, first, a disposal of his assets in . .
CitedMagistrates of Edinburgh v McLaren HL 1881
. .
DisapprovedIn re Hallett’s Estate; Knatchbull v Hallett CA 1880
Where a trustee of a policy used money received from others to make payment of premiums on an insurance policy, they would be entitled to a lien on the policy. Where an asset was acquired exclusively with trust money, the beneficiary could either . .
CitedLupton v White 19-Dec-1808
Whatever alteration of form any property may undergo, the true owner is entitled to seize it in its new shape if he can prove the identity of the original material. . .
CitedJones v De Marchant 1916
A husband wrongfully used 18 beaver skins belonging to his wife together with four skins of his own, to have a fur coat made up which he then gave to his mistress. The wife was held entitled to recover the coat. The mistress knew nothing of the true . .
CitedFrith v Cartland 1865
‘. . . If a man mixes trust funds with his own, the whole will be treated as the trust property, except so far as he may be able to distinguish what is his own.’ . .

Cited by:
Appealed toFoskett v McKeown and Others CA 27-Jun-1997
Various people had paid money with the promise of acquiring an interest in land in Portugal. The scheme was fraudulent. The funds had been used to purchase a life/investment policy. The policy was held in trust for the fraudster’s mother but he had . .
CitedUltraframe (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 . .
CitedClark v Cutland CA 18-Jun-2003
One director discovered that his co-director had withdrawn substantial sums from the company. . .
CitedBank of Cyprus UK Ltd v Menelaou SC 4-Nov-2015
The bank customers, now appellants, redeemed a mortgage over their property, and the property was transferred to family members, who in turn borrowed from the same lender. A bank employee simply changed the name on the mortgage. This was ineffective . .
CitedScott v Bridge and Others ChD 25-Nov-2020
Claim to recover money and property said to have been transferred by the claimant to the defendants or one or more of them. The money concerned came from a bank account belonging to the claimant. The property concerned consisted of two . .

Lists of cited by and citing cases may be incomplete.

Insurance, Equity, Trusts

Leading Case

Updated: 10 November 2021; Ref: scu.80646

In re Whiteley: 1886

Lindley LJ considered the duties of a trustee in exercising his powers of investment and said: ‘The principle applicable to cases of this description was stated . . to be that 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. I accept this principle; but in applying it care must be taken not to lose sight of the fact that the business of the trustee, and the business which the ordinary prudent man is supposed to be conducting for himself, is the business of investing money for the benefit of persons who are to enjoy it at some future time, and not for the sole benefit of the person entitled to the present income. The duty of a trustee is not to take such care only as a prudent man would take if he had only himself to consider; the duty rather is to take such care as an ordinary prudent man would take if he were minded to make an investment for the benefit of other people for whom he felt morally bound to provide.’

Lindley LJ
(1886) 33 ChD 347
England and Wales
Cited by:
CitedCowan v Scargill and Others ChD 13-Apr-1984
Trustee’s duties in relation to investments
Within the National Coal Board Pension scheme, the trustees appointed by the NCB were concerned at the activities of the trustees of the miners, and sought directions from the court. The defendants refused to allow any funds to be invested abroad. . .
CitedNestle v National Westminster Bank CA 6-May-1992
The claimant said that the defendant bank as trustee of her late father’s estate had been negligent in its investment of trust assets.
Held: The claimant had failed to establish either a breach of trust or any loss flowing from it, though . .

Lists of cited by and citing cases may be incomplete.

Trusts

Leading Case

Updated: 10 November 2021; Ref: scu.222827

Re Vandervell’s Trusts (No 2): ChD 17 Jul 1973

The court considered the requirement that a proposed beneficiary must establish some positive act on the part of the person creating the trust for that person to be bound by the trust asserted. Megarry J said: ‘(1) If a transaction fails to make any effective disposition of any interest it does nothing. This is so at law and in equity, and has nothing to do with resulting trusts. (2) Normally the mere existence of some unexpressed intention in the breast of the owner of the property does nothing: there must at least be some expression of that intention before it can effect any result. To yearn is not to transfer. (3) Before any doctrine of resulting trust can come into play, there must at least be some effective transaction which transfers or creates some interest in property. (4) Where A effectually transfers to B (or creates in his favour) any interest in any property, whether legal or equitable, a resulting trust for A may arise in two distinct classes of case. For simplicity, I shall confine my statement to cases in which the transfer or creation is made without B providing any valuable consideration, and where no presumption of advancement can arise; and I shall state the position for transfers without specific mention of the creation of new interests. (a) The first class of case is where the transfer to B is not made on any trust. If, of course, it appears from the transfer that B is intended to hold on certain trusts, that will be decisive, and the case is not within this category; and similarly if it appears that B is intended to take beneficially. But in other cases there is a rebuttable presumption that B holds on a resulting trust for A. The question is not one of the automatic consequences of a dispositive failure by A, but one of presumption: the property has been carried to B, and from the absence of consideration and any presumption of advancement B is presumed not only to hold the entire interest on trust, but also to hold the beneficial interest for A absolutely. The presumption thus establishes both that B is to take on trust and also what that trust is. Such resulting trusts may be called ‘presumed resulting trusts. (b) The second class of case is where the transfer to B is made on trusts which leave some or all of the beneficial interest undisposed of. Here B automatically holds on a resulting trust for A to the extent that the beneficial interest has not been carried to him or others. The resulting trust here does not depend on any intentions or presumptions, but is the automatic consequence of A’s failure to dispose of what is vested in him. Since ex hypothesi the transfer is on trust, the resulting trust does not establish the trust but merely carries back to A the beneficial interest that has not been disposed of. Such resulting trusts may be called ‘automatic resulting trusts. (5) Where trustees hold property in trust for A, and it is they who, at A’s direction, make the transfer to B, similar principles apply, even though on the face of the transaction the transferor appears to be the trustees and not A. If the transfer to B is on trust, B will hold any beneficial interest that has not been effectually disposed of on an automatic resulting trust for the true transferor, A. If the transfer to B is not on trust, there will be a rebuttable presumption that B holds on a resulting trust for A.’

Megarry J
[1974] 1 Ch 269
England and Wales
Citing:
See AlsoVandervell v Inland Revenue Commissioners HL 24-Nov-1966
The taxpayer made a gift of shares to a trust set up to fund a medical professorship. The shares were in a private company, and an option was given for their repurchase once a certain level of dividends had been attributed to them. He was assessed . .

Cited by:
CitedAllen and Another v Rochdale Borough Council CA 23-Mar-1999
Land was sold. It had been used as playing fields. The freehold and leasehold interests in the land were held by the respondent, and the claimants asserted it was held as bare trustees for them as charitable trustees for the school foundation. The . .
Appeal fromWhite and others v Vandervell Trustees Ltd. (No. 2), Re Vandervell’s Trusts (No 2) CA 3-Jul-1974
Lord Denning MR described the modern practice concerning pleadings: ‘It is sufficient for the pleader to state the material facts. He need not state the legal result. If, for convenience, he does so, he is not bound by, or limited to, what he has . .

Lists of cited by and citing cases may be incomplete.

Trusts

Leading Case

Updated: 10 November 2021; Ref: scu.187406

Williams v Lawrence and Another: ChD 28 Jul 2011

The claimant, as trustee for the deceased’s insolvent estate, sought a declaration that a transfer of the deceased’s share in property made by the executors was void as being at an undervalue. The property was subject to a right of occupation in favour of one of the purchaser, one of the defendants, and therefore reduced in value.
Held: The effect of Regulation 12 was to allow such an application to go back much further than could happen in a normal insolvency, but in this case, at the time of the transfer, the parties knew of the estate’s debts. On the facts, no common intention to create a binding right was established, and therefore the sale was at a gross undervalue, and was to be set aside.

David Cooke J
[2011] EWHC 2001 (Ch)
Bailii
Administration of Insolvent Estates of Deceased Persons Order 1986 (SI 1986/1999)
England and Wales
Citing:
CitedLloyds Bank plc v Rosset HL 29-Mar-1990
The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest . .
CitedPascoe v Turner CA 1-Dec-1978
The defendant had been assured by the plaintiff that ‘the house is yours and everything in it.’ In reliance on that assurance she carried out improvements to the house. Although the improvements were modest, their cost represented a large part of . .
CitedKernott v Jones CA 26-May-2010
The unmarried couple bought a property together. Mr K appealed against an award of 90% of the property to his former partner. The court was asked, whether, following Stack v Dowden, it was open to the court to find that the parties had agreed that . .
CitedJames v Thomas CA 23-Nov-2007
The claimant sought an interest in the property registered in the sole name of the respondent. The respondent had inherited a share in the property, and then bought out the interests of his siblings with support of a loan. The claimant had made no . .
CitedStack 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 . .
CitedOxley v Hiscock CA 6-May-2004
The parties were not married, but had brought together their resources to purchase a home in the name of one of them. Nothing had been said about the respective shares on which the property was to be held.
Held: The shares were to be assessed . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Insolvency, Trusts

Updated: 09 November 2021; Ref: scu.442271

Armitage v Nurse; etc: CA 19 Mar 1997

A clause in a trust deed may validly excuse trustees from personal liability for even gross negligence. The trustee was exempted from liability for loss or damage ‘unless such loss or damage shall be caused by his own actual fraud’.
Held: The trustee was under no liability in absence of any dishonest intention. Millett LJ criticised the existing law. Care was needed when applying concepts relevant to the tort of deceit to a breach of trust because breaches of trust were of many different kinds. An exemption clause could exclude the trustee from liability for loss and damage to the trust property ‘no matter how indolent, imprudent, lacking in diligence, negligent or wilful he may have been, so long as he had not acted dishonestly’.
Millett LJ held that a fraudulent breach of trust: ‘simply means dishonesty. I accept that formulation put forward by Mr Hill on behalf of the respondents which (as I have slightly modified it) is that it connotes at the minimum an intention on the part of the trustee to pursue a particular course of action, either knowing that it is contrary to the interests of the beneficiaries or being recklessly indifferent whether it is contrary to their interests or not.
It is the duty of a trustee to manage the trust property and deal with it in the interests of the beneficiaries. If he acts in a way which he does not honestly believe is in their interests then this is acting dishonestly. It does not matter whether he stands or thinks he stands to gain personally from his actions. A trustee who acts with the intention of benefiting persons who are not the objects of the trust is not the less dishonest because he does not intend to benefit himself.’
As to the requirements for pleading fraud, he said: ‘Fraud must be distinctly alleged and as distinctly proved: Davy v Garrett (1877) 7 Ch D 473 , 489 per Thesiger LJ. It is not necessary to use the word ‘fraud’ or ‘dishonesty’ if the facts which make the conduct complained of fraudulent are pleaded; but, if the facts pleaded are consistent with innocence, then it is not open to the court to find fraud. As Buckley LJ said in Belmont Finance Corp Ltd v Williams Furniture Ltd [1979] Ch 250, 268: ‘An allegation of dishonesty must be pleaded clearly and with particularity. That is laid down by the rules and it is a well-recognised rule of practice. This does not import that the word ‘fraud’ or the word ‘dishonesty’ must be necessarily used . . The facts alleged may sufficiently demonstrate that dishonesty is allegedly involved, but where the facts are complicated this may not be so clear, and in such a case it is incumbent on the pleader to make it clear when dishonesty is alleged. If he uses language which is equivocal, rendering it doubtful whether he is in fact relying on the alleged dishonesty of the transaction, this will be fatal; the allegation of its dishonest nature will not have been pleaded with sufficient clarity.’
‘Every beneficiary is entitled to see the trust accounts, whether his interest is in possession or not.’
Millett LJ identified the ‘irreducible core’ of obligations of a fiduciary: ‘there is an irreducible core of obligations owed by the trustees to the beneficiaries and enforceable by them which is fundamental to the concept of a trust. If the beneficiaries have no rights enforceable against the trustees there are no trusts . . The duty of the trustees to perform the trusts honestly and in good faith for the benefit of the beneficiaries is the minimum necessary to give substance to the trusts, but in my opinion it is sufficient.’

Millett LJ
Times 31-Mar-1997, [1997] Pens LR 51, [1997] EWCA Civ 1279, [1998] Ch 241, [1997] 2 All ER 705, [1997] 3 WLR 1046
Bailii
Trustee Act 1925 21(3)
England and Wales
Citing:
CitedDavy v Garrett 1878
It is not sufficient in pleadings to allege facts from which fraud might be inferred but which are also consistent with innocence.
Thesiger LJ said: ‘Fraudulent conduct must be distinctly alleged and distinctly proved, and it [is] not . .
Appeal fromArmitage v Nurse and Others ChD 3-Jul-1995
A clause exonerating trustees from responsibility for breaches of duty will be construed strictly against them. . .

Cited by:
CitedDEG-Deutsche Investitions und Entwicklungsgesellschaft mbH v Koshy and Other (No 3); Gwembe Valley Development Co Ltd (in receivership) v Same (No 3) CA 28-Jul-2003
The company sought to recover damages from a director who had acted dishonestly, by concealing a financial interest in a different company which had made loans to the claimant company. He replied that the claim was out of time. At first instance the . .
CitedBarraclough v Mell and others ChD 1-Dec-2005
Moneys due under a will had been misdistributed. The correct beneficiary sought repayment. The executor sought to rely upon a trustee exemption clause.
Held: the tustee exemption clause was effective to protect the executor as such. She had . .
CitedCrawford v Financial Institutions Services Ltd PC 2-Nov-2005
(Jamaica) The government had intervened in banking institutions under the control of the appellant. Subsequently orders had been made against him for compensation in respect of loans made negligently or otherwise than in accordance with good banking . .
CitedBerezovsky v Abramovich ComC 22-May-2008
Applications were made to amend pleadings and for consequential orders. The claimant sought damages of $4.3 billion alleging breach of trust. The claimant sought to add claims which the defendant said were out of time.
Held: The proposed . .
CitedCavell USA, Inc and Randall v Seaton Insurance Company etc CA 16-Dec-2009
The parties had settled terms for concluding business arrangements between them. The agreement released and referred all claims in law and in equity ‘save for fraud’ to the UK courts. The respondents now wanted to bring a case alleging breach of a . .
See AlsoArmitage v Nurse SCCO 11-Apr-2000
review of counsel’s fees in a legal aid only case . .
CitedAbbar and Another v Saudi Economic and Development Company (Sedco) Real Estate Ltd and Others ChD 5-Aug-2010
The defendant sought a strike out of the claim in fraud, saying it was an abuse of process, saying that the facts as pleaded were consistent with honest dealing. The claimants said they had been induced to purchase shares.
Held: The request . .
CitedStocker v Stocker QBD 10-Jun-2015
The claimant alleged defamation by his former wife in a post on facebook. The posting and associatedeEmails were said falsely to have accused him of serious abuse, and that the accusations had undermined his relationship with his new partner.
CitedRoyal National Lifeboat Institution and Others v Headley and Another ChD 28-Jul-2016
Beneficiaries’ right to information from estate
The claimant charities sought payment of interests under the will following the dropping of two life interests. They now requested various documents forming accounts of the estate.
Held: The charities were entitled to some but not to all of . .
CitedHenchley and Others v Thompson ChD 16-Feb-2017
The Claimants sought an order directing the Defendant to provide a full account of his dealings with the assets of the two trusts as a trustee or as a de facto trustee.
Held: The court has a discretion whether or not to make an order for an . .
CitedLehtimaki and Others v Cooper SC 29-Jul-2020
Charitable Company- Directors’ Status and Duties
A married couple set up a charitable foundation to assist children in developing countries. When the marriage failed an attempt was made to establish a second foundation with funds from the first, as part of W leaving the Trust. Court approval was . .

Lists of cited by and citing cases may be incomplete.

Trusts, Torts – Other, Litigation Practice

Leading Case

Updated: 09 November 2021; Ref: scu.141675

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 flexibility so that the courts can no longer adapt it to changing conditions the strength of the presumption must have been much diminished. I do not think it would be proper to apply it to the circumstances of the present case.’
Lord Hodson said: ‘Reference has been made to the ‘presumption of advancement’ in favour of a wife in receipt of a benefit from her husband. In old days when a wife’s right to property was limited, the presumption, no doubt, had great importance and today, when there are no living witnesses to a transaction and inferences have to be drawn, there may be no other guide to a decision as to property rights than by resort to the presumption of advancement. I do not think it would often happen that when evidence had been given, the presumption would today have any decisive effect.’ Lord Upjohn: ‘But the document may be silent as to the beneficial title. The property may be conveyed into the name of one or other or into the names of both spouses jointly in which case parol evidence is admissible as to the beneficial ownership that was intended by them at the time of acquisition and if, as very frequently happens as between husband and wife, such evidence is not forthcoming, the court may be able to draw an inference as to their intentions from their conduct. If there is no such available evidence then what are called the presumptions come into play. They have been criticised as being out of touch with the realities of today but when properly understood and properly applied to the circumstances of today I remain of opinion that they remain as useful as ever in solving questions of title’ and ‘Though normally referred to as a presumption of advancement, it is no more than a circumstance of evidence which may rebut the presumption of resulting trust, and the learned editors of White and Tudor were careful to remind their readers at p763 that ‘all resulting trusts which arise simply from equitable presumptions, may be rebutted by parol evidence’ This doctrine applies equally to personalty. These presumptions or circumstances of evidence are readily rebutted by comparatively slight evidence.’
Lord Diplock noted that: ‘It would, in my view, be an abuse of the legal technique for ascertaining or imputing intention to apply to transactions between the post-war generation of married couples ‘presumptions’ which are based upon inferences of fact which an earlier generation of judges drew as to the most likely intentions of earlier generations of spouses belonging to the propertied classes of a different social era.’
As to the presumption of advancement. Lord Upjohn commented that it is ‘readily rebutted by comparatively slight evidence.’

Lord Reid, Lord Hodson, Lord Upjohn
[1969] 2 WLR 966, [1969] 2 All ER 385, [1970] AC 777, [1969] UKHL 5
Bailii
England and Wales
Cited by:
ConsideredSpringett v Defoe CA 1992
Partners lived together, without being married, as secure joint tenants. They exercised the right to buy, contributing three quarters and one quarter of the price respectively. At the time they intended to marry. They did not discuss he shares, and . .
CitedLloyds Bank plc v Rosset HL 29-Mar-1990
The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest . .
CitedLavelle 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 . .
AppliedBurns v Burns CA 1984
Long Relationship Not Enough for Interest in Home
The parties lived together for 17 years but were not married. The woman took the man’s name, but beyond taking on usual household duties, she made no direct financial contribution to the house. She brought up their two children over 17 years. . .
CitedWalker v Hall CA 1984
The court considered the way of distributing property purchased by an unmarried couple: ‘When such a relationship comes to an end, just as with many divorced couples, there are likely to be disputes about the distribution of shared property. How are . .
CitedGrant v Edwards and Edwards CA 24-Mar-1986
A couple were not married but lived together in Vincent Farmhouse in which the plaintiff claimed a beneficial interest on separation. The female partner was told by the male partner that the only reason for not acquiring the property in joint names . .
CitedMcFarlane v McFarlane CANI 1972
The parties disputed their respective shares in the family home. The facts in Pettitt and Gissing ‘were not such as to facilitate or encourage a comprehensive statement of this vexed branch of the law’ and ‘much remains unsettled.’ The court . .
CitedStack v Dowden CA 13-Jul-2005
The parties purchased a property together. The transfer contained a survivorship restriction but no declaration of the beneficial interests. The judge had held the property to be held as tenants in commn on equal shares.
Held: In a case where . .
CitedCrossley 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 . .
CitedBernard v Josephs CA 30-Mar-1982
The court considered the division of proceeds of sale of a house bought by an unmarried couple.
Held: Where the trusts for which a property was purchased have been concluded, the house should be sold.
Griffiths LJ said: ‘the fact that . .
CitedClarke v Harlowe ChD 12-Aug-2005
The parties lived together. They acquired between them several properties of which the last was declared to be held as joint tenants. The relationship broke down. The parties now sought a declaration as to the destination of the proceeds of sale, . .
CitedPudner and Another v Pudner CA 27-Feb-2006
The parties challenged the validity of a will, and claimed the house by survivorship. The house had been conveyed into joint names, but the solicitors on registration had declared it a tenancy in common. This was said to have been a mistake.
CitedStack 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 . .
CitedJones v Kernott SC 9-Nov-2011
Unmarried Couple – Equal division displaced
The parties were unmarried but had lived together. They now disputed the shares in which they had held the family home. It had been bought in joint names, but after Mr Kernott (K) left in 1993, Ms Jones (J) had made all payments on the house. She . .
CitedJones v Kernott SC 9-Nov-2011
Unmarried Couple – Equal division displaced
The parties were unmarried but had lived together. They now disputed the shares in which they had held the family home. It had been bought in joint names, but after Mr Kernott (K) left in 1993, Ms Jones (J) had made all payments on the house. She . .
CitedBen 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.

Trusts, Family

Leading Case

Updated: 09 November 2021; Ref: scu.187404

Royal National Lifeboat Institution and Others v Headley and Another: ChD 28 Jul 2016

Beneficiaries’ right to information from estate

The claimant charities sought payment of interests under the will following the dropping of two life interests. They now requested various documents forming accounts of the estate.
Held: The charities were entitled to some but not to all of the documents sought, including accounts of capital and lists of investments, and the trustee’s fees insofar as they impacted on capital. They were not generally entitled to matters relating to income. They were allowed to see the documents underlying the trust and to be informed as to the history of the identities of the trustees and the status of life interest holders.
As to costs, the trustees had failed to engage properly at all with what were proper requests, and the claimant charities should be entitled to their costs. The claimants also sought an order disallowing the trustees an indemnity from the estate, and ‘In my judgment, notwithstanding the lack of participation or explanation on behalf of the Defendants, it is clear that the Second Defendant in failing to account to the Claimants over so many years acted for a benefit other than that of the estate, and in failing to take part in these proceedings at all acted unreasonably. I have no hesitation in saying that any costs incurred by the Second Defendant in the context of these proceedings, including the costs which I have ordered him to pay to the Claimants, were not ‘properly incurred’ within s 31(1) and CPR rule PD46 para 1.1, and hence he is not entitled to be reimbursed out of the trust fund in respect of them.’
Master Matthews said: ‘Every beneficiary is entitled to see the trust accounts, whether his interest is in possession or not’, but ‘There is some danger of misunderstanding here. When the books and cases talk about beneficiaries ‘entitlements to accounts’ or to trustees being ‘ready with their accounts’ they are not generally referring to annual financial statements such as limited companies and others carrying on business (and indeed some large trusts) commonly produced in the form of balance sheets and profit and loss accounts, usually through accountants, and – in the case of limited companies – filed at Companies House. Instead they are referring to the very notion of accounting itself. Trustees must be ready to account to their beneficiaries for what they have done with the trust assets. This may be done with formal financial statements, or with less formal documents, or indeed none at all. It is no answer for trustees to say that formal financial statements have not yet been produced by the trustees’ accountants.’

Master Matthews
[2016] EWHC 1948 (Ch)
Bailii
England and Wales
Citing:
CitedRe Cowin 1886
. .
CitedIn re Tillott ChD 1892
The plaintiff was entitled under a will trust to a one twelfth share in the capital of the residue, contingently on the death of his mother, who was a life tenant. The residue included Bank of England Consols. He had already obtained from the court . .
CitedIn re Dartnall CA 1895
. .
CitedNestle v National Westminster Bank ChD 1988
The plaintiff was the remainder beneficiary under the will trust of her grandfather, who died in 1922. The trust fund was then worth about andpound;50,000. The last outstanding life interest under the trust was that of her father John, who died in . .
CitedD v United Kingdom ECHR 1997
In the circumstances of the case, where the applicant was in the advanced stage of a terminal illness (AIDS), to implement a decision by the respondent to remove the appellant to St Kitts in the West Indies would be a violation of his rights under . .
CitedArmitage v Nurse; etc CA 19-Mar-1997
A clause in a trust deed may validly excuse trustees from personal liability for even gross negligence. The trustee was exempted from liability for loss or damage ‘unless such loss or damage shall be caused by his own actual fraud’.
Held: The . .
CitedVadim Schmidt v Rosewood Trust Limited PC 27-Mar-2003
PC (Isle of Man) The petitioner sought disclosure of trust documents, as a beneficiary. Disclosure had been refused as he had not been a named beneficiary.
Held: Times had moved on, and trust documents had . .
CitedO’Rourke v Darbishire HL 1920
Sir Joseph Whitworth had died in 1887. In 1884 he had made a will appointing three executors and leaving his residuary estate to charity. By a codicil made in 1885 he altered his will to leave his ultimate residue to his executors for their own . .
CitedBurrows v Walls 10-Mar-1855
A testator, by his will, gave the residue of his property to three trustees, whom he appointed executors, upon trust to sell and invest the same and to pay the income thereof to his widow for life, and after her decease, to his children, who were . .
CitedO’Rourke v Darbishire HL 1920
Sir Joseph Whitworth had died in 1887. In 1884 he had made a will appointing three executors and leaving his residuary estate to charity. By a codicil made in 1885 he altered his will to leave his ultimate residue to his executors for their own . .
CitedMurphy v Murphy ChD 2-May-1998
Where a plaintiff could show that he might have some potential interest under a discretionary trust, the settlor could be obliged by the court to disclose the names and addresses of the settlement trustees. . .
CitedBrittlebank v Goodwin 1868
A trustee is bound to inform a beneficiary, who, on attaining majority is entitled to share in a trust fund, of that interest . .
CitedHeugh v Scard CA 1875
Sir George Jessel MR said: ‘In certain cases of mere neglect or refusal to furnish accounts, when the neglect is very gross or the refusal wholly indefensible, I reserve to myself the right of making the executor or trustee pay the costs of . .
CitedIn Re Skinner ChD 1904
A beneficiary of a will trust brought an action for an account, having had little or no accounting from the executors and trustees (one a professional solicitor, entitled to charge) since the testator died more than two years before the action was . .
CitedBlades v Isaac and Another ChD 21-Mar-2016
Claim by beneficiary under discretionary trust.
Held: A trustee’s wrongful failure to provide information does not necessarily justify an adverse costs order. . .

Cited by:
CitedHenchley and Others v Thompson ChD 16-Feb-2017
The Claimants sought an order directing the Defendant to provide a full account of his dealings with the assets of the two trusts as a trustee or as a de facto trustee.
Held: The court has a discretion whether or not to make an order for an . .

Lists of cited by and citing cases may be incomplete.

Trusts, Costs

Updated: 09 November 2021; Ref: scu.567848

Gomez and others v Vives: CA 3 Oct 2008

The claimant appealed a finding that the court did not have jurisdiction over income payable to a trust governed by English law under which the claimant was beneficiary.
Held: The appeal failed in part. Because Article 5 is in derogation from the basic principle of domicile in Article 2, the provisions of Article 5 are to be construed restrictively. In this case, the beneficiary was being sued for overpayment as part of the trust. ‘It would be quite inconsistent with the restrictive approach to the special head of jurisdiction in Article 5(6) to read the words ‘as trustee’ in the expansive way, in which they would have to be read, to produce a result in favour of the claimants.’ Even if the powers on which the claim was based are classified as fiduciary, the first defendant is not being sued in the second claim ‘as a trustee . . of a trust created . . by a written instrument’ for the purposes of Article 5(6).

Lawrence Collins LJ, Jacobs LJ
[2008] EWCA Civ 1065
Bailii
Council Regulation (EC) 44/2001 2 5(6), Jurisdiction and Judgments Act 1982
England and Wales
Citing:
Appeal fromGomez and others v Encarnacion Gomez-Monche Vives and others ChD 18-Feb-2008
The court had no jurisdiction in a claim by the three claimants against their mother, the first defendant, arising out of a trust created by their father. The family was Spanish and the trust was expressed to be governed by English law. The . .
CitedDuke of Marlborough v Attorney General 1945
The Court was asked whether foreign shares held on trust were taxable as on a succession on the death of the beneficiary of the trust.
Held: The proper law of a marriage settlement ‘can only be the law by reference to which the settlement as . .
CitedIn re Diplock’s estate CA 1948
After considering a situation in which trust money had been applied in making alterations to the property of an innocent third party but had not added to the value of the property,
Held: The origin of the equitable rules of tracing were . .
CitedBonython v Commonwealth of Australia PC 1951
Lord Simonds defined the proper law governing a contract to be: ‘the system of law by reference to which the contract was made or that with which the transaction has its closest and most real connection.’ . .
MentionedMinistry of Health v Simpson; In re Diplock dec HL 1950
The will of Cable Diplock purported to make a gift to charity, and was distributed accordingly. The house however found the gift to be invalid.
Held: A personal remedy existed for the recovery of amounts wrongly paid in the distribution of an . .
CitedReisch Montage AG v Kiesel Baumaschinen Handels GmbH (Area Of Freedom, Security and Justice) ECJ 13-Jul-2006
Europa Regulation (EC) No 44/2001 – Article 6(1) – Cases where there is more than one defendant – Action brought in a Member State against a person domiciled in that State who is the subject of bankruptcy . .
CitedChellaram and Another v Chellaram and others (No 2) ChD 16-Apr-2002
One of the defendants had not been properly served by posting the proceedings to an address at which he stayed on his very occasional visits to London. The proceedings had not been issued for the purposes of service abroad, because at the time of . .
CitedIn re United Railways of the Havana v Regla Warehouses Ltd CA 1960
There had been a financing transaction by way of a lease by a Pennsylvania corporation, as trustee for foreign bondholders, to an English company carrying on business in Cuba, of assets in Cuba. By a Cuban decree the assets were transferred to the . .
CitedKleinwort Benson Limited v City of Glasgow District Council HL 19-Jun-1997
Restitution when Contract Void ab initio
A claim for restitution of money paid under a contract which was void ab initio is not a claim in contract, nor tort, nor delict, it was justiciable only in the court of domicile. The Brussels Convention does not decide jurisdiction. ‘But it is . .
CitedKalfelis v Bankhaus Schroder, Munchmeyer, Hengst and Co and others ECJ 27-Sep-1988
kalfelisECJ1988
ECJ For Article 6(1) of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters to apply, a connection must exist between the various actions brought . .
CitedIn re United Railways of Havana and Regla Warehouses Ltd; Tomkinson v First Pennsylvania Banking and Trust Co HL 1960
A sum was held to be due from that company in US dollars under a lease and another agreement which were both governed by the law of Pennsylvania.
Held: The sum provable in the liquidation of the company was to be converted at the rates of . .
CitedMettoy Pension Trustees v Evans ChD 1990
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . .
CitedRe Freiburg Trust 2004
(Jersey) . .

Lists of cited by and citing cases may be incomplete.

Jurisdiction, Trusts

Updated: 09 November 2021; Ref: scu.276660

The Earl of Oxford’s Case In Chancery: ChD 1615

Chancellor may relieve common law oppression

The claim was made under a lease. judgement have been entered in default at common law in favour of the plaintiff. the defendant began a suit in the Chancery Court. a common-law injunction was then issued against the original plaintiff, and he was served with a subpoena to appear in Chancery.
Held: The defendant was entitled to relief in Chancery.
Lord Ellesmere LC said: ‘The Cause why there is a Chancery is, for that Mens Actions are so divers and infinite, That it is impossible to make any general Law which may aptly meet with every particular Act, and not fail in some Circumstances.’ and
‘The office of the Chancellor is to correct man’s consciences for frauds, breach of trust, wrongs and oppressions of whatsoever nature and to soften and mollify the extremity of the law . . when judgement is obtained by oppression, wrong and hard conscience, the Chancellor will frustrate and set it aside, not for any error or defect in the judgment but for the hard conscience of the party.’

Lord Ellesmere LC
[1615] EngR 2, (1615) 1 Rep Ch 1, (1615) 21 ER 485
Commonlii
England and Wales
Cited by:
CitedShearer and Others v Spring Capital Ltd and Others ChD 4-Nov-2013
The court considered various applications for interim orders and directions in the cause. . .

Lists of cited by and citing cases may be incomplete.

Equity, Trusts

Leading Case

Updated: 09 November 2021; Ref: scu.424216

Re Coomber, Coomber v Coomber: ChD 1911

A father had been assisted in his business by his second son. After the father’s death, the mother transferred the business assets to that second son. After her death, the elder son sought the transfer of those assets back into her estate, saying that in the absence of her having taken independent advice, the younger son’s position brought an implication of undue influence.
Held: The mother’s actions were adequately explained by her wish to do what she thought her husband would have wanted.
Fletcher Moulton LJ summarised the general rules applicable to cases of persons who are competent to form an opinion of their own: ‘All that is necessary is that some independent person, free from any taint of the relationship, or of the consideration of interest which would affect the act, should put clearly before the person what are the nature and the consequences of the act. It is for adult persons of competent mind to decide whether they will do an act, and I do not think that independent and competent advice means independent and competent approval. It simply means that the advice shall be removed entirely from the suspected atmosphere; and that from the clear language of an independent mind, they should know precisely what they are doing.’
and ‘It is possible that there might have been a transaction between the son and the mother, with regard to a purchase of this leasehold property, in which the son would have had to shew that he had given her full information in every possible way as to the value. But in this case the gift was not based on value in any way at all. The mother knew the house, she had lived in it for twenty years, and knew the son was managing it. She meant it to go to the son whatever its value was . .’

Neville J, Fletcher Moulton L
[1911] 1 Ch 174
England and Wales
Citing:
Appealed toRe Coomber; Coomber v Coomber CA 2-Jan-1911
The Coomber family sold beer in Battersea. Coomber Senior had increasingly relied on his second son. After his father’s death, the second son continued to run the business. His mother shortly afterwards assigned both the licence and the premises to . .

Cited by:
Appeal fromRe Coomber; Coomber v Coomber CA 2-Jan-1911
The Coomber family sold beer in Battersea. Coomber Senior had increasingly relied on his second son. After his father’s death, the second son continued to run the business. His mother shortly afterwards assigned both the licence and the premises to . .
CitedRoyal Bank of Scotland v Etridge (No 2); Barclays Bank plc v Harris; Midland Bank plc v Wallace, etc HL 11-Oct-2001
Wives had charged the family homes to secure their husband’s business borrowings, and now resisted possession orders, claiming undue influence.
Held: Undue influence is an equitable protection created to undo the effect of excess influence of . .

Lists of cited by and citing cases may be incomplete.

Trusts, Undue Influence

Leading Case

Updated: 09 November 2021; Ref: scu.222821

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 the legal title in the property to him.
Held: The beneficiary was entitled to call for the property. The intention of the testator was that the beneficiary would ultimately take the property, but had merely sought to postpone the date on which this would happen. Beneficiaries who are sui juris and together entitled to the whole beneficial interest can put an end to the trust and direct the trustees to hand over the trust property as they may direct: ‘once something has been given to a person the court will not enforce any attempt to keep it out of his grasp until a later date.’

Lord Cottenham
(1841) 4 Beav 115 affd Cr and Ph 240, [1841] EWHC Ch J27, [1841] EWHC Ch J82, (1841) Cr and Ph 240, [1841] EngR 629, (1841) 4 Beav 115, (1841) 49 ER 282
Bailii, Bailii, Commonlii
England and Wales
Cited by:
CitedTod v Judith Cobb Lady Barton, William Godfrey Lukes Barton, The Royal Society of Chemistry, In re Barton (Deceased) ChD 20-Feb-2002
The deceased was an English scientist who died domiciled in Texas. His beneficiaries in England executed a deed of variation, but this would not be recognised in the law of Texas. The will expressly stated it was subject to the laws of England. . .
CitedGoulding and Goulding v James and Daniel CA 10-Dec-1996
The family sought approval of a proposed variation of the will to make best advantage of tax allowances. Because the beneficial interests of children would be affected, the court’s approval was necessary. The judge had refused to approve the . .
CitedHunt 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 . .
CitedBarbados Trust Company Ltd v Bank of Zambia and Another CA 27-Feb-2007
The creditor had assigned the debt, but without first giving the debtor defendant the necessary notice. A challenge was made to the ability of the assignee to bring the action, saying that the deed of trust appointed to circumvent the reluctance of . .
CitedNelson v Greening and Sykes (Builders) Ltd CA 18-Dec-2007
The builders had obtained a charging order for the costs awarded to them in extensive litigation, and a third party costs order but without the third party having opportunity to test the bill delivered. They had agreed to sell land to the defendant, . .
CitedClarence House Ltd v National Westminster Bank Plc ChD 23-Jan-2009
The claimant landlord alleged that the defendant tenant had transferred the lease under a ‘virtual assignment’ and that this was in breach of its lease.
Held: The Abbey National case was not helpful. However, the arrangement was not a breach . .
CitedClarence House Ltd v National Westminster Bank Plc CA 8-Dec-2009
The defendant tenants, anticipating that the landlord might delay or refuse consent to a subletting entered into a ‘virtual assignment’ of the lease, an assignment in everything but the deed and with no registration. The lease contained a standard . .
See AlsoSaunders v Vautier 5-Jun-1841
. .
CitedAkers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .

Lists of cited by and citing cases may be incomplete.

Trusts, Wills and Probate

Leading Case

Updated: 09 November 2021; Ref: scu.182790

Phipps v Boardman: HL 3 Nov 1966

A trustee has a duty to exploit any available opportunity for the trust. ‘Rules of equity have to be applied to such a great diversity of circumstances that they can be stated only in the most general terms and applied with particular attention to the exact circumstances of each case. The relevant rule for the decision of this case is the fundamental rule of equity that a person in a fiduciary capacity must not make a profit out of his trust, which is part of the wider rule that a trustee must not place himself in a position where his duty and his interest may conflict.’
‘The whole of the law is laid down in the fundamental principle exemplified in Lord Cranworth’s statement [in Aberdeen Railway Co v. Blaikie]. But it is applicable, like so many equitable principles which may affect a conscience, however innocent, to such a diversity of different cases that the observations of judges and even in your Lordships’ House in cases where this great principle is being applied must be regarded as applicable only to the particular facts of the particular case in question and not regarded as a new and slightly different formulation of the legal principle so well settled.’ and ‘The phrase ‘possibly may conflict’ requires consideration. In my view it means that the reasonable man looking at the relevant facts and circumstances of the particular case would think that there was a real sensible possibility of conflict; not that you could imagine some situation arising which might, in some conceivable possibility in events not contemplated as real sensible possibilities by any reasonable person, result in conflict.’
The court considered the circumstances under which information has been acquired which impose a duty of confidence: ‘The true test is to determine in what circumstances the information has been acquired. If it has been acquired in such circumstances that it would be a breach of confidence to disclose it to another then courts of equity will restrain the recipient from communicating it to another. In such cases such confidential information is often and for many years has been described as the property of the donor, the books of authority are full of such references: knowledge of secret processes, ‘know-how’, confidential information as to the prospects of a company or of someone’s intention or the expected results of some horse race based on stable or other confidential information. But in the end the real truth is that it is not property in any normal sense but equity will restrain its transmission to another if in breach of some confidential relationship.’
Lord Upjohn said: ‘In general, information is not property at all. It is normally open to all who have eyes to read and ears to hear. The true test is to determine in what circumstances the information has been acquired. If it has been acquired in such circumstances that it would be a breach of confidence to disclose it to another, then courts of equity will restrain the recipient from communicating it to another. In such cases such confidential information is often and for many years has been described as the property of the donor, the books of authority are full of such references; knowledge of secret processes, ‘know-how’, confidential information as to the prospects of a company or of someone’s intention or the expected results of some horse race based on stable or other confidential information. But in the end the real truth is that it is not property in any normal sense, but equity will restrain its transmission to another if in breach of some confidential relationship’.

Lord Upjohn, Lord Hodson
[1966] 3 All ER 721, [1967] 2 AC 46, [1966] UKHL 2
Bailii
England and Wales
Citing:
CitedBray v Ford HL 1896
An appellate court’s power to order a new trial is conditional on ‘some substantial wrong or miscarriage’ being established.
Lord Hershell said: ‘It is an inflexible rule of the court of equity that a person in a fiduciary position, such as . .
Appeal fromPhipps v Boardman CA 1965
Affirmed . .
At first instancePhipps v Boardman ChD 1964
Agents of certain trustees had purchased shares, in circumstances where they only had that opportunity because they were agents.
Held: The shares were held beneficially for the trust. . .

Cited by:
CitedBhullar and others v Bhullar and Another CA 31-Mar-2003
The claimants were 50% shareholders in a property investment company and sought relief alleging prejudicial conduct of the company’s affairs. After a falling out, two directors purchased property adjacent to a company property but in their own . .
CitedNew Zealand Netherlands Society ‘Oranje’ Inc v Laurentuis Cornelis Kuys PC 1963
(New Zealand) The scope of a fiduciary duty may be modified by a course of dealing by the person to whom the duty is owed. ‘The obligation not to profit from a position of trust, or, as it sometimes relevant to put it, not to allow a conflict to . .
CitedCrown Dilmun, Dilmun Investments Limited v Nicholas Sutton, Fulham River Projects Limited ChD 23-Jan-2004
There was a contract for the sale of Craven Cottage football stadium, conditional upon the grant of non-onerous planning permissions. It was claimed that the contract had been obtained by the defendant employee in breach of his fiduciary duties to . .
CitedDouglas and others v Hello! Ltd and others (No 3) CA 18-May-2005
The principal claimants sold the rights to take photographs of their wedding to a co-claimant magazine (OK). Persons acting on behalf of the defendants took unauthorised photographs which the defendants published. The claimants had retained joint . .
CitedUltraframe (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 . .
CitedRatiu, Karmel, Regent House Properties Ltd v Conway CA 22-Nov-2005
The claimant sought damages for defamation. The defendant through their company had accused him acting in such a way as to allow a conflict of interest to arise. They said that he had been invited to act on a proposed purchase but had used the . .
CitedImageview Management Ltd v Jack CA 13-Feb-2009
The appellant company acted for the respondent footballer in placing him with a football club. The respondent said that he had also taken a payment from the club, nominally for arranging a work permit. The respondent said this was improper. The . .
CitedO’Donnell v Shanahan and Another CA 22-Jul-2009
The claimant appealed against dismissal of her petition for an order for the defendants to purchase her shares at a fair value, saying that they had acted unfairly toward her. Her co-directors had acquired, for another company of which they were . .
CitedGray v News Group Newspapers Ltd and Another; Coogan v Same ChD 25-Feb-2011
The claimants said that agents of the defendant had unlawfully accessed their mobile phone systems. The court was now asked whether the agent (M) could rely on the privilege against self incrimination, and otherwise as to the progress of the case. . .
CitedPhillips v Mulcaire SC 24-May-2012
The claimant worked as personal assistant to a well known public relations company. She alleged that the defendant had intercepted telephone message given by and left for her. The court was asked first as to whether the information amounted to . .
CitedHalton International Inc (Holding) and Another v Guernroy Ltd ChD 9-Sep-2005
Parties had entered into a shareholders’ agreement as to voting arrengemets within a company. Thay disputed whether votes had been used in reach of that agreement, particularly as to the issue of new shares and their allotment, but the court now . .

Lists of cited by and citing cases may be incomplete.

Equity, Trusts, Information

Leading Case

Updated: 02 November 2021; Ref: scu.180410

Lloyds Bank plc v Rosset: HL 29 Mar 1990

The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest in it as the matrimonial home. She said there had been a common understanding or intention arising out of her own efforts in arranging for extensive renovation works and herself carrying out some redecoration that she would have an overriding interest under section 70(1)(g) in the house. The bank appealed a finding that she had a beneficial interest on the date of completion.
Held: To establish a trust here would have to have been a declaration in writing. Mrs Rosset therefore relied on an estoppel, for which she would have to establish a change of her circumstances in reliance upon such a representation. There was no such evidence, and the judge’s finding that Mr. Rosset held the property as constructive trustee for himself his wife could not be supported.
Lord Bridge said: ‘The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel.
‘where there is no evidence to support a finding of an agreement or arrangement to share, however reasonable it might have been for the parties to reach such an arrangement if they had applied their minds to the question, and where the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention to share the property beneficially and as the conduct relied on to give rise to a constructive trust. In this situation direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust. But, as I read the authorities, it is at least extremely doubtful whether anything less will do.’

Lord Bridge of Harwich, Lord Griffiths, Lord Ackner, Lord Oliver of Aylmerton, Lord Jauncey of Tullichettle
[1991] 1 AC 107, [1990] 2 WLR 867, [1990] 1 All ER 1111, [1990] UKHL 4, [1990] UKHL 14
Bailii, Bailii
Land Registration Act 1925 70(1)(g), Law of Property Act 1925 53(1)
England and Wales
Citing:
CitedPettitt 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 . .
CitedGissing v Gissing HL 7-Jul-1970
Evidence Needed to Share Benefical Inerests
The family home had been purchased during the marriage in the name of the husband only. The wife asserted that she had a beneficial interest in it.
Held: The principles apply to any case where a beneficial interest in land is claimed by a . .
CitedEves v Eves CA 28-Apr-1975
The couple were unmarried. The female partner had been led by the male partner to believe, when they set up home together, that the property would belong to them jointly. He had had told her that the only reason why the property was to be acquired . .
CitedGrant v Edwards and Edwards CA 24-Mar-1986
A couple were not married but lived together in Vincent Farmhouse in which the plaintiff claimed a beneficial interest on separation. The female partner was told by the male partner that the only reason for not acquiring the property in joint names . .
Appeal fromLloyds Bank plc v Rosset CA 13-May-1988
Claim by a wife that she has a beneficial interest in a house registered in the sole name of her husband and that her interest has priority over the rights of a bank under a legal charge executed without her knowledge. The case raises a point of . .

Cited by:
CitedChan, Chun v Leung, Ho CA 29-Jul-2002
The claimant sought to assert her interest in a house purchased by a company in debt to the respondent for whom she had worked and with whom she had had a relationship. The company was insolvent. She claimed he had promised her a house, and that it . .
ConsideredSpringett v Defoe CA 1992
Partners lived together, without being married, as secure joint tenants. They exercised the right to buy, contributing three quarters and one quarter of the price respectively. At the time they intended to marry. They did not discuss he shares, and . .
CitedEvans v James (Administratrix of the Estate of Thomas Hopkin Deceased) CA 5-Jul-1999
Before the parties called evidence, and having read the papers, the court considered that there was no real defence shown, and invited submissions. Negotiations for the grant of a tenancy had been terminated by the sudden illness of the proposed . .
CitedHyett v Stanley and others CA 20-Jun-2003
The couple had lived together at the property without being married for several years. The house was held in the man’s sole name, and after his death she sought a half share in it. It was established that she had been told she should have a half . .
CitedYaxley v Gotts and Another CA 24-Jun-1999
Oral Agreement Creating Proprietory Estoppel
The defendant offered to give to the Plaintiff, a builder, the ground floor of a property in return for converting the house, and then managing it. They were friends, and the oral offer was accepted. The property was then actually bought in the name . .
CitedOxley v Hiscock CA 6-May-2004
The parties were not married, but had brought together their resources to purchase a home in the name of one of them. Nothing had been said about the respective shares on which the property was to be held.
Held: The shares were to be assessed . .
FollowedMidland Bank v Cooke and Another CA 13-Jul-1995
Equal equitable interest inferrable without proof
The bank sought to enforce a charge given by the husband to secure a business loan. The property was purchased from the husband’s and his family’s resources and the loan, and was in his name. There had been no discussion or agreement between husband . .
CitedDrake v Whipp CA 30-Nov-1995
The parties, an unmarried cohabiting couple, disputed their respective shares in a property held in the man’s sole name. Both had made direct contributions both to the purchase of a barn and to its expensive conversion into a home. The plaintiff . .
CitedGoodchild 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, . .
CitedCobbe v Yeomans Row Management Ltd and Others ChD 25-Feb-2005
Principles for Proprietary Estoppel
A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement . .
CitedStack v Dowden CA 13-Jul-2005
The parties purchased a property together. The transfer contained a survivorship restriction but no declaration of the beneficial interests. The judge had held the property to be held as tenants in commn on equal shares.
Held: In a case where . .
CitedVan Laethem v Brooker and Another ChD 12-Jul-2005
The claimant asserted an interest in several properties by virtue of a common intention constructive trust or by proprietary estoppel. The parties had been engaged to be married.
Held: ‘A [constructive] trust arises in connection with the . .
CitedKyriakides 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 . .
CitedCrossley 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 . .
CitedStack 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 . .
CitedHealey v Brown ChD 25-Apr-2002
The two deceased had made mutual wills bequeathing the family home. The survivor transferred the property during his life to defeat the agreement. It was now said that the arrangement fell foul of the 1989 Act and was unenforceable.
Held: . .
CitedHopton v Miller ChD 31-Aug-2010
The parties had entered into partnership to open and run a restaurant, but without a formal agreement. They differed as to the values contributed by their respective efforts. After failures to disclose materials requested, the defendant we precluded . .
CitedWilliams v Lawrence and Another ChD 28-Jul-2011
The claimant, as trustee for the deceased’s insolvent estate, sought a declaration that a transfer of the deceased’s share in property made by the executors was void as being at an undervalue. The property was subject to a right of occupation in . .
CitedScott v Southern Pacific Mortgages Ltd and Others SC 22-Oct-2014
The appellant challenged a sale and rent back transaction. He said that the proposed purchaser had misrepresented the transaction to them. The Court was asked s whether the home owners had interests whose priority was protected by virtue of section . .

Lists of cited by and citing cases may be incomplete.

Trusts, Estoppel

Leading Case

Updated: 02 November 2021; Ref: scu.180914

Clarke v Harlowe: ChD 12 Aug 2005

A house was bought in the joint names of the parties. It was in bad condition. An express declaration of trust said they held as beneficial joint tenants. One tenants was earning much more than the other. He paid all the mortgage instalments. Very substantial building work was carried out during the relationship – all of which he paid for. Following a breakdown it was conceded that the other joint tenant was entitled to a half share and that there was no intention to alter the shares; it was argued that principles of equitable accounting applied and that he should be entitled to credit for the cost of the improvements.
Held: The argument failed. tt had been the common understanding that he would pay for the improvements and thus there was no obligation to account. Behrens J said: ‘There are a wide variety of situations in which a property may be bought in joint names with an express declaration of trust in relation to the beneficial interest. These vary from the common situation where a man and a woman form a relationship and decide to live together to the commercial type situation where for example two people buy a house intending to do it up and resell it at a profit.
In the commercial type of situation there may be an express agreement between the parties that each will contribute equally to the outgoings, any mortgage instalments and to the cost of any improvements. It may be that one of the parties is unable to honour this agreement with the result that he or she pays less than his or her fair share of the outgoings or the cost of the improvements. Notwithstanding this failure the property may still be developed and resold during the course of the relationship between the parties. On such a resale the division of the proceeds will of course have to be in accordance with the express declaration of trust. However I do not see why a court of equity should not take account of the failure by one of the parties to honour their agreement as to the contributions to the outgoings and the improvements by means of equitable accounting. I equally do not see that such equitable accounting is prohibited simply because the relationship is not at an end.
It is to be noted that in the example I have given the considerations leading to equitable accounting involve a breach or failure by the accounting party to honour the arrangements or agreements between the parties as to the payments for the outgoings or the improvements to the property.
It seems to me that this failure or breach is at the heart of the matter. Before there can be a duty to account by one party to the other there must be a breach of or failure to comply with some obligation owed by that party to the other. There may be a debate in individual cases as to the nature of the obligation necessary to give rise to a duty to account but there must still be an obligation.’

Behrens J
[2005] EWHC 3062 (Ch), [2007] 1 FLR 1, [2007] 3 FCR 726, [2006] Fam Law 846, [2006] BPIR 636, [2005] WTLR 1473
Bailii
Trusts of Land and Appointment of Trustees Act 1996
England and Wales
Cited by:
CitedWilcox v Tait CA 13-Dec-2006
The court considered the principles of equitable accounting as between co-owners of land.
Held: The question of whether there is a liability to account depends on the intention of the parties. Jonathan Parker LJ said: ‘Moreover, it is in any . .
CitedKetteringham and Another v Hardy ChD 3-Feb-2011
Two partners had together bought several properties for development, and now disputed the interests in one of them. One partneer had dies, and the refusal of development permission and the fall in property values left the land in negative equity. . .

Lists of cited by and citing cases may be incomplete.

Land, Trusts

Updated: 02 November 2021; Ref: scu.270428

Malayan Credit Ltd v Jack Chia-MPH Ltd: PC 1986

The Board considered whether there were only three situations in which joint owners of property could be found to be tenants in common, and whether there were other circumstances which could lead to a contrary conclusion.
Held: It was improbable that a joint tenancy in equity was intended where joint tenants in law held commercial premises for their separate business purposes. The parties may have equal shares without indending survivorship rules to apply. There was no fundamental distinction between buying a lease at a premium with a token rent and taking a lease at a rack rent with no premium. In the latter case the rent is equivalent to the purchase money. The features of the case pointed: ‘unmistakably towards a tenancy in common in equity, and furthermore towards a tenancy in common in unequal shares’. Amongst these were not only that the parties had paid the refundable deposit, stamp duty, survey fees, rent and service charges in unequal shares, but also that those shares were proportionate to the actual square footage which each of them occupied.
Lord Brightman: ‘The lessees at the inception of the lease hold the beneficial interest therein as joint tenants in equity. This will be the case if there are no circumstances which dictate to the contrary.’

Lord Brightman
[1986] 1 AC 549
Cited by:
CitedStack 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 . .
CitedFowler v Barron CA 23-Apr-2008
The parties had lived together for many years but without marrying. The house had been put in joint names, but without specific advice on the issue or any express declaration of trust. In practice Mr Barron made the direct payments for the house and . .

Lists of cited by and citing cases may be incomplete.

Commonwealth, Trusts, Land

Leading Case

Updated: 02 November 2021; Ref: scu.251499

Milroy v Lord: CA 26 Jul 1862

The donor executed a transfer of 50 shares. The shares were only transferable by entry in the books of the bank. No such transfer was ever made. The defendant had a power of attorney authorising him to transfer the donor’s shares and after the deed the donor gave him a further power of attorney authorising him to receive dividends on the shares. The donor died and an action was bought to enforce the transfer.
Held: The transaction was imperfect and incomplete and that the donor might have perfected it and completed it by a transfer.
Turner LJ said: ‘in order to render a voluntary settlement valid and effectual, the settlor must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him. He may of course do this by actually transferring the property to the persons for whom he intends to provide, and the provision will then be effectual, and it will be equally effectual if he transfers the property to a trustee for the purposes of the settlement, or declares that he himself holds it in trust for those purposes; and if the property be personal, the trust may, as I apprehend, be declared either in writing or by parol; but, in order to render the settlement binding, one or other of these modes must, as I understand the law of this Court, be resorted to, for there is no equity in this Court to perfect an imperfect gift. The cases I think go further to this extent, that if the settlement is intended to be effectuated by one of the modes to which I have referred, the Court will not give effect to it by applying another of those modes. If it is intended to take effect by transfer, the Court will not hold the intended transfer to operate as a declaration of trust, for then every imperfect instrument would be made effectual by being converted into a perfect trust. These are the principles by which, as I conceive, this case must be tried.’

Knight-Bruce LJ and Turner LJ
(1862) 4 De GF and J 264, [1862] EWHC Ch J78, [1862] EngR 951, (1862) 4 De G F and J 264, (1862) 45 ER 1185
Bailii, Commonlii
England and Wales
Cited by:
CitedPennington and Another v Waine, Crampton and others CA 4-Mar-2002
The deceased had made a gift of shares. She had executed a transfer, and acting upon the promise, the donee had agreed to become a director which he could only do if he also became a shareholder. The transfer was delivered to the deceased’s agent, . .
CitedMacedo v Stroud PC 1922
(Trinidad) The donor purported to give real property (in part) by memorandum which was not registered. Under the law of Trinidad the transfer did not pass any estate or interest in the land. The donor delivered the instrument to his solicitor . .
DistinguishedIn re Rose, Rose v Inland Revenue Commissioners CA 1952
The deceased had executed instruments of transfer and delivered them with the relevant certificates to the transferees.
Held: The transfers were transferred the whole of the deceased’s title both legal and equitable in the shares and all . .
CitedMascall v Mascall CA 13-Jun-1984
The question was whether a gift of land was completely constituted by delivery of the land certificate
Held: Equity will not come to the aid of a volunteer. Therefore, if a donee needs to get an order from a court of equity in order to . .

Lists of cited by and citing cases may be incomplete.

Company, Equity, Trusts

Leading Case

Updated: 02 November 2021; Ref: scu.179865

Clarke and Another v Corless and Another: ChD 8 Jul 2009

The parties disputed whether one could retain for his own benefit land on an estate reserved for an estate road. A trust was claimed under Pallant saying that the parties had made an informal agreement before the property was purchased.
Held: Any original agreement had lapsed before contracts were exchanged, and were no longer applicable. Proudman J summarised the applicable law: ‘although the agreement between the parties requires less than contractual certainty (for otherwise a constructive trust would not be necessary) it is not engaged with anything less than an express accord between the parties. The court does not impute an agreement to the parties based on conduct alone although of course conduct could lead the court to infer that there had as a matter of fact been consensus.
Secondly, while unconscionable behaviour is a necessary condition for relief by way of constructive trust, it is insufficient by itself. . . the court should have two aims: one is to recognise and prevent unconscionable conduct, but the other is to protect people from unintended legal consequences resulting from informal relationships. Thus while something less than contractual certainty will suffice it is not clear in the absence of some rubric such as ‘subject to contract’ how informal the consensus may be. What does seem to me to be plain as a matter of law is that in order to be enforced there must be a clear agreement on the basic details of the arrangement without difference of principle.
Thirdly, in order to succeed, the claimants have to show that they relied on the alleged agreement, arrangement or understanding. Typically that would be by staying out of the market themselves, or by committing expenditure that they would not otherwise have committed, but on any view their activity or inactivity must be referable to the consensus on which they rely. ‘

Proudman J
[2009] EWHC 1636 (Ch), [2009] 2 P and CR DG24
Bailii
England and Wales
Citing:
CitedPallant v Morgan ChD 1952
The agents of two neighbouring landowners orally agreed in the auction room that the plaintiff’s agent would refrain from bidding at auction and that the defendant, if his agent’s bid was successful, would divide the land according to an agreed . .
CitedYeoman’s Row Management Ltd and Another v Cobbe HL 30-Jul-2008
The parties agreed in principle for the sale of land with potential development value. Considerable sums were spent, and permission achieved, but the owner then sought to renegotiate the deal.
Held: The appeal succeeded in part. The finding . .
CitedBanner Homes Group Plc v Luff Developments and Another CA 10-Feb-2000
Competing building companies agreed not to bid against each other for the purchase of land. One proceeded and the other asserted that the land was then held on trust for the two parties as a joint venture.
Held: Although there was no formal . .
CitedKeefe v Amor CA 1965
The Court declined to limit the extent of a right of way 20 feet wide by reference to the bottleneck at its entrance from the road of 4 feet 6 inches, consisting of a pair of gate pillars and a gate of that width. The grant was over the whole 20 . .
CitedScott v Martin 1987
When construing a land contract, the parties should not readily be assumed to have intended to act in breach of planning requirements . .
CitedB and Q Plc v Liverpool and Lancashire Properties Ltd ChD 26-Jul-2000
The dominant owner wished to deal with delivery vehicles in a manner where they were left parked awaiting emptying. The servient owner (a lessee) wanted to construct buildings over a large part of the land. The servient owner objected.
Held: . .

Cited by:
Appeal fromClarke and Another v Corless and Another CA 31-Mar-2010
The claimants appealed against refusal of a declaration that a neighbouring access road and land was held on a constructive trust. They said that an agreement bewteeen the parties should have been effective to impose a trust on the defendants. The . .

Lists of cited by and citing cases may be incomplete.

Land, Trusts

Updated: 02 November 2021; Ref: scu.347456

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, creating a trust from which he should not resile, and an exceptional circumstance under the 1975 Act.
Held: A claim that mutual wills had been made requires clear evidence of a contract or agreement between the two testators. It is wrong to import into that doctrine lesser standards based upon secret trusts and similar: ‘Two wills may be in the same form as each other. Each testator may leave his or her estate to the other with a view to the survivor leaving both estates to their heir. But there is no presumption that a present plan will be immutable in future. A key feature of the concept of mutual wills is the irrevocability of the mutual intentions. Not only must they be binding when made, but the testators must have undertaken, and so must be bound, not to change their intentions after the death of the first testator.’

Lord Justice Leggat, Lord Justice Morritt, Lord Justice Phillips
Times 12-May-1997, [1997] EWCA Civ 1611, [1997] 3 All ER 63, [1997] 1 WLR 1216
Bailii
Inheritance (Provision for Family and Dependants) Act 1975
England and Wales
Citing:
Appeal fromGoodchild v Goodchild ChD 13-Dec-1995
The husband and wife had made mirror wills. They divorced, and the husband made a new will. After his death, the child and the third wife of the deceased made a claim against the second wife.
Held: The wills were in identical terms, but . .
CitedBirmingham v Renfrew 11-Jun-1937
(High Court of Australia) 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. Latham CJ described a mutual will arrangement as . .
DistinguishedIn 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 . .
CitedLord 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’. . .
CitedIn re Gardner 1920
A common intention of husband and wife and taking of benefit are sufficient to establish mutual wills. . .
CitedIn re Hagger; Freeman v Arscott ChD 1930
The husband and wife had made wills in similar terms, each leaving their separate property to each other on the first spouse dying with remainders over. They agreed that the wills should not be revoked without the agreement of the other. The wife . .
CitedOttaway v Norman ChD 1971
Proof required for mutual wills claim
The testator devised his house to a Miss Hodges intending that she should dispose of the property in her will to specific individuals. He communicated his intention to her and she agreed to it. After the testator’s death, Miss Hodges changed her . .
CitedIn 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 . .
CitedDufour v Pereira 1769
Nature of Joint and Mutual Wills
The court was asked as to the validity and effect of a single joint will.
Held: Lord Camden considered the nature of joint or mutual wills. Lord Camden LC said: ‘The parties by mutual will do each of them devise, upon the engagement of the . .
CitedGray v Perpetual Trustee Co Ltd PC 12-Jun-1928
The Board considered a claim that wills had been mutual. Viscount Haldane said: ‘The case before us is one in which the evidence of an agreement, apart from that of making the wills in question, is so lacking that they are unable to come to the . .
CitedBosch v Perpetual Trustee Co 22-Feb-1938
(New South Wales) If a Court finds that the testator has been guilty in all the circumstances of a breach of moral obligation owed by a father towards his child, by leaving the child in straitened financial circumstances, the Court must ensure that . .
CitedLloyds Bank plc v Rosset HL 29-Mar-1990
The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest . .
CitedRe Sainsbury’s Settlement 1967
If an order is made properly and within the jurisdiction of the court, the fact that it was sought with the motive of seeking to achieve a better tax position is usually irrelevant. . .
CitedIn re Coventry dec’d ChD 2-Jan-1979
The court set out the general approach to applications under the 1975 Act: ‘these matters have to be considered at two stages – first in determining the reasonableness of such provision (if any) as has been made by the deceased for the applicant’s . .

Cited by:
Appealed toGoodchild v Goodchild ChD 13-Dec-1995
The husband and wife had made mirror wills. They divorced, and the husband made a new will. After his death, the child and the third wife of the deceased made a claim against the second wife.
Held: The wills were in identical terms, but . .
CitedHealey v Brown ChD 25-Apr-2002
The two deceased had made mutual wills bequeathing the family home. The survivor transferred the property during his life to defeat the agreement. It was now said that the arrangement fell foul of the 1989 Act and was unenforceable.
Held: . .
CitedCharles and Others v Fraser ChD 11-Aug-2010
The claimants said that the last will had purported to revoke and earlier but mutual will. They said that the executors should be required to implement the revoked will. The wills had been made by elderly sisters. The wills were in similar terms, . .
CitedLegg and Another v Burton and Others ChD 11-Aug-2017
Testing for Mutual Wills
The parties disputed whether wills were mutual. The claimants challenged the probate granted to a later will of their deceased mother, saying that her earlier will had been mutual and irrevocable after the death of their father.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Trusts

Leading Case

Updated: 02 November 2021; Ref: scu.142007

DEG-Deutsche Investitions und Entwicklungsgesellschaft mbH v Koshy and Other (No 3); Gwembe Valley Development Co Ltd (in receivership) v Same (No 3): CA 28 Jul 2003

The company sought to recover damages from a director who had acted dishonestly, by concealing a financial interest in a different company which had made loans to the claimant company. He replied that the claim was out of time. At first instance the first defendant had been found dishonest through non-disclosure, and that section 21 of the 1980 Act applied to leave the claim not out of time.
Held: The authorities suggested that when looking at fiduciaries, a six year period would apply unless excluded under 21(1)(a) or (b). A claim for an account from someone acting as a trustee was such, since it was a claim against his personal liability for his own acts as director, and if fraud was established his case would fall within 21(1)(a), but not (b).
Mummery LJ said that: ‘For limitation purposes the two classes of trust and/or fiduciary duty are treated differently. The first class of case arising from the breach of a pre-existing duty is, or is treated by analogy, as an action by the beneficiary for breach of trust falling within section 21(1) of the 1980 Act. This means that there is no limitation period for the cases falling within section 21(1)(a) or (b); but that there is a six-year limitation period for cases falling with s21(3).’

Mummery, Hale, Carnwath LJJ
[2003] EWCA Civ 1048, Times 09-Sep-2003, [2004] 1 BCLC 131
Bailii
Limitation Act 1980 21(1)
England and Wales
Citing:
Appeal fromDeg-Deutsch Investitions Und Entwicklungsgesellschaft Mbh v Koshy (No 3) Gwembe Valley Development Co Ltd v Same (No 3) ChD 26-Oct-2001
A claim against a company director which alleged a misapplication of company assets involving a fraudulent, or dishonest breach of trust, was not subject to a limitation period. A company was alleged to have fraudulently hidden certain profits. The . .
CitedCompanhia De Seguros Imperio v Heath (REBX) Ltd and Others CA 20-Jul-2000
Although a claim for breach of fiduciary duty, as a claim in equity, was not subject to the same limitation periods imposed by the Act as claims in tort or contract, a court exercising an equitable jurisdiction should apply similar periods under the . .
CitedFurs Ltd v Tomkies 1936
(High Court of Australia) ‘the inflexible rule that, except under the authority of a provision in the articles of association, no director shall obtain for himself a profit by means of a transaction in which he is concerned on behalf of the company . .
CitedRegal (Hastings) Ltd v Gulliver HL 20-Feb-1942
Directors Liability for Actions Ouside the Company
Regal negotiated for the purchase of two cinemas in Hastings. There were five directors on the board, including Mr Gulliver, the chairman. Regal incorporated a subsidiary, Hastings Amalgamated Cinemas Ltd, with a share capital of 5,000 pounds. There . .
CitedTito v Wadell (No 2) ChD 1977
The liability to account for profits on breach of the self-dealing rule and the fair-dealing rule does not arise from a breach of duty at all. In his judgment such liability is the consequence of an equitable disability rather than of a breach of . .
CitedMovitex v Bulfield ChD 1988
The court considered a company’s articles of association which excused a director taking an interest in a contract with the company. The court treated the general exclusion of the self-dealing rule in the Articles as subject to the duty of the . .
CitedGuinness plc v Saunders CA 1988
. .
CitedKelly v Cooper and Another PC 25-Nov-1992
There was a dispute between a client and an estate agent in Bermuda. The client sued the estate agent for damages for breach of duty in failing to disclose material information to him and for putting himself in a position where his duty and his . .
CitedIn Re Neptune (Vehicle Washing Equipment) Ltd: Neptune (Vehicle Washing Equipment) Ltd v Fitzgerald ChD 2-Mar-1995
A sole company director must still have company meetings before entering into a contract even if only he will be present. When a director’s claim to the validity of a contract or arrangement depends upon his disclosure of it at a meeting, he must . .
CitedKnox v Gye HL 1872
A court will, by analogy, apply a statutory limitation period if the remedy in equity, specific performance, is ‘correspondent to the remedy at law’ and where ‘the suit in equity corresponds with an action at law’. Lord Westbury said: ‘For where the . .
CitedIn Re Sharpe 1892
The misapplication of company money in the form of ultra vires payments of interest to shareholders was treated as a breach of trust by the directors. . .
CitedRe Lands Allotment Company CA 1894
A limited company is not a trustee of its funds, but their beneficial owner. However, the fiduciary character of the duties of its directors mean that they are treated as if they were trustees of those funds of the company which are in their hands . .
CitedTaylor v Davies PC 19-Dec-1919
(Ontario) An assignee for the benefit of creditors conveyed mortgaged property to the mortgagee in satisfaction of part of the debt due to him. The mortgagee was also one of the inspectors required by the Canadian legislation to supervise the . .
CitedClarkson v Davies PC 1923
In a case involving fraud, referring to Taylor v Davies, Lord Justice Clerk said that: ‘it was there laid down that there is a distinction between a trust which arises before the occurrence of the transaction impeached and cases which arises only by . .
CitedMothew (T/a Stapley and Co) v Bristol and West Building Society CA 24-Jul-1996
The solicitor, acting in a land purchase transaction for his lay client and the plaintiff, had unwittingly misled the claimant by telling the claimant that the purchasers were providing the balance of the purchase price themselves without recourse . .
CitedParagon Finance Plc (Formerly Known As National Home Loans Corporation Plc v D B Thakerar and Co (a Firm); Ranga and Co (a Firm) and Sterling Financial Services Limited CA 21-Jul-1998
Where an action had been begun on basis of allegations of negligence and breach of trust, new allegations of fraud where quite separate new causes of claim, and went beyond amendments and were disallowed outside the relevant limitation period. . .
CitedBairstow and Others v Queens Moat Houses plc CA 17-May-2001
The court considered the liability of directors for an unlawfully paid dividend.
Held: Robert Walker LJ: ‘The prospect of the former directors being able to obtain contribution from innocent recipients of unlawful dividends was debated . .
CitedJ J Harrison v Harrison 2002
A company director, having concealed relevant information from the board, obtained company property at a substantial undervalue. . .
CitedIn re H and R (Minors) (Child Sexual Abuse: Standard of Proof) HL 14-Dec-1995
Evidence allowed – Care Application after Abuse
Children had made allegations of serious sexual abuse against their step-father. He was acquitted at trial, but the local authority went ahead with care proceedings. The parents appealed against a finding that a likely risk to the children had still . .
CitedArmitage v Nurse; etc CA 19-Mar-1997
A clause in a trust deed may validly excuse trustees from personal liability for even gross negligence. The trustee was exempted from liability for loss or damage ‘unless such loss or damage shall be caused by his own actual fraud’.
Held: The . .
CitedBrickenden v London Loan and Savings Co PC 10-May-1934
In order to establish breach of the fiduciary dealing rules, the company does not have to prove that it would not have entered into the transaction if there had been compliance by the director with the fiduciary-dealing rules and he had made . .
CitedGross v Lewis Hillman Ltd CA 1970
Where there has been no misdirection on an issue of fact by the trial judge the presumption is that his conclusion on issues of fact is correct. The Court of Appeal will only reverse the trial judge on an issue of fact when it is convinced that his . .
CitedArmagas Ltd v Mundogas SA (‘The Ocean Frost’) CA 1985
Proof of corruption not needed for bribe
In establishing that money was paid as an improper inducement or bribe, proof of corruptness or a corrupt motive was unnecessary.
When a court looks at a decision of a judge at first instance, the court stressed the need to look at the . .
See AlsoGwembe Valley Development Company Ltd v Koshy and others CA 3-Dec-2002
Second application further to amend court order . .

Cited by:
CitedNewgate 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 . .
CitedUltraframe (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 . .
CitedBerezovsky v Abramovich ComC 22-May-2008
Applications were made to amend pleadings and for consequential orders. The claimant sought damages of $4.3 billion alleging breach of trust. The claimant sought to add claims which the defendant said were out of time.
Held: The proposed . .
CitedGreen and others v Gaul and Another; In re Loftus deceased ChD 18-Mar-2005
The claimants began an action in January 2003 to seek to set aside the appointment of an administrator from December 1991, and to have set aside transfers of property made within the estate.
Held: The limitation period against a personal . .
CitedWilliams v Central Bank of Nigeria SC 19-Feb-2014
Bank not liable for fraud of customer
The appellant sought to make the bank liable for a fraud committed by the Bank’s customer, the appellant saying that the Bank knew or ought to have known of the fraud. The court was asked whether a party liable only as a dishonest assistant was a . .
CitedHalton 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.

Company, Trusts, Limitation, Equity

Updated: 02 November 2021; Ref: scu.186028

Gorgeous Beauty Ltd v Liu and Others: ChD 22 Sep 2014

The claimant company was owned by members of a family and was formed to take ownership of land in Taiwan. The family members disputed whether property was held for the company or in trust for one particular family member.
Held: Fraud being alleged the court must exert particular caution before finding that allegations were established. ‘Taking everything into consideration, the conclusion I have come to is that the preponderance of the evidence supports Gorgeous Beauty’s case on each of the sub-issues which make up the key factual issue. I therefore conclude that the Longtan Property was purchased for the benefit of YSC’s shareholders, not for the benefit of William Liu, and that the Declaration of Trust was made without the consent of the majority of the shareholders in Gorgeous Beauty.’ Allowing the application of the law of Seychelles where appropriate, an award was made in the terms requested by the claimant.

Arnold J
[2014] EWHC 2952 (Ch)
Bailii
England and Wales
Cited by:
Main JudgmentGorgeous Beauty Ltd v Liu and Others (Costs) ChD 2-Oct-2014
. .

Lists of cited by and citing cases may be incomplete.

Trusts, International, Torts – Other

Updated: 02 November 2021; Ref: scu.537221

Roome v Edwards: HL 5 Feb 1981

HL Capital gains tax – Trustees of fund appointed out of main settlement under special powers- – Whether liable for chargeable gain accruing to trustees of unappointed residue – Finance Act 1965, s 25(11) – Sch 10, para 12.
A claim was made for the payment of Capital Gains Tax. It was material to that claim to decide whether the exercise of a power of appointment contained in a settlement gave rise to a settlement separate from the main settlement.
Lord Wilberforce (with whose speech three of the other four Law Lords agreed, Lord Roskill delivering a separate speech) spoke generally: ‘There are a number of obvious indicia which may help to show whether a settlement, or a settlement separate from another settlement, exists. One might expect to find separate and defined property; separate trusts; and separate trustees. One might also expect to find a separate disposition bringing the separate settlement into existence. These indicia may be helpful, but they are not decisive. For example, a single disposition, eg, a will with a single set of trustees, may create what are clearly separate settlements, relating to different properties, in favour of different beneficiaries, and conversely separate trusts may arise in what is clearly a single settlement, e.g. when the settled property is divided into shares. There are so many possible combinations of fact that even where these indicia or some of them are present, the answer may be doubtful, and may depend upon an appreciation of them as a whole.
Since ‘settlement’ and ‘trusts’ are legal terms, which are also used by business men or laymen in a business or practical sense, I think that the question whether a particular set of facts amounts to a settlement should be approached by asking what a person, with knowledge of the legal context of the word under established doctrine and applying this knowledge in a practical and common-sense manner to the facts under examination, would conclude. To take two fairly typical cases. Many settlements contain powers to appoint a part or a proportion of the trust property to beneficiaries: some may also confer power to appoint separate trustees of the property so appointed, or such power may be conferred by law: see Trustee Act 1925, section 37. It is established doctrine that the trusts declared by a document exercising a special power of appointment are to be read into the original settlement: see Muir (or Williams) v Muir [1943] AC 468. If such a power is exercised, whether or not separate trustees are appointed, I do not think that it would be natural for such a person as I have presupposed to say that a separate settlement had been created: still less so if it were found that provisions of the original settlement continued to apply to the appointed fund, or that the appointed fund were liable, in certain events, to fall back into the rest of the settled property. On the other hand, there may be a power to appoint and appropriate a part or portion of the trust property to beneficiaries and to settle it for their benefit. If such a power is exercised, the natural conclusion might be that a separate settlement was created, all the more so if a complete new set of trusts were declared as to the appropriated property, and if it could be said that the trusts of the original settlement ceased to apply to it. There can be many variations on these cases each of which will have to be judged on its facts.’

Lord Wilberforce, Lord Roskill
[1982] AC 279, [1981] UKHL TC – 54 – 359, [1981] UKHL TC – 54 – 359, [1981] 1 All ER 736, 54 TC 359, [1981] 2 WLR 268, [1982] AC 279
Bailii
Trustee Act 1925 37
England and Wales
Cited by:
CitedTrennery 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

Leading Case

Updated: 02 November 2021; Ref: scu.222084

Tinker v Tinker: CA 1970

The husband bought a business in Cornwall and a house for his family. At first he intended to buy the house in his own name, but was advised that if the venture failed, the house could be taken by his creditors as part of his business assets. It was put in his wife’s name and all was explained to his wife by the solicitors. The marriage broke down. The husband applied for a declaration that the wife held the house on trust for him. The registrar found that the husband was an honest businessman, intending and able to honour his financial commitments and held that he had rebutted the presumption of advancement and made the declaration sought.
Held: The wife’s appeal succeeded. The husband, being an honest man, must have genuinely intended that the house should belong to his wife because that was the only honest intention he could have. The Court must weigh, or balance, the adverse consequences of granting relief against the adverse consequences of refusing relief. The ultimate decision calls for a value judgment.
Salmon LJ: ‘The husband is in an inescapable dilemma. Either he is honest, in which case the house belongs to his wife; or he is dishonest. The registrar has found that he is honest.’ and ‘The burden of displacing the presumption of advancement is therefore on the husband. This burden can in many cases be displaced without much effort. It seems to me, however, that in this case the husband’s evidence, far from displacing the presumption, has done much to reinforce it.’
‘The burden of displacing the presumption of advancement is therefore on the husband. This burden can in many cases be displaced without much effort. It seems to me, however, that in this case the husband’s evidence, far from displacing the presumption, has done much to reinforce it.’ Having referred to the husband’s evidence as to the advice given by the solicitor and having pointed out that there would have been nothing wrong in the husband’s putting the property into his wife’s name in order to protect it from his creditors, Salmon LJ continued: ‘It seems to me to follow from the registrar’s finding that he was an honest man that the husband must have intended that the house should belong to his wife. That is why I say that his evidence strengthens the presumption of advancement. As far as I can see, the only possible alternative to what I have just described would be the husband dishonestly putting the house in his wife’s name with the intention of himself having the beneficial interest in it, and also with the intention, when he failed in business, to go to his creditors and say quite untruthfully and dishonestly: ‘I have no interest in this house. You can look at the documents, and they are plain enough to show that I have none.’ The registrar negatived that dishonest frame of mind, and certainly this court would not interfere with that finding.’
Lord Denning MR: ‘So it is plain that the husband had the house put into his wife’s name so as to avoid any risk of it being taken by his creditors in case his business was not a success. What is the result in law? In Gascoigne v Gascoigne [1918] 1 K.B. 223, it was held that when a husband put a house in his wife’s name so as to avoid it being taken by his creditors, the house belonged to the wife. The husband could not be heard to say that it belonged to him because he could not be allowed to take advantage of his own dishonesty. That case was applied In re: Emery’s Investment Trusts [1959] Ch. 410; and also McEvoy v Belfast Banking Co. Ltd. [1934] N.I. 67. We were invited by Mr Wheatley to overrule those decisions but in my opinion they are good law.’ He considered the attempts of counsel to distinguish the facts of that case from the authorities that he had quoted and concluded: ‘But whether the solicitor gave that advice or not, I am quite clear that the husband cannot have it both ways. So he is on the horns of a dilemma. He cannot say that the house is his own and, at one and the same time, say that it is his wife’s. As against his wife, he wants to say that it belongs to him. As against his creditors that it belongs to her. That simply will not do. Either it was conveyed to her for her own use absolutely: or it was conveyed to her as trustee for her husband. It must be one or the other. The presumption is that it was conveyed to her for her own use: and he does not rebut that presumption by saying that he only did it to defeat his creditors. It belongs to her.’

Nicholas LJ, Lord Denning MR, Cross LJ
[1970] P 136, [1970] 1 All ER 540
England and Wales
Citing:
CitedGascoigne v Gascoigne 1918
When a husband put a house in his wife’s name so as to avoid it being taken by his creditors, the house belonged to the wife. The husband could not be heard to say that it belonged to him because he could not be allowed to take advantage of his own . .

Cited by:
CitedLowson v Coombes CA 26-Nov-1998
A house was purchased by an unmarried couple to live together, but conveyed into the female partner’s sole name. Her partner was still married, and she feared that on his death his wife would inherit.
Held: ‘the case being one of illegality, I . .
CitedCollier 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 . .
CitedSlater v Simm ChD 27-Apr-2007
The deceased and her partner did not marry but owned three properties together. They could not agree on the interpretation of the documents setting out their interests, and whether they had been varied.
Held: The court set out the various . .
CitedSQ v RQ and Another FD 31-Jul-2008
The home in which the family had lived was held in the name of a brother. Each party claimed that it was held in trust for them. Chancery proceedings had been consolidated into these ancillary relief applications. The home had been in the husband’s . .

Lists of cited by and citing cases may be incomplete.

Family, Trusts

Leading Case

Updated: 02 November 2021; Ref: scu.236573

Dufour v Pereira: 1769

Nature of Joint and Mutual Wills

The court was asked as to the validity and effect of a single joint will.
Held: Lord Camden considered the nature of joint or mutual wills. Lord Camden LC said: ‘The parties by mutual will do each of them devise, upon the engagement of the other, that he will likewise devise in manner therein mentioned. The instrument itself is the evidence of the agreement; and he, that dies first, does by his death carry the agreement on his part into execution. If the other then refuses, he is guilty of a fraud, can never unbind himself, and becomes a trustee of course. For no man shall deceive another to his prejudice. By engaging to do something that is in his power, he is made a trustee for the performance, and transmits that trust to those that claim under him.’ and ‘There is no difference between promising to make a will in such a form and making his will with a promise not to revoke it’

Lord Camden LC
(1769) 1 Dick 419, (1769) 2 Harg Jurid Arg 304, [1769] EngR 63, (1769) Dick 419, (1769) 21 ER 332
Commonlii
England and Wales
Cited by:
CitedIn 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 . .
CitedIn 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 . .
CitedGoodchild 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, . .
ExplainedIn re Hagger; Freeman v Arscott ChD 1930
The husband and wife had made wills in similar terms, each leaving their separate property to each other on the first spouse dying with remainders over. They agreed that the wills should not be revoked without the agreement of the other. The wife . .
CitedThe Thomas and Agnes Carvel Foundation v Carvel and Another ChD 11-Jun-2007
The husband and wife had made mutual wills in the US with an express agreement not to make later alterations or dispositions without the agreement of the other or at all after the first death. The wife survived, but having lost the first will made a . .
CitedWalters v Olins CA 4-Jul-2008
The claimant appealed against a finding that he had entered into a mutual will contract with the deceased.
Held: It is a legally necessary condition of mutual wills that there is clear and satisfactory evidence of a contract between two . .
CitedHealey v Brown ChD 25-Apr-2002
The two deceased had made mutual wills bequeathing the family home. The survivor transferred the property during his life to defeat the agreement. It was now said that the arrangement fell foul of the 1989 Act and was unenforceable.
Held: . .
CitedRe Oldham; Hadwen v Myles 1925
The court was asked whether an agreement for mutual wills should be inferred. The court said that it is inherently improbable that a testator should be prepared to give up the possibility of changing his or her will in the future, whatever the . .
CitedBirmingham v Renfrew 11-Jun-1937
(High Court of Australia) 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. Latham CJ described a mutual will arrangement as . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Trusts

Leading Case

Updated: 02 November 2021; Ref: scu.195672

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 date of the gift as joint tenants or tenants in common.
Where a trust is for a non-charitable purpose and does not have a beneficiary, it fails ‘for a purpose or object cannot sue . . to enforce it’
Viscount Simonds said: ‘But, though their Lordships are of opinion that the section may operate where there is a composite expression covering charitable and non-charitable purposes, and does so in the present case, it is clear that not every expression which might possibly justify a charitable application is brought within it. For instance, in In re Hollole there was a gift to a trustee ‘to be disposed of by him as he may deem best’. The trustee might presumably have deemed it best to dispose of it for a charitable purpose, and, if he had done so, could not be said to have exceeded his powers. Yet O’Bryan J held that the gift was not saved by the section, and his decision has been rightly approved in the High Court. This was a clear case because the testator did not designate any purpose at all but in effect delegated his testamentary power in a manner that the law does not permit. Greater difficulty will arise where the permissible objects of choice are described in a composite expression which, though not so vague and general as to amount to a delegation of testamentary power, does not very clearly indicate a charitable intention on the part of the testator. ‘In the present case,’ say the Chief Justice and McTiernan J, ‘there is reference to a distributable class which, while not exclusively charitable, is predominantly charitable in character’. The same concept appears in a different form in the judgment of Williams J and Webb J. ‘One can also agree with him’ (ie., Myers J) they say ‘that in order to satisfy the section the application of the whole fund to charity must be one way of completely satisfying the intention of the testator. But, if the trust either directs or allows this to be done, the testator’s intention will be completely satisfied if the trust funds are so applied….’ Thus whether the gift be to Orders of Nuns, an object so predominantly charitable that a charitable intention on the part of the testator can fairly be assumed, or for (say) benevolent purposes, which connotes charitable as well as non-charitable purposes, the section will apply. Inevitably there will be marginal cases, where an expression is used which does not significantly indicate a charitable intention, and their Lordships do not propose to catalogue the expressions which will or will not attract the section. It may be sufficient to say that in the chequered history of this branch of the law the misuse of the words ‘benevolent’ and ‘philanthropic’ has more than any other disappointed the charitable intention of benevolent testators and that the section is clearly designed to save such gifts.’

Viscount Simonds
[1959] AC 457, [1959] UKPC 1, [1959] UKPC 9
Bailii, Bailii
Cited by:
CitedRe 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 . .
CitedHunt 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 . .
CitedNeville 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, . .

Lists of cited by and citing cases may be incomplete.

Trusts, Commonwealth

Leading Case

Updated: 02 November 2021; Ref: scu.245263

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 displaced the presumption of advancement.
Held: The presumption of advancement in a gift between father and son is not lightly to be displaced by evidence: ‘in the present case the plaintiff had of necessity to disclose his own illegality to the court and for this reason: He had not only to get over the fact that the transfer stated that the son paid $7000 for the land. He had also to get over the presumption of advancement, for whenever a father transfers property to his son, there is a presumption that he intended it as a gift to his son; and if he wishes to rebut that presumption and to say that he took as trustee for him, he must prove the trust clearly and distinctly, by evidence properly admissible for the purpose, and not leave it to be inferred from slight circumstances. see Shepherd v. Cartwright [1955] AC 431. The fact that the father received the income does not suffice . . The father had also to get over this pertinent question: If he intended the son to take as a trustee, why did he not insert on the memorandum of transfer the words ‘as trustee’ and register the trust as he could have done under section 160 of the Land Code?
‘In these circumstances it was essential for the father to put forward a convincing explanation why the transfer took the form it did, and the explanation he gave disclosed that he made the transfer for a fraudulent purpose, namely, to deceive the public administration . . Once this disclosure was made by the father, the courts were bound to take notice of it, even though the son had not pleaded it . .in the present case the father has of necessity to put forward,, and indeed, assert, his own fraudulent purpose, which he has fully achieved. He is met therefore by the principle stated long ago by Lord Mansfield ‘No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act,’ see Holman v. Johnson (1775) 1 Cowp. 341, 343).”

Lord Denning, Viscount Simonds
[1962] AC 294, [1962] UKPC 1, [1962] UKPC 4, [1962] 2 WLR 548, [1962] 2 All ER 238
Bailii, Bailii
Commonwealth
Citing:
CitedHolman v Johnson 5-Jul-1775
ex turpi causa non oritur actio
Mansfield LCJ set out the principle of ex turpi causa non oritur actio: ‘The objection, that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, . .
See AlsoPalaniappa Chettiar v Arunasalam Chettiar PC 31-Jan-1962
Malaya . .

Cited by:
CitedLavelle 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 . .
ApprovedTinsley v Milligan HL 28-Jun-1993
Two women parties used funds generated by a joint business venture to buy a house in which they lived together. It was vested in the sole name of the plaintiff but on the understanding that they were joint beneficial owners. The purpose of the . .
CitedCollier 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 . .
See AlsoPalaniappa Chettiar v Arunasalam Chettiar PC 31-Jan-1962
Malaya . .

Lists of cited by and citing cases may be incomplete.

Trusts, Commonwealth

Leading Case

Updated: 02 November 2021; Ref: scu.194812

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.
Held: The appeal was allowed. The matter was justiciable and should be allowed to go to a hearing. The dispute related to the ownership, possession or control of property held on trust. It may have been within the power of the trustees to agree to the clauses in the disputed documents, and were unable to challenge its validity, deriving their own status from it.
The Court referred to a type of foreign act of state under the head of non-justiciability which it said ‘refers to a case where an issue is said to be inherently unsuitable for judicial determination by reason only of its subject matter’ (even though it would otherwise be within the English courts’ jurisdiction under, for example, the Brussels Regulation and Lugano Convention or the rules of court). Lord Oliver of Aylmerton went on to say that such cases ‘generally fall into one of two categories’:
(i) The first was where the issue was ‘beyond the constitutional competence assigned to the courts under our conception of the separation of powers’, of which the ‘paradigm cases are the non-justiciability of certain transactions of foreign states and of proceedings in Parliament’. The distinctive feature of such cases was that ‘once the forbidden area is identified, the court may not adjudicate on the matters within it, even if it is necessary to do so in order to decide some other issue which is itself unquestionably justiciable’. Buttes Gas falls into this category.
(ii) The second category was of cases not involving private legal rights or obligations or reviewable matters of public policy, and included ‘issues of international law which engage no private right of the claimant or reviewable question of public law’. Such issues were not justiciable in the abstract, but ‘must nevertheless be resolved if their resolution is necessary in order to decide some other issue which is in itself justiciable’. Examples of this second category, where no private right or reviewable question of public law was engaged, are Nabob of the Carnatic v East India Co (1793) 2 Ves Jun 56, where the Nabob was seeking to sue for an account due under an international treaty, and JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry [1990] 2 AC 418, where the House of Lords stated that it is ‘axiomatic that municipal courts have not and cannot have the competence to adjudicate upon or to enforce the rights arising out of transactions entered into by independent sovereign states between themselves on the plane of international law’

Lord Neuberger, President, Lord Mance, Lord Clarke, Lord Sumption, Lord Hodge
[2014] UKSC 33, [2014] 3 WLR 1, [2014] WLR(D) 263, UKSC 2012/0234, [2014] PTSR 907, [2014] WTLR 1729, [2014] 3 All ER 243
Bailii, Bailii Summary, WLRD, SC Summary, SC
England and Wales
Citing:
Appeal fromKhaira 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. . .
CitedCraigdallie v Aikman PC 14-Jun-2013
A chapel was acquired with the subscriptions of a congregation which seceded from the Church of Scotland in 1737 and subsequently split over whether a magistrate might suppress heresy. Each of the rival groups claimed that the chapel belonged to . .
CitedIn re Orphan Working School and Alexandra Orphanage’s Contract 1912
An established trust had collected subscriptions over many years, ptting those subscriptions wth other funds derived from the sale of one school property for the purchase of another. That property in turn came to be sold, and questions arose as to . .
CitedAttorney-General v Mathieson CA 1907
The Rev John Wilkinson, ran charities in Stoke Newington in London, including ‘the Mildmay Mission to the Jews’. He was given received andpound;1350 from ‘a lady’ locally who suggested that the money be used for a convalescent home. He pointed out . .
CitedUnderhill v Hernandez 29-Nov-1897
(US Supreme Court) Underhill, a US citizen, had constructed a waterworks in Bolivar for the government which was eventually overthrown by revolutionary forces, one of whose generals was Hernandez. After Hernandez had captured Bolivar, Underhill . .
CitedButtes 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 . .
CitedJeeves v Imperial Foods Ltd, Pension Scheme ChD 27-Jan-1986
Walton J explained that there may be many ‘occasions in law in which a fund is held on trust, but at the particular point there is no final definitive trust deed’. He went on to say that ‘it may very well be that . . a person who had contributed to . .
CitedPrebble v Television New Zealand Ltd PC 27-Jun-1994
(New Zealand) The plaintiff, an MP, pursued a defamation case. The defendant wished to argue for the truth of what was said, and sought to base his argument on things said in Parliament. The plaintiff responded that this would be a breach of . .
CitedHamilton v Al Fayed HL 23-Mar-2000
The claimant MP sued the defendant in defamation after he had alleged that the MP had corruptly solicited and received payments and benefits in kind as a reward for parliamentary services rendered.
Held: Parliament has protected by privilege . .
CitedCampaign for Nuclear Disarmament (CND) v Prime Minister and others Admn 17-Dec-2002
CND sought an advisory declaration as to the meaning of UN Security Council resolution 1441, which had given Iraq ‘a final opportunity to comply with its disarmament obligations’ and whether the resolution authorised states to take military action . .
CitedBruker v Marcovitz 14-Dec-2007
Canlii (Supreme Court of Canada) Contracts – Validity – Breach – Agreement with religious aspect – Husband refusing to provide wife with Jewish religious divorce after civil divorce despite agreement to do so – . .
CitedAl-Haq, Regina (On the Application of) v Secretary Of State for Foreign and Commonwealth Affairs Admn 27-Jul-2009
The claimant sought a declaration that the UK was in breach of its international obligations. The claimant was a non-governmental human rights organisation based in Palestine. The respondent argued that the issue was beyond the court’s jurisdiction, . .
CitedBarker v O’Gorman ChD 1971
The plaintiff sought to challenge to a proposed union between the Methodist Church and the Church of England on the ground that the Methodist Conference had no power to vary the doctrinal standards of the former church. . .
CitedRegina (on the application of Abassi and Another) v Secretary of State for Foreign and Commonwealth Affairs and Another CA 6-Nov-2002
A British national had been captured in Afghanistan, and was being held without remedy by US forces. His family sought an order requiring the respondent to take greater steps to secure his release or provide other assistance.
Held: Such an . .
CitedSyndicat Northcrest v Amselem 30-Jun-2004
Canlii (Supreme Court of Canada) Civil rights – Freedom of religion — Definition of freedom of religion — Exercise of religious freedoms — Orthodox Jews setting up succahs in pursuit of their religious beliefs . .
CitedGentle, Regina (on the Application of) and Another v The Prime Minister and Another HL 9-Apr-2008
The appellants were mothers of two servicemen who had died whilst on active service in Iraq. They appealed refusal to grant a public inquiry. There had already been coroners inquests. They said that Article 2 had been infringed.
Held: The . .
CitedLong v Lord Bishop of Cape Town PC 13-Feb-1863
After constitutional government had been granted to a colony, the Crown, by letters patent appointing a bishop, could no longer grant any coercive ecclesiastical jurisdiction to him. The church could be nothing more than a voluntary association.
CA CostsKhaira 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. . .

Cited by:
CitedBelhaj 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 . .
At SCKhaira and Others v Shergill and Others ChD 23-Mar-2016
. .
At SCShergill 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 . .
At SCKhaira 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 . .
CitedMiller, Regina (On the Application Of) v The Prime Minister QBD 11-Sep-2019
Prorogation request was non-justiciable
The claimant sought to challenge the prorogation of Parliament by the Queen at the request of the respondent.
Held: The claim failed: ‘the decision of the Prime Minister to advise Her Majesty the Queen to prorogue Parliament is not justiciable . .
CitedCherry, Reclaiming Motion By Joanna Cherry QC MP and Others v The Advocate General SCS 11-Sep-2019
(First Division, Inner House) The reclaimer challenged dismissal of her claim for review of the recent decision for the prorogation of the Parliament at Westminster.
Held: Reclaim was granted. The absence of reasons allowed the court to infer . .

Lists of cited by and citing cases may be incomplete.

Trusts, International

Leading Case

Updated: 02 November 2021; Ref: scu.526418

Ideal Bedding Company Ltd v Holland: 1907

The plaintiffs had obtained against the trustees an order that the settlement was void as against the plaintiffs and other creditors. The court considered the trustees’ position on costs.
Held: A trustee has a duty to defend the trust, and where he defended the action, he was entitled to his costs out of the trust estate.

Kekewich J
[1907] 2 Ch 157
Cited by:
DoubtedAlsop Wilkinson v Neary and Others ChD 4-Nov-1994
The second defendant, a solicitor, had fraudulently taken money from trusts, and paid money into trusts for his own family. It was claimed that the payments were intended to defeat the recovery of the funds. The trustees sought protection on costs . .

Lists of cited by and citing cases may be incomplete.

Trusts, Costs

Leading Case

Updated: 02 November 2021; Ref: scu.198267

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 court, they are entitled to an indemnity for their costs out of the trust fund. The Order provided: ‘Subject to the provisions of the Acts and these rules, the costs of and incident to all proceedings in the Supreme Court, including the administration of estimates and trusts, shall be in the discretion of the Court or judge . .’

[1893] 1 Ch 547
Order LXV Rule 1
England and Wales
Cited by:
CitedSingh 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. . .
CitedAlsop Wilkinson v Neary and Others ChD 4-Nov-1994
The second defendant, a solicitor, had fraudulently taken money from trusts, and paid money into trusts for his own family. It was claimed that the payments were intended to defeat the recovery of the funds. The trustees sought protection on costs . .
CitedRe Biddencare Ltd ChD 1994
The court set out the principles applicable on making a Beddoe application. The court should consider the strength of the case, the likely costs order in the eventual proceedings, and the justice of the application itself. . .
CitedCorner House Research, Regina (on the Application of) v Secretary of State for Trade and Industry CA 1-Mar-2005
The applicant sought to bring an action to challenge new rules on approval of export credit guarantees. The company was non-profit and founded to support investigation of bribery. It had applied for a protected costs order to support the . .
CitedWallersteiner v Moir (No 2) CA 1975
The court was asked whether Moir would be entitled to legal aid to bring a derivative action on behalf of a company against its majority shareholder.
Held: A minority shareholder bringing a derivative action on behalf of a company could obtain . .
CitedDagnell and Another v J L Freedman and Co and Others HL 5-Apr-1993
The plaintiffs, trustees of the will, sued the solicitors who had prepared it in negligence. They issued the writ some 7 months before the limitation date for their claim, but did not then serve it. They were advised first to make an application to . .

Lists of cited by and citing cases may be incomplete.

Litigation Practice, Trusts

Leading Case

Updated: 01 November 2021; Ref: scu.183455

Miller Smith v Miller Smith: CA 2 Dec 2009

The married couple owned a property as tenants in common. The husband had moved out and, anticipating divorce proceedings, sought an order for the sale of the house citing his inability to sustain the very considerable mortgage payments. The wife said that it was inappropriate to use the 1996 Act when divorce proceedings were anticipated.
Held: The wife’s appeal failed. The application here had been made at a point where capital orders were otherwise unavailable to the husband, though ‘confronted with an application under TOLATA between separated spouses, the court should embark upon the discretionary exercise by asking itself whether the issue raised by the application can reasonably be left to be resolved within an application for ancillary relief following divorce. It is in principle much more desirable that an issue, as here, about sale of the home should be resolved within an application for ancillary relief. ‘ The wife had already obstructed the the decree nisi by more than six months. Apart from a recent receipt, the husband’s main asset was his interest in the house.
Wilson LJ said: ‘Our society in England and Wales now urgently demands a second attempt by Parliament, better than in the ill-fated Part II of the [Family Law Act 1996], to reform the five ancient bases of divorce; meanwhile, in default, the courts have set the unreasonableness of the behaviour required to secure the success of a petition on the second basis, namely pursuant to section 1(2)(b) of the Act of 1973, even when defended, at an increasingly low level.’

Sir Mark Potter P, Wilson LJ, Rimer LJ
[2009] EWCA Civ 1297, Times 08-Jan-2010, [2010] Fam Law 142, [2009] NPC 138, [2010] WTLR 519, [2010] 1 FLR 1402
Bailii
Trusts of Land and Appointment of Trustees Act 1996 14, Married Women’s Property Act 1882 17, Matrimonial Causes Act 1973 25
England and Wales
Citing:
CitedTee v Tee, John Arthur Hillman Co CA 22-Mar-1999
The wife and her second husband occupied a property in the joint names of herself and of her first husband, who, following their divorce, had applied under the Act of 1973 for a lump sum order reflective of his equal beneficial interest in it to be . .
CitedFielding v Fielding CA 1977
The wife, following divorce, applied for a lump sum order to be made against the husband but then she added a claim under s.17 of the Act of 1882 for a declaration that she had an interest, for which the husband should account to her, in the assets . .
CitedWicks v Wicks CA 29-Dec-1997
A court has no power to make an interim order for the purchase of a house for the wife and children pending determination of the overall ancillary application. The result sought by the wife could have been achieved by application under section 17 of . .

Cited by:
CitedOwens v Owens SC 25-Jul-2018
W petitioned for divorce alleging that he ‘has behaved in such a way that [she] cannot reasonably be expected to live with [him]’. H defended, and the petition was rejected as inadequate in the behaviour alleged. She said that the section should be . .
CitedOwens v Owens SC 25-Jul-2018
W petitioned for divorce alleging that he ‘has behaved in such a way that [she] cannot reasonably be expected to live with [him]’. H defended, and the petition was rejected as inadequate in the behaviour alleged. She said that the section should be . .

Lists of cited by and citing cases may be incomplete.

Trusts, Family

Updated: 01 November 2021; Ref: scu.381716

Birmingham v Renfrew: 11 Jun 1937

(High Court of Australia) 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. Latham CJ described a mutual will arrangement as ‘a trust which is declared by the law to affect the conscience of [the survivor’s] executor and of the volunteers who are devisees or legatees under his will.’ and ‘Those who undertake to establish such an agreement [ie of mutual wills] assume a heavy burden of proof’.
Dixon J set down the principles for mutual wills: ‘It has long been established that a contract between persons to make corresponding wills gives rise to equitable obligations when one acts on the faith of such an agreement and dies leaving his will unrevoked so that the other takes property under its dispositions. It operates to impose upon the survivor an obligation regarded as specifically enforceable. It is true that he cannot be compelled to make and leave unrevoked a testamentary document and if he dies leaving a last will containing provisions inconsistent with his agreement it is nevertheless valid as a testamentary act. But the doctrines of equity attach the obligation to the property. The effect is, I think, that the survivor becomes a constructive trustee and the terms of the trust are those of the will he undertook would be his last will . . The purpose of an arrangement for corresponding wills must often be, as in this case, to enable the survivor during his life to deal as absolute owner with the property passing under the will of the party first dying. That is to say, the object of the transaction is to put the survivor in a position to enjoy for his own benefit the full ownership so that, for instance, he may convert it and expend the proceeds if he choose. But when he dies he is to bequeath what is left in the manner agreed upon. It is only by the special doctrines of equity that such a floating obligation, suspended, so to speak, during the lifetime of the survivor can descend upon the assets at his death and crystallize into a trust. No doubt gifts and settlements, inter vivos, if calculated to defeat the intention of the compact, could not be made by the survivor and his right of disposition, inter vivos, is, therefore, not unqualified. But, substantially, the purpose of the arrangement will often be to allow full enjoyment for the survivor’s own benefit and advantage upon condition that at his death the residue shall pass as arranged.’

Dixon J, Latham CJ
(1937) 57 CLR 666, [1937] HCA 52
Austlii
Australia
Citing:
CitedDufour v Pereira 1769
Nature of Joint and Mutual Wills
The court was asked as to the validity and effect of a single joint will.
Held: Lord Camden considered the nature of joint or mutual wills. Lord Camden LC said: ‘The parties by mutual will do each of them devise, upon the engagement of the . .
CitedRe Oldham; Hadwen v Myles 1925
The court was asked whether an agreement for mutual wills should be inferred. The court said that it is inherently improbable that a testator should be prepared to give up the possibility of changing his or her will in the future, whatever the . .

Cited by:
CitedGoodchild 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, . .
CitedIn 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 . .
CitedGoodchild v Goodchild ChD 13-Dec-1995
The husband and wife had made mirror wills. They divorced, and the husband made a new will. After his death, the child and the third wife of the deceased made a claim against the second wife.
Held: The wills were in identical terms, but . .
CitedThe Thomas and Agnes Carvel Foundation v Carvel and Another ChD 11-Jun-2007
The husband and wife had made mutual wills in the US with an express agreement not to make later alterations or dispositions without the agreement of the other or at all after the first death. The wife survived, but having lost the first will made a . .
CitedWalters v Olins CA 4-Jul-2008
The claimant appealed against a finding that he had entered into a mutual will contract with the deceased.
Held: It is a legally necessary condition of mutual wills that there is clear and satisfactory evidence of a contract between two . .
CitedHealey v Brown ChD 25-Apr-2002
The two deceased had made mutual wills bequeathing the family home. The survivor transferred the property during his life to defeat the agreement. It was now said that the arrangement fell foul of the 1989 Act and was unenforceable.
Held: . .
CitedLegg and Another v Burton and Others ChD 11-Aug-2017
Testing for Mutual Wills
The parties disputed whether wills were mutual. The claimants challenged the probate granted to a later will of their deceased mother, saying that her earlier will had been mutual and irrevocable after the death of their father.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Contract, Trusts, Equity

Leading Case

Updated: 01 November 2021; Ref: scu.183791

Wright and Another v Gater and Others: ChD 7 Nov 2011

The beneficiary, a child was to inherit estates of his grandparents and parents, all of which were intestate. An application was made to vary the provisions in order to reduce the liability to Inheritance Tax.
Held: A deferment of vesting might constitute a ‘benefit’ for the purposes of the 1958 Act, but it was an issue to be decided from case to case. In this case the original proposal would cross the line between variation and resettlement, and the child at three could not now be predicted to be in need of protection at the age of majority. However a variety of the proposal was acceptable and was approved.

Norris J
[2011] EWHC 2881 (Ch), 14 ITELR 603, [2012] 1 WLR 802, [2012] STC 255, [2011] STI 3431, [2012] WTLR 549
Bailii
Administration of Estates Act 1925 47, Trustee Act 1925 31 32
England and Wales
Citing:
CitedIn Re Bernstein ChD 2008
The testator had left andpound;100,000 legacies to his grandchildren at 25. In order to achieve a tax saving. The court was asked to approve an arrangement under which the individual legacies were replaced by interest in a fund in which the widow . .
CitedRe Cohen’s Will Trusts ChD 1959
An application was made for the variation of trust provisions on behalf of a child beneficiary.
Held: Where the outcome of the arrangement cannot be predicted with certainty then the Court should be prepared to take on behalf of a minor, a . .
CitedIn Re Druce’s Settlement Trusts ChD 1962
Russell J discussed the difficulties of trustees when making an application on behalf of a beneficiary of the trust: ‘The application was made not by a beneficiary but by the trustees. This is a disadvantage, particularly in a case such as the . .
CitedIn re T’s Settlement Trusts ChD 1964
Wilberforce J was asked to approve a variation of a trust in favour of a child under the 1958 Act, to restrict her from getting her full entitlement on her attaining the age of 21 because she was said to be ‘alarmingly immature and irresponsible as . .
CitedRe Van Gruisen’s Will Trusts ChD 1964
The court considered the extent of its discretion to vary the provisions of a trust.
Held: The Court should ask whether, if the persons on whose behalf consent is to be given were themselves competent and reasonable, the bargain is one that . .
CitedRe Weston’s Settlement Trusts CA 1968
The settlor applied for the approval of an arrangement for the export of his trust to Jersey, where he had gone to live. The court considered its powers under the 1968 Act.
Held: The court should not consider merely the financial benefit to . .
Citedin Re Wallace’s Settlements ChD 1968
A judge considering an application to vary trusts should approach it with ‘a fair cautious and enquiring mind’. . .
CitedIn Re Remnant ChD 1970
Approval was sought of a proposed deed varying trusts created in the will.
Held: The testator’s intention would be defeated by the proposed arrangement which involved the deletion of the forfeiture provision dependant upon the beneficiary’s . .
CitedIn Re Holt’s Settlement ChD 1969
An application was made to vary the terms of a trust in favour of children.
Held: The court was ready to receive evidence from a mother whose children were due to become entitled to funds at the age of 21 that she believed it most important . .
CitedIn Re Irving 1975
The (Canadian) court considered an application to vary a trust on behalf of a child, and asked itself: ‘Would a prudent adult, motivated by intelligent self-interest, and after sustained consideration of the proposed trusts and powers and the . .
CitedWeston v Inland Revenue Commissioners ChD 29-Nov-2000
The taxpayer owned land upon which he ran a caravan park. Income was generated by pitch fees, and from commissions taken from the sales of caravans from one pitch owner to the next. The Commissioners asserted that the income was to be treated as . .
CitedRidgwell and others v Ridgwell and others; In Re RGST Settlement Trusts ChD 14-Nov-2007
Funds were held upon trust for X with the remainder (in default of exercise of the power of appointment) to his three children aged 7,5 and 2. It was beneficial for tax purposes to insert a life interest in favour of X’s surviving spouse (thereby . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Inheritance Tax, Trusts

Updated: 01 November 2021; Ref: scu.448121

Zeital and Another v Kaye and Others: CA 5 Mar 2010

The deceased had held an apartment through beneficial interests in shares in a limited company. He died intestate. The parties disputed the ownership of the two shares. The company had been put into a members’ liquidation, and the company liquidator sought the court’s direction. The widow and deceased had lived seperately for over 20 years, and his more recent partner said that he had informally given the shares to her. The widow and children appealed a finding in favour of the gift in respect of one share, and against the costs order.
Held: The appeal succeeded. The steps taken by the deceased to transfer the share fell short of what was required. He had not been himself registered as owner, and could not execute a share transfer. The company was in liquidation, and no share certificate was handed over. The deceased had not done all he could to transfer the share.

Dyson, Maurice Kay, Rimer LJJ
[2010] EWCA Civ 159
Bailii
England and Wales
Citing:
MentionedIn re Re Rose, Midland Bank Executor and Trustee Company Limited v Rose ChD 1949
The testator handed a transfer of the relevant shares to the donee, Mr Hook, together with the relevant certificates. The transfer had not been registered by the date of his death.
Held: Equity will not compel an imperfect gift to be . .
MentionedIn re Rose, Rose v Inland Revenue Commissioners CA 1952
The deceased had executed instruments of transfer and delivered them with the relevant certificates to the transferees.
Held: The transfers were transferred the whole of the deceased’s title both legal and equitable in the shares and all . .
CitedPennington and Another v Waine, Crampton and others CA 4-Mar-2002
The deceased had made a gift of shares. She had executed a transfer, and acting upon the promise, the donee had agreed to become a director which he could only do if he also became a shareholder. The transfer was delivered to the deceased’s agent, . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Trusts, Company

Updated: 01 November 2021; Ref: scu.402536

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 a conveyance into joint names indicates only that each party is intended to have some beneficial interest but says nothing about the nature and extent of that beneficial interest that establishes a prime facie case of joint and equal beneficial interests until the contrary is shown.
Held: In a domestic consumer context, a conveyance into joint names indicates both a legal and a beneficial joint tenancy, unless and until the contrary is proved: ‘The burden will be on the person seeking to show that the parties did intend their beneficial interests to be different from their legal interests, and in what way.’
In this case the parties had kept their finances rigidly separate, and Ms Dowden had made a good case for receiving a 65% share of the value. The powers under the 1996 Act replace the old equitable accounting rules, and older case law should no longer be applied.
Lord Neuberger of Abbotsbury said: ‘where the resulting trust presumption (or indeed any other basis of apportionment) applies at the date of acquisition, I am unpersuaded that (save perhaps in a most unusual case) anything other than subsequent discussions, statements or actions, which can fairly be said to imply a positive intention to depart from that apportionment, will do to justify a change in the way in which the beneficial interest is owned.’ and ‘The court’s power to order payment to a beneficiary, excluded from property he would otherwise be entitled to occupy, by the beneficiary who retains occupation, is now governed by sections 12 to 15 of the Trusts of Land and Appointment of Trustees Act 1996, having been formerly equitable in origin. However, I think that it would be a rare case where the statutory principles would produce a different result from that which would have resulted from the equitable principles.’
Baroness Hale summarised the applicable principles in the 1996 Act: ‘Section 12(1) gives a beneficiary who is beneficially entitled to an interest in land the right to occupy the land if the purpose of the trust is to make the land available for his occupation . . Section 13(1) gives the trustees the power to exclude or restrict that entitlement, but under section 13(2) this power must be exercised reasonably. The trustees also have power under section 13(3) to impose conditions upon the occupier. These include, under section 13(5), paying any outgoing or expenses in respect of the land and under section 13(6) paying compensation to a person whose right to occupy has been excluded or restricted. Under section 14(2)(a), both trustees and beneficiaries can apply to the court for an order relating to the exercise of these functions. Under section 15(1), the matters to which the court must have regard in making its order include (a) the intentions of the person or persons who created the trust, (b) the purposes for which the property subject to the trust is held, (c) the welfare of any minor who occupies or might reasonably be expected to occupy the property as his home, and (d) the interests of any secured creditor of any beneficiary. Under section 15(2), in a case such as this, the court must also have regard to the circumstances and wishes of each of the beneficiaries who would otherwise be entitled to occupy the property.’

Lord Hoffmann, Lord Hope of Craighead, Lord Walker of Gestingthorpe, Baroness Hale of Richmond, Lord Neuberger of Abbotsbury
[2007] 2 WLR 831, [2007] UKHL 17, [2007] 2 All ER 929, [2007] 2 WLR 831, [2007] AC 432, Times 26-Apr-2007, [2007] 1 FLR 1858, [2007] BPIR 913, [2007] Fam Law 593, [2007] 2 FCR 280, [2007] 18 EG 153, (2006-07) 9 ITELR 815, [2007] WTLR 1053
Bailii
Married Women’s Property Act 1882 17, Trusts of Land and Appointment of Trustees Act 1996 14
England and Wales
Citing:
CitedGalloway v Galloway 1929
. .
CitedMcKenzie vNutter ScSf 2007
A cohabiting couple had bought a house in joint names. They intended to live together as a couple in the property, and that they would both sell their own separate houses and apply the proceeds towards the purchase of their new home. In the event . .
CitedWissenbruch v Wissenbruch 1961
. .
CitedSatchwell v McIntosh ScSf 2006
The house had been bought in the name of one cohabitee only. The parties separated. The law of unjust enrichment could be used to allow the other co-habitant the return of sums which he contributed to the purchase of the house and its refurbishment . .
CitedOxley v Hiscock CA 6-May-2004
The parties were not married, but had brought together their resources to purchase a home in the name of one of them. Nothing had been said about the respective shares on which the property was to be held.
Held: The shares were to be assessed . .
CitedMortgage Corporation Ltd v Shaire and Another ChD 25-Feb-2000
The claimant had an equitable charge over the property, and sought a possession order after failures to keep up repayments. The order was sought under the Act, and the claimants asserted that the conditions for the grant of possession were . .
CitedLloyds Bank plc v Rosset HL 29-Mar-1990
The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest . .
CitedDenvir v Denvir 1969
. .
CitedPettitt 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 . .
CitedGissing v Gissing HL 7-Jul-1970
Evidence Needed to Share Benefical Inerests
The family home had been purchased during the marriage in the name of the husband only. The wife asserted that she had a beneficial interest in it.
Held: The principles apply to any case where a beneficial interest in land is claimed by a . .
CitedBedson v Bedson CA 1965
The parties, a married couple disputed the shares in which the matrimonial home, formerly held by them as joint tenants would be held after severance o that joint tenancy.
Held: The wife was entitled to a half share in the property.
CitedMcFarlane v McFarlane CANI 1972
The parties disputed their respective shares in the family home. The facts in Pettitt and Gissing ‘were not such as to facilitate or encourage a comprehensive statement of this vexed branch of the law’ and ‘much remains unsettled.’ The court . .
CitedEves v Eves CA 28-Apr-1975
The couple were unmarried. The female partner had been led by the male partner to believe, when they set up home together, that the property would belong to them jointly. He had had told her that the only reason why the property was to be acquired . .
CitedBernard v Josephs CA 30-Mar-1982
The court considered the division of proceeds of sale of a house bought by an unmarried couple.
Held: Where the trusts for which a property was purchased have been concluded, the house should be sold.
Griffiths LJ said: ‘the fact that . .
CitedLloyds Bank plc v Rosset CA 13-May-1988
Claim by a wife that she has a beneficial interest in a house registered in the sole name of her husband and that her interest has priority over the rights of a bank under a legal charge executed without her knowledge. The case raises a point of . .
ApprovedMuschinski v Dodds 1985
(High Court of Australia) The idea of conscience is too vague a notion to found the principles of equity, it would open the door to ‘idiosyncratic notions of fairness and justice’ and ‘That property was acquired, in pursuance of the consensual . .
CitedDrake v Whipp CA 30-Nov-1995
The parties, an unmarried cohabiting couple, disputed their respective shares in a property held in the man’s sole name. Both had made direct contributions both to the purchase of a barn and to its expensive conversion into a home. The plaintiff . .
CitedCrabb v Arun District Council CA 23-Jul-1975
The plaintiff was led to believe that he would acquire a right of access to his land. In reliance on that belief he sold off part of his land, leaving the remainder landlocked.
Held: His claim to have raised an equity was upheld. The plaintiff . .
CitedMidland Bank v Cooke and Another CA 13-Jul-1995
Equal equitable interest inferrable without proof
The bank sought to enforce a charge given by the husband to secure a business loan. The property was purchased from the husband’s and his family’s resources and the loan, and was in his name. There had been no discussion or agreement between husband . .
CitedGrant v Edwards and Edwards CA 24-Mar-1986
A couple were not married but lived together in Vincent Farmhouse in which the plaintiff claimed a beneficial interest on separation. The female partner was told by the male partner that the only reason for not acquiring the property in joint names . .
CitedSaunders v Edwards CA 24-Mar-1986
The parties had agreed for the sale and purchase of land and chattels, but had deliberately misdescribed the apportionment so as to reduce tax liability. The purchasers then brought an action for misrepresentation. The vendor replied that the action . .
CitedIn re Rogers’ Question CA 1948
Where a wife contributes directly or indirectly, in money or money’s worth, to the initial deposit or to the mortgage instalments, she gets an interest proportionate to her contribution.
Evershed LJ pointed out that the task of a judge after . .
CitedNewgrosh v Newgrosh 28-Jun-1950
. .
CitedJones v Maynard 1951
Former spouses disputed the division of property.
Held: It was appropriate to apply the priciple of equality. The maxim that ‘equality is equity’ provides no more than a fall-back position where no other basis of division is appropriate. . .
CitedRimmer v Rimmer 1953
Where it is not possible for a court to identify the precise contributions made by partners to a property, the court may take a view that ‘They will not necessarily be equal, but may be held so where that conclusion accords with the broad merits of . .
CitedHine v Hine CA 1962
Lord Denning MR said: ‘the jurisdiction of the court over family assets under section 17 is entirely discretionary. Its discretion transcends all rights, legal or equitable, and enables the Court to make such order as it thinks fit. This means, as I . .
CitedHarwood v Harwood CA 1991
The court rejected the argument that declaring in a transfer of land that the survivor ‘can give a valid receipt for capital money arising on a disposition of the land’ in itself amounts to an express declaration of a beneficial joint tenancy. . .
CitedWhite v White HL 26-Oct-2000
The couple going through the divorce each had substantial farms and wished to continue farming. It had been a long marriage.
Held: Where a division of the assets of a family would satisfy the reasonable needs of either party on an ancillary . .
CitedGoodman 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 . .
CitedDyer v Dyer 27-Nov-1988
Where property is purchased by one person in the name of another there is a presumption that a resulting trust is created: ‘The clear result of all the cases, without a single exception is that the trust of a legal estate, whether freehold, copyhold . .
CitedMalayan Credit Ltd v Jack Chia-MPH Ltd PC 1986
The Board considered whether there were only three situations in which joint owners of property could be found to be tenants in common, and whether there were other circumstances which could lead to a contrary conclusion.
Held: It was . .
Appeal fromStack v Dowden CA 13-Jul-2005
The parties purchased a property together. The transfer contained a survivorship restriction but no declaration of the beneficial interests. The judge had held the property to be held as tenants in commn on equal shares.
Held: In a case where . .
CitedSpringette v Defoe CA 1-Mar-1992
Property was purchased in joint names, but with no express declaration of the beneficial interests. The couple had lived together for a short time as joint tenants of the local authority. They were able to purchase at a substantial discount from the . .
CitedHuntingford 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 . .
CitedWestdeutsche Landesbank Girozentrale v Islington London Borough Council HL 22-May-1996
Simple interest only on rate swap damages
The bank had paid money to the local authority under a contract which turned out to be ultra vires and void. The question was whether, in addition to ordering the repayment of the money to the bank on unjust enrichment principles, the court could . .
CitedRoyal Bank of Scotland v Etridge (No 2); Barclays Bank plc v Harris; Midland Bank plc v Wallace, etc HL 11-Oct-2001
Wives had charged the family homes to secure their husband’s business borrowings, and now resisted possession orders, claiming undue influence.
Held: Undue influence is an equitable protection created to undo the effect of excess influence of . .
CitedUlrich 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 . .

Cited by:
CitedTackaberry and Another v Hollis and others ChD 13-Nov-2007
A house had been purchased in 1982 by one member of a large family. Other family members now disputed whether the land was held in trust for them. A constructive trust was asserted.
Held: The claimants had failed to establish that a . .
CitedPowell and Another v Benney CA 5-Dec-2007
The claimants asserted an interest under a constructive trust in land held by the defendant.
Held: The judge had found acts of detriment suffered by the claimants. Though elements of the judgment might be criticised, the appeal failed. . .
CitedJames v Thomas CA 23-Nov-2007
The claimant sought an interest in the property registered in the sole name of the respondent. The respondent had inherited a share in the property, and then bought out the interests of his siblings with support of a loan. The claimant had made no . .
CitedFowler v Barron CA 23-Apr-2008
The parties had lived together for many years but without marrying. The house had been put in joint names, but without specific advice on the issue or any express declaration of trust. In practice Mr Barron made the direct payments for the house and . .
CitedSQ v RQ and Another FD 31-Jul-2008
The home in which the family had lived was held in the name of a brother. Each party claimed that it was held in trust for them. Chancery proceedings had been consolidated into these ancillary relief applications. The home had been in the husband’s . .
CitedGibson v Revenue and Customs Prosecution Office CA 12-Jun-2008
The claimant’s husband had been made subject to a criminal confiscation order in the sum of pounds 5.5 million. She now sought to appeal an action against life policies in which she claimed a 50% interest.
Held: Despite the finding that she . .
CitedFrench v Barcham and Another ChD 4-Jul-2008
The court was asked the extent to which a beneficial tenant in common who continues in occupation of a property following the bankruptcy of the other beneficial tenant in common ought to compensate the bankrupt’s estate for that continued . .
CitedElithorn v Poulter and others CA 11-Dec-2008
A house had been bought in joint names, but one owner had died. The deceased had contributed the full price. Her executors said that the couple had intended initially that on the sale of the others property, he would contribute, but this never . .
CitedHSBC Bank Plc v Dyche and Another ChD 18-Nov-2009
The parties disputed the claimed beneficial interest of the second defendant. The second defendant (C) said that it had been purchased for him by the first defendant (D) from C’s trustee in bankruptcy, and was thereafter held in trust for him on the . .
CitedMurphy v Gooch CA 27-Jun-2007
The unmarried parties had sought an order from the court as to their respective interests in their former family home.
Held:The judge had been incorrect to make his decsion based on the principles of equitable accounting. He should have used . .
CitedLarkfield Ltd and Others v Revenue and Customs Prosecution Office and Others CA 12-May-2010
The defendant in criminal proceedings (M) had been found to be beneficial owner of property. The company, its registered proprietor appealed against an order declaring the property to be a realisable asset of M. The respondent had said the . .
CitedHopton v Miller ChD 31-Aug-2010
The parties had entered into partnership to open and run a restaurant, but without a formal agreement. They differed as to the values contributed by their respective efforts. After failures to disclose materials requested, the defendant we precluded . .
CitedKernott v Jones CA 26-May-2010
The unmarried couple bought a property together. Mr K appealed against an award of 90% of the property to his former partner. The court was asked, whether, following Stack v Dowden, it was open to the court to find that the parties had agreed that . .
CitedWilliams v Lawrence and Another ChD 28-Jul-2011
The claimant, as trustee for the deceased’s insolvent estate, sought a declaration that a transfer of the deceased’s share in property made by the executors was void as being at an undervalue. The property was subject to a right of occupation in . .
CitedJones v Kernott SC 9-Nov-2011
Unmarried Couple – Equal division displaced
The parties were unmarried but had lived together. They now disputed the shares in which they had held the family home. It had been bought in joint names, but after Mr Kernott (K) left in 1993, Ms Jones (J) had made all payments on the house. She . .
CitedGow v Grant SC 24-May-2012
The parties had lived together as an unmarried couple, but separated. Mrs Gow applied under the 2006 Act for provision. Mr Grant’s appeal succeeded at the Inner House, and Mrs Gow now herself appealed.
Held: The appeal succeeded. The Act did . .
AppliedAbbott v Abbott PC 26-Jul-2007
(Antigua and Barbuda) The parties disputed the division of the family assets after a divorce. The family home was registered in the sole name of the husband. There being no provision for property adjustment, the court had to decide the division on . .
CitedSingh v Singh and Another ChD 8-Apr-2014
The parties disputed ownership of various valuable properties. The father asserted that they were held under trusts following the Mitakshara Hindu code, under a common intention constructive trust. The son said that properties held in his own name . .

Lists of cited by and citing cases may be incomplete.

Family, Land, Trusts

Leading Case

Updated: 01 November 2021; Ref: scu.251487

Sieff v Fox: ChD 23 Jun 2005

The advisers to trustees wrongly advised the trustees about the tax consequences of exercising a power of appointment in a certain way. As a result a large unforeseen Capital Gains Tax liability arose. The trustees sought to set aside the appointment in reliance on the rule in Hastings-Bass. It was also sought to avoid the transaction on account of a mistake by an individual personally.
Held: Lloyd LJ upheld the claim under both heads, summarising the Hastings-Bass principle: ‘(i) The best formulation of the principle seems to me to be this. Where trustees act under a discretion given to them by the terms of the trust, in circumstances in which they are free to decide whether or not to exercise that discretion, but the effect of the exercise is different from that which they intended, the court will interfere with their action if it is clear that they would not have acted as they did had they not failed to take into account considerations which they ought to have taken into account, or taken into account considerations which they ought not to have taken into account . .
(iii) It does not seem to me that the principle applies only in cases where there has been a breach of duty by the trustees, or by their advisers or agents, despite what Lightman J. said in Abacus Trust Co (Isle of Man) v Barr [2003] Ch 409.
(iv) His conclusion that, if the principle is satisfied, the act in question is voidable rather than void is attractive, but seems to me to require further consideration, in the light of earlier authority.
(v) I am in no doubt that, as a general proposition, fiscal consequences are among the matters which may be relevant for the purposes of the principle.’

Lloyd LJ
[2005] 1 WLR 3811, [2005] EWHC 1312 (Ch)
Bailii
England and Wales
Citing:
CitedStannard v Fisons Pension Trust Limited CA 1991
Fisons had sold their fertiliser division to Norsk Hydro. Acting on advice of actuaries and thinking that the fund was in deficit, the trustees made a transfer to a new fund to provide for pensions of transferring employees in accordance with a . .
CitedMettoy Pension Trustees v Evans ChD 1990
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . .
CitedMihlenstedt v Barclays Bank International CA 1989
The company’s pension scheme provided that the trustees were to form an opinion as to the employee’s ability or otherwise to work. The plaintiff sought payment of an ill-health pension under the Bank Pension Scheme.
Held: A pension scheme . .
CitedRe 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 . .

Cited by:
CitedSt Mary and St Michael Parish Advisory Company Ltd v The Westminster Roman Catholic Diocese Trustee, Her Majesty’s Attorney Genera and others ChD 6-Apr-2006
Parish members objected to the building within the church grounds of an education centre. They said that the land was to be used for the purposes of the members of the parish only under a trust deed of 1851.
Held: The deed had to be construed . .
CitedKohli v Lit and Others ChD 13-Nov-2009
The claimant asserted that the other shareholders had acted in a manner unfairly prejudicial to her within the company.
Held: The claimant was allowed to bring in without prejudice correspondence to contradict evidence by the defendant which . .
CitedPitt and Another v Holt and Others ChD 18-Jan-2010
The deceased had created a settlement in favour of his wife. He suffered serious injury and placed the damages in trust, but in a form which created an unnecessary liability to Inheritance Tax on his death. The wife’s mental health act receiver now . .
CitedFutter and Another v Futter and Others ChD 11-Mar-2010
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .
CitedPitt and Another v Holt and Another ChD 18-Jan-2010
The claimant sought to unravel a settlement she had made as receiver for her late husband, saying that it had been made without consideration of its Inheritance Tax implications. The Revenue said that there was no operative mistake so as to allow . .
CitedFutter 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.

Trusts, Capital Gains Tax

Updated: 01 November 2021; Ref: scu.227061

Thorner v Major and others: CA 2 Jul 2008

The deceased had written a will, revoked it but then not made another. The claimant had worked for the deceased understanding that property would be left to him, and now claimed that the estate property was held under a trust for him.
Held: The defendant’s appeal succeded. An intention to create a trust would be insufficient. The claimant had to establish an estoppel. ‘while there is no special rule as to the form or nature of the promise, representation or assurance which is capable of providing the basis of a proprietary estoppel case as regards a claim against a deceased’s estate, it seems to me that the general requirements that there must be a clear and unequivocal representation, and that it must be intended to be relied on, or at the very least that it must be reasonably taken as intended to be relied on, are of no less importance in this type of case than in others, and they must be applied with care, given that statements may be made about testamentary intentions which are not necessarily intended to be taken as promises.’

Ward LJ, LLoyd LJ, Rimer Lj
(2008-09) 11 ITELR 344, [2008] 2 FCR 435, [2008] EWCA Civ 732, [2008] WTLR 1289, [2009] 3 All ER 945
Bailii
England and Wales
Citing:
CitedRamsden v Dyson HL 1866
The Vice-Chancellor had held that two tenants of Sir John Ramsden, the owner of a large estate near Huddersfield, were entitled to long leases of plots on the estate. They ostensibly held the plots as tenants at will only, but they had spent their . .
CitedMaddison v Alderson HL 1883
The requirement of the doctrine of part performance is that the acts of part performance relied upon must be ‘referable’ to the contract sued on. The principle underlying the doctrine of part performance was expressed by Lord Selborne: ‘In a suit . .
Appeal fromThorner v Curtis and others ChD 26-Oct-2007
The claimant said that the deceased, his father and a farmer, had made representations to him over many years that if the claimant continued to work on the farm, he would leave the farm to him in his will. He died intestate. He claimed a proprietary . .
CitedUglow v Uglow and others CA 27-Jul-2004
The deceased had in 1976 made a promise to the claimant. The promise was not honoured in the will, and the claimant asserted a proprietary estoppel.
Held: The judge was right to have found that the promise was bound up with the claimant being . .
CitedSchaefer v Schuman PC 1972
(New South Wales – Australia) A promise to leave the property had been performed, and the issue was as to the relevance, if any, and the effect of an earier promise when the value of the devise was sought to be reduced by an order by way of . .
CitedGrundy v Ottey CA 31-Jul-2003
The deceased left his estate within a discretionary trust. The claimant sought to assert an interest in it, claiming an estoppel and, under the 1975 Act, as his partner. They had lived together for four years. She had been dependent upon him . .
CitedJennings v Rice, Wilson, Marsh, Norris, Norris, and Reed CA 22-Feb-2002
The claimant asserted a proprietary estoppel against the respondents. He had worked for the deceased over many years, for little payment, and doing more and more for her. Though he still worked full time at first, he came to spend nights at the . .
CitedCampbell v Griffin and others CA 27-Jun-2001
. .
CitedGillett v Holt and Another CA 23-Mar-2000
Repeated Assurances Created Equitable Estoppel
Repeated assurances, given over years, that the claimant would acquire an interest in property on the death of the person giving the re-assurance, and upon which the claimant relied to his detriment, could found a claim of equitable estoppel. The . .
CitedTaylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd ChD 1981
The fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine of estoppel. In the light of the more recent cases, the principle ‘requires a very much broader approach which is . .
CitedIn re Basham dec’d; Basham v Basham 1986
The claimant and her husband had helped her mother and her stepfather throughout the claimant’s adult life. She received no remuneration but understood that she would inherit her stepfather’s property when he died. After her mother’s death and until . .
CitedWayling v Jones CA 2-Aug-1993
The plaintiff and defendant were in a homosexual relationship. The plaintiff worked for the defendant for nominal expenses against his repeated promise to leave the business to him in his will. A will was made to that effect, but the defendant sold . .
CitedTaylor v Dickens and Another ChD 24-Nov-1997
The court has no general equitable power to enforce a promise even though broken in unconscionable circumstances. . .

Cited by:
Appeal fromThorner v Major and others HL 25-Mar-2009
The deceased had made a will including a gift to the claimant, but had then revoked the will. The claimant asserted that an estoppel had been created in his favour over a farm, and that the defendant administrators of the promisor’s estate held it . .
CitedGill v Woodall and Others ChD 5-Oct-2009
The claimant challenged her late mother’s will which had left the entire estate to a charity. She asserted lack of knowledge and approval and coercion, and also an estoppel. The will included a note explaining that no gift had been made because she . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Trusts, Estoppel

Updated: 02 November 2021; Ref: scu.270582

Lloyds TSB Foundation for Scotland v Lloyds Banking Group Plc: SC 23 Jan 2013

A predecessor bank had created a trust into which it paid a small proportion of its profits. The parties now disputed the calculation of profits when the Bank declared a loss which allowed for an unrealised gain on the acquisition of HBOS. Accounting standards had changed on the introduction of the EC Regulations, which now required any ‘gain on acquisition’ arising from a bargain purchase be recognised on the profit and loss account as of the acquisition date in line with International Financial Reporting Standards requirements. This converted a loss of over andpound;10 billion, to a profit of andpound;1 billion. The Outer House had dimissed the trustees’ claim, granting a decree of absolvitor, but the Inner House allowed the appeal. The bank now appealed.
Held: The appeal succeeded. It was necessary to construe the deed in the legal and accounting context of the time when they were made, when the deeds clearly anticipated reference only to realised gains. The alteration in accounting methods was wholly without the parties anticipations, and would have been rejected at the time.
This led to a frustration of the deed, which was to be resolved by ignoring the unrealised gain shown in the current accounts.
Though the doctrine of equitable adjustment remains part of Scots law and resort may be made to it in cases where the contract has become impossible of performance or otherwise, a Court cannot equitably adjust a contract on the basis that its performance, while not frustrated, is no longer that originally contemplated.

Lord Hope, Deputy President, Lord Mance, Lord Clarke, Lord Reed, Lord Carnwath
[2013] UKSC 3, UKSC 2012/0042
Bailii, Bailii Summary, SC Summary, SC
Companies Act 1985 230(1)
Scotland
Citing:
CitedPrenn v Simmonds HL 1971
Backgroun Used to Construe Commercial Contract
Commercial contracts are to be construed in the light of all the background information which could reasonably have been expected to have been available to the parties in order to ascertain what would objectively have been understood to be their . .
CitedCharter Reinsurance Co Ltd v Fagan and Others HL 24-May-1996
The re-insurers appealed against a finding that they were liable to make payment under a contract which required them to pay ‘sums actually paid.’ They said that the company having become insolvent, no payment would in fact be made.
Held: The . .
CitedBromarin Ab and Another v IMD Investments Limited CA 29-Jan-1999
Construction of share purchase agreements. . .
CitedCantiere San Rocco Sa v Clyde Shipbuilding and Engineering Co SCS 20-Jul-1922
The pursuers maintained that, in consequence of the contract having become incapable of fulfilment, they were entitled to recover the money paid by them to the defenders in terms of the contract. The defenders contended that rights acquired under . .
CitedShilliday v Smith SCS 2-Apr-1998
The phrase ‘causa data causa non secuta’ is used not to describe a remedy as such, but rather to describe one particular group of situations in which the law may provide a remedy because one party is unjustifiably enriched at the expense of the . .
CitedBank of Credit and Commerce International SA v Ali, Khan and others (No 1); BCCI v Ali HL 1-Mar-2001
Cere Needed Releasing Future Claims
A compromise agreement which appeared to claim to settle all outstanding claims between the employee and employer, did not prevent the employee later claiming for stigma losses where, at the time of the agreement, the circumstances which might lead . .
CitedDebenhams Retail Plc and Another v Sun Alliance and London Assurance Company Ltd CA 20-Jul-2005
The landlord appealed against a decision that VAT was not to be included when calculating a rent based upon the turnover in the premises, when it had been expressed to include purchase taxes.
Held: The appeal succeeded: ‘it would be wrong to . .
At Inner HouseLloyds TSB Foundation for Scotland v Lloyds Banking Group Plc SCS 29-Dec-2011
(Inner House) The bank had created a trust deed providing for a share of realised profits to be paid each year to the pursuer charitable foundation. The bank had acquired another bank leading to a substantial but unrealised gain. Regulations on . .
At Outer HouseLloyds TSB Foundation for Scotland v Lloyds Banking Group Plc SCS 17-Jun-2011
(Outer House) The bank had covenanted to provide a certain proportion of its profits to the pursuer charitable foundation. The bank had acquired another at an accounting loss, but in 2005, a change in accounting standards turned that substantial . .

Lists of cited by and citing cases may be incomplete.

Trusts, Company

Leading Case

Updated: 01 November 2021; Ref: scu.470522

Twinsectra Ltd v Yardley and Others: HL 21 Mar 2002

Solicitors acted in a loan, giving an undertaking as to its application. In breach of that undertaking they released it to the borrower. The appellants appealed a finding of liability as contributors to the breach.
Held: ‘Money in a solicitor’s client account is held on trust. The only question is the terms of that trust.’ A power was sufficiently clear to be enforceable, if it could be seen whether particular circumstances satisfied it. Here that could be seen, and the condition in the undertaking was not void. A trust had been created. To be liable under the principle in Royal Brunei, by dishonest assistance, the person sought to be made liable must himself be party to the dishonesty. The requirement was beyond that, consciousness that one was transgressing ordinary standards of honest behaviour, as well as the fact of the breach of trust. The lack of enquiry by the solicitor fell short of having shut his eyes to the truth. It may have been wrong or misguided, but he believed the money was for the free use by the client. Dishonesty in the context of assistance in a breach of trust has both objective and subjective elements. A person cannot set his own standards of honesty, but in order for him to be held liable on the grounds of dishonesty it is necessary to show not only that his conduct fell short of ordinary standards of honesty, but that he was aware of that fact. Appeal allowed in part.
Lord Millett: ‘Liability for ‘knowing receipt’ is receipt-based. It does not depend on fault. The cause of action is restitutionary and is available only where the defendant received or applied the money in breach of trust for his own use and benefit . . .’
Lord Hutton: ‘ . . . dishonesty requires knowledge by the defendant that what he was doing would be regarded as dishonest by honest people although he should not escape a finding of dishonesty because he sets his own standards of dishonesty and does not regard as dishonest what he knows would offend the normally accepted standards of honest conduct.’

Lord Slynn of Hadley, Lord Steyn, Lord Hoffmann, Lord Hutton and Lord Millett
Times 25-Mar-2002, Gazette 10-May-2002, [2002] UKHL 12, [2002] 2 AC 164, [2002] 38 EGCS 204, [2002] PNLR 30, [2002] 2 All ER 377, [2002] NPC 47, [2002] 2 WLR 802, [2002] WTLR 423
House of Lords, Bailii
England and Wales
Citing:
CitedMcPhail 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 . .
CitedRoyal Brunei Airlines SDN BHD v Tan PC 24-May-1995
(Brunei) The defendants were a one-man company, BLT, and the one man, Mr Tan. A dishonest third party to a breach of trust was liable to make good a resulting loss even though he had received no trust property. The test of knowledge was an objective . .
Appeal fromTwinsectra Limited v Yardley, and similar CA 30-Apr-1998
. .
CitedGromax Plasticulture Ltd v Don and Low Nonwovens Ltd PatC 12-Jun-1998
The court set out tests of bad faith for applications for the registration of trade marks: ‘I shall not attempt to define bad faith in this context. Plainly it includes dishonesty and, as I would hold, includes also some dealings which fall short of . .
CitedRegina v Ghosh CACD 5-Apr-1982
The defendant surgeon was said to have made false claims for payment for operations, and was charged under the 1968 Act. He claimed to have been entitled to the sums claimed, and denied that he had been dishonest. The court considered the meaning of . .

Cited by:
CitedNIRU Battery Manufacturing Company and Another v Milestone Trading Ltd and others ComC 8-May-2003
There was a contract for the sale of lead ingots. The sale was supported by letters of credit but inaccurate certificates were issued to release payment. The parties sought now to amend the contributions in the light of the Royal Brompton Hospital . .
CitedThe Secretary of State for Trade and Industry v Michael Hamilton Amiss, Jonathan Andrew Chapman, Roger Rex Ingles ChD 20-Mar-2003
The Secretary sought disqualification orders, under section 8 which left the court with a discretion as to whether an order should be made.
Held: It was not necessary to establish dishonesty to a Twinsectra standard to justify an order. The . .
CitedNiru Battery Manufacturing Company, Bank Sepah Iran v Milestone Trading Limited CA 23-Oct-2003
The claimant had contracted to purchase lead from some of the defendants. There were delays in payment but when funds were made available they should have been repaid. An incorrect bill of lading was presented. The bill certified that the goods had . .
CitedCrown Dilmun, Dilmun Investments Limited v Nicholas Sutton, Fulham River Projects Limited ChD 23-Jan-2004
There was a contract for the sale of Craven Cottage football stadium, conditional upon the grant of non-onerous planning permissions. It was claimed that the contract had been obtained by the defendant employee in breach of his fiduciary duties to . .
CitedIS Innovative Software Ltd v Howes CA 19-Feb-2004
It was alleged that the defendant had backdated contracts of employment to a time when he had been employed by the claimant, and had induced staff to leave. The company appealed dismissal of its claim.
Held: The advantage of the court . .
CitedSir Graham Stanley Latimer and others – Trustees for the Crown Forestry Rental Trust v The Commissioner of Inland Revenue PC 25-Feb-2004
PC (New Zealand) The Crown created a charitable trust for certain Maori people. Upon exhaustion of the purpose, the fund was to revert to the Crown. The trustees appealed a finding of liability to income tax.
CitedHarrison v Teton Valley Trading Co; Harrison’s Trade Mark Application (CHINAWHITE) CA 27-Jul-2004
The applicant had been an employee of the objector at their nightclub ‘Chinawhite’ and whose principal attraction was a cocktail of the same name. Employees signed a confidentiality agreement as to the recipe. Having left the employment, the . .
CitedUltraframe (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 . .
CitedBarlow Clowes International Ltd and Another v Eurotrust International Ltd and others PC 10-Oct-2005
(Court of Appeal of the Isle of Man) Defendants appealed a finding of dishonest assistance in the activities of Barlow Clowes.
Held: The judge had been able to reach the conclusions on the basis of the evidence. The appeal of the deemster . .
CitedAbouRahmah and Another v Abacha and others QBD 28-Nov-2005
Claims were made as to an alleged fraud by some of the respondents. . .
CitedConstantinides v The Law Society Admn 7-Apr-2006
The appplicant appealed against a decision to strike him from the roll of solicitors for dishonesty which he denied. He had drawn documents under which his client invested substantial sums abroad, and lost. She had claimed in negligence. The . .
CitedSingleton v The Law Society QBD 11-Nov-2005
The claimant appealed his striking off the roll of solicitors. He said he had not been dishonest. He was said to have made entries to show receipts into client account to support payments out when such receipts had not occurred. He denied this was . .
AppliedBaxendale-Walker v The Law Society Admn 30-Mar-2006
The solicitor appealed being struck off. He had given a character reference in circumstances where he did not have justification for the assessment.
Held: ‘The appellant knew that Barclays Bank trusted him to provide a truthful reference. . .
CitedCharter Plc and Another v City Index Ltd and others ChD 12-Oct-2006
An employee of the claimant had fraudulently spent several million pounds of the claimant’s money on personal bets through the defendant company. The claimant said that the defendants knew the origin of the funds and were liable to repay them. . .
CitedJules Rimet Cup Ltd v The Football Association Ltd. ChD 18-Oct-2007
The parties disputed on preliminary issues the ownership of the rights in the trade mark ‘World Cup Willie’. The claimant had set out to register the mark, and the defendant gave notice of its intention to oppose. The claimant now alleged threat and . .
CitedIrwin Mitchell v Revenue and Customs Prosecutions Office and Allad CACD 30-Jul-2008
The solicitors had been paid funds on account of their fees in defending the client. By the time a freezing order was made under the 2002 Act in respect of his assets, the firm’s fees exceeded the amount held. The court was asked what was to happen . .
CitedJeremy D Stone Consultants Ltd and Another v National Westminster Bank Plc and Another ChD 11-Feb-2013
The claimants asserted an equitable claim against funds held by the defendant bank in the name of a company owned by another defendant who they said defrauded them through a Ponzi investment scheme.
Held: The claim failed. On the evidence, the . .
CitedWyatt v Vince SC 11-Mar-2015
Long delayed ancillary relief application proceeds
The parties had divorced some 22 years before, but no ancillary relief order had been made to satisfy the application outlined in the petition. The parties when together had lived in relative poverty, but H had subsequently become wealthy. W applied . .
CitedIvey v Genting Casinos (UK) Ltd (T/A Crockfords) SC 25-Oct-2017
The claimant gambler sought payment of his winnings. The casino said that he had operated a system called edge-sorting to achieve the winnings, and that this was a form of cheating so as to excuse their payment. The system exploited tiny variances . .

Lists of cited by and citing cases may be incomplete.

Legal Professions, Trusts, Torts – Other

Leading Case

Updated: 01 November 2021; Ref: scu.168070

Barclays Bank Trust Company Ltd v Revenue and Customs: CA 14 Jul 2011

Parents had each left a share of their estate to the bank on trusts for their disabled son. The revenue said that the gifts were caught by and taxable by virtue of sections 5, 49 and 89 of the 1984 Act, the residuary estates of both parents forming part of the son’s estate because section 89 required the son to be treated as if he had had an interest in possession in each of them.
Held: The detailed structure of the clauses created an interest for the son, and income accumulated could only be applied for the son and not, by virtue of the limitations and the circumstances, in favour of his children. Also, ‘the time at which the conditions for the application of section 89 must be satisfied is ‘when the property was transferred into the settlement’. At that time the trusts on which the property was held did ‘secure’ that not less than half the settled property applied during his life was applied for the benefit of Edwin. The fact that at some later time Edwin disposed of his interest so that thereafter property could not be applied for his benefit is nothing to the point.’ As such the bank’s appeal failed.

Sir Andrew Morritt Ch,
[2011] EWCA Civ 810, [2011] NPC 75, [2011] WTLR 1489, [2011] BTC 375
Bailii
Inheritance Tax Act 1984 89, Trustee Act 1925 32
England and Wales
Citing:
CitedRe Halstead’s Will Trusts ChD 1937
The term ‘benefit’ in a trust instrument is to be construed widely. To exercise a power of advancement by settling on an object of the power and his wife and children, property in which he has otherwise only a life interest was an ‘application’. . .
CitedIn Re Pilkington’s Will Trusts; Pilkington v Inland Revenue Commissioners HL 8-Oct-1962
The trustees proposed establishing a new trust in respect of the share of an estate to which an infant beneficiary had a contingent entitlement. A portion of the trust fund would be allocated to the new trust.
Held: This was a lawful exercise . .

Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Trusts

Updated: 01 November 2021; Ref: scu.441817

Futter and Another v Futter and Others: ChD 11 Mar 2010

Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives from trust law, not the law of mistake. The principle does not exist to relieve advisors from the consequences of their mistakes. It exists to ensure that beneficiaries do not suffer by an invalid exercise of a power by trustees (no distinction being drawn between the objects in whose favour the power is exercised and those entitled in default). The relevant failure is a failure to take into account a particular factor and its impact upon the true effect of the exercise of the power. The actions here fell within the rule. In relation to private family trusts the consequence of invoking ‘the Rule in Hastings Bass’ is to make the deed or transaction void. The rigours of this analysis may be mitigated in particular cases.
Norris J pointed out: ‘This is another application by trustees who wish to assert that they have acted in an un-trustee-like fashion and so have failed properly to exercise a power vested in them. The trustees wish to take advantage of this failure to perform their duties in order to enable the beneficiaries to avoid paying the tax liability consequent upon the trustees’ decision. Put like that (and I am conscious that that is not the only way in which the situation may be described) the possibility is raised that the development of the rule may have been diverted from its true course.’

Norris J
[2010] EWHC 449 (Ch), [2010] Pens LR 145, [2010] STC 982, [2010] STI 1442, [2010] BTC 455, [2010] WTLR 609
Bailii
Taxation of Capital Gains Act 1992 87(2)
England and Wales
Citing:
CitedBurrell and Sharman v Burrell, Shore, Tyrrell, etc ChD 23-Feb-2005
burrell_burrellChD05
Shares were appointed by trustees in the mistaken belief that they attracted business property relief from Inheritance tax. They sought to set aside the appointment.
Held: Mann J applied the rule in Stannard v Fisons Pensions Trust and . .
CitedGreen v Cobham ChD 19-Jan-2000
cw The Trustees had overlooked the fact that a Will Trust and two sub-settlements together constituted a single composite settlement for the purposes of CGT with a single body of trustees. As a result of his . .
CitedPitt and Another v Holt and Another ChD 18-Jan-2010
The claimant sought to unravel a settlement she had made as receiver for her late husband, saying that it had been made without consideration of its Inheritance Tax implications. The Revenue said that there was no operative mistake so as to allow . .
CitedBreadner v Granville-Grossman ChD 2000
‘it cannot be right, whenever trustees do something which they later regret and think they ought not to have done, they can say they never did it in the first place’
It was not correct to suggest that whenever trustees do something which they . .
CitedSmithson and others v Hamilton CA 23-Jul-2008
. .
CitedSieff v Fox ChD 23-Jun-2005
The advisers to trustees wrongly advised the trustees about the tax consequences of exercising a power of appointment in a certain way. As a result a large unforeseen Capital Gains Tax liability arose. The trustees sought to set aside the . .
CitedColchester Estates (Cardiff) v Carlton Industries plc ChD 30-Mar-1984
If a decision of a court has been reached after full consideration of an earlier decision which went the other way, it should not be open to review on a third occasion when the same point arose for decision.
Nourse J said: ‘There must come a . .
CitedRe 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 . .
CitedPitt and Another v Holt and Others ChD 18-Jan-2010
The deceased had created a settlement in favour of his wife. He suffered serious injury and placed the damages in trust, but in a form which created an unnecessary liability to Inheritance Tax on his death. The wife’s mental health act receiver now . .
CitedStannard v Fisons Pension Trust Limited CA 1991
Fisons had sold their fertiliser division to Norsk Hydro. Acting on advice of actuaries and thinking that the fund was in deficit, the trustees made a transfer to a new fund to provide for pensions of transferring employees in accordance with a . .
CitedGibbon v Mitchell ChD 1990
G executed a deed surrendering his life interest in a trust fund in order to vest the property in his two children: the deed did not have that effect because of two errors (one of which was ignoring the fact that his life interest was subject to . .
CitedAnker-Petersen v Christensen ChD 2002
Where a mistake is made as to the effect of an appointment under a trust it may be possible to invoke the court’s jurisdiction to rescind the appointment. Davis J considered Millett J’s distinction between ‘effect’ and ‘consequences’: ‘An example in . .
CitedAbacus Trust Company (Isle of Man) Ltd and Another v National Society for the Prevention of Cruelty to Children ChD 17-Jul-2001
abacus_nspccChD01
The claimants were beneficiaries, trustee and protector of a trust fund. In order to mitigate Capital Gains Tax liability they sought advice, and, following that advice, entered into a deed of gift in favour of the respondent charity. The deed . .
CitedIn Re Marsden’s Trust 4-Jun-1859
Where the donee exercises a power of appointment in favour of one of several objects of the power, with a view to the benefit of a stranger, the appointment is fraudulent and void, even although the appointee is ignorant of the fraud, and the motive . .
CitedCloutte v Storey 1911
A trust power was exercised in favour of one of the objects, but under a private arrangement whereby he passed the benefit back to his parents, who had made the appointment.
Held: Farwell LJ spoke of a compromise of proceedings sanctioned by a . .
CitedOgden and Another v Trustees of the RHS Griffiths 2003 Settlement and others; In Re Griffiths deceased ChD 25-Jan-2008
A life-time transfer which had been made under a mistake as to the donor’s chances of surviving long enough for the transfer to be exempt from Inheritance Tax was set aside. Unbeknown to the donor, he had lung cancer at the time.
Held: Lewison . .
CitedVatcher v Pault PC 17-Dec-2014
(Jersey) A fraudulent exercise of a trust power is constituted if it is exercised for a purpose or with an intention beyond the scope of the power. It was said that ‘it is not enough that an appointor or some person not an object of power may . .
CitedSmithson and others v Hamilton ChD 10-Dec-2007
It is settled law that ‘the Hastings-Bass principle’ was not restricted to cases where the trustees failed to achieve the direct legal effect which they intended. The usual situation is that the action which the trustees have taken achieves exactly . .
CitedTurner v Turner ChD 1983
The trustees for many years signed every document placed before them by their solicitors (including appointments) without understanding that they had any discretion in the exercise.
Held: What might first appear to have been a decision of . .
CitedThe Duke Of Portland And Others v Lady Mary E Topham And Others HL 6-Apr-1864
A power, to be validly executed, must be executed without any indirect object. The donee of the power must give the property which is the subject of it, as property, to the person to whom he affects to give it.
A created a power to appoint a . .
CitedMettoy Pension Trustees v Evans ChD 1990
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . .
CitedAMP (UK) Plc and Another v Barker and Others ChD 8-Dec-2000
The claimants were interested under a pension scheme. Alterations had been made, which the said had been in error, and they sought rectification to remove a link between early leaver benefits and incapacity benefits. The defendant trustees agreed . .

Cited by:
At First InstanceFutter 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.

Trusts, Capital Gains Tax

Updated: 01 November 2021; Ref: scu.402600

Lloyds TSB Bank Plc v Markandan and Uddin (A Firm): ChD 14 Oct 2010

The claimant sought damages saying that the defendant firm of solicitors had failed to deal properly with a conveyance having paid across the mortgage funds to a non-existent firm of solicitors and without obtaining the appropriate documents at all. The defendant was not suspected of being involved in the fraud. The court was asked whether the claimant could recover under section 61 of the 1925 Act, having paid the funds across to be held in express trust until the defendant could complete, and if so, whether the defendant could raise a defence of contributory negligence.
Held: The issue as to whether the Defendant made sufficient checks as to the identity of the solicitors purportedly acting on behalf of the vendors of the Property was not one of breach of trust. The express trusts created by the form of certificate of title did not extend to all the matters on it. However, the advance money had been paid away without receiving the proper documentation for completion and without an undertaking for them. The defendant was in breach of trust when so acting.
Any relief from liability under section 61 required the defendant to have acted both honestly and reasonably. His honesty was not challenged, but it was said that he had acted unreasonably. The defendant said that the claimant should itself have been alerted to the dangers by the circumstances of the transaction. The court found the defendant to have acted unreasonably, irrespective of any failing by the claimant. There was nothing in the case of Vesta v Butcher to allow the extension of the defence of contributory negligence to cases involving breach of trust.
The loss suffered was the entire loan amount.

Roger Wyand QC J
[2010] EWHC 2517 (Ch), [2011] PNLR 6
Bailii
Trustee Act 1925 61
England and Wales
Citing:
CitedEdward Wong Finance Co Ltd v Johnson Stokes and Master PC 1984
(Hong Kong) The defendant’s solicitors completed a mortgage in ‘Hong Kong style’ rather than in the old fashioned English style. Completion in Hong Kong style provides for money to be paid over against an undertaking by the solicitors for the . .
CitedTarget 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 . .
CitedForsikringsaktieselskapt Vesta v Butcher HL 1988
A contract of insurance and a facultative reinsurance, under which part of the original risk was reinsured, contained warranties in identical terms.
Held: The warranty in the reinsurance policy, which was governed by English law, should be . .
CitedPatel and Another v Daybells (a Firm) CA 27-Jul-2001
Land was purchased and a resale negotiated before it was registered. An undertaking was accepted that the seller’s solicitor would discharge all charges. The purchasers sought to avoid completion by saying the Act required them to be registered . .
CitedMothew (T/a Stapley and Co) v Bristol and West Building Society CA 24-Jul-1996
The solicitor, acting in a land purchase transaction for his lay client and the plaintiff, had unwittingly misled the claimant by telling the claimant that the purchasers were providing the balance of the purchase price themselves without recourse . .

Cited by:
CitedCook v The Mortgage Business Plc CA 24-Jan-2012
The land owners sought relief from possession orders made under mortgages given in equity release schemes: ‘If the purchaser raises all or part of the purchase price on mortgage, and then defaults, the issue arises whether the mortgagee’s right to . .
Appeal fromLloyds TSB Bank Plc v Markandan and Uddin (A Firm) CA 9-Feb-2012
The defendant solicitors appealed against judgment. They and the lenders had been subject to a mortgage fraud. Fraudsters had set up a false branch office of a firm of solicitors, and secured payment of a mortgage advance. . .

Lists of cited by and citing cases may be incomplete.

Legal Professions, Trusts, Professional Negligence

Updated: 01 November 2021; Ref: scu.425358

Smithson and others v Hamilton: ChD 10 Dec 2007

It is settled law that ‘the Hastings-Bass principle’ was not restricted to cases where the trustees failed to achieve the direct legal effect which they intended. The usual situation is that the action which the trustees have taken achieves exactly the legal effect intended but has unwelcome consequences (usually tax consequences) which the trustees failed to foresee.

Sir Andrew Park
[2007] EWHC 2900 (Ch), [2008] 1 WLR 1453
Bailii
England and Wales
Cited by:
Appeal fromSmithson and others v Hamilton CA 23-Jul-2008
. .
CitedFutter and Another v Futter and Others ChD 11-Mar-2010
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .

Lists of cited by and citing cases may be incomplete.

Company, Trusts

Updated: 01 November 2021; Ref: scu.261961

Burns v Burns: CA 1984

Long Relationship Not Enough for Interest in Home

The parties lived together for 17 years but were not married. The woman took the man’s name, but beyond taking on usual household duties, she made no direct financial contribution to the house. She brought up their two children over 17 years. Latterly she went to work, but her earnings went on normal household expenses.
Held: She had acquired no interest in the family home. There was no express agreement to qualify the fact that the house was bought in the man’s sole name. Some substantial contribution was required before an intention that she was to take a share could be imputed.
Fox LJ said: ‘The house with which we are concerned in this case was purchased in the name of the defendant and the freehold was conveyed to him absolutely. That was in 1963. If, therefore, the plaintiff is to establish she has a beneficial interest in the property she must establish that the defendant holds the legal estate upon trust to give effect to that interest. That follows from Gissing v. Gissing [1971] A.C. 886. For present purposes I think that such a trust could only arise (a) by express declaration or agreement or (b) by way of a resulting trust where the claimant has directly provided part of the purchase price or (c) from the common intention of the parties.
In the present case (a) and (b) can be ruled out. There was no express trust of an interest in the property for the benefit of the plaintiff; and there was no express agreement to create such an interest. And the plaintiff made no direct contribution to the purchase price. Her case, therefore, must depend upon showing a common intention that she should have a beneficial interest in the property. Whether the trust which would arise in such circumstances is described as implied, constructive or resulting does not greatly matter. If the intention is inferred from the fact that some indirect contribution is made to the purchase price, the term ‘resulting trust’ is probably not inappropriate. Be that as it may, the basis of such a claim, in any case, is that it would be inequitable for the holder of the legal estate to deny the claimant’s right to a beneficial interest.’
May LJ said: ‘For my part, I agree that the principles which the courts must apply are those laid down in Pettitt v Pettitt [1970] AC 777 and Gissing v Gissing [1971] AC 886. Those two cases concerned disputes between couples who had in fact been married, where the claims were made under section 17 of the Married Women’s Property Act 1882 and not under the matrimonial legislation. But it is quite clear that the House of Lords decided that section 17 is merely a procedural section giving the courts no overriding general discretion in such circumstances and that the principles to be applied are ill general the same whether the couple have been married or not.’ and
‘In the light of all these cases, I think that the approach which the courts should follow, be the couples married or unmarried is now clear. What is difficult, however, is to apply it to the facts and circumstances of any given case. Where the family home is taken in the joint names, then unless the facts are very unusual I think that both the man and the woman are entitled to a share in the beneficial interest. Where the house is bought outright and not on mortgage, then the extent of their respective shares will depend upon a more or less precise arithmetical calculation of the extent of their contributions to the purchase price. Where, on the other hand, and as is more usual nowadays, the house is bought with the aid of a mortgage, then the court has to assess each of the parties’ respective contributions in a broad sense; nevertheless the court is only entitled. to look at the financial contributions or their real or substantial equivalent, to the acquisition of the house; that the husband may spend his weekends redecorating or laying a patio is neither here nor there, nor is the fact the woman has spent so much of her time looking after the house, doing the cooking and bringing up the family.
The inquiry becomes even more difficult when the home is taken in only one of the two names. For present purposes I will assume that it is the man, although the same approach will be followed if it is taken in the name of the woman. Where a matrimonial or family home is bought in the man’s name alone on mortgage by the mechanism of deposit and installments, then if the woman pays or contributes to the initial deposit this points to a common intention that she should have some beneficial interest in the house. If thereafter she makes direct contributions to the instalments, then the case is a fortiori and her rightful share is likely to be greater. If the woman, having contributed to the deposit, but although not making direct contributions to the instalments, nevertheless uses her own money for other joint household expenses so as to enable the man the more easily to pay the mortgage instalments out of his money, then her position is the same. Where a woman has made no contribution to the initial deposit, but makes regular and substantial contributions to the mortgage instalments, it may still be reasonable to infer a common intention that she should share the beneficial interest from the outset or a fresh agreement after the original conveyance that she should acquire such a share. It is only when there is no evidence upon which a court can reasonably draw an inference about the extent of the share of the contributing woman that it should fall back on the maximum ‘equality is equity.’ Finally, when the house is taken in the man’s name alone, if the woman makes no ‘real’ or ‘substantial’ financial contribution towards either the purchase price, deposit or mortgage instalments by the means of which the family home was acquired, then she is not entitled to any share in the beneficial interest in that home even though over a very substantial number of years she may have worked just as hard as the man in maintaining the family in the sense of keeping the house, giving birth to and looking after and helping to bring up the children of the union.
On the facts of the instance case, which Waller L.J. has outlined, I think that it is clear that the plaintiff falls into the last of the categories to which I have just referred and accordingly I too would dismiss this appeal. When one compares this ultimate result with what it would have been had she been married to the defendant, and taken appropriate steps under the Matrimonial Causes Act 1973, I think that she can justifiably say that fate has not been kind to her. In my opinion, however, the remedy for any inequity she may have sustained is a matter for Parliament and not for this court’.

Waller, Fox, May LJJ
[1984] 1 All ER 244, [1983] EWCA Civ 4, [1984] Ch 317, [1984] 2 WLR 582
Bailii
Law of Property Act 1925, Trustees Act 1925
England and Wales
Citing:
AppliedPettitt 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 . .
AppliedRichards v Dove ChD 1974
. .
AppliedFalconer v Falconer CA 1970
. .
AppliedHazell v Hazell CA 1972
The parties disputed the shares they should take in a family home.
Held: Shares should normally be ascertained at the time of separation – not at the date when they acquired the house. If a wife contributes directly or indirectly, in money or . .
AppliedGissing v Gissing HL 7-Jul-1970
Evidence Needed to Share Benefical Inerests
The family home had been purchased during the marriage in the name of the husband only. The wife asserted that she had a beneficial interest in it.
Held: The principles apply to any case where a beneficial interest in land is claimed by a . .

Cited by:
CitedGow v Grant SC 24-May-2012
The parties had lived together as an unmarried couple, but separated. Mrs Gow applied under the 2006 Act for provision. Mr Grant’s appeal succeeded at the Inner House, and Mrs Gow now herself appealed.
Held: The appeal succeeded. The Act did . .

Lists of cited by and citing cases may be incomplete.

Family, Trusts

Leading Case

Updated: 01 November 2021; Ref: scu.188801

Abacus Trust Company (Isle of Man) Colyb Limited v Barr, Barr, and Barr: ChD 6 Feb 2003

The court considered the Rule in Hastings-Bass, and specifically (1) whether the trustee’s decision is open to challenge when the failure to take a consideration into account is not attributable to a breach of fiduciary duty on the part of the trustee; and (2) whether, where a decision is open to challenge on the ground that the trustee failed to take a factor into account, the decision is void or voidable. The trustees had exercised their power of appointment, but on the basis of mistaken information.
Held: The appointment was voidable and not void. As to the rule in Hastings Bass: ‘A successful challenge made to a decision under the rule should in principle result in the decision being held voidable and not void.’
Lightman J identified three important differences between the duties owed by trustees and by those making a public law decision, as the discretionary nature of relief on judicial review, a different approach to nullity, and strict time limits.

The Hon Mr Justice Lightman
[2003] EWHC 114 (Ch), Gazette 03-Apr-2003, [2003] WTLR 149, [2003] 2 WLR 1362, [2003] 1 All ER 763, [2003] Ch 409
Bailii
England and Wales
Citing:
CitedRe 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 . .
CitedAnker-Petersen v Christensen ChD 2002
Where a mistake is made as to the effect of an appointment under a trust it may be possible to invoke the court’s jurisdiction to rescind the appointment. Davis J considered Millett J’s distinction between ‘effect’ and ‘consequences’: ‘An example in . .
CitedEdge and others v Pensions Ombudsman and Another CA 29-Jul-1999
The Pensions Ombudsman was wrong to set aside the decision of pensions trustees where that decision was properly made within the scope of a discretion given to the Trustees. He should not carry out an investigation where no particular benefit could . .
CitedMettoy Pension Trustees v Evans ChD 1990
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . .
CitedGibbon v Mitchell ChD 1990
G executed a deed surrendering his life interest in a trust fund in order to vest the property in his two children: the deed did not have that effect because of two errors (one of which was ignoring the fact that his life interest was subject to . .
CitedTurner v Turner ChD 1983
The trustees for many years signed every document placed before them by their solicitors (including appointments) without understanding that they had any discretion in the exercise.
Held: What might first appear to have been a decision of . .
CitedSaunders (Executrix of the Will of Rose Maude Gallie, Deceased) v Anglia Building Society HL 9-Nov-1970
The Appellant had signed an assignment of her lease in favour of her nephew. She said she thought the effect of it would protect her right to continue to live in the house. She now appealed rejection of her plea of non est factum.
Held: The . .
CitedStannard v Fisons Pension Trust Limited CA 1991
Fisons had sold their fertiliser division to Norsk Hydro. Acting on advice of actuaries and thinking that the fund was in deficit, the trustees made a transfer to a new fund to provide for pensions of transferring employees in accordance with a . .

Cited by:
CitedKohli v Lit and Others ChD 13-Nov-2009
The claimant asserted that the other shareholders had acted in a manner unfairly prejudicial to her within the company.
Held: The claimant was allowed to bring in without prejudice correspondence to contradict evidence by the defendant which . .
AppliedHunter v Senate Support Services Ltd and others ChD 2005
The court set aside a forfeiture of shares for non-payment of a call. The decisions of the directors to forfeit the shares and to transfer the forfeited shares to the group holding company were flawed, though not improperly motivated, because the . .
CitedPitt and Another v Holt and Others ChD 18-Jan-2010
The deceased had created a settlement in favour of his wife. He suffered serious injury and placed the damages in trust, but in a form which created an unnecessary liability to Inheritance Tax on his death. The wife’s mental health act receiver now . .
CitedPitt and Another v Holt and Another ChD 18-Jan-2010
The claimant sought to unravel a settlement she had made as receiver for her late husband, saying that it had been made without consideration of its Inheritance Tax implications. The Revenue said that there was no operative mistake so as to allow . .
CitedFutter 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 . .
CitedFutter 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.

Trusts, Equity

Leading Case

Updated: 01 November 2021; Ref: scu.179013

In re Dellow’s Will Trusts; Lloyd’s Bank v Institute of Cancer Research: ChD 1964

Husband and wife, having made mutual wills each leaving their estate to the other, had been found dead in their home from coal gas poisoning. The court asked what was required to displace the presumption that the husband, the older of the two, had died first.
Held: The court described the standards of proof when serious allegations are made in civil courts: ‘It seems to me that in civil cases it is not so much that a different standard of proof is required in different circumstances varying according to the gravity of the issue, but, as Morris LJ says, the gravity of the issue becomes part of the circumstances which the court has to take into consideration in deciding whether or not the burden of proof has been discharged. The more serious the allegation the more cogent is the evidence required to overcome the unlikelihood of what is alleged and thus to prove it. This is perhaps a somewhat academic distinction and the practical result is stated by Denning LJ: ‘The more serious the allegation the higher the degree of probability that is required: but it need not, in a civil case, reach the very high standard required by the criminal law.’ In this case the issue is whether or not the wife feloniously killed the husband. There can hardly be a graver issue than that, and its gravity weighs very heavily against establishing that such a killing took place, even for the purpose of deciding a civil issue.’ (Ungoed-Thomas J)

Ungoed-Thomas J
[1964] 1 WLR 451
England and Wales
Cited by:
CitedIn re H and R (Minors) (Child Sexual Abuse: Standard of Proof) HL 14-Dec-1995
Evidence allowed – Care Application after Abuse
Children had made allegations of serious sexual abuse against their step-father. He was acquitted at trial, but the local authority went ahead with care proceedings. The parents appealed against a finding that a likely risk to the children had still . .
CitedAN, Regina (on the Application of) v Mental Health Review Tribunal (Northern Region) and others CA 21-Dec-2005
The appellant was detained under section 37 of the 1983 Act as a mental patient with a restriction under section 41. He sought his release.
Held: The standard of proof in such applications remained the balance of probabilities, but that . .
CitedKhera v Secretary of State for The Home Department; Khawaja v Secretary of State for The Home Department HL 10-Feb-1983
The appellant Khera’s father had obtained leave to settle in the UK. The appellant obtained leave to join him, but did not disclose that he had married. After his entry his wife in turn sought to join him. The appellant was detained as an illegal . .
CitedIn re D; Doherty, Re (Northern Ireland); Life Sentence Review Commissioners v D HL 11-Jun-2008
The Sentence Review Commissioners had decided not to order the release of the prisoner, who was serving a life sentence. He had been released on licence from a life sentence and then committed further serious sexual offences against under-age girls . .
Citedre G (A Child) CA 8-Apr-2014
McFarlane LJ said: ‘In most child care cases a choice will fall to be made between two or more options. The judicial exercise should not be a linear process whereby each option, other than the most draconian, is looked at in isolation and then . .

Lists of cited by and citing cases may be incomplete.

Evidence, Wills and Probate

Leading Case

Updated: 01 November 2021; Ref: scu.196915

Burnden Holdings (UK) Ltd v Fielding and Another: CA 17 Jun 2016

The company, now in liquidation sought to claim for the alledged misapplication by former directors of its funds in 2007. It now appealed against a summary rejection of its claim as time barred.
Held: The appeal succeeded. Section 21(1)(b) provides that no period of limitation prescribed by the Act applies to an action by a beneficiary under a trust ‘to recover from the trustee trust property or the proceeds of trust property in the possession of the trustee, or previously received by the trustee and converted to his use.’ That was to be taken not to be restricted to the personal receiot by the defendant but should include sums paid into a third party company to achieve a similar effect.

Arden , Tomlinson , David Richards LJJ
[2016] EWCA Civ 557, [2016] WLR(D) 313
Bailii, WLRD
Limitation Act 1980 21, Companies Act 1985 263
England and Wales
Citing:
Appeal fromBurnden Holdings (UK) Ltd v Fielding and Another ChD 5-Sep-2014
The company sought to recover from the defendants, two former directors.
Held: The claim was statute barred.
Hodge QC dealt with the claimant’s reliance on section 32: ‘That leaves the claimant’s reliance upon section 32. There the . .
ApprovedIn re Pantone 485 Ltd ChD 29-Nov-2001
The respondent Bain was a director of a number of connected companies, including Smarturgent and Pantone, both of which he indirectly controlled. The liquidator of both companies brought proceedings against Bain on a number of claims for breach of . .
CitedCave v Robinson Jarvis and Rolf (a Firm) HL 25-Apr-2002
An action for negligence against a solicitor was defended by saying that the claim was out of time. The claimant responded that the solicitor had not told him of the circumstances which would lead to the claim, and that deliberate concealment should . .
CitedJetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .
CitedJD Wetherspoon Plc v Van De Berg and Co Ltd and others ChD 4-May-2007
Lewison J summarised the approach to be taken by courts hearing an application by defendants to strike out claims: ‘Both the application to strike out and the application for summary judgment are summary applications. The application for summary . .

Lists of cited by and citing cases may be incomplete.

Company, Limitation, Trusts

Updated: 01 November 2021; Ref: scu.565725

Barnes v Addy: 1874

A stranger to a trust can be liable in equity for assisting in a breach of trust, even though he received no trust property.
Lord Selborne said: ‘Now in this case we have to deal with certain persons who are trustees, and with certain other persons who are not trustees. That is a distinction to be borne in mind throughout the case. Those who create a trust clothe the trustee with a legal power and control over the trust property, imposing on him a corresponding responsibility. That responsibility may no doubt be extended in equity to others who are not properly trustees, if they are found either making themselves trustees de son tort, or actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust. But, on the other hand, strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a Court of Equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees. Those are the principles, as it seems to me, which we must bear in mind in dealing with the facts of this case.’

Lord Selborne
[1874] 9 ChA 244
England and Wales
Cited by:
CitedBrown and Another v Bennett and Others CA 1-Dec-1998
Morritt LJ discussed the ‘corporate opportunitycases’: ‘Those are cases in which a beneficial commercial opportunity comes the company’s way and forms knowledge owned or possessed by the directors as agents for the company. Those directors then seek . .
CitedDubai Aluminium Company Limited v Salaam and Others HL 5-Dec-2002
Partners Liable for Dishonest Act of Solicitor
A solicitor had been alleged to have acted dishonestly, having assisted in a fraudulent breach of trust by drafting certain documents. Contributions to the damages were sought from his partners.
Held: The acts complained of were so close to . .
CitedRoyal Brunei Airlines SDN BHD v Tan PC 24-May-1995
(Brunei) The defendants were a one-man company, BLT, and the one man, Mr Tan. A dishonest third party to a breach of trust was liable to make good a resulting loss even though he had received no trust property. The test of knowledge was an objective . .
CitedWilliams v Central Bank of Nigeria SC 19-Feb-2014
Bank not liable for fraud of customer
The appellant sought to make the bank liable for a fraud committed by the Bank’s customer, the appellant saying that the Bank knew or ought to have known of the fraud. The court was asked whether a party liable only as a dishonest assistant was a . .

Lists of cited by and citing cases may be incomplete.

Trusts, Equity

Leading Case

Updated: 01 November 2021; Ref: scu.189985

Pitt and Another v Holt and Others: ChD 18 Jan 2010

The deceased had created a settlement in favour of his wife. He suffered serious injury and placed the damages in trust, but in a form which created an unnecessary liability to Inheritance Tax on his death. The wife’s mental health act receiver now sought the unravelling of the trust based on either Hastings Bass or mistake.
Held: The rule in Hastings-Bass could be used by others than only trustees. Robert Englehart QC said: ‘A mere failure by someone to take a material consideration into account in the conduct of his own affairs will not justify setting aside for mistake. It was said in argument before me that the law allows you to be as foolish as you like with your own property. On the other hand, there certainly is jurisdiction, irrespective of any trust or fiduciary element, to set aside a voluntary transaction where there has been an operative mistake. Nevertheless, for the rule in Hastings-Bass to apply there is no need to identify a mistake as such, as opposed to a failure to take a relevant consideration into account.’ though there was no real mistake, only a failure to address the effect of the arrangement fully, the rule in Hastings-Bass could be applied and the trust varied.

Robert Englehart, QC
[2010] EWHC 236 (Ch)
Bailii, Times
Mental Health Act 1983
England and Wales
Citing:
CitedSieff v Fox ChD 23-Jun-2005
The advisers to trustees wrongly advised the trustees about the tax consequences of exercising a power of appointment in a certain way. As a result a large unforeseen Capital Gains Tax liability arose. The trustees sought to set aside the . .
CitedRe 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 . .
CitedMettoy Pension Trustees v Evans ChD 1990
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . .
CitedByng v London Life Association CA 1990
The venue selected for a meeting of the members of a company was too small to accommodate all the members who attended, and so the chairman adjourned the meeting to an alternative venue.
Held: The decision by the chairman was set aside on the . .
CitedGibbon v Mitchell ChD 1990
G executed a deed surrendering his life interest in a trust fund in order to vest the property in his two children: the deed did not have that effect because of two errors (one of which was ignoring the fact that his life interest was subject to . .
CitedHunter v Senate Support Services Ltd and others ChD 2005
The court set aside a forfeiture of shares for non-payment of a call. The decisions of the directors to forfeit the shares and to transfer the forfeited shares to the group holding company were flawed, though not improperly motivated, because the . .
CitedEdge and others v Pensions Ombudsman and Another CA 29-Jul-1999
The Pensions Ombudsman was wrong to set aside the decision of pensions trustees where that decision was properly made within the scope of a discretion given to the Trustees. He should not carry out an investigation where no particular benefit could . .
CitedEquitable Life Assurance Society v Hyman HL 20-Jul-2000
The directors of the Society had calculated the final bonuses to be allocated to policyholders in a manner which was found to be contrary to the terms of the policy. The language of the article conferring the power to declare such bonuses contained . .
CitedAnker-Petersen v Christensen ChD 2002
Where a mistake is made as to the effect of an appointment under a trust it may be possible to invoke the court’s jurisdiction to rescind the appointment. Davis J considered Millett J’s distinction between ‘effect’ and ‘consequences’: ‘An example in . .
CitedOgden and Another v Trustees of the RHS Griffiths 2003 Settlement and others; In Re Griffiths deceased ChD 25-Jan-2008
A life-time transfer which had been made under a mistake as to the donor’s chances of surviving long enough for the transfer to be exempt from Inheritance Tax was set aside. Unbeknown to the donor, he had lung cancer at the time.
Held: Lewison . .
CitedWolff v Wolff ChD 6-Sep-2004
The court considered its ability to redraw a document where its legal effect was misunderstood. . .
CitedAbacus Trust Company (Isle of Man) Colyb Limited v Barr, Barr, and Barr ChD 6-Feb-2003
The court considered the Rule in Hastings-Bass, and specifically (1) whether the trustee’s decision is open to challenge when the failure to take a consideration into account is not attributable to a breach of fiduciary duty on the part of the . .
CitedOgilvie v Littleboy CA 1897
Lindley LJ discussed the variation of a gift for mistake: ‘Gifts cannot be revoked, nor can deeds be set aside, simply because the donors wish they had not made them and would like to have back the property given. Where there is no fraud, no undue . .
CitedBurrell and Sharman v Burrell, Shore, Tyrrell, etc ChD 23-Feb-2005
burrell_burrellChD05
Shares were appointed by trustees in the mistaken belief that they attracted business property relief from Inheritance tax. They sought to set aside the appointment.
Held: Mann J applied the rule in Stannard v Fisons Pensions Trust and . .

Cited by:
CitedFutter and Another v Futter and Others ChD 11-Mar-2010
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .

Lists of cited by and citing cases may be incomplete.

Trusts, Wills and Probate, Inheritance Tax

Leading Case

Updated: 01 November 2021; Ref: scu.396742