Category: Trusts

HM Revenue and Customs v Trustees of the Peter Clay Discretionary Trust: CA 19 Dec 2008

The court was asked whether the Commissioners had been correct to disallow in a closure notice, the attribution in part to income in the year 2000-01 of expenses incurred by the trustees of a United Kingdom resident discretionary trust. The expenses claimed were (i) trustees’ fees, (ii) investment management fees, (iii) bank charges, (iv) custodian fees and (v) professional fees for accountancy and administration.
Held: It had not been open to the Special Commissioners to approach their task on the basis that: ‘in the light of the general principle of fairness ‘expenses incurred for the benefit of the whole estate’ should not be understood widely as meaning anything that is for the benefit of both the income and capital beneficiaries should be charged to capital and should not be attributed.’ The appeal was allowed to a limited extent, but ‘the onus of showing that some of the fees of the non-executive trustees related to advice for the exclusive benefit of income beneficiaries rests on the trustees.’

Arden LJ, Lloyd LJ, Sir John Chadwick
[2008] EWCA Civ 1441, Times 02-Jan-2009, [2009] WTLR 247, [2009] 2 All ER 683, [2009] STC 469, (2008-09) 11 ITELR 672, [2009] STI 79, [2009] 2 WLR 1353, [2009] Ch 296, [2009] BTC 50
Bailii
Taxes Management Act 1970 56A, Income and Corporation Taxes Act 1988 686
England and Wales
Citing:
At SCIT – Peter Clay Discretionary Trust v Revenue and Customs SCIT 27-Feb-2007
SCIT DISCRETIONARY TRUST – whether single fee for expenses of management that relate partly to income and partly to capital can be attributed partly to each for s 686(2AA) Taxes Act 1988 – yes – attribution . .
Appeal from – HM Revenue and Customs v The Trustees of the Peter Clay Discretionary Trust ChD 15-Nov-2007
. .
Cited – In re Bennett, Jones v Bennett CA 1896
The deceased’s estate held mainly an unsecured interest-bearing loan to a firm of which he had been a partner. On his retirement the loan was repayable on demand if conditions for the continued solvency of the firm were not met. The court was asked . .
Cited – Carver v Duncan HL 1985
The court considered whether expenses, premiums paid in respect of life assurance policies, and the fees of professional investment managers, were properly to be set against the capital or income of a trust.
Held: Lord Templeman said: . .

Lists of cited by and citing cases may be incomplete.

Income Tax, Trusts

Updated: 31 October 2021; Ref: scu.278979

Oxley 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 as at the time of the sale, not the time of the purchase. It was artificial to attribute to them some notional agreement fixed at the date of the purchase.
Chadwick LJ said: ‘in many such cases, the answer will be provided by evidence of what they said and did at the time of the acquisition. But, in a case where there is no evidence of any discussion between them as to the amount of the share which each was to have-and even in a case where the evidence is that there was no discussion on that point-the question still requires an answer. It must now be accepted that (at least in this court and below) the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property. And in that context, ‘the whole course of dealing between them in relation to the property’ includes the arrangements which they make from time to time in order to meet the outgoings (for example, mortgage contributions, council tax and utilities, repairs, insurance and housekeeping) which have to be met if they are to live in the property as their home.’

Chadwick LJ, Mance LJ, Scott Baker LJ
[2004] EWCA Civ 546, Times 14-Jul-2004, [2004] 2 FLR 669, [2005] Fam 211
Bailii
Trusts of Land and Appointment of Trustees Act 1996 14, Law of Property Act 1925 53(1)
England and Wales
Citing:
Cited – Springette 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 . .
Cited – Midland 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 . .
Cited – Walker 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 . .
Cited – Turton 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 . .
Cited – Grant 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 . .
Cited – Eves 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 . .
Cited – 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 . .
Approved – McFarlane 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 . .
Cited – Stokes 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 . .
Cited – Huntingford v Hobbs CA 1-Mar-1992
The parties lived together in a property transferred to the woman after her divorce. That house was sold and the defendant contributed the capital. There was a joint mortgage, but the plaintiff alone had an income from which to make payments. The . .
Cited – Evans v Hayward CA 1-Jun-1992
The property had been bought in joint names at a discounted price under a ‘right to buy’ conferred by the Housing Act 1985; but where the discount was substantially attributable to the plaintiff’s former occupation as local authority tenant. The . .
Cited – Saville v Goodall CA 1993
The court considered the requirements to establish that property purchased in one name but for an unmarried couple were to be held on trust: ‘[Counsel] referred us to a recent decision of this court in Springette v Defoe [1992] 2 FLR 388, which . .
Cited – Marsh v von Sternberg QBD 1986
In a constructive trust case, a discount from the open market price given to a sitting tenant by the landlord selling a flat was treated as a relevant contribution by the sitting tenant. . .
Cited – Drake 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 . .
Cited – Yaxley 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 . .
Cited – Carlton v Goodman CA 29-Apr-2002
The defendant claimed an interest in a house. The deceased had been a sitting tenant, and wanted to purchase his house. He could not obtain finance alone, and she joined with him, becoming liable under the mortgage. She did not live in the house . .

Cited by:
Cited – Kilcarne 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 . .
Cited – 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 . .
Cited – Strover and Another v Strover and Another ChD 10-May-2005
Insurance policies had been taken out by the partners in a firm. The surviving family of one and the remaining partners contested ownership. The policy was held in part for the benefit of the family. The premiums had been paid from partnership . .
Cited – Stack 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 . .
Cited – Van 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 . .
Cited – Stack v Dowden HL 25-Apr-2007
The parties had cohabited for a long time, in a home bought by Ms Dowden. After the breakdown of the relationship, Mr Stack claimed an equal interest in the second family home, which they had bought in joint names. The House was asked whether, when . .
Cited – James 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 . .
Cited – Fowler 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 . .
Cited – 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 . .
Cited – Jones 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 . .

Lists of cited by and citing cases may be incomplete.

Trusts, Land

Leading Case

Updated: 31 October 2021; Ref: scu.196770

Yaxley 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 of the first defendant, the second defendant’s son. The Plaintiff nevertheless fulfilled his promise. The parties fell out, and the first Defendant then refused to grant to the Plaintiff any interest in the property. The judge found that the oral agreement with the second Defendant had been adopted by his son. The Plaintiff was entitled to an interest by a proprietary estoppel, and he ordered the first Defendant to grant him a 99 year lease of the ground floor.
Held: The defendant’s appeal failed. The oral agreement was enforceable having created a trust, even though no paper had been signed to evidence the contract as required by law. A constructive trust might be created where previously part performance or proprietary estoppel might have created one. The doctrine of part performance has not survived the 1989 Act, but the doctrine of estoppel may still operate to modify (and sometimes perhaps even counteract) the effect of section 2 of the 1989 Act. The 1989 Act represents ‘a radical change in the law’. ‘In the area of a joint enterprise for the acquisition of land (which may be, but is not necessarily, the matrimonial home) the two concepts [estoppel and constructive trust] coincide’; and ‘the species of constructive trust based on ‘common intention’ is closely akin to, if not indistinguishable from, proprietary estoppel’.

Robert Walker LJ, Beldam LJ, Clarke LJ
Gazette 14-Jul-1999, Times 08-Jul-1999, [1999] 1 WLR 1217, [2000] Ch 162, [1999] EGCS 92, [1999] EWCA Civ 3006, [2000] 1 All ER 711
Bailii
Law of Property (Miscellaneous Provisions) Act 1989 2
England and Wales
Citing:
Cited – Crabb 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 . .
Cited – Firstpost Homes Ltd v Johnson and Others CA 14-Aug-1995
The parties disputed whether a contract had been made. The proposed contract was contained in a letter and a plan but only the plan was signed by both parties.
Held: The requirements of Section 2 had not been satisfied because it was the . .
Cited – Steadman v Steadman HL 1976
A mere payment of a sum of money might amount to an act of part performance, as might the act of a purchaser instructing solicitors to prepare and submit a draft conveyance or transfer, so as to leave asituation capable of enforcement in equity. . .
Cited – McCausland and Another v Duncan Lawrie Ltd and Another CA 18-Jun-1996
The parties entered into a written contract for the sale of land which, in error, provided for completion on a Sunday. The parties varied the date to the Friday but did not execute a new contract which would comply with section 2(1) of the 1989 Act. . .
Cited – Lester v Foxcroft 1701
Entry into possession under agreement for lease and expenditure of money – Part performance . .
Cited – Britan v Rossiter 1879
A contract which fails to meet the standards required under the Act is not not void, but is merely unenforceable. . .
Cited – Maddison 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 . .
Cited – Kok Hoong v Leong Cheong Kweng Mines Ltd PC 1964
A clear public policy underlying a statute (for instance, the need to protect vulnerable persons dealing with moneylenders or landlords) prevents an estoppel arising: ‘To ask whether the law that confronts the estoppel can be seen to represent a . .
Cited – Westdeutsche Landesbank Girozentrale v Islington London Borough Council; Kleinwort Benson Ltd v Sandwell Borough Council ChD 23-Feb-1993
A bank, having made payment under an void interest rate swap agreement to a local authority, was entitled to recover the payments made under the equitable doctrine of restitution. It would be wrong to allow the local authorities to enjoy an unjust . .
Cited – United Bank of Kuwait Plc v Sahib and Others CA 2-Feb-1996
The bank appealed against a decision that the simple deposit of deeds with a bank did not take effect as an equitable charge.
Held: Depositing deeds with a bank is not sufficient to create a charge over them. The old law as to the creation of . .
Cited – Godden v Merthyr Tydfil Housing Association CA 15-Jan-1997
The Plaintiff was a building contractor; the Defendant a housing association engaged in developing suitable sites for residential accommodation for letting to tenants. Before the contract the parties had successfully completed what was been called . .
Cited – Bankers Trust Company v Namdar and Namdar CA 14-Feb-1997
The bank sought repayment of its loan and possession of the defendants’ property. The second defendant said that the charge had only her forged signature.
Held: Non-compliance with section 2 of the 1989 Act does not make a bargain illegal, and . .
Cited – King v Jackson (T/a Jackson Flower Company) CA 16-Jul-1997
The defendant appealed an award of pounds 11,000 damages for unlawful eviction of his tenant. The tenant had found herself unable to pay the rent and had given notice to quit. She was then told to leave immediately. The judge awarded statutory . .
Cited – Plimmer v Mayor, Councillors and Citizens of the City of Wellington PC 1884
(New Zealand) Mr Plimmer had occupied land under a revocable licence from the Corporation’s predecessor-in-title and at their request had made extensive improvements to it. He sought compensation when the land was to be vested in the defendant. The . .
Cited – Gregory v Mighell 1811
. .
Cited – Take Harvest Ltd v Liu and Another PC 9-Mar-1993
(Hong Kong) An oral agreement to surrender a lease of less than three years might not defeat a rent arrears claim under an estoppel.
An unenforceable agreement can be used as a defence in an action brought by another party only if raising that . .
Cited – 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 . .
Cited – Grant 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 . .
Cited – 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 . .
Cited – Lloyds Bank Plc v Carrick and Another CA 17-Apr-1996
Mrs Carrick was a widow who orally agreed with her brother in law, a builder, to sell her house and pay him the proceeds, for which he would provide her with a new house. She did so and moved into the new house, which remained in the . .
Cited – Connecticut Fire Insurance Co v Kavanagh PC 1892
An appeal court must scrutinise most carefully an argument or point not taken at the trial and presented for the first time on appeal to ensure that injustice is not caused. ‘When a question of law is raised for the first time in a court of last . .
Cited – Hodgson v Marks ChD 1970
The plaintiff, an elderly widow, transferred her house into the name of her lodger, but remained in occupation of the house, on exactly the same basis as before, until the lodger sold the house and the purchaser had mortgaged it to a building . .
Cited – Black-Clawson International Ltd v Papierwerke Waldhof Aschaffenburg AG HL 5-Mar-1975
Statute’s Mischief May be Inspected
The House considered limitations upon them in reading statements made in the Houses of Parliament when construing a statute.
Held: It is rare that a statute can be properly interpreted without knowing the legislative object. The courts may . .
Cited – Pascoe 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 . .
Leave to appeal – Yaxley v Gotts and Gotts CA 20-Mar-1998
The defendants were granted leave to appeal out of time. . .

Cited by:
Cited – X v Y, Z sub nom In re E (Enduring power of attorney) ChD 18-Feb-2000
The application was an appeal against an order registering an enduring power of attorney. The appeal from Master Lush was by way of rehearing. The donor had executed two powers. The second was invalid, and the donees of the first power sought to . .
Cited – Parker v Parker ChD 24-Jul-2003
Lord Macclesfield claimed a right to occupy a castle. The owners claimed that he had only a mere tenancy at will. The exact rooms in the castle which had been occupied had varied over time.
Held: The applicant was entitled to reasonable . .
Cited – Evans 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 . .
Cited – Hyett 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 . .
Cited – Nweze and Another v Nwoko CA 29-Mar-2004
The parties had settled their dispute in an oral compromise agreement under which it was agreed that land would be sold at the best price reasonably obtainable. One now argued this was unenforceable as an agreement for the disposal of land requiring . .
Cited – Oxley 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 – 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 . .
Cited – Ravenocean 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 . .
Cited – Van 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 . .
Cited – Scottish and Newcastle Plc v Lancashire Mortgage Corporation Ltd CA 5-Jul-2007
The parties each had a charge over a property, and now disputed which had priority. The brewery appealed an order for rectification of the registers to reverse priority on the basis of an estoppel. The charge in their favour had been registered . .
Cited – Powell 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. . .
Cited – Eyestorm Ltd v Hoptonacre Homes Ltd CA 19-Dec-2007
The appellant had agreed to take leases on a development of the defendant, hoping to sell the apartments on at a profit. After difficulties, the appellant refused to complete, and the defendant forfeited the deposits.
Held: Eyestorm’s appeal . .
Cited – Yeoman’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 . .
Cited – Anderson Antiques (UK) Ltd v Anderson Wharf (Hull) Ltd and Another ChD 23-May-2007
anderson_andersonChD2008
The claimants owned land against which they said, the defendant had wrongfully registered notices. They sought removal of the notices, damages, and an injunction to prevent further notices being registered. The first defendant asserted an oral . .
Cited – Brightlingsea Haven Ltd and Another v Morris and others QBD 30-Oct-2008
The caravan park operated under planning consents requiring the caravans to be occupied only during certain months. The defendants had bought their mobile homes from the claimants to occupy full time, and said that the claimants knew of this. The . .
Cited – Sharma and Another v Simposh Ltd CA 23-Nov-2011
The parties created an oral (and therefore void) contract for a development, the claimants paid a deposit, expressed to be non-refundable, and the defendant builders completed the building work. The buyers backed out. The developer now appealed . .
Cited – Scott 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 . .
Cited – Legg 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.

Land, Trusts, Estoppel

Leading Case

Updated: 31 October 2021; Ref: scu.90659

Carl 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 separate claim against the defendant’s solicitors, Herbert Smith, contending that they were liable to account to the claimant for the fees paid by the defendant from the trust assets. The solicitors applied to strike out the claims. At first instance Pennycuick J decided that the proceedings were contrary to public policy in that they obstructed the due administration of justice.
Held: The appeal failed. t the claims did not give rise to a reasonably arguable claim that the solicitors were constructive trustees under the relevant legal tests. The Court of Appeal did not need to address the public policy argument, though it expressed some sympathy for the judge’s decision.
The court approved the statement in Snell’s Principles of Equity that: ‘A constructive trust is a trust which is imposed by equity in order to satisfy the demands of justice and good conscience without reference to any express or presumed intentions of the parties.’
Danckwerts LJ said that ‘knowledge of a claim being made against the solicitor’s client by the other party is not sufficient to amount to notice of a trust or notice of misapplication of the moneys’ and ‘[Counsel for the plaintiff’s] contention was that the defendant solicitors knew where the moneys that they received came from and knew that the source was trust funds. In my view this contention fails at the outset. What the defendant solicitors knew was that the moneys came from the West German foundation and they knew of the allegations contained in the proceedings brought against that foundation by the plaintiffs in which they were instructed to act as solicitors for the West German foundation. They knew that claims were being made against the West German foundation that all their property and assets belonged to the plaintiffs or were held on trust for them. But claims are not the same thing as facts. [The plaintiffs’ counsel] contended that for the purposes of the present issue all the allegations contained in the statements of claim in both the actions must be taken as true. That will not do. What we have to deal with is the state of the defendant solicitors’ knowledge (actual or imputed) at the date when they received payments of their costs and disbursements. At that date they cannot have had more than knowledge of the claims above mentioned. It was not possible for them to know whether they were well-founded or not. The claims depended upon most complicated facts still to be proved or disproved, and very difficult questions of German and English law. It is not a case where the West German foundation were holding property upon any express trust. They were denying the existence of any trust or any right of property in the assets claimed by the plaintiffs. Why should the solicitors of the West German foundation assume anything against their clients?’
Sachs LJ agreed: ‘Firstly, and to my mind decisively, whatever be the nature of the knowledge or notice required, cognisance of what has been termed ‘a doubtful equity’ is not enough. This phrase is to be found in Lewin on Trusts, 16th ed. (1964), p. 658, and Underhill’s Law Relating to Trusts and Trustees 11th ed (1959) p. 606: it appears first to have been used by Lord Grant M.R. in Parker v. Brooke (1804) 9 Ves. 583, 588. The rule, as I understand it, is that no stranger can become a constructive trustee merely because he is made aware of a disputed claim the validity of which he cannot properly assess. Here it has been rightly conceded that no one can foretell the result of the litigation even if the plaintiffs were to prove all the facts they allege.’ and ‘As to facts alleged in a statement of claim, [counsel for the defendants] was, to my mind, correct in submitting that a defendant’s solicitor is under no duty to the plaintiffs to inquire into their accuracy for the purposes urged by [counsel for the plaintiff], nor, where there is a likelihood of a conflict of evidence between his client’s witnesses and those of the plaintiffs is he under any such duty to assess the result.
Edmund Davies LJ agreeing said: ‘The law being reluctant to make a mere agent a constructive trustee, as Lord Selborne L.C put in in Barnes v. Addy, 9 Ch. App. 244, 251-252, mere notice of a claim asserted by a third party is insufficient to render the agent guilty of a wrongful act in dealing with property derived from his principal in accordance with the latter’s instructions unless the agent knows that the third party’s claim is well-founded and that the principal accordingly had no authority to give such instructions’.
Edmund Davies LJ, Danckwerts LJ, Sachs LJ
[1969] 2 WLR 427
England and Wales
Citing:
Adopted – La Roche v Armstrong KBD 1922
Lush J said: ‘Here the solicitor has received a sum of money from his client for the purpose of his resisting on her behalf a claim by A, who says it is trust money and that the client is under a duty to return it. Under such circumstances I should . .

Cited by:
Cited – 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 . .
Still Good Law – XX and Others v YY and Others ChD 2-Jul-2021
The first defendant applies for an order that the claimants are not entitled to pursue legal action against his lawyers in respect of funds over which the claimants claim a proprietary interest and paid to the first defendant’s lawyers as legal fees . .
Cited – The Serious Fraud Office and Another v Litigation Capital Ltd and Others ComC 18-May-2021
. .
Cited – Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd and Others ChD 30-Jun-2010
Lord Neuberger MR said that Carl Zeiss ‘supports the proposition that notice of a claim is not the same as notice of a right’. . .

Lists of cited by and citing cases may be incomplete.
Updated: 30 October 2021; Ref: scu.223731

XX and Others v YY and Others: ChD 2 Jul 2021

The first defendant applies for an order that the claimants are not entitled to pursue legal action against his lawyers in respect of funds over which the claimants claim a proprietary interest and paid to the first defendant’s lawyers as legal fees in defence of the claim.
Held: Where a claimant brings a proprietary claim against a defendant and the defendant uses the claimed assets to pay a solicitor to defend the claim, the solicitor will be a purchaser for value. (When referring below to solicitors I should also be taken to include counsel also instructed in the defence of the claims.) It is possible that the claimant will nonetheless seek to maintain a claim against the solicitors in respect of the fees as a knowing recipient of the claimed assets.
Held: The order was refused. A similar application for an increase in allowed living expenses was also refused.
‘When deciding whether to allow the payment of legal expenses the court has to balance the risks of irremediable injustice in conditions of uncertainty about the outcome of the proprietary claim. The court does not know whether the claimant or defendant will end up owning the assets. It seeks to weigh the risk of the claimant’s property being (wrongly) spent by the defendant against that of the defendant being (wrongly) enjoined from using its property to defend itself. The court does the best it can to balance the risks of irremediable harm. But the order now sought is of an entirely different character: it would have the practical effect of extinguishing the claimants’ claims. The claimants would be prevented from asserting a cause of action, whatever the circumstances. The court would not be deciding how to hold the ring pending the determination of the parties’ rights; it would be making a proleptic determination of the claimants’ substantive rights.’
Mr Justice Miles
[2021] EWHC 1833 (Ch)
Bailii
Senior Courts Act 1981 37(1)
England and Wales
Citing:
Cited – La Roche v Armstrong KBD 1922
Lush J said: ‘Here the solicitor has received a sum of money from his client for the purpose of his resisting on her behalf a claim by A, who says it is trust money and that the client is under a duty to return it. Under such circumstances I should . .
Still Good Law – Carl 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 . .
Cited – The Serious Fraud Office and Another v Litigation Capital Ltd and Others ComC 18-May-2021
. .
Cited – Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd and Others ChD 30-Jun-2010
Lord Neuberger MR said that Carl Zeiss ‘supports the proposition that notice of a claim is not the same as notice of a right’. . .
Cited – Bank of Credit and Commerce International (Overseas) Ltd and Another v Akindele CA 22-Jun-2000
The test of whether a person who received funds held them on constructive trust, was not whether he himself was dishonest, but rather whether he had knowledge of circumstances which made it unconscionable to hold on to the money received. In respect . .
Cited – Sundt Wrigley Co Ltd v Wrigley CA 23-Jun-1993
In an asset freezing order, where the defendant seeks leave to discharge liabilities, the nature of the plaintiff’s interest makes a difference. The court distinguished between cases where the plaintiff has a proprietary claim in the frozen assets . .
Cited – Ostrich Farming Corportation Limited v Ketchell CA 10-Dec-1997
The court considered the principles to be applied on injunction applications within proprietary claims.
Held: Millett LJ explained the difference between a proprietary injunction and a Mareva freezing injunction: ‘The courts have always . .
Cited – Marino v FM Capital Partners Ltd CA 2016
The test for proprietary injunctions the courts impose a stricter test on defendants wishing to use assets falling within the scope of the injunction to pay legal fees. . .
Cited – Tidewater Marine International Inc v Phoenixtide Offshore Nigeria Ltd and Others ComC 6-Oct-2015
Interpretation of world wide asset freezing order – access to funds paid as costs to solicitor – requirement to advise of source of funds. . .
Cited – A J Bekhor and Co Ltd v Bilton CA 6-Feb-1981
The plaintiff had applied for disclosure of assets under the Rules of the Supreme Court in support of a Mareva freezing order. The rules were held not to provide any such power: disclosure of assets could not be obtained as part of discovery as the . .
Cited – Maclaine Watson and Co Ltd v International Tin Council (No. 2) CA 1988
When the ITC did not satisfy an arbitral award made against it, the judgment creditor sought to discover where its assets could be found. Application to the Court was made under RSC 0.48 of the Supreme Court Act 1981 and under the Court’s inherent . .
Cited – United Mizrahi Bank Ltd v Doherty and Others ChD 15-Dec-1997
The defendant had obtained leave to use disputed funds to meet its legal costs. It sought an order (in the nature of a declaration) that such use of the funds would not make them constructive trustees. Mr Burton QC held that where leave is given to . .
Cited – Smith v Peters ChD 24-Jun-1875
Where an agreement has been entered into for the sale of a house at a fixed price, and of the fixtures and furniture therein at a valuation by a person named by both parties, and he undertakes the valuation, but if refused permission by the vendor . .
Cited – Bayer v Winter CA 1986
Fox LJ said: ‘Bearing in mind we are exercising a jurisdiction which is statutory, and which is expressed in terms of considerable width, it seems to me that the court should not shrink if it is of the opinion that an injunction is necessary for the . .
Cited – House of Spring Gardens v Waite CA 1991
The principle of abuse of process is capable of applying where the relevant earlier proceedings have taken place before a foreign court (Ireland). In this case the defendants argued that the judgment obtained in Ireland had been obtained . .
Cited – Independent Trustee Services Ltd v GP Noble Trustees Ltd and Others ChD 26-Jan-2009
Application to vary a freezing order made on a without notice application.
Held: Lewison J set out the proper approach at para. 6 by setting out the four questions which should be addressed: ‘(1) does the claimant have an arguable proprietary . .

Lists of cited by and citing cases may be incomplete.
Updated: 30 October 2021; Ref: scu.668750

Marino v FM Capital Partners Ltd: CA 2016

The test for proprietary injunctions the courts impose a stricter test on defendants wishing to use assets falling within the scope of the injunction to pay legal fees.
[2016] EWCA Civ 1301
England and Wales
Citing:
Cited – Independent Trustee Services Ltd v GP Noble Trustees Ltd and Others ChD 26-Jan-2009
Application to vary a freezing order made on a without notice application.
Held: Lewison J set out the proper approach at para. 6 by setting out the four questions which should be addressed: ‘(1) does the claimant have an arguable proprietary . .

Cited by:
See Also – FM Capital Partners Ltd v Marino and Others ComC 1-Nov-2018
consequentials hearing . .
See Also – FM Capital Partners Ltd v Marino and Others ComC 28-Mar-2019
Post judgment assessment of damages. . .
See Also – Marino v FM Capital Partners Ltd CA 26-Feb-2020
. .
Cited – XX and Others v YY and Others ChD 2-Jul-2021
The first defendant applies for an order that the claimants are not entitled to pursue legal action against his lawyers in respect of funds over which the claimants claim a proprietary interest and paid to the first defendant’s lawyers as legal fees . .
Cited – FM Capital Partners Ltd v Marino and Others ComC 11-Jul-2018
Claims for conspiracy to injure . .
See Also – FM Capital Partners Ltd v Marino and Others ComC 9-Oct-2018
Proceedings to enforce court judgment . .
See Also – FM Capital Partners Ltd v Marino and Others ComC 31-Oct-2018
. .

Lists of cited by and citing cases may be incomplete.
Updated: 30 October 2021; Ref: scu.668763

La Roche v Armstrong: KBD 1922

Lush J said: ‘Here the solicitor has received a sum of money from his client for the purpose of his resisting on her behalf a claim by A, who says it is trust money and that the client is under a duty to return it. Under such circumstances I should be very loath to say that the solicitor, who cannot know the real truth of the matter, inasmuch as he hears one story from his client and another from A, is bound to hold the money, not for his client, but for A whose claim is not yet established.’
Lush J
[1922] 1 KB 485
England and Wales
Cited by:
Adopted – Carl 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 . .
Cited – XX and Others v YY and Others ChD 2-Jul-2021
The first defendant applies for an order that the claimants are not entitled to pursue legal action against his lawyers in respect of funds over which the claimants claim a proprietary interest and paid to the first defendant’s lawyers as legal fees . .

Lists of cited by and citing cases may be incomplete.
Updated: 30 October 2021; Ref: scu.668762

Kliers v Kliers: FD 7 Apr 2020

Husband’s claim for a financial remedy, heard together with a wife’s claim for an order for sale of the former family home to conclude TOLATA proceedings brought by her in the Chancery Division of the High Court.
[2020] EWHC 1026 (Fam)
Bailii
England and Wales

Updated: 27 October 2021; Ref: scu.655231

Spread Trustee Company Ltd v Hutcheson and Others: PC 15 Jun 2011

(Guernsey)
Lady Hale, Lord Mance, Lord Kerr, Lord Clarke, Sir Robin Auld
[2011] UKPC 13, [2012] 2 AC 194, 14 ITELR 37, [2012] 1 All ER 251, [2012] 2 WLR 1360, [2012] WTLR 317, [2012] PNLR 1
Bailii
England and Wales
Cited by:
Cited – Hayes v Willoughby SC 20-Mar-2013
The claimant and appellant had been employer and employee who had fallen out, with a settlement in 2005. The appellant then began an unpleasant and obsessive personal vendetta against Mr Hayes, complaining to public bodies with allegations of tax . .

Lists of cited by and citing cases may be incomplete.
Updated: 26 October 2021; Ref: scu.440734

The Attorney-General, At The Relation Of Richard Whitworth, v The Haberdashers’ Company: 30 May 1852

The attorney-general possesses the entire dominion over every information instituted in his name, whether it be filed ex-officio, or at the instance of a relator. It is irregular for the solicitors of a relating to proceed in a charity information after the death of the relator.
The administration of a charity by a court of equity or not to be continued after a scheme and final decree.
[1852] EngR 636, (1852) 15 Beav 397, (1852) 51 ER 591
Commonlii
England and Wales

Updated: 23 October 2021; Ref: scu.295759

Parris 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 joint venture, and that there was a common intention constructive trust.
Held: The appeal was dimissed.
Moore-Bick LJ, Rimer LJ
[2008] EWCA Civ 1147, [2009] BPIR 96, [2008] NPC 111, [2008] 43 EG 194, [2009] 1 P and CR 9
Bailii
England and Wales
Citing:
Cited – 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 . .
Cited – Eves 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 . .
Cited – Midland Bank Plc v Dobson CA 12-Jul-1985
The trial judge had been entitled to find a common intention constructive trust from evidence which he accepted that the parties treated the house as ‘our house’ and had a ‘principle of sharing everything’. Although the judge should approach such . .
Cited – Bancoult, Regina (on the Application of) v Secretary of State for Foreign and Commonwealth Affairs (No 2) HL 22-Oct-2008
The claimants challenged the 2004 Order which prevented their return to their homes on the Chagos Islands. The islanders had been taken off the island to leave it for use as a US airbase. In 2004, the island was no longer needed, and payment had . .
Cited – Crossley v Crossley CA 19-Dec-2007
The parties had entered into a pre-nuptial agreement. On the ancillary relief proceedings on divorce, the husband sought to have the agreement taken into account by the court. It decided that the wife should give reasons why she considered that the . .

Lists of cited by and citing cases may be incomplete.
Updated: 22 October 2021; Ref: scu.277145

The Case of Thetford School and Co: 1572

Land of the value of 351, a year was devised to certain persons, and their heirs, for the maintenance of a preacher, andc. of a master and usher, and of a grammar school, and of certain poor people: special distribution was made amongst them by the testator in the same will ; the sums distributed amounting itn the whole to 35l. Per annum, the then yearly profit of the land. The land became of greater value. Held, the devisees shall not take the surplus, but such surplus shall be expended in rnaintaining greater number of poor.
[1572] EngR 419, (1572-1616) 8 Co Rep 130, (1572) 77 ER 671
Commonlii
England and Wales

Updated: 20 October 2021; Ref: scu.432385

Wilcox 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 event risky in my judgment to attempt to formulate general principles to be applied in carrying out an equitable accounting exercise in any given case, if for no other reason than that, as the judge put it in the instant case, equitable accounting, is ‘fact sensitive’. What can at least be said is that an exercise of equitable accounting is not to be confused with an enquiry as to the extent of the parties’ respective beneficial interests in the property in question. Questions of equitable accounting only arise once the extent of the parties’ beneficial interests has been determined, since the requirement to account (where it exists) is a reflection of and derives from those beneficial interests.
As to the period to which equitable accounting should relate, in a case such as the instant case where the property has been used as a home for both parties but the relationship between the parties has come to an end (what was described in argument as a cohabitation case), the judge was in my judgment right to conclude that that depends upon the intentions of the parties as to how the relevant expenditure should be borne as between them.’
Auld, Jonathan Parker LLJ
[2006] EWCA Civ 1867, [2007] 2 FLR 871
Bailii
England and Wales
Citing:
Cited – 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 . .

Cited by:
Cited – 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. . .

Lists of cited by and citing cases may be incomplete.
Updated: 19 October 2021; Ref: scu.249123

Ex Parte Lacey: 1789

[1789] EngR 811, (1789-1817) 1 Ves Jun Supp 633, (1789) 34 ER 955 (D)
Commonlii
England and Wales
Cited by:
See Also – 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 . .

Lists of cited by and citing cases may be incomplete.
Updated: 17 October 2021; Ref: scu.366442

Attorney General v Haberdashers’ Company: 7 May 1791

Where a surplus to be distributed is an uncertain sum, the Master ought to report the shares in aliquot parts, not in money. The only way of administering a charity is under general direction to trustees; in case of misbehaviour there must be a new information, but the court will not keep the information and execute under it from time to time.
Lord Thurlow LC
[1791] EngR 1334, (1791) 1 Ves Jun 295, (1791) 30 ER 351 (B)
Commonlii
England and Wales
Cited by:
Cited – Lehtimaki 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.
Updated: 16 October 2021; Ref: scu.362849

Inglorest Investments Ltd v Robert Campbell and Another: CA 2 Apr 2004

The appellants appealed an order that property be part of the estate of the deceased. There had been an agreement to assign the reversion of the lease to the claimant. That was not completed, but he later acquired the freehold reversion. No written agreement existed, and the claimant asserted a right based upon part performance.
Held: The claimant sought to assert both that it the freehold was held on trust for it and that there was a contract. He could not plead both. There was neither an enforceable contract for the sale of the freehold to Inglorest nor a resulting trust in its favour.
Lord Justice Mummery Sir Martin Nourse Lord Justice Kay
[2004] EWCA Civ 408
Bailii
England and Wales
Citing:
Cited – Steadman v Steadman HL 1976
A mere payment of a sum of money might amount to an act of part performance, as might the act of a purchaser instructing solicitors to prepare and submit a draft conveyance or transfer, so as to leave asituation capable of enforcement in equity. . .
Cited – Davis v Whitby CA 1974
The court discussed the need for some system of acquisition of right by user.
Lord Denning MR said: ‘the long user as of right should by our law be given a lawful origin if that can be done.’
Stamp LJ said: ‘if long enjoyment of a right . .
Cited – Joyce v Joyce 2-Jan-1978
A claim was made for specific performance of an oral agreement to sell shares.
Held: The plaintiff had failed to show that if he issued another writ for the same relief, it would be not be defeated by the doctrine of laches. Payment of the . .
Cited – Joyce v Barker Bros (Builders) Ltd 1980
The rule that where in a deed there are two contradictory provisions, the earlier provision prevails over the later is ‘an absolutely last resort in construction’. . .

Lists of cited by and citing cases may be incomplete.
Updated: 16 October 2021; Ref: scu.195094

Staden v Jones: CA 13 Jun 2008

Whether the appellant, S, has any right to enforce an arrangement, arrived at solely between her parents following their divorce, that her late father, J, would ensure that her mother’s half-interest in the former matrimonial home, which was to be transferred to J, would be S’s in due course.
Lady Justice Arden
[2008] EWCA Civ 936, [2008] 2 FLR 1931, [2008] Fam Law 1000
Bailii
England and Wales

Updated: 14 October 2021; Ref: scu.278244

In re Courage Group’s Pension Schemes Ryan v Imperial Brewing and Leisure Ltd: ChD 1987

It was possible to amend the provisions of a pension scheme provided the amendments did not conflict with the purposes of the scheme. How was a court to identify such purposes: ‘It is trite law that a power can be exercised only for the purpose for which it is conferred, and not for any extraneous or ulterior purpose. The rule-amending power is given for the purpose of promoting the purposes of the scheme, not altering them. Before I consider this question, I should make some general observations on the approach which I conceive ought to be adopted by the court to the construction of the trust deed and rules of a pension scheme. First, there are no special rules of construction applicable to a pension scheme; nevertheless, its provisions should wherever possible be construed to give reasonable and practical effect to the scheme, bearing in mind that it has to be operated against a constantly changing commercial background. It is important to avoid unduly fettering the power to amend the provisions of the scheme, thereby preventing the parties from making those changes which may be required by the exigencies of commercial life. This is particularly the case where the scheme is intended to be for the benefit not of the employees of a single company, but of a group of companies. The composition of the group may constantly change as companies are disposed of and new companies are acquired; and such changes need to be reflected by modifications to the scheme. Secondly, in the case of an institution of long duration and gradually changing membership like a club or pension scheme, each alteration in the rules must be tested by reference to the situation at the time of the proposed alteration, and not by reference to the original rules at its inception. By changes made gradually over a long period, alterations may be made which would not be acceptable if introduced all at once. Even the main purpose may be changed by degrees.’ and ‘So the main purpose of a club or pension scheme may be enlarged by appropriate amendments to the rules; and once it becomes too late to challenge the amendments, the enlarged purposes become the new basis by reference to which any further proposed changes must be considered.’
Millett J
[1987] 1 WLR 495, [1987] 1 All ER 538
England and Wales
Citing:
Cited – Re South African Supply and Cold Storage Co 1904
The court had to construe the words ‘reconstruction or amalgamation’ in the memorandum of association of a company: ‘The only question I have to decide is whether, in the case of each of these two companies, there has or has not been a winding-up . .
Cited – Brooklands Selangor Holdings Limited v Inland Revenue Commissioners ChD 1970
The court had to consider whether the arrangments before it amounted to a reconstruction for stamp duty purposes: ‘I will deal first with the question whether those transactions amounted to a reconstruction. In ordinary speech the word . .

Cited by:
Followed – Mettoy 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 . .
Cited – Bank of New Zealand v Board of Management of the Bank of New Zealand Officers’ Provident Association PC 14-Jul-2003
PC (New Zealand) The defendant operated a superannuation scheme for and on behalf of the officers of the bank it regulated. The trustees ought to amend the scheme, but it had been set up by statute.
Held: . .
Cited – Mytravel Group Plc, Re Companies Act 1985 ChD 24-Nov-2004
The company sought approval of a proposed reconstruction under the section.
Held: Approval could not be given. To count as a reconstruction two principal qualities were required. The business carried on should be the same or similar, and those . .
Cited – Barnardo’s v Buckinghamshire and Others SC 7-Nov-2018
The Court considered the interpretation of a clause in a pension scheme trust deed which defines the phrase ‘Retail Prices Index’ and which allows the trustees of the pension scheme to adopt a ‘replacement’ of the officially published Retail Prices . .

Lists of cited by and citing cases may be incomplete.
Updated: 10 October 2021; Ref: scu.195608

Wood v Wood: 15 Feb 1844

Where an estate is mortgaged, the equity of redemption, unless there appears a clear intention of making a new settlement, remains subject to the old uses, or to the trusts of the original settlement.
[1844] EngR 260, (1844) 7 Beav 183, (1844) 49 ER 1034
Commonlii
England and Wales

Updated: 08 October 2021; Ref: scu.304852

In 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 consideration and exercise of their powers. An intermediate power break the normal principles because, in relation to a power exercisable by the trustees at their absolute discretion, the only ‘control’ exercisable by the court is the removal of the trustees, and the only ‘due administration’ which can be ‘directed’ is an order requiring the trustees to consider the exercise of the power, and in particular a request from a person within the ambit of the power.
Templeman J said: ‘The Court cannot insist on any particular consideration being given by the trustees to the exercise of the power. If a settlor creates a power exercisable in favour of … his relations … the trustees may for many years hold regular meetings, study the terms of the power and the other provisions of the settlement, examine the accounts and either decide not to exercise the power or to exercise it only in favour, for example, of the children of the settlor.
In my judgment it cannot be said that the trustees in those circumstances have committed a breach of trust and that they ought to have advertised the power or looked beyond the persons who are most likely to be the objects of the bounty of the settlor. The trustees are, of course, at liberty to make further inquiries but cannot be compelled to do so at the behest of any beneficiary. The court cannot judge the adequacy of the consideration given by the trustees to the exercise of the power, and cannot insist on the trustees applying a particular principle or any principle in reaching a decision.
If a person within the ambit of the power is aware of its existence he can require the trustees to consider exercising the power and in particular to consider a request on his part for the power to be exercised in his favour. The trustees must consider this request, and if they decline to do so or can be proved to have omitted to do so, then the aggrieved person may apply to the court which may remove the trustees and appoint others in their place. This, as I understand it, is the only right and only remedy of any object of the power.’
Templeman J
[1974] Ch 17, [1973] 3 WLR 341, [1973] 2 All ER 1203
England and Wales
Cited by:
Cited – 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 . .

Lists of cited by and citing cases may be incomplete.
Updated: 08 October 2021; Ref: scu.180359

In re Gestetner: ChD 1953

The court considered a discretionary distribution power given to trustees.
Held: Harman J said that the trustees were bound ‘to consider at all times during which the trust is to continue whether or no to distribute any and if so what part of the fund, and, if so, to whom they should distribute it.’
If all the beneficiaries being of full capacity are agreed among themselves to equal divisions they may compel the trustees to distribute the whole fund.
Harman J set out a distinction between, on the one hand, a power collateral, or appurtenant, or other powers ‘which do not impose a trust on the conscience of the donee’ and on the other hand a trust imposing a duty to distribute. As to the first, the learned judge said: ‘ I do not think it can be the law that it is necessary ‘to know of all the objects in order to appoint to any one of them’. As to the latter he said: ‘It seems to me there is much to be said for the view that he must be able to review the whole field in order to exercise his judgment properly’ though if the discretion is exercisable in favour of a very wide class the trustees need not ‘survey mankind from China to Peru.’
Harman J
[1953] Ch 672, [1953] 1 All ER 1150
England and Wales
Cited by:
Cited – Inland Revenue v Broadway Cottages CA 26-Jul-1954
Two charitable trusts appealed against decisions disallowing their claim to allowance for relief against income tax of certain incomes.
Held: To be valid, a trust must be one which the Court can control and execute. In this case, the . .

Lists of cited by and citing cases may be incomplete.
Updated: 01 October 2021; Ref: scu.471313

Smithson and others v Hamilton: CA 23 Jul 2008

Mummery LJ
[2008] EWCA Civ 996, [2008] Pens LR 363, [2009] ICR 1
Bailii
England and Wales
Citing:
Appeal from – 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 . .

Cited by:
Cited – 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 . .

Lists of cited by and citing cases may be incomplete.
Updated: 29 September 2021; Ref: scu.273163

Moody v Cox and Hatt: CA 1917

An action was brought for rescission of a contract of sale of a public house and four cottages, with a counterclaim for specific performance. The sellers, Hatt and Cox, were respectively a solicitor and his managing clerk. They were the trustees of a will trust, and were selling as such. In addition Hatt acted as solicitor for the purchaser Moody. The contract price was pounds 8,400. Moody complained that Cox had failed to disclose to him a valuation showing the property to be worth less than the contract price, and that Cox had expressly asserted that the cottages were worth pounds 225 each when he knew that they were worth less. A ‘clean hands’ issue arose from the fact that Moody had paid two sums of pounds 100 to Cox as a sweetener. Since Hatt and Cox were selling as trustees, they had a duty to their beneficiaries to obtain the best price reasonably obtainable. It was argued that this modified the extent of Hatt’s duty, as a solicitor, to Moody as his client.
Held: The argument was decisively rejected. A fiduciary with two principals must take care not to find himself in a position where there is an actual conflict of duty so that he cannot fulfil his obligations to one principal without failing in his obligations to the other.
Lord Cozens-Hardy MR said: ‘A man may have a duty on one side and an interest on another. A solicitor who puts himself in that position takes upon himself a grievous responsibility. A solicitor may have a duty on one side and a duty on the other, namely, a duty to his client as solicitor on the one side and a duty to his beneficiaries on the other; but if he chooses to put himself in that position it does not lie in his mouth to say to the client ‘I have not discharged that which the law says is my duty towards you, my client, because I owe a duty to the beneficiaries on the other side’. The answer is that if a solicitor involves himself in that dilemma it is his own fault. He ought before putting himself in that position to inform the client of his conflicting duties, and either obtain from that client an agreement that he should not perform his full duties of disclosure or say – which would be much better – ‘I cannot accept this business.’ I think it would be the worst thing to say that a solicitor can escape from the obligations, imposed upon him as solicitor, of disclosure if he can prove that it is not a case of duty on one side and of interest on the other, but a case of duty on both sides and therefore impossible to perform.’
Scrutton LJ referred to evidence given by the defendant solicitor, Mr Cox to the effect that he, Cox, knew that the price the client, Moody, was paying for the cottages was a good deal more than the value that had been placed on the cottages for probate purposes and that he, Cox, had not told the client the amount of the probate valuation.
He continued: ‘A man who says that admits in the plainest terms that he is not fulfilling the duty which lies upon him as a solicitor acting for a client. But it is said that he could not disclose that information consistently with his duty to his other clients, the cestius que trust. It may be that a solicitor who tries to act for both parties puts himself in such a position that he must be liable to one or the other, whatever he does. The case has been put of a solicitor acting for vendor and a purchaser who knows of a flaw in the title by reason of his acting for the vendor, and who, if he discloses that flaw in the title which he knows as acting for the vendor, may be liable to an action by his vendor, and who, if he does not disclose the flaw in the title, may be liable to an action by the purchaser for not doing his duty as solicitor for him. It will be his fault for mixing himself up with a transaction in which he has two entirely inconsistent interests, and solicitors who try to act for both vendors and purchasers must appreciate that they run a very serious risk of liability to one or the other owing to the duties and obligations which such curious relation puts upon them.’
Lord Cozens-Hardy MR, Scrutton LJ, Warrington LJ
[1917] 2 Ch 71
England and Wales
Cited by:
Cited – Hilton v Barker Booth and Eastwood HL 3-Feb-2005
The claimant had instructed the defendant solicitors to act for him, where he was to contract with another client of the same solicitor in a land development. The solicitor failed to disclose that the other client had convictions for dishonesty, and . .
Distinguished – Hilton v Barker Booth & Eastwood (a Firm) CA 22-May-2002
The firm of solicitors acted for both parties in a conveyancing transaction, in a situation when they were permitted to do so. The firm had previously acted for one party in a case where he had been convicted of a crime. The other party said the . .
Cited – Burkle Holdings Ltd v Laing TCC 23-Mar-2005
The parties had each instructed the same solicitor, but now disputed the entitlement of the other to see documents held by the solicitor. . .
Cited – Mortgage Express v Abensons Solicitors (A Firm) ChD 20-Apr-2012
The claimant lender sought damages against the defendant solicitors alleging negligence and breach of fiduciary duty by them in acting for them on mortgage advances. The defendants now argued that the allowance of an amendment to add the allegation . .

Lists of cited by and citing cases may be incomplete.
Updated: 25 September 2021; Ref: scu.222537

Richards v Delbridge: CA 16 Apr 1874

The donor purported to make a voluntary gift of leasehold premises and stock in trade by endorsing on the lease ‘This deed and all thereto belonging I give to E from this time forth, and all the stock in trade.’ This document was delivered to E’s mother on his behalf.
Held: No valid declaration of trust was made in favour of E. For a man to make himself a trustee, he must express an intention to become a trustee.
Jessel MR said: ‘The principle is a very simple one. A man may transfer his property, without valuable consideration in two ways: he may either do such acts as amount in law to a conveyance or assignment of the property, and thus completely divest himself of the legal ownership, in which case the person who by those acts acquires the property takes it beneficially, or on trust as the case may be; or the legal owner of the property may, by one or other of the modes recognised as amounting to a valid declaration of trust, constitute himself a trustee, and, without an actual transfer of the legal title, may so deal with the property as to deprive himself of its beneficial ownership, and declare that he will hold it from that time forward on trust for the other person. It is true he need not use the words, ‘I declare myself trustee’, but he must do something which is equivalent to it, and use expressions which have that meaning, for, however anxious the court may be to carry out a man’s intentions, it is not at liberty to construe the words otherwise than according to their proper meaning.’
Sir George Jessel MR
(1874) LR 18 Eq 11, [1874] UKLawRpEq 67
Commonlii
England and Wales
Cited by:
Cited – Pennington 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, . .
Cited – Clarence 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 . .

Lists of cited by and citing cases may be incomplete.
Updated: 17 September 2021; Ref: scu.183416

In re Segelman (dec’d): ChD 1996

The burden of proof which falls on a disappointed beneficiary who seeks rectification of the will, saying that the will did not give effect to a testator’s intentions, is an exacting one.
Chadwick J said: ‘Although the standard of proof required in a claim for rectification made under section 20(1) of the 1982 Act is that the Court should be satisfied on the balance of probabilities, the probability that a will which a testator has executed in circumstances of some formality represents his intentions is usually of such weight that convincing evidence to the contrary is necessary.’ The section required three questions to be examined: first, what were the testator’s intentions with regard to dispositions in respect of which rectification is sought; second, is the will expressed so that it fails to carry out those intentions; and, third, is the will expressed as it is in consequence of either a clerical error or a failure on the part of someone to whom the testator has given instructions in connection with his will, to understand those instructions.
The jurisdiction conferred by section 20 of the 1982 Act in England was limited to cases in which ‘the intended words of the testator’ can be identified with precision: ‘In my view the jurisdiction conferred by section 20(1), through paragraph (a) extends to cases where the relevant provision in the will, by reason of which the will is so expressed that it fails to carry out the testator’s intentions, has been introduced (or as in the present case has not been deleted) in circumstances in which the draftsman has not applied his mind to its significance or effect.’
Chadwick J: ‘The third question in relation to the claim for rectification is whether the failure of cl 11(a) to carry out the testator’s intention is in consequence of a clerical error or a failure to understand his instructions, or has come about for some other reason. I am satisfied that the reason why cl 11(a) with its proviso did not carry out the testator’s intention was that Mr White failed to appreciate on 5 May 1992 that the proviso which he had included in the draft will on his own initiative had become inapt once he had been instructed that the second schedule was to take the form which it did. Once he had a list for inclusion as the second schedule which included the issue of five of the six named beneficiaries Mr White ought to have deleted the proviso to cl 11(a) from the draft will. Failure to do so was a mistake. That mistake did not arise from any failure by Mr White to understand his instructions. Mr White told me that he simply forgot that the proviso was there. The question is whether that mistake can properly be regarded as a clerical error for the purposes of s 20(1).’ and
The distinction between (i) the introduction of words into a will per incuriam without advertence to their significance and effect (described in that passage as ‘a mere clerical error’), (ii) the introduction of words to which the draftsman has applied his mind but in relation to which he has failed to understand his instructions and (iii) the introduction of words to which the draftsman has applied his mind with a proper understanding of his instructions but which (perhaps through failure properly to understand the law) do not achieve the objective which he and the testator intended, was preserved when the law relating to the rectification of wills was altered by s 20(1) of the 1982 Act. The distinction had been recognised by the Law Reform Committee in their nineteenth report. . . Interpretation of Wills; a report which led to, but which was not wholly carried into effect by, the 1982 Act. The alteration of the law made by that Act gives power to the court to order rectification-as distinct from the former power merely to order the omission of words from probate-and extends that power to cases of failure to understand instructions, in addition to mistakes in consequence of clerical error; but there is no reason to think that that which the editor of Mortimer would have recognised as a clerical error in 1927 was not intended to be picked up by of s 20(1)(a)of the 1982 Act.
The mistake with which he was concerned lay in a failure to include in a new will made in 1989 a clause exercising a testamentary power of appointment in favour of her husband which had been conferred on the testatrix under the will of her father. The relevant clause exercising that testamentary power had been included in two earlier wills. The judge was satisfied that the testatrix intended that her 1989 will should include a provision precisely in the terms of the relevant clause in her immediately preceding will. He concluded: ‘It follows that in my judgment [the solicitor’s] error in failing to include in his draft new will a paragraph following the provisions of cl 4 of the 1979 will was an error made in the process of recording the intended words of the testatrix and, in my judgment, constituted a clerical error within s 20(1)(a) [of the 1982 Act].’
In reaching that conclusion the judge had considered the passage in Mortimer to which I have already referred and the judgment of Latey J in Re Morris (decd). He had also considered the Australian case of R v Comr of Patents, ex p Martin (1953) 89 CLR 381 and the nineteenth century English case of Re Sharp’s Patent, ex p Wordsworth (1840) 3 Beav 245, 49 ER 96. It was, I think, observations in those patent cases which led him to the view that: ‘the words ‘clerical error’ used in section 20(1)(a) of the 1982 Act are to be construed as meaning an error made in the process of recording the intended words of the testator in the drafting or transcription of his will.’
If taken out of context there is some danger, perhaps, that the judge’s reference to ‘the intended words of the testator’ might be thought to require a finding that the testator had actually reached the point of putting into words the relevant provision which was to give effect to his intention; or of approving words put to him by another for that purpose. There will, of course, be many such cases. Wordingham v Royal Exchange Trust Co Ltd was itself such a case, in that the judge was able to find that the error lay in not transposing the precise terms of the relevant clause in the testatrix’s earlier will. But, for my part, I do not think that the jurisdiction conferred by s 20(1)(a) of the 1982 Act is limited to cases in which ‘the intended words of the testator’ can be identified with precision.
In my view, the jurisdiction conferred by s 20(1), through para (a), extends to cases where the relevant provision in the will-by reason of which the will is so expressed that it fails to carry out the testator’s intentions-has been introduced (or, as in the present case, has not been deleted) in circumstances in which the draftsman has not applied his mind to its significance or effect. It is to this failure to apply thought that Latey J and the editor of Mortimer attach the phrase ‘per incuriam’. As Nicholls J pointed out in Re Williams (decd), Wiles v Madgin [1985] 1 All ER 964 at 969, [1985] 1 WLR 905 at 911-912 a testator writing out his own will can make a clerical error just as much as someone else writing out a will for him.
It follows that I am satisfied that the mistake which I have identified-namely, the failure by Mr White through inadvertence to delete the proviso to cl 11(a) from the draft will once he had the list for inclusion in the second schedule-can properly be regarded as a clerical error for the purposes of s 20(1) of the 1982 Act.
Chadwick J
[1996] Ch 171, [1996] 2 WLR 173, [1995] 3 All ER 676
Administration of Justice Act 1982 20
England and Wales
Citing:
Applied – Re Williams Deceased, Wiles v Madgin ChD 1985
A testator writing out his own will can make a clerical error just as much as someone else writing out a will for him. ‘In passing, I note that there is no claim for rectification in the present case. It was suggested in the course of argument that . .
Cited – In re Morris Deceased ChD 1970
A mistake was made in the drafting of a codicil by which, inter alia, the testatrix had revoked cl 7 of her will. It was clear from the evidence that the testatrix had never intended to revoke the whole of that clause but only to revoke the . .
Cited – Wordingham v Royal Exchange Trust Co Ltd and Another ChD 6-May-1992
A testatrix revoked her earlier will and, by an oversight and contrary to the testatrix’s instructions, her solicitor had failed to repeat in her later will, provisions of the earlier will exercising a testamentary power of appointment. The clerical . .
Cited – In re Morris Deceased ChD 1970
A mistake was made in the drafting of a codicil by which, inter alia, the testatrix had revoked cl 7 of her will. It was clear from the evidence that the testatrix had never intended to revoke the whole of that clause but only to revoke the . .
Cited – Simpkins v Pays 1955
The court found an intention to create legal relations and therefore an enforceable contract among the members of a family to share the winnings in a newspaper competition which the family regularly entered.
Sellers J said: ‘It may well be . .

Cited by:
Cited – Walker v Geo H Medlicott and Son (a Firm) CA 19-Nov-1998
The claimant said that the defendant solicitor had negligently failed to include in the will a specific devise of property in his favour.
Held: A beneficiary who alleged negligent failure of a will draftsman to include a gift to him in a will . .
Cited – Powell v Haywards (a Firm) CA 18-Feb-1999
Solicitors appealed against an order for payment of damages for professional negligence. The solicitors said that the plaintiff should have mitigated her damages.
Held: The plaintiffs had not failed to take reasonable steps to mitigate their . .
Cited – Goodman v Goodman, Clegg, Manuel ChD 14-Jul-2006
The claimant sought rectification of the will to alter a clause leaving a monthly sum to the first defendant. She said it did not reflect the deceased’s wishes. It was accepted that ‘ the burden of proof rests on her to establish a case that Guy’s . .
Cited – Clarke v Brothwood and others; In re Clarke ChD 16-Nov-2006
The claimant sought rectification of a will. The respondents argued that any mistake was not a clerical one so as to bring it within section 20. The gift of residue had left sixty per cent undisposed of. It was said that the will had referred to . .
Cited – Sprackling and others v Sprackling and Another ChD 6-Nov-2008
Family members argued that the will did not reflect the wishes of the deceased. The deceased had owned substantial and varied farming businesses, and had made a new will leaving the farm to his seciond wife, and not the sons by his first marriage. . .
Cited – Marley v Rawlings and Another ChD 3-Feb-2011
A married couple had purported to make mirror wills, but by mistake had each executed the will of the other. Rectification was now sought.
Held: The will did not comply with the 1837 Act and should not be admitted to probate. The testator had . .
Cited – Bimson, Re The Estate of ChD 26-Jul-2010
Application to rectify the will under the 1982 Act.
Held: The application succeeded. Henderson J said: ‘this case falls comfortably within the scope of clerical error within the meaning of section 20(1)(a). It appears to me plain that David . .

Lists of cited by and citing cases may be incomplete.
Updated: 14 September 2021; Ref: scu.241679

White 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 stated.’
Lord Denning MR, Stephenson LJ, Lawton LJ
[1974] EWCA Civ 7, [1974] Ch 269, [1974] 1 All ER 47, [1974] 3 WLR 256
Bailii
England and Wales
Citing:
Appeal from – 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 . .

Cited by:
Cited – United Bank of Kuwait Plc v Sahib and Others CA 2-Feb-1996
The bank appealed against a decision that the simple deposit of deeds with a bank did not take effect as an equitable charge.
Held: Depositing deeds with a bank is not sufficient to create a charge over them. The old law as to the creation of . .
Cited – NML Capital Ltd v Argentina SC 6-Jul-2011
The respondent had issued bonds but in 2001 had declared a moratorium on paying them. The appellant hedge fund later bought the bonds, heavily discounted. Judgment was obtained in New York, which the appellants now sought to enforce against assets . .

Lists of cited by and citing cases may be incomplete.
Updated: 14 September 2021; Ref: scu.262732

Ness Training Limited v Triage Central Ltd and c: ScHC 27 Aug 2001

The complainant sought a contract to deliver services to the New Deal system in Scotland as part of a joint venture. They incorporated in England, but were then told they needed to be a Scottish company. A new company was established in Scotland, which continued the services. The other members of the venture later declined to account of a share of the receipts, and a claim was made for such a share.
Held: A joint venture need not amount to a partnership in law. Were the business profits held subject to a trust? It was difficult to identify just what property might be subject to such a trust. In reality any duty extended to one to award a share in the company which was to be set up to run the venture. That was not what was claimed, and would fall short of what was claimed.
Lord Eassie
[2001] ScotCS 212, [2001] ScotHC 94
Bailii, Bailii
Scotland
Citing:
Cited – Aberdeen Railway Co v Blaikie Brothers HL 1854
The plaintiff needed a large quantity of iron chairs (rail sockets) and contracted for their supply over an 18-month period with Blaikie Bros a partnership. Thomas Blaikie was the managing partner of Blaikie Bros and a director and the chairman of . .

Lists of cited by and citing cases may be incomplete.
Updated: 11 September 2021; Ref: scu.166509

Garnham v PC and Others: 13 Mar 2012

(Royal Court – Samedi)
M C St J. Birt, Esq., Bailiff, and Jurats Tibbo and Crill.
[2012] JRC 050
Bailii
England and Wales
Cited by:
Cited – Lehtimaki 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.
Updated: 07 September 2021; Ref: scu.653199

Martin v City of Edinburgh District Council: SCS 1988

The pursuer, a Conservative member of the defender Council, with others, challenged a policy introduced at the behest of the majority Labour section to disinvest Council assets from South Africa because of their repugnance at apartheid policies.
Held: The councillors had failed in their fiduciary duty because they had not undergone due process and taken proper advice. However, the policy might have been lawfully implemented if they were following professional advice. The judge said: ‘I accept that the most profitable investment of funds is one of a number of matters which trustees have a duty to consider. But I cannot conceive that trustees have an unqualified duty . . simply to invest trust funds in the most profitable investment available. To accept that without qualification would, in my view, involve substituting the discretion of financial advisers for the discretion of trustees.’
Lord Murray held that ‘trustees have a duty not to fetter their investment discretion for reasons extraneous to the trust purpose, including reasons of a political or moral nature’.
Lord Murray
[1989] PLR 10, [1988] SLT 329, [1989] Pens LR 9
Scotland

Updated: 30 August 2021; Ref: scu.518932

Hampden v Buckinghamshire (Earl of): ChD 24 Apr 1893

(ChD and CA) By sect. 11 of the Settled Land Act, 1890 (which Act and the Settled Land Act, 1882, are to be read and construed together as one Act): ‘Where money is required for the purpose of discharging an incumbrance on the settled land or part thereof, the tenant for life may raise the money so required . . on mortgage of the settled land . . and the money so raised shall be capital money for that purpose, and may be paid or applied accordingly;’ but ‘incumbrance’ under that section does not include a life annuity. By sect. 53 of the Settled Land Act, 1882, ‘a tenant for life shall, in exercising any power under this Act, have regard to the interests of all parties entitled under the settlement, and shall, in relation to the exercise thereof by him, be deemed to be in the position and to have the duties and liabilities of a trustee for those parties.’
The tenant for life of settled land, part of which was mortgaged and part was not, and the whole of which was charged with the payment of certain life annuities, proposed to raise a sum of money by mortgaging the settled land (including the part of it not then subject to any mortgage) in order to pay off the existing mortgages and certain pecuniary legacies given by the settlement. The proposed mortgage would, by virtue of sects. 20 and 21 of the Settled Land Act, 1882, take priority over the annuities and all other charges and estates created by the settlement.
It was not proposed to pay off the annuitants out of the money to be raised, nor could they be so paid off; and, having regard to the estimated probable sum which would be produced by a sale of the land under the powers given by the Settled Land Acts, it appeared that such a sale would preserve, whilst the proposed mortgage would unjustly prejudice, their interests. It was assumed that the tenant for life in deciding to effect the proposed mortgage was acting honestly, and with the desire, bona fide, to preserve his family estates for those intended by the settlor to enjoy them.
Held: That sect. 11 of the Settled Land Act, 1890, gave the tenant for life power to mortgage the unmortgaged part of the settled land in order
to pay off the incumbrances on the other part; but that, having regard to sect. 53 of the Settled Land Act, 1882, and to the circumstances, the Court had power to interfere, and ought to interfere, to restrain him from effecting the proposed mortgage.
The Court of Appeal intervened to prevent a trustee about to act in a manner which was within his powers but detrimental to other beneficiaries applying the following principle: ‘But, . . to preserve the estates for those intended by the settlor to enjoy them, still an honest trustee may fail to see that he is acting unjustly towards those whose interests he is bound to consider and to protect; and, if he is so acting, and the court can see it although he cannot, it is in my opinion the duty of the court to interfere.’
Kekewich J, Lindley LJ
[1893] UKLawRpCh 67, (1893) 2 Ch 531
Commonlii
England and Wales
Cited by:
Cited – Lehtimaki 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.
Updated: 29 August 2021; Ref: scu.653170

SEC v Chenery Corporation: 1 Feb 1943

(United States Supreme Court) Frankfurter J held: ‘to say that a man is a fiduciary only begins analysis; it gives direction to further inquiry. To whom is he a fiduciary? What obligations does he owe as a fiduciary?’
[1943] 63 SCt 454, [1943] 87 LEd 626, [1943] USSC 32, [1943] 318 US 80
Worldlii
United States
Cited by:
Cited – Lehtimaki 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.
Updated: 29 August 2021; Ref: scu.652998

Clephane and Others v Magistrates of Edinburgh and Others: SCS 5 Dec 1866

This action was instituted by certain pensioners of the Mortification of Trinity Hospital of Edinburgh against the Lord Provost, Magistrates, and Town Council, both as representing the community of the city and as administrators and Governors of the Hospital, and the Presbytery of Edinburgh. The summons concludes for a decree of declarator that the Church called Trinity College Church, with the building known as Trinity Hospital, were vested in the pursuers ‘as trustees and administrators solely and exclusively for the ends, uses, and purposes mentioned and contained in a charter of King James VI., dated 12th Nov. 1567, and the de enders are not entitled to use and apply the property thereby conveyed, or the produce or prices thereof, in any other manner, or for any other uses and purposes than the uses and purposes prescribed and mentioned in the said charter;’ and in particular, that they are bound to apply the sum of pounds 17,671, 9s. 6d. received from the forth British Railway Company, as therein mentioned, exclusively for behoof of the hospital in terms of that charter; and that they are not entitled to apply any part of that sum ‘in the purchase of ground, or site for, or in the erection of a church to be used as one of the city churches of Edinburgh, or for any other purpose not conducive to the use and benefit of the said Trinity Hospital.’
The Court of Session, on 26th June 1860, found that the sum received from the Railway Company was applicable to the action of a site and the erection of a church within the locality designated as the parish of Trinity College, or as near thereto as conveniently may be, with equal convenience of access and accommodation, and of the same style and model as the church formerly existing, and that the Magistrates were bound to apply the said money, or an much thereof as might be necessary, for the accomplishment of these purposes. The House of Lords on appeal reversed this finding on 15th February 1864, and the case then came back to the Court of Session in order that effect should be given to the judgment of the House of Lords, by which it was declared that after expending a sum not exceeding pounds 7000 in purchasing a site and rebuilding the church, ‘all the residue of the money received from the said railway company, and all interest thereon, and all the rest of the property of the said hospital, is applicable to the enlargement and maintenance of the said charity, as declared by the charters dated respectively 12th November 1567 and 26th May 1587, in such proceedings mentioned according to a scheme to settled for the purpose, including therein the rebuilding of the hospital, if the same shall be deemed necessary.’ A state and scheme having been ordered by the Court and lodged by the magistrates, the University of Edinburgh made appearance in the case, and asked leave to sist themselves as parties, in order that they might establish a claim which they made to be found entitled and preferred to the one-half of the revenues and property of the foundation, or to such portion thereof as shall be considered just. The Court, without formally sisting the University, allowed it to lodge a condescendence and claim, and a record was made up and closed as betwixt it and the magistrates. It is unnecessary to detail the grounds of the claim as these are fully stated in the judgment of the Court.
[1866] SLR 3 – 84 – 1
Bailii
Scotland

Updated: 29 August 2021; Ref: scu.574652

John Nairn of Greenyards, Esq v Margaret, Lady Dowager Nairn Et Alii, Her Creditors and Heirs of Entail The Lord Advocate, On Behalf of His Majesty: HL 14 Jun 1736

Tailzie – Clause – In an entail in favour of a daughter, nominatim, a clause ‘prohibiting the heirs female of the said Margaret, her body, or any other of the heirs male and of tailzie above written, (except the heirs male of the said Margaret’s body,) to sell, andc.’ found to debar the daughter from selling.
[1736] UKHL 1 – Paton – 192, (1736) 1 Paton 192
Bailii
Scotland

Updated: 28 August 2021; Ref: scu.554679

Tempest v Lord Camoys: CA 1 Aug 1882

A testator gave his trustees a power to be exercised at their absolute discretion of selling real estates, with a declaration that the proceeds should be applied, at the like discretion, in the purchase of other real estates. He also gave them power at their absolute discretion to raise money by mortgage for the purchase of real estates. A suit having been instituted for the execution of the trusts of the will, and a sum of money, the proceeds of the sale of real estate, having been paid into Court, one of the trustees proposed to purchase a large estate and to apply the fund in Court in part payment of the purchase-money, and to raise the remainder of the purchase-money by mortgage of the purchased estate. The other trustee refused to concur in the purchase.
Held: (affirming the decree of Chitty, J) Where absolute discretion has been given to trustees as to the exercise of a power the Court will not compel them to exercise it, but if they propose to exercise it, the Court will see that they do not exercise it improperly or unreasonably. Where the power is coupled with a trust or duty the Court will enforce the proper and timely exercise of the power, but will not interfere with the discretion of the trustees as to the particular time or manner of their bona fide exercise of it. The Court could not control the dissentient trustee in the exercise of his discretion in refusing to make the purchase, or in refusing to exercise his power of raising money by mortgage for the proposed purpose.
Jessel MR said: ‘It is settled law that when a testator has given a pure discretion to trustees as to the exercise of a power, the court does not enforce the exercise of the power against the wish of the trustees, but it does prevent them from exercising it improperly.’
Lord Jessel MR
(1882) 21 ChD 571, [1882] UKLawRpCh 200
Commonlii
England and Wales
Citing:
Appeal from – Tempest v Lord Camoys 18-Jan-1866
To a bill for the administration of real and personal estate, and for the appointment of a receiver and a new trustee, a plea in bar, by the alleged executors, that they had been prevented proving by the Plaintiff’s entering a caveat in the Court of . .

Lists of cited by and citing cases may be incomplete.
Updated: 28 August 2021; Ref: scu.536789

Letterstedt v Broers: PC 22 Mar 1884

(Supreme Court of the Cape of Good Hope) Lack of harmony may be of itself a good reason for a trustee to resign or be dismissed. Lord Blackburn approved a passage in Story’s Equity Jurisprudence, s 1289: ‘But in cases of positive misconduct, courts of equity have no difficulty in interposing to remove trustees who have abused their trust; it is not indeed every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce courts of equity to adopt such a course. But the acts or omissions must be such as to endanger the trust property or to shew a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity.’
. . and ‘It seems to their Lordships that the jurisdiction which a court of equity has no difficulty in exercising under the circumstances indicated by Story is merely ancillary to its principal duty, to see that the trusts are properly executed. This duty is constantly being performed by the substitution of new trustees in the place of original trustees for a variety of reasons in non-contentious cases. And therefore, though it should appear that the charges of misconduct were either not made out, or were greatly exaggerated, so that the trustee was justified in resisting them, and the court might consider that in awarding costs, yet if satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.’
The court set out the principles underlying a decision to remove a trustee. Lord Blackburn said: ‘The whole of the matters which have been complained of, and the whole that, if this judgment stands, may yet have to be done by the Board, are matters which they had to do, as having accepted the burthen of carrying out the trusts which on the true construction of the will were imposed upon them, and so become trustees. What they had to do as executors merely, such as paying debts, collecting assets, andc., have long ago been over, and by the terms of the compromise the plaintiff cannot now say they have not been done properly. There may be some peculiarity in the Dutch Colonial law, which made it proper to make the prayer in the way in which it was done to remove them from the office of executor; if so, it has not been brought to their Lordships’ notice; the whole case has been argued here, and, as far as their Lordships can perceive, in the Court below, as depending on the principles which should guide an English Court of Equity when called upon to remove old trustees and substitute new ones. It is not disputed that there is a jurisdiction ‘in cases requiring such a remedy,’ as is said in Story’s Equity Jurisprudence, s. 1287, but there is very little to be found to guide us in saying what are the cases requiring such a remedy; so little that their Lordships are compelled to have recourse to general principles.
Story says, s. 1289, ‘But in cases of positive misconduct, Courts of Equity have no difficulty in interposing to remove trustees who have abused their trust; it is not indeed every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce Courts of Equity to adopt such a course. But the acts or omissions must be such as to endanger the trust property or to shew a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity’
It seems to their Lordships that the jurisdiction which a Court of Equity has no difficulty in exercising under the circumstances indicated by Story is merely ancillary to its principal duty, to see that the trusts are properly executed. This duty is constantly being performed by the substitution of new trustees in the place of original trustees for a variety of reasons in non-contentious cases. And therefore, though it should appear that the charges of misconduct were either not made out, or were greatly exaggerated, so that the trustee was justified in resisting them, and the Court might consider that in awarding costs, yet if satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate. The reason why there is so little to be found in the books on this subject is probably that suggested by Mr. Davey in his argument. As soon as all questions of character are as far settled as the nature of the case admits, if it appears clear that the continuance of the trustee would be detrimental to the execution of the trusts, even if for no other reason than that human infirmity would prevent those beneficially interested, or those who act for them, from working in harmony with the trustee, and if there is no reason to the contrary from the intentions of the framer of the trust to give this trustee a benefit or otherwise, the trustee is always advised by his own counsel to resign, and does so. If, without any reasonable ground, he refused to do so, it seems to their Lordships that the Court might think it proper to remove him; but cases involving the necessity of deciding this, if they ever arise, do so without getting reported. It is to be lamented that the case was not considered in this light by the parties in the Court below, for, as far as their Lordships can see, the Board would have little or no profit from continuing to be trustees, and as such coming into continual conflict with the appellant and her legal advisers, and would probably have been glad to resign, and get out of an onerous and disagreeable position. But the case was not so treated.
In exercising so delicate a jurisdiction as that of removing trustees, their Lordships do not venture to lay down any general rule beyond the very broad principle above enunciated, that their main guide must be the welfare of the beneficiaries.’ He referred to cases in which there was a conflict between trustee and beneficiary and continued: ‘As soon as all questions of character are as far settled as the nature of the case admits, if it appears clear that the continuance of the trustee would be detrimental to the execution of the trusts, even if for no other reason than that human infirmity would prevent those beneficially interested, or those who act for them, from working in harmony with the trustee, and if there is no reason to the contrary from the intentions of the framer of the trust to give this trustee a benefit or otherwise, the trustee is always advised by his own counsel to resign, and does so. If, without any reasonable ground, he refused to do so, it seems to their Lordships that the Court might think it proper to remove him; but cases involving the necessity of deciding this, if they ever arise, do so without getting reported.’
However: ‘It is quite true that friction or hostility between trustees and the immediate possessor of the trust estate is not of itself a reason for the removal of the trustees. But where the hostility is grounded on the mode in which the trust has been administered, where it has been caused wholly or partially by substantial overcharges against the trust estate, it is certainly not to be disregarded.’
Lord Blackburn
[1884] UKPC 1, (1884) 9 App Cas 371, [1884] UKPC 18, [1884] UKLawRpAC 12
Bailii, Bailii, Commonlii
England and Wales
Cited by:
Cited – Charman v Charman CA 20-Dec-2005
The court considered orders to third parties abroad to produce docments for use in ancillary relief proceedings. The husband had built up considerable assets within an offshore discretionary trust. The court was asked whether these were family . .
Cited – The 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 . .
Cited – Jones and others v Firkin-Flood ChD 17-Oct-2008
The trustees had contracted to sell shares in a private company held within the estate. A family member now claimed that they were held in trust after a settlement of a possible challenge to the will based in lack of testamentary capacity and undue . .
Cited – Green 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 . .
Cited – Kershaw v Micklethwaite and Others ChD 12-Feb-2010
Application by the claimant, Mr Kershaw, for some or all of the defendants to be removed as executors of the Will of Mr Kershaw’s mother. . .
Cited – Lehtimaki 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.
Updated: 25 August 2021; Ref: scu.247442

In re Steed: CA 26 Jan 1960

The court considered an application under the 1968 Act to vary a trust. The testator had shown in the terms of his will a particular purpose in creating a protective trust; that was to protect the life tenant from improvident dealings with property in favour of certain members of her family.
Held: The court was satisfied that the testator’s purpose, evidenced in the will, was still justified at the time of the application to vary. That was a view also shared by the trustees, who opposed the application by the protected life tenant. In those circumstances there was an overwhelming reason for the continuation of the protective trusts and in the continuance of the interest of the paragraph (d) class of person. The court said that the 1958 Act conferred ‘a revolutionary discretion.’ The intentions, wishes and motives of the settlor or testator may be relevant and weighty in desiding whether to accept a proposed variation. The court upheld a refusal to approve a variation on the basis that the proposed variation was contrary to the testator’s clear intentions. The court had an unfettered discretion which it could refuse to exercise if the arrangement was contrary to the testator’s wishes.
Lord Evershed MR: ‘After all, if the court is asked to approve this proposal on behalf of a spectral spouse (if I may revert to that phrase) it must ask, I take it, why is the spectral spouse there at all under the trust? If one asks that question, nearly everything else, as it seems to me, follows. There is no doubt why the spectral spouse is there. It was part of the testator’s scheme, made as I think manifest by the language which I have read from the clauses in the will, that it was the intention and the desire of the testator that this trust should be available for the plaintiff so that she would have proper provision made for her throughout her life, and would not be exposed to the risk that she might, if she had been handed the money, part with it in favour of another individual about whom the testator felt apprehension, which apprehension is plainly shared by the trustees.’
Lord Evershed MR
[1960] Ch 407, [1960 1 All ER 487, [1960] EWCA Civ 2, [1960] 1 All ER 487, [1960] Ch 407
Bailii
Variation of Trusts Act 1958 1
England and Wales
Cited by:
Cited – Goulding 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 . .
Cited – Lehtimaki 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 . .
Cited – Lehtimaki 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.
Updated: 25 August 2021; Ref: scu.262817

Chapman v Chapman: HL 25 Mar 1954

It was suggested to the House that: ‘A judge of the Chancery Division of the High Court of Justice has an inherent jurisdiction, in the execution of the trusts of a settlement, to sanction, on behalf of infant beneficiaries and unborn persons, a rearrangement of the trusts of that settlement for no other purpose than to secure an adventitious benefit, which may be and in the present case, is that estate duty, payable in a certain event as things now stand, will, in consequence of the rearrangement, not be payable in respect of the trust funds.’
Held: The appeal failed. Lord Simonds LC said: ‘It is not the function of the court to alter a trust because alteration is thought to be advantageous to an infant beneficiary. It was, I thought, significant that counsel was driven to the admission that since the benefit of the infant was the test, the court had the power, though in its discretion it might not use it, to override the wishes of a living and expostulating settlor, if it assumed to know better than he what was beneficial for the infant. This would appear to me a strange way for a court of conscience to execute a trust. If, then, the court has not, as I hold it has not, power to alter or rearrange the trusts of a trust instrument, except within the limits which I have defined, I am unable to see how that jurisdiction can be conferred by pleading that the alteration is but a little one.’
Lord Simonds LC
[1954] UKHL 1, [1954] AC 429, [1954] 1 All ER 798, [1954] 2 WLR 723
Bailii
Trustee Act 1927 57
England and Wales
Citing:
Appeal from – In re Downshire Settled Estates CA 1953
A scheme of arrangements was proposed on behalf of infant beneficiaries to three settlements. The object of the scheme was to avoid losses to the beneficiaries by reason of inheritance tax.
Held: The court rejected the contention that it had . .

Cited by:
Cited – Goulding 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 . .
Cited – Lehtimaki 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.
Updated: 25 August 2021; Ref: scu.241668

In re Baden (No.2): CA 27 Mar 1972

The deceased had established a trust fund for the welfare of employees of his company. After his death his executors said that the trusts were wholly void.
Sachs, Megaw, Stamp LJJ
[1972] EWCA Civ 10, [1972] 2 All ER 1304, [1972] 3 WLR 250, [1973] Ch 9
Bailii
England and Wales

Updated: 25 August 2021; Ref: scu.262748

Attorney General v British Museum: ChD 27 May 2005

The trustees brought a claim against the Attorney-General seeking clarification of their duties and powers to return objects which were part of the collection in law, but where a moral duty might exist to return it to a former owner. Here drawings had been looted in Czechoslovakia in 1939 by the Gestapo.
Held: The court reviewed the authorities. The A-G does not have the authority to suspend the operation of an Act of Parliament. The 1963 Act prohibited any disposition by the trustees. No moral obligation can justify a disposition by the Trustees of an object forming part of the collections of the Museum in breach of s.3(4).
The Vice-Chancellor, Sir Andrew Morritt
[2005] EWHC 1089 (Ch), Times 02-Jun-2005, [2005] 3 WLR 396, [2005] Ch 397
Bailii
Museum Act 1753 9 14, British Museum Act 1963, Charities Act 1993 27(3)
England and Wales
Citing:
Cited – Re Snowden ChD 1970
Two summonses came before the court arising form wills of a Mr Snowden and a Mrs Henderson. Norman Snowden, had made sales adeeming bequests but, in consequence, pecuniary legacies and bequests of shares of residue were greater than contemplated. . .
Cited – Re Shipwrecked Fishermen and Mariners’ Royal Benevolent Society ChD 1959
The court approved a scheme conferring wider powers of investment than those authorised by the statute incorporating the charity: ‘It is said on behalf of persons interested in the charity that the court is empowered to make a scheme to authorize a . .
Cited – Re: Shrewsbury Grammar School 1849
Trustees of the school had accumulated income in excess of what was required to achieve the objects of the charitable trust, and asked the court how to apply them. Having upheld the contention that what was described as Sir S. Romilly’s Act . .
Cited – The Berkhamstead School Case 1865
The school was regulated inter alia by a statute of Edward VI.
Held: The court approved a scheme for its further regulation which permitted the charging of fees for all pupils, notwithstanding that the statute provided that some boys should be . .
Cited – Hazell v Hammersmith and Fulham London Borough Council HL 1991
Swap deals outwith Council powers
The authority entered into interest rate swap deals to protect itself against adverse money market movements. They began to lose substantial amounts when interest rates rose, and the district auditor sought a declaration that the contracts were . .
Cited – Construction Industry Training Board v Attorney-General CA 1973
The principal issue was whether a body set up by statute and subject to the control of a minister of the Crown was a ‘charity’ within the meaning of section 45(1) of the Charities Act 1960, for which purpose it had to be subject to ‘the control of . .
Cited – Attorney General and Another v Great Eastern Railway Company HL 27-May-1880
An Act of Parliament authorised a company to construct a railway. Two other companies combined and contracted with the first to supply rolling stock. An injunction was brought to try to restrain this, saying that such a contract was not explicitly . .
Cited – Binder v Alachouzos CA 1972
A contract recited that the parties had been advised by solicitors and counsel that the Moneylenders Acts did not apply to transactions which were the subject of legal proceedings between them, and went on to provide for a compromise.
Held: . .
Cited – Attorney-General v Governors of Christ’s Hospital 3-Mar-1896
The Attorney-General proposed a scheme to except certain endowments from the 1869 Act. They would be made over to another governing body in augmentation of the endowments held by them subject to the provisions of that Act.
Held: The court . .
Cited – National Anti-Vivisection League v Inland Revenue Commissioners HL 2-Jul-1947
The main object of the Society was political viz, the repeal of the Cruelty to Animals Act 1876, and for that reason the Society was not established for charitable purposes only and was not entitled to exemption from tax. An organisation whose aims . .
Cited – In re Whitworth Art Gallery Trusts 1958
. .
Cited – Re Royal Society’s Charitable Trusts 1956
The Society, a charitable company regulated by statute, requested that it be permitted inter alia, to consolidate various different trust funds of which it was trustee for investment and accounting purposes.
Held: The application did not come . .

Cited by:
Cited – Lehtimaki 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.
Updated: 25 August 2021; Ref: scu.225333

Armitage v Nurse and Others: ChD 3 Jul 1995

A clause exonerating trustees from responsibility for breaches of duty will be construed strictly against them.
Ind Summary 03-Jul-1995
England and Wales
Cited by:
At first Instance – Armitage v Nurse SCCO 11-Apr-2000
review of counsel’s fees in a legal aid only case . .
Appeal from – 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 . .

Lists of cited by and citing cases may be incomplete.
Updated: 24 August 2021; Ref: scu.77868

Chinachem Charitable Foundation Ltd v The Secretary for Justice: 18 May 2015

(Court of Final Appeal of Hong Kong) Lord Walker of Gestingthorpe NPJ referred to a proposed scheme as ‘a written instrument approved by the court to regulate, in whole or in part, the future management and administration of the trust’
Lord Walker of Gestingthorpe NPJ
[2015] HKCFA 35, [2015] 3 HKC 549, (2015) 18 HKCFAR 169
HKLII
England and Wales
Cited by:
Cited – Lehtimaki 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.
Updated: 18 August 2021; Ref: scu.652999

Slater 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 interests it found in the properties according to its findings on the facts.
Peter Smith J
[2007] EWHC 951 (Ch)
Bailii
England and Wales
Citing:
Cited – Slingsby’s Case 1587
Where two inconsistent provisions in a deed cannot be reconciled, the earlier provision prevails over the later. . .
Cited – Joyce v Barker Bros (Builders) Ltd 1980
The rule that where in a deed there are two contradictory provisions, the earlier provision prevails over the later is ‘an absolutely last resort in construction’. . .
Cited – Martin v Martin 1987
A property was bought by parties as ‘beneficial joint tenants in equal shares’.
Held: The words ‘in equal shares’ had the effect of severing any joint tenancy created by the first words of the phrase. The law would apply the first of two . .
Cited – 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 . .
Cited – Tinsley 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 . .
Cited – Neville and Another v Wilson and Others CA 4-Apr-1996
A parole agreement by all the shareholders in a company, to liquidate it, created a constructive trust. That a specifically enforceable agreement to assign an interest in property, created an equitable interest in the assignee, was unquestionably . .

Lists of cited by and citing cases may be incomplete.
Updated: 18 August 2021; Ref: scu.251540

Stoeckert v Geddes (Appeal No 66 of 1998): PC 13 Dec 1999

PC Jamaica The claimant claimed against the estate of her former partner. Though not married they had lived together for many years, and she claimed there had been an express understanding that she would receive part of his estate. A constructive trust was claimed and denied.
Held: The facts alleged were not capable of sustaining the claim. Leaving the claimant in charge of his business whilst the deceased had gone to live abroad did not establish such a trust, and nor did the several statements made.
Lord Browne-Wilkinson, Lord Steyn, Lord Hoffmann, Lord Saville of Newdigate, Lord Hobhouse of Woodborough
[1999] UKPC 52
Bailii, PC
England and Wales
Citing:
Cited – Grant 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 . .

Lists of cited by and citing cases may be incomplete.
Updated: 14 August 2021; Ref: scu.163208

Bannister v Bannister: 1948

A claim that the owner had agreed to let the occupier live in a cottage rent free for as long as she wished was treated as a claim based on constructive trust, on the basis that the purchaser fraudulently set up ‘the absolute character of the conveyance . . for the purpose of defeating the beneficial interest’
[1948] 2 ALL ER 137
Settled Land Act 1925
England and Wales
Cited by:
Cited – Binions v Evans CA 27-Jan-1972
The plaintiffs had bought a cottage subjecty to a tenancy to the defendant. They sought possession saying that she held under a tenancy at will. It was a renancy for her life but described as a tenancy at will. The judge had held that the other . .
Cited – Scott 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.
Updated: 09 August 2021; Ref: scu.259539

Re Egerton Trust Retirement Benefit Scheme: ChD 2000

(No Date) Robert Walker J identified four categories of case in which the court has to consider actions taken or to be taken by trustees, as follows:-
‘ . . it seems to me that, when the court has to adjudicate on a course of action proposed or actually taken by trustees, there are at least four distinct situations (and there are no doubt numerous variations of those as well).
(1) The first category is where the issue is whether some proposed action is within the trustees’ powers . .
(2) The second category is where the issue is whether the proposed course of action is a proper exercise of the trustees’ powers where there is no real doubt as to the nature of the trustees’ powers and the trustees have decided how they want to exercise them but, because the decision is particularly momentous, the trustees wish to obtain the blessing of the court for the action on which they have resolved and which is within their powers. Obvious examples of that, which are very familiar in the Chancery Division, are a decision by trustees to sell a family estate or to sell a controlling holding in a family company. In such circumstances there is no doubt at all as to the extent of the trustees’ powers nor is there any doubt as to what the trustees want to do but they think it prudent, and the court will give them their costs of doing so, to obtain the court’s blessing on a momentous decision. In a case like that, there is no question of surrender of discretion and indeed it is most unlikely that the court will be persuaded in the absence of special circumstances to accept the surrender of discretion on a question of that sort, where the trustees are prima facie in a much better position than the court to know what is in the best interests of the beneficiaries.
(3) The third category is that of surrender of discretion properly so called. There the court will only accept a surrender of discretion for a good reason, the most obvious good reasons being either that the trustees are deadlocked (but honestly deadlocked, so that the question cannot be resolved by removing one trustee rather than another) or because the trustees are disabled as a result of a conflict of interest. Cases within categories (2) and (3) are similar in that they are both domestic proceedings traditionally heard in Chambers in which adversarial argument is not essential though it sometimes occurs. It may be that ultimately all will agree on some particular course of action or, at any rate, will not violently oppose some particular course of action. The difference between category (2) and category (3) is simply as to whether the court is (under category (2)) approving the exercise of discretion by trustees or (under category (3)) exercising its own discretion.
(4) The fourth category is where trustees have actually taken action, and that action is attacked as being either outside their powers or an improper exercise of their powers. Cases of that sort are hostile litigation to be heard and decided in open court . . ‘.
Robert Walker J
Unreported undated chambers judgment
England and Wales
Cited by:
Cited – Public Trustee v Cooper 2001
The court looked at the circumstances required when a court was asked to approve a proposed exercise by trustees of a discretion vested in them. The second category of circumstances was (quoting Robert Walker J): ‘Where the issue was whether the . .
Cited – Lehtimaki 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.
Updated: 01 August 2021; Ref: scu.652994

Goldcorp Exchange Ltd and others v Liggett and others: PC 25 May 1994

(New Zealand) The non allocated claimants purchased gold bullion from a company for future delivery on a non allocated basis. The company stored and insured the metal, but the claimants had a right to call for delivery of their part within 7-days. The company became insolvent and, a bank holding a debenture appointed receivers. R brought claims of a proprietary nature. The receivers applied to the High Court of New Zealand for directions on the disposal of the bullion. The judge rejected the claims of the non allocated claimants. The Court of Appeal in New Zealand allowed their appeal on different grounds.
Held: The receivers’ appeal succeeded. An equitable title could not pass under a simple contract for the sale of unascertained goods merely by virtue of the sale, since the buyer could not acquire title until it was known to what exact goods the proposed title related. The non allocated claimants were not entitled to assert any proprietary rights over the remaining stocks of bullion arising out of a fiduciary relationship since any such relationship was no different from the contractual relationship between the parties.
‘The essence of a fiduciary relationship is that it creates obligations of a different character from those deriving from the contract itself’.
Lord Mustill
[1994] 2 All ER 806, [1994] UKPC 3, [1994] UKPC 18, [1995] 1 AC 74, [1994] 2 BCLC 578, [1994] 3 WLR 199, (1994) 138 (LB) 127, (1994) Tr LR 434
Bailii, Bailii
England and Wales
Cited by:
Cited – Foskett 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 . .
Cited – Lehtimaki 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.
Updated: 30 July 2021; Ref: scu.245740

In 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 beneficiaries. They set out to do this by a sort of ‘framework’ resolution that income should ‘belong’ to the minor beneficiaries in specified shares, followed by further half-yearly resolutions to the effect that income was not required for the beneficiaries’ maintenance, and should therefore be accumulated under section 31 of the 1925 Act. The difficulty was that the language of section 31 did not really fit such a situation. The infant beneficiaries appealed against a finding that the resolutions were ineffective.
Held: The allocation of the balance of the income to the infant beneficiaries was valid under the power in the settlement, as an application of the income for their benefit, but that this made the income the absolute property of the relevant beneficiaries, and the power to accumulate under section 31 therefore did not apply. That then raised the question whether, because of the erroneous belief that the income would fall to be accumulated, the allocation of the income to the infant beneficiaries was valid and effective at all.
Sir Raymond Evershed MR said that the issue was whether the court should hold: ‘that there has been no effective exercise of the discretion on the ground that the trustees intended to undertake this operation on the footing that they were producing a specific result, and that, if they produced a wholly different result, it would not be right to say that they had exercised their discretion.’
Shortly after that he said that the question had to be decided having regard to the terms of the resolutions as a whole. His conclusion was that the allocation of funds to the infant beneficiaries was the essence of the operation, and that the reference to accumulation was no more than setting out ‘the mechanical results which had to be applied’. He said: ‘I do not think that it can or ought to be said that if, as I hold, the trustees wrongly thought that section 31 would operate, then a result is produced substantially or essentially different from that which was intended.’
Sir Raymond Evershed MR, Asquith and Jenkins LJJ
[1951] Ch 220
Trustee Act 1925 31
England and Wales
Citing:
Appeal from – In 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 . .

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

Lists of cited by and citing cases may be incomplete.
Updated: 29 July 2021; Ref: scu.509127

In 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 adult beneficiaries and declared the balance to belong to infant beneficiaries in specified shares. The minute of each resolution went on to record that the trustees were of the opinion that none of the income falling to infant beneficiaries under the resolution was required for the maintenance of the beneficiaries and accordingly they resolved that the income should be accumulated under section 31 of the Trustee Act 1925. In this, the trustees had had regard to the fact that if income were distributed it would be subject to surtax whereas if it were accumulated it would not be taxed in that way. They came to doubt whether what they had done had been effective as they had intended, and they brought proceedings to have the position clarified, joining the adult beneficiaries and the infant beneficiaries as defendants.
Held: The allocation of the income to the infants for accumulation was not a valid exercise of the power conferred by the settlement.
Harman J
[1951] Ch 209, [1950] 2 All ER 891
Trustee Act 1925 31
England and Wales
Cited by:
Appeal from – In 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 . .
Cited – Futter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .

Lists of cited by and citing cases may be incomplete.
Updated: 29 July 2021; Ref: scu.509126

Alexander Abercromby, Esq; of Glasshaugh, for Himself and The Other Creditors of Alexander Wilson of Littlefield, Deceased v John Innes of Knockorth, and Lewis Donaldson, Writer In Edinburgh, Son, Heir, and Executor of John Donaldson, Deceased: HL 31 Jan 1724

Trust – Trustees chosen by creditors, who had a salary for their trouble, having thrown the debtor into prison on a caption, but afterwards liberated him without applying to the creditors for their consent; the debt being afterwards lost, it was relevant to make the trustees liable for the debt that they consented to the debtor’s liberation.
[1724] UKHL Robertson – 457, (1724) Robertson 457
Bailii
Scotland

Updated: 26 July 2021; Ref: scu.553897

Thorne 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 representing to the first mortgagee that he had the authority of the second mortgagee, Thorne, to receive the balance. He paid interest to Thorne as if Thorne’s mortgage was still subsisting, thereby concealing his theft of the money. The truth came out when Searle became bankrupt. Thorne then sued Heard for the balance of the proceeds, asserting that Heard had acted in breach of trust in allowing Searle to retain the proceeds. That was a breach of trust, but it was innocent, not fraudulent, and had occurred much more than six years before the start of the proceedings. Accordingly Thorne relied on section 8(1), claiming that Heard was liable for the fraud of Searle, he having been Heard’s agent, and claiming that accordingly Heard was party or privy to Searle’s fraud as principal.
Lindley LJ asked when the right of action accrued. He said that the fraud first occurred when Searle misappropriated the money, and it was concealed by Searle continuing to pay Thorne the interest that would have been due to him. He held that the fraud and its concealment could not be treated as perpetrated or concealed by Heard. He distinguished both Blair v Bromley and Moore v Knight, where the fraud and its concealment, though committed by one partner (or, in Moore v Knight, by an employee), was imputable to the firm, so that the firm was held to have concealed the fraud, even though not guilty of it in the first place (p.604). He noted that the 1888 Act had not affected the principles on which the time when a cause of action accrues is to be determined. Accordingly, he held that the right of action accrued more than six years before the start of the proceedings, and he went on to consider the section.
On this he said: ‘Counsel for the Appellant contended that the facts of this case brought it within the first exception; but I am clearly of opinion that they do not. It is only by a misuse of language that a person who in fact knows absolutely nothing of the fraudulent conduct of another, and who in no way benefits by it or ratifies it, can be said to be party or privy to it. One person may be, and often is, liable in law for frauds which he has not committed; but to say that he is party or privy to them is quite another matter, and is only true when he has personally in some way participated in them. The Defendants were, in my judgment, in no sense whatever either fraudulent themselves or parties or privies to the fraud of Searle.’
Kay LJ dealt with the argument under the section first, on which he said this: ‘Of course the Defendants are liable unless the statute to which I have referred protects them. It has been argued that they were party or privy to Searle’s fraud. Even if it could be said that they were liable for his fraud, it is another thing to say that they were party or privy to it. I think that those words in the statute indicate moral complicity, which is not suggested in this case.’
Lindley LJ, Kay LJ
[1894] UKLawRpCh 12, (1894) 1 Ch 599
Commonlii
Trustee Act 1888 8
England and Wales
Citing:
Distinguished – Moore 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 . .

Cited by:
Appeal from – Thorne 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 . .
Cited – 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, . .

Lists of cited by and citing cases may be incomplete.
Updated: 22 July 2021; Ref: scu.666143

Moore 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 limitation, and in particular section 8. Stirling J noted that the second exception in the section might well apply, since the money had been received by the members of the firm and converted to the use of the firm, but he did not decide the case on that footing. Instead he based his decision on the concealment of the fraud, following Blair v Bromley (1847) 2 Ph 354. Interest had been paid to the client all along as if the fund had been invested as it should have been. That payment of interest was the act of the partnership, so that the partners were all affected by the implicit representation that the funds had been invested as they should have been, thereby concealing the fraud, even though they were innocent of the fraud. It was not argued that the first exception to section 8 applied, and this is therefore of no assistance on the application of the phrase ‘party or privy’.
Sterling J said: ‘Money came into the hands of the firm of Messrs Bromley without fraud and that one of the firm afterwards committed a fraud in respect of it, but made misrepresentations (some of which were attributable to the firm) which prevented the fraud from being discovered until the period fixed by the Statute of Limitations had expired. It was held that the innocent partner was deprived of the benefit of the statute by those representations which bound him as a partner. The decision rests on principles of the law relating to representation and to partnership, not on those which relate to trusts.’
Sterling J
(1891) 1 Ch 547, [1890] UKLawRpCh 172
Commonlii
Trustee Act 1888 8
England and Wales
Cited by:
Distinguished – Thorne 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 . .
Cited – Lord 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 . .
Cited – 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, . .

Lists of cited by and citing cases may be incomplete.
Updated: 22 July 2021; Ref: scu.666142

Thorne 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 contended that it did not, because of the exception contained in the 1st sub-section to section 8: ‘Except where the claim is founded upon any fraud or fraudulent breach of trust to which the trustee was party or privy.’ My Lords, it seems to me to be impossible seriously to say that the respondents were ‘party or privy’ to the fraud in this case. The fraud was a fraud committed by Searle entirely subsequent to the transaction in which they had any interest or any concern, and they neither knew of it, nor assented to it, nor received any benefit from it, nor took part in it in any sort of way. Under these circumstances, I am at a loss to see how it can be said that they were ‘party or privy’ to it.’
Lord Macnaghten said: ‘By a recent and I think very beneficial change of the law, a trustee who has committed a breach of trust is entitled to rely on any Statute of Limitations as fully as anybody may do who not a trustee, provided his conduct has been free from any taint of fraud, and provided he had not derived and is not in a position to derive any personal benefit from the transaction impeached as a breach of trust.’
Lord Davey referred to the concept of fraud imputable to the person who invokes the aid of the Statute of Limitations, but did so in the context of concealment. On section 8, he agreed with the other members of the Appellate Committee and with the judges in the courts below
Lord Herschell LC, Lord Macnaghten, Lord Davey
[1895] AC 495
Trustee Act 1888 8
England and Wales
Citing:
Appeal from – Thorne 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 . .

Cited by:
Cited – 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, . .

Lists of cited by and citing cases may be incomplete.
Updated: 22 July 2021; Ref: scu.666144

Jerome v Kelly (Her Majesty’s Inspector of Taxes): HL 13 May 2004

In 1987, trustees holding land for various beneficiaries in undivided shares entered into a contract to sell it to a purchaser. In 1989 Mr and Mrs Jerome, who were absolutely entitled to interests in the land, assigned part of their beneficial interests (subject to the contract) to the trustees of two Bermuda settlements. By three conveyances in 1990-1992, the original trustees completed the contract of sale. The revenue claimed that the disposal was made at the time of the contract; the taxpayer argued for the time of the conveyances.
Held: The section did not provide a clear answer for this situation. The section was intended to fix the time of disposal. It was not intended to impose a liability to tax upon a person who would not be treated as having made a disposal under the carefully constructed scheme for taxing the disposals of assets held on trust, particularly where this might lead to a double charge to tax.
Lord Walker said that ‘beneficial ownership of the land is in a sense split between the seller and buyer on the provisional assumptions that specific performance is available and that the contract will in due course be completed . . ‘
Lord Nicholls of Birkenhead, Lord Hoffmann, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Brown of Eaton-under-Heywood
[2004] UKHL 25, Times 20-May-2004, [2004] 21 EGCS 151, [2004] STI 1201, [2004] 2 All ER 835, [2004] 1 WLR 1409, [2004] NPC 75, [2004] WTLR 681, [2004] STC 887, 76 TC 147, [2004] BTC 176
House of Lords, Bailii
Capital Gains Tax Act 1979 46 58
England and Wales
Citing:
Appeal from – Jerome v Kelly (HM Inspector of Taxes) CA 20-Dec-2002
The taxpayer had contracted for the disposal of land in three tranches. The later sales were by a Bahamian company to whom the land was assigned subject to the contract.
Held: The later sales were under the original contract. That contract . .
Cited – Burnett’s Trustee v Grainger and Another HL 4-Mar-2004
A flat was sold, but before the purchasers registered the transfer, the seller was sequestrated, and his trustee registered his own interest as trustee. The buyer complained that the trustee was unjustly enriched.
Held: The Act defined the . .
Cited – Eastham v Leigh London and Provincial Properties Ltd CA 1971
A contract is not conditional merely because it contains obligations which may be termed promissory conditions. The taxpayer company was the prospective tenant under a building agreement. By clause 4 it agreed to build a six-story office block in . .
Cited – Lysaght v Edwards ChD 20-Mar-1876
The testator had agreed to sell a farm, but died before completion.
Held: The farm passed under a devise of ‘all the real estate which at my death might be vested in me as trustee.’ On the making of contract for the purchase of land, the . .
Cited – Shaw v Foster HL 14-Mar-1872
As regards the trusteeship which arises for a vendor of land after exchange of contracts: ‘there cannot be any doubt of the relation subsisting in the eye of a Court of Equity between the vendor and the purchaser. The vendor was a trustee of the . .
Cited – Kirby v Thorn EMI Plc 1987
Taxation of asset assigned before it was created. . .
Cited – Rayner v Preston CA 8-Apr-1881
The vendors agreed to sell a house which they had insured against fire risk. The house was damaged by fire after contract but before completion, and the issue was whether the purchaser was entitled to the benefit of the insurance.
Held: . .
Cited – Aberdeen Construction Group Ltd v Inland Revenue Commissioners HL 1978
The House gave guidance on the interpretation of Tax statutes.
Held: The consideration at issue had been paid both for shares and for something else, the waiver of a loan the seller had made to the company. Lord Wilberforce emphasised the need . .
Cited – Chang v Registrar of Titles 11-Feb-1976
(High Court of Australia) The court discussed the trusteeship arising on a contract for the sale of land.
Mason J said: ‘It has long been established that a vendor of real estate under a valid contract of sale is a trustee of the property sold . .
Cited – Marshall (Inspector of Taxes) v Kerr HL 30-Jun-1994
A settlor by will was deemed to have had an interest as funds were passed to a Jersey Trust. The section merely made or allowed that a variation of a will would not be a taxable event in UK law. It had no other effects. A deed of family arrangement . .
Cited – Burca v Parkinson ChD 2001
An assignment of the consideration due under a contract does not alter the capital gains tax liability of the person making the disposal. . .

Cited by:
Appealed to – Jerome v Kelly (HM Inspector of Taxes) CA 20-Dec-2002
The taxpayer had contracted for the disposal of land in three tranches. The later sales were by a Bahamian company to whom the land was assigned subject to the contract.
Held: The later sales were under the original contract. That contract . .
Cited – Cook v The Mortgage Business Plc CA 24-Jan-2012
cook_mbpCA2012
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 . .
Cited – Scott 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 . .

These lists may be incomplete.
Updated: 17 July 2021; Ref: scu.196757

Selangor 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 trustees of those assets.’
He continued: ‘It is essential at the outset to distinguish two very different kinds of so-called constructive trustees: (1) Those who, though not appointed trustees, take upon themselves to act as such and to possess and administer trust property for the beneficiaries, such as trustees de son tort. Distinguishing features for present purposes are (a) they do not claim to act in their own right but for the beneficiaries, and (b) their assumption to act is not of itself a ground of liability (save in the sense of course of liability to account and for any failure in the duty so assumed), and so their status as trustees precedes the occurrence which may be the subject of claim against them. (2) Those whom a court of equity will treat as trustees by reason of their action, of which complaint is made. Distinguishing features are (a) that such trustees claim to act in their own right and not for beneficiaries, and (b) no trusteeship arises before, but only by reason of, the action complained of.’
. . And ‘It seems to me imperative to grasp and keep constantly in mind that the second category of constructive trusteeship (which is the only category with which we are concerned) is nothing more than a formula for equitable relief. The court of equity says that the defendant shall be liable in equity, as though he were a trustee. He is made liable in equity as trustee by the imposition or construction of the court of equity. This is done because in accordance with equitable principles applied by the court of equity it is equitable that he should be held liable as though he were a trustee.’
Ungoed-Thomas J
[1968] 1 WLR 1555, [1968] 2 All ER 1073
England and Wales
Cited by:
Cited – Dubai 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 . .
Cited – 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 . .
Cited – Paragon 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. . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Cited – Holland v Revenue and Customs and Another SC 24-Nov-2010
The Revenue sought an order under section 212 of the 1986 Act, for payment of the tax debts of the insolvent company by a de facto director. H had organised a scheme under which IT contractors had worked through companies created by him under a . .
Cited – Williams 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 . .

These lists may be incomplete.
Updated: 24 June 2021; Ref: scu.193893

Bartlett v Barclays Bank Trust Co Ltd (Nos 1 and 2): ChD 1980

A claim was made against a trustee for compensation for losses incurred during the administration of the trust.
Held: For a court to order an account by a trustee on the basis of wilful default, and make the defendant liable not only for assets which have come to their hands but also in respect of assets which ought to have come to their hands, the claimant must plead and prove at least one act of wilful default. Higher standards may be expected of professional trustees.
Brightman J considered the nature of the remedy of restitution: ‘the so-called restitution which the [trustee] must now make to the plaintiffs . . is in reality compensation for loss suffered by the plaintiffs . . not readily distinguishable from damages except with the aid of a powerful legal microscope.’ and ‘The trustee’s obligation is to restore to the trust estate the assets of which he has deprived it.’ and
‘The bank, as trustee, was bound to act in relation to the shares and to the controlling position which they conferred, in the same manner as a prudent man of business. The prudent man of business will act in such manner as is necessary to safeguard his investment. He will do this in two ways. If facts come to his knowledge which tell him that the company’s affairs are not being conducted as they should be, or which put him on enquiry, he will take appropriate action. Appropriate action will no doubt consist in the first instance of enquiry of and consultation with the directors, and in the last but most unlikely resort, the convening of a general meeting to replace one or more directors. What the prudent man of business will not do is to content himself with the receipt of such information on the affairs of the company as a shareholder ordinarily receives at annual general meetings. Since he has the power to do so, he will go further and see that he has sufficient information to enable him to make a responsible decision from time to time either to let matters proceed as they are proceeding, or to intervene if he is dissatisfied.’
The normal order in hostile litigation is for costs to be taxed on a standard basis.
A proper rate of interest to be awarded, in the absence of special circumstances, to compensate beneficiaries and trust funds for non-receipt from a trustee of money that ought to have been received was that allowed from time to time on the Short Term Investment Account, a rate which may be taken to be not more favourable than base rate less 0.5 per cent.
Brightman J
[1980] Ch 515
England and Wales
Cited by:
Cited – Malhotra v Dhawan CA 26-Feb-1997
There had been litigation as to the payment due on fees earned during the partnership. One party had destroyed the evidence which would have settled many issues. The court discussed the principle that it should presume all against a destroyer of . .
Cited – Jones and others v Firkin-Flood ChD 17-Oct-2008
The trustees had contracted to sell shares in a private company held within the estate. A family member now claimed that they were held in trust after a settlement of a possible challenge to the will based in lack of testamentary capacity and undue . .
Cited – Carlisle and Cumbria United Independent Supporters’ Society Ltd v CUFC Holdings Ltd and Others CA 5-May-2010
The claimant supporters’ club had brought an action to prevent a substantial shareholder in the first defendant company from selling off land owned by the club for no consideration. The parties had reached a settlement after a protracted claim . .
Cited – AIB Group (UK) Plc v Mark Redler and Co Solicitors SC 5-Nov-2014
Bank not to recover more than its losses
The court was asked as to the remedy available to the appellant bank against the respondent, a firm of solicitors, for breach of the solicitors’ custodial duties in respect of money entrusted to them for the purpose of completing a loan which was to . .

These lists may be incomplete.
Updated: 24 June 2021; Ref: scu.193790

P v P: CA 6 May 2015

Appeal brought by the trustees of a post-nuptial settlement against an order varying that settlement by way of ancillary relief following a divorce between the spouses.
Jackson, Black, LJJ, Sir David Keene
[2015] EWCA Civ 447
Bailii
England and Wales

Updated: 22 June 2021; Ref: scu.546456

Asertis Ltd v Clarkson and Others: ChD 10 Feb 2021

Claims brought by Mr C, who is the first defendant to the London proceedings, seeking various declarations concerning a substantial short-term loan taken out by Ten Acres from the lenders as to which default had occurred. As part of that claim, Mr C had asserted that he was the ultimate beneficial owner of a property in Manchester called Ten Acres which had been purchased using the lenders’ moneys and was held in Ten Acres’ name.
[2021] EWHC 1053 (Ch)
Bailii
England and Wales

Updated: 22 June 2021; Ref: scu.663037

Elithorn 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 happened. The survivor now appealed against a declaration that he held the property in trust absolutely for the deceased estate, saying that she had had loaned the money to him.
Held: The appeal succeeded and a retrial was ordered. The evidence did not support the existence of any loan arrangement, and much was inconsistent with it. It was not the function of the appeal court to find facts, only to see if the judge’s view was supported by evidence. The judge had however incorrectly summarised, and understood the cases prevented by either side, and his conclusion was inconsistent with Stack v Dowden. (Rix LJ dissenting)
Rimer LJ, Rix LJ, Wilson LJ
[2008] EWCA Civ 1364, [2009] 1 P and CR 19, [2009] 1 P and CR DG14
Bailii
England and Wales
Citing:
Cited – Stack v Dowden HL 25-Apr-2007
The parties had cohabited for a long time, in a home bought by Ms Dowden. After the breakdown of the relationship, Mr Stack claimed an equal interest in the second family home, which they had bought in joint names. The House was asked whether, when . .

Cited by:
Main Judgment – Elithorn v Poulter and Others (Costs) CA 11-Dec-2008
. .

These lists may be incomplete.
Updated: 21 June 2021; Ref: scu.278976

Midland 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 and wife at the time of the acquisition as to the basis upon which the property was held by the husband, or as to the extent of their respective beneficial interests.
Held: The wife was entitled to half share in the property. She had made a contribution equal to one half of the wedding gift, had a claim under Rossett. An equal equitable interest in a home could be inferred without proof of explicit words: ‘I would therefore hold that positive evidence that the parties neither discussed nor intended any agreement as to the proportions of their beneficial interest does not preclude the court, on general equitable principles, from inferring one’. Cash contributions were not the sole determinant of the value of a share of the equity in a home.
Lord Justice Stuart-Smith, Lord Justice Waite and Lord Justice Schiemann
Independent 26-Jul-1995, Times 13-Jul-1995, Gazette 31-Aug-1995, [1995] 4 All ER 562, [1995] 2 FLR 915, [1995] EWCA Civ 12, [1996] 1 FCR 442
Bailii
England and Wales
Citing:
Followed – 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 . .
Cited – Springette 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 . .
Cited – Grant 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 . .
Cited – McHardy and Sons (A Firm) v Warren and Another CA 8-Apr-1994
A gift of the deposit to a couple can create an equal interest in the home for the spouses though the house is purchased in one name only. Lord Justice Dillon said: ‘To my mind it is irresistible conclusion that where a parent pays the deposit, . .

Cited by:
Cited – Oxley v Hiscock CA 6-May-2004
oxley_hiscockCA2004
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 – Carlton v Goodman CA 29-Apr-2002
The defendant claimed an interest in a house. The deceased had been a sitting tenant, and wanted to purchase his house. He could not obtain finance alone, and she joined with him, becoming liable under the mortgage. She did not live in the house . .
Cited – Van 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 . .
Cited – Stack v Dowden HL 25-Apr-2007
The parties had cohabited for a long time, in a home bought by Ms Dowden. After the breakdown of the relationship, Mr Stack claimed an equal interest in the second family home, which they had bought in joint names. The House was asked whether, when . .

These lists may be incomplete.
Updated: 21 June 2021; Ref: scu.83713