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 influence. The trustees requested the court to determine the trusts on which the shares were now held.
Held: The evidence of some family members and others had been variously bitter and unreliable including making baseless allegations of forgery and lying about attempting to pay witnesses for evidence. There had been no agreement to share the estate equally, but the company had since been run in a way which was prejudicial to the minority shareholders.
Since the death, the trustees had failed to take proper control of the company’s activities or to take note that the company had not declared dividends. Though the failure yet to provide accounts was as yet excusable, their other failings were a total abdication of their duties, including the duty to regulate the activities of the minority shareholder exercising control over the company, and preventing self dealing actions by him with company assets. The solicitor and professional trustee had failed, and the failures of the lay trustees stemmed largely from his: ‘the Trustees had by their conduct . . demonstrated their collective and individual unfitness to be Trustees of this trust.’ This was not however a case of dishonesty or deliberate breach. On the other hand the case demonstrated a total breakdown of trust and confidence. One trustee should remain to be joined by new trustees. Though the two proposed trustees should be added provisionally.
 EWHC 2417 (Ch)
England and Wales
Cited – 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 . .
Cited – Oceanic Steam Navigation Co v Sutherberry 1880
Cited – Beloved Wilkes’ Charity, Re ChD 28-Apr-1851
Trustees are under no general duty to explain the exercise by them of a discretion. . .
Cited – Regal (Hastings) Ltd v Gulliver HL 20-Feb-1942
Directors Liability for Actions Ouside the Company
Regal negotiated for the purchase of two cinemas in Hastings. There were five directors on the board, including Mr Gulliver, the chairman. Regal incorporated a subsidiary, Hastings Amalgamated Cinemas Ltd, with a share capital of 5,000 pounds. There . .
Cited – Holder v Holder; In re Frank Holder dec CA 8-Dec-1967
The court considered a complaint that a trustee had purchased trust property.
Held: There is a residual discretion in the Court to uphold a transaction that technically falls within the prohibition. . .
Cited – ATC (Cayman) v Rothschild Trust Cayman Ltd 2007
(Grand Court of the Cayman Islands) The court considered a proposed undertaking by successor trustees to their predecessors not to distribute a proportion of the trust fund for as long as it was required to meet the outgoing trustees’ entitlement to . .
Cited – Re Thompson’s Settlement 1985
Company shares were held in trust for the grandchildren of the settlor whose two sons were the trustees who effectively ran the company. The plaintiffs proposed the transfer of trust property to the company. The beneficiaries said that such a . .
Cited – Re: Gibson’s Settlement Trusts; Mellor v Gibson 1981
Settlement trustees undertook to execte a deed appointing trust moneys to the settlor’s children. The beneficiaries were not content with the proposed deed, and the trustees sought directions.
Held: The undertaking was invalid as a fetter on . .
Cited – Hillsdown Holdings plc v Pensions Ombudsman 1997
The court had to answer the question of whether the Pensions Ombudsman could make orders which the court could not.
Held: It could not, Knox J said: ‘there is a real distinction between ordering compensation for inconvenience and distress . .
Cited – Swales v Inland Revenue Commissioners 1984
Nicholls J said: ‘It is trite law that trustees cannot fetter the exercise by them at a future date of a discretion possessed by them as trustees.’ . .
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 – Re Hastings-Bass; Hastings v Inland Revenue CA 14-Mar-1974
Trustees of a settlement had exercised their power of advancement under the section, in order to save estate duty by transferring investments to be held on the trusts of a later settlement. However the actual effect of the advancement was that the . .
Cited – 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 . .
Cited – Re Clore’s Settlement Trusts ChD 1966
A 21 year old beneficiary of a substantial trust fund requested the trustees to apply for his benefit a sum (equal to about one-seventh of the fund) to a family charitable foundation. He would be entitled to the capital of the fund on attaining 30, . .
Lists of cited by and citing cases may be incomplete.
Wills and Probate
Updated: 02 November 2021; Ref: scu.277024