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Trusts - From: 1960 To: 1969

This page lists 57 cases, and was prepared on 02 April 2018.

 
Jones v Challenger [1960] 1 All ER 785; [1961] 1 QB 176
1960
CA
Devlin LJ
Land, Trusts
The test under the section was whether it was inequitable to make the order for sale where one of the joint beneficiaries, who in that case were ex-husband and wife, wished to realise their investment in the property. Held: Referring to the statement of principle in in re Mayo, described as 'a simple uncomplicated case of a trust for sale of freehold property, where the beneficiaries were brother and sister, and where there was no suggestion that either of them were intended or even wished to occupy the property . . But this simple principle cannot prevail where the trust itself in the circumstances in which it was made show that there was a secondary or collateral object besides that of sale . . it is at any rate wrong and inequitable for one of the parties to the trust to invoke the letter of the trust in order to defeat one of its purposes, whether that purpose be written or unwritten, and the court will not permit it."
Law of Property Act 1925 30
1 Cites

1 Citers


 
Re Steed's Will Trusts [1960] Ch 407; [1960 1 All ER 487
1960
CA
Lord Evershed MR
Trusts
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."
Variation of Trusts Act 1958 1
1 Citers


 
Compton v Compton [1960] P 201
1960
FD
Marshall J
Trusts, Family
The court considered whether trusts were to be deemed to be post nuptial settlements.
Marshall J said: "The first point taken by Mr. Beyfus on the wife's behalf is fundamental. He has submitted that the four settlements in question are not "post-nuptial settlements made on the parties "whose marriage is the subject of the decree." This submission was made before the registrar, but later abandoned before the hearing was concluded. It has, however, been revived before me and I must deal with it. If he were right in that submission this court would have no jurisdiction to make any order upon this application. I do not entertain any doubt that this submission is wrong. These settlements are settlements of property made in the course of marriage, and they deal with the interests of the children of the marriage. In the disposal of the property for the benefit of each child the respondent wife has been given a voice both as trustee and under the power of appointment even though it is the husband who provides all the money. Under the settlements on the two daughters she also has a beneficial interest in reversion. A settlement can settle on parties to a marriage power over the disposal as well as over the property itself."
1 Citers


 
In re Moritz [1960] Ch 251
1960
CA
Wynn-Parry LJ
Trusts, Costs, Litigation Practice
Trustees had denied the defendants a sight of the exhibits to affidavits. Their' counsel argued for a settled practice that where an application is made by trustees for directions of the Beddoe kind, then the proposed defendant beneficiaries should not necessarily see all the evidence relating to the dispute. Counsel for the proposed beneficiary defendants, argued that he should be entitled to attend argue for his clients, on all matters including ones based on the so-far denied exhibits, and that it was for the Judge to say if those arguments were heard in the presence of parties other than the trustees who sought the directions of the court, though where one was considering beneficiaries and where their trust estate might bear the expense of the proposed litigation, it was beneficiaries' money that was being spent or being proposed to be spent. Held: Wynn-Parry J said: "Speaking for myself, so far as I know, it has been the practice of this court, without exception, over a great many years, that where, in such a case as this, application is made by a trustee ex necessis where there are disputes, for directions from the court as to whether or not proceedings should be brought against the defendants, those defendants are not entitled to be heard upon that application. The court acts upon such evidence as is placed before it and it expresses itself one way or the other." and
"As I understand it, the practice in this Division is that where a trustee finds it is compelled to ask for the directions of the court as to whether or not certain proceedings should be taken, while it is proper and indeed necessary to join the parties against whom the proposed relief is sought, those parties should not be present in Chambers when the matter is debated; and they should not be furnished with the evidence upon which the court is asked to act… Very frequently, the leave to proceed is limited, for instance, up to discovery, but it would seem to me to be a quite unjustified inroad upon what I conceive to be a very useful practice if I were to allow this application and to allow the two defendants not merely to be present at the beginning of the proceedings when the originating summons is heard, but to remain there throughout those proceedings and to have all the evidence on which the trustees are asking the court for its directions. I know of no precedent for it, and, in my view, it is completely against the established practice."
1 Cites

1 Citers


 
Re Seale's Marriage Settlement [1961] 1 Ch 575
1961


Trusts
Principles governing the exercise of a trustee's discretion.

 
In Re Collard's Will Trusts [1961] 1 Ch 293
1961

Buckley J
Trusts
Buckley J said: "In the present case, the farm has recently been valued by qualified valuers at £20,000, and an advance of £20,000 would be within the financial limit of the power of the advancement which the trustees at present have, having regard to the value of the elder daughter’s settled share. So far as I can see, there would be nothing wrong in the trustees making an advance in cash to her son of £20,000 and subsequently selling the farm to him for £20,000. In those circumstances it seems to me that the Court need not insist on that process having gone through; and that the right view is that the trustees have power to convey the farm to the son and treat that conveyance as an advancement to him of its market value.
1 Citers


 
In Re Pilkington's Will Trusts; Pilkington v Inland Revenue Commissioners [1961] Ch 466
1961
CA
Upjohn LJ
Trusts

1 Cites

1 Citers


 
Re Burney's Settlement Trusts [1961] 1 WLR 545; [1961] 1 All ER 856
1961
ChD
Wilberforce J
Trusts
The court approved a proposed variation of a trust.
1 Citers


 
Wissenbruch v Wissenbruch 1961 SC 340
1961


Scotland, Trusts

1 Citers


 
in Re Pilkington's Will Trusts; Pilkington v Inland Revenue Commissioners [1961] Ch 488
2 Jan 1961
CA
Upjohn LJ
Trusts, Equity

1 Cites

1 Citers


 
Hine v Hine [1962] 1 WLR 1124
1962
CA
Lord Denning MR
Trusts, Family
Lord Denning MR said: "the jurisdiction of the court over family assets under section 17 is entirely discretionary. Its discretion transcends all rights, legal or equitable, and enables the Court to make such order as it thinks fit. This means, as I understand it, that the Court is entitled to make such order as appears to be fair and just in all the circumstances of the case."
Married Women's Property Act 1882 17
1 Citers



 
 Neville Estates Ltd v Madden; ChD 1962 - [1962] Ch 832
 
In Re Druce's Settlement Trusts [1962] 1 WLR 363
1962
ChD
Russell J
Litigation Practice, Trusts
Russell J discussed the difficulties of trustees when making an application on behalf of a beneficiary of the trust: "The application was made not by a beneficiary but by the trustees. This is a disadvantage, particularly in a case such as the present, where the interests of the persons for whom the court is concerned are not exactly the same as those of some respondent. It means that there is no counsel whose sole task is to protect and support those interests. Where the trustees make the application their counsel is there to argue for the acceptance of the scheme: but at the same time his duty and that of the trustees is to be the watchdog for (for example) unborn interests. Let me say at once that Mr Brightman for the trustees, while recognising the disadvantage, overcame admirably the duality of his position. To change the metaphor, his performance as touch judge was not marred by the fact that he started in the line-out, and I was grateful for his assistance. Nevertheless, the disadvantages of this duality exist. Counsel for the applicant trustees must have an instinctive reaction against a criticism from the bench, designed to safeguard or benefit those unborn interests, which would be lacking in a respondent trustee, an instinctive tendency to be against alteration of the scheme for the approval of which he is applying. Moreover, if the criticism be in fact unsound, it is likely to take longer for the judge to be dissuaded from it because of that very duality. There are, of course, cases of applications to vary beneficial interests where it is necessary and proper that the trustees should make the application, notwithstanding the disadvantage I have mentioned. This case was one of them, the trustees being satisfied that the scheme was beneficial to their beneficiaries and no beneficiary being willing to make the application. But, in general, the trustees should not be the applicants in applications to vary beneficial trusts, unless they are satisfied that the proposals are beneficial to the persons interested and have a good prospect of being approved by the court, and further, that if they do not make the application no one will. In particular, it would not be right if it became the general practice for such applications to be made by the trustees upon the supposition that should the application fail it will be more probable (though not, of course, certain) that the costs of all parties will be directed to be met out of the trust funds."
1 Citers


 
In re Hubbard's Will Trusts [1962] Ch 275
1962


Trusts
The rule that a gift may fail on the failure of a prior interest upon which it is dependent and which is void for remoteness is a "rule of invalidity by contagion with another and invalid limitation".
1 Citers


 
Re Pauling's Settlement Trusts [1962] 1 WLR 86
1962
ChD
Wilberforce J
Trusts
Family money had been placed into a trust to be managed by a bank. It was said that te bank had wrongly advanced money to the daughter allowing her to fritter away large parts of the capital Held: The bank had misunderstood the power of advancement given, and was liable to replace nearly £15,000 as having been expended in breach of trust for which they could be compelled to account.
Wilberforce J said: "The . . court has to consider all the circumstances in which the concurrence of the cestui que trust was given with a view to seeing whether it is fair and equitable that, having given his concurrence, he should afterwards turn round and sue the trustees; . . subject to this, it is not necessary that he should know that what he is concurring in is a breach of trust, provided that he fully understands what he is concurring in, and . . it is not necessary that he should himself have directly benefited by the breach of trust."
Trustee Act 1925
1 Citers



 
 Chettiar v Chettiar; PC 14-Feb-1962 - [1962] AC 294; [1962] UKPC 1; [1962] UKPC 4; [1962] 2 WLR 548; [1962] 2 All ER 238
 
In Re Pilkington's Will Trusts; Pilkington v Inland Revenue Commissioners [1964] AC 612; [1962] 3 All ER 622; [1962] 3 WLR 1051; 106 Sol Jo 834; 40 Tax Cas 433; [1962] UKHL TC_40_416
8 Oct 1962
HL
Viscount Radcliffe
Equity, Trusts
The trustees proposed establishing a new trust in respect of the share of an estate to which an infant beneficiary had a contingent entitlement. A portion of the trust fund would be allocated to the new trust. Held: This was a lawful exercise of the statutory power of advancement. The new trusts must be read as if they had been created by the settlor of the existing settlement, at the time of the existing settlement, and, when tested against the rule against perpetuities in that situation, they failed. In the context of a power of advancement, it is no bar to an exercise of the power that the primary object neither requested nor consented to it, and the power was not limited to the conferring of benefit "personal to the person concerned in the sense of being related to his or her own real or personal needs". Nevertheless, trusts created in remainder after the life interest of the settlor's son were void for perpetuity. The phrase "advancement or benefit" in setion 32 of the 1925 Act covered: "any use of the money which will improve the material situation of the beneficiary."
A power of advancement was a special power and accordingly trusts called into existence by its exercise must be written into the instrument creating the power far the purposes of applying the perpetuity rule.
Viscount Radcliffe said: "I ought to note for the record (1) that the transaction envisaged does not actually involve the raising of money, since the trustees propose to appropriate a block of shares in the family’s private limited company as the trust investment, and (2) there will not be any actual transfer, since the trustees of the proposed settlement and the will trustees are the same persons. As I have already said, I do not attach any importance to these factors . . To transfer or appropriate outright is only to do by shortcut what could be done in a more roundabout way by selling the shares to a consenting party, paying the money over to the new settlement with appropriate instructions and arranging for it to be used in buying back the shares as the trust investment. It cannot make any difference to follow the course taken in In Re Collard’s Will Trusts and deal with the property direct. On the other point, so long as there are separate trusts, the property effectually passes out of the old settlement into the new one, and it is of no relevance that, at any rate for the time being, the persons administering the new trust are the same individuals."
TC Trusts - Will settlement - Infant beneficiary with contingent interest - Statutory power of advancement - Whether exercisable by resettlement on new trusts - Rule against perpetuities - Whether new trusts to be treated as if contained in original settlement - Trustee Act, 1925 (15 & 16 Geo. V, c. 19), Section 32.
Trustee Act 1925 32 - Trustee Act 1925
1 Cites

1 Citers

[ Bailii ]
 
Wilson v Wilson [1963] 1 WLR 1470
1963
CA

Trusts

1 Citers


 
New Zealand Netherlands Society "Oranje" Inc v Laurentuis Cornelis Kuys [1973] 1 WLR 1126
1963
PC
Lord Wilberforce
Trusts, Commonwealth
(New Zealand) The scope of a fiduciary duty may be modified by a course of dealing by the person to whom the duty is owed. "The obligation not to profit from a position of trust, or, as it sometimes relevant to put it, not to allow a conflict to arise between interest and duty, is one of strictness. The strength, and indeed the severity, of the rule has recently been emphasised by the House of Lords in Phipps v. Boardman …. It retains its vigour in all jurisdictions where the principles of equity are applied. Naturally it has different applications in different contexts. It applies, in principle, whether the case is one of a trust, express or implied, of partnership, of directorship of a limited company, of principal and agent, or master and servant, but the precise scope of it must be moulded according to the nature of the relationship." A trustee seeking to to obtain a benefit or incur or enter into any transaction which is a prima facie breach of his fiduciary duties, must make full and frank advance disclosure.
1 Cites

1 Citers



 
 Re Pauling's Settlement Trusts (No.1); CA 29-May-1963 - [1963] EWCA Civ 5; [1964] Ch 303; [1963] 3 All ER 1; [1963] 3 WLR 742
 
Re Pauling's Settlement Trusts (No 2) [1963] 1 All ER 857; [1963] 3 WLR 742; [1963] Ch 576
1 Jun 1963

Wilberforce J
Trusts
An application was made for the trustee to be replaced. The trustee complained that he would remain liable in certain events, and sought an indemnity from any new trustee out of the trust fund. Held: A new trustees would be under "the normal duty of preserving an equitable balance, and if at any time it was shown they were inclining one way or the other, it would not be a difficult matter to bring them to account." The court asked to what extent a trustee may have a lien over the trust fund for the liabilities to which that trustee may be subject.
1 Cites

1 Citers



 
 Re Van Gruisen's Will Trusts; ChD 1964 - [1964] 1 WLR 449
 
In re Eaton [1964] 1 WLR 1269
1964


Trusts

1 Citers


 
In re Dellow's Will Trusts; Lloyd's Bank v Institute of Cancer Research [1964] 1 WLR 451; [1964] 1 All ER 771
1964
ChD
Ungoed-Thomas J
Wills and Probate, Trusts, Evidence
Ungoed-Thomas J said: "The more serious the allegation the more cogent is the evidence required to overcome the unliklihood of what is alleged and thus to prove it."
1 Citers


 
In re Buckton's Settlement Trusts [1964] Ch 497
1964


Trusts

1 Citers


 
In re T's Settlement Trusts [1964] Ch 158
1964
ChD
Wilberforce J
Trusts
Wilberforce J was asked to approve a variation of a trust in favour of a child under the 1958 Act, to restrict her from getting her full entitlement on her attaining the age of 21 because she was said to be "alarmingly immature and irresponsible as regards money." She was within 18 days of attaining majority. Held: The court deferred the vesting and imposed protective trusts in the interim. Wilberforce J said this of the word "benefit": "'benefit' is a word of wide meaning: it is not restricted to material benefit. On this basis I was urged to approve the arrangement.
This argument, based on the language of the Act, has much force . . There are obvious difficulties in attributing so wide a meaning to the Act of 1958. For example, is the court to consult the wished of the infant? That is, as has been found here, a matter of considerable difficulty, and where, as here, the infant is nearly 21, it would seem preferable, if her wishes can be taken into account, to leave the matter over until she can decide for herself. Or can the court impose a settlement against the infant's wishes? To so this would involve going much further than the court goes under the Act of 1855, and places upon the court a heavy responsibility (which it does not have generally in variation of trusts applications) of considering and estimating the views of other persons (often including parents and medical and psychological experts) as to what is for the infant's benefit."
Variation of Trusts Act 1958 1
1 Citers


 
In re Londonderry's Settlement; Peat v Lady Walsh [1964] EWCA Civ 6; [1964] 3 All ER 855; [1965] Ch 918; [1965] 2 WLR 229
3 Nov 1964
CA
Harman LJ, Danckwerts LJ, Salmon LJ
Trusts
The Court considered limitations on the right to disclosure of trust documents, and in particuar the need to protect confidentiality in communications between trustees as to the exercise of their dispositive discretions, and in communications made to the trustees by other beneficiaries. Trustees exercising a discretionary power are not bound to disclose to their beneficiaries the reasons actuating them in coming to a decision. In this particular case, there was no obligation to allow inspection of documents relating to trust meetings.
1 Citers

[ Bailii ]
 
Bedson v Bedson [1965] 2 QB 666; [1965] 3 All ER 307
1965
CA
Lord Denning MR, Russell LJ, Davies LJ
Family, Trusts
The parties, a married couple disputed the shares in which the matrimonial home, formerly held by them as joint tenants would be held after severance o that joint tenancy. Held: The wife was entitled to a half share in the property.
Russell LJ considered that the court had no jurisdiction under section 17 of the 1882 Act to find that the wife had any beneficial interest other than one equal to that of the husband. He said: ""If a freehold is conveyed to A and B on trust for themselves as joint tenants, each has the same beneficial interest in that property as the other. That is inherent in the nature of the beneficial interest created, as is the right to the whole on survivorship before severance. It is also inherent in the nature of the beneficial interest created that either may sever at any time inter vivos-, and on severance the beneficial joint tenancy becomes a beneficial tenancy in common in undivided shares and right by survivorship no longer obtains. If there be two beneficial joint tenants, severance produces a beneficial joint tenancy in common in two equal shares . . by declaration of the beneficial joint tenancy between A and B, their respective rights and titles are no less clearly laid down and established than if there had been a declaration of a beneficial tenancy in common in equal undivided shares."
Lord Denning MR, delivering the leading judgment took a strong line of his own, saying: "Although the court refused a sale, we are asked to determine what is the wife's share in the property. I do not think that the fact that they were joint tenants means that, on a sale, she necessarily takes a half share. That is decisively shown by the decision of this court in Hine v. Hine. I would refer particularly to the wise observations of Pearson LJ. That decision was distinguished by Russell, LJ, in Wilson v Wilson, on the ground that the conveyance in Hine v. Hine did not contain an express declaration of trust for the two jointly: but I for myself assumed that it did, because a declaration of trust is common form: see Smith v. Smith and Brown v. Brown and s.36(1) of the Law of Property Act 1925. The mere insertion of a declaration of trust (which would be imported anyway) cannot make any difference. Notwithstanding the criticisms that have been made of Hine v. Hine, it is, I think, still good law. In that very case, Pearson, LJ, pointed out that a half-and-half division would not have produced a fair and just result, whereas decisions of this court did achieve a reasonable result. I would, myself, hesitate long before I overthrew a case which did' justice: but suffice it to say that it is binding on this court and none of us can overthrow it. In this situation, I have had great doubt whether we should interfere with the decision of the judge who relied on Hine v. Hine, but my brethren think that we should, and I concur on the ground that there is solid ground for believing that the parties did intend that, come what may, the proceeds of the sale of the property (when it should happen) should be shared equally. I say this because of the form of the latest accounts which were agreed by the husband with the accountants after the disputes had arisen. They showed the property as belonging half-and-half to each."
Lord Justice Davies, said that he could see no distinction in principle between a declaration of trust of the nature under discussion and a mere conveyance into joint names, and: "From the many and sometimes conflicting authorities the principle, in my judgment, emerges that, in proceedings under s.17 of the Act of 1882 between husband and wife, the form of a transaction is not conclusive. In enquiring into the title to property, the court must investigate the reality of the situation and, having done so and having ascertained the facts, must make such order as it thinks fit. So that, whatever the documents may appear to say on their face, the court may reach the conclusion that, in reality, by express or implied agreement the true position was something different from that appearing on the face of the documents. Unless, however, the court is satisfied on evidence that the parties expressly or by conduct did agree to a state of affairs other than that indicated by the documents, then the documents must prevail. It may be that it is more difficult to go behind a declaration of trust than a conveyance. It may be that practical difficulties may arise in any given case; but I do not think that there is any authority for the proposition that, in no circumstances as between husband and wife where no third party interest is concerned, can the court look behind the form of the documents."
Nevertheless, he concluded that since there was no evidence of any agreement between the parties that the property should be owned otherwise than in equal shares, the wife was entitled to a half- interest in the property.
Married Women's Property Act 1882 17
1 Citers


 
In re DML [1965] Ch 1133
1965


Trusts, Health

1 Citers


 
Phipps v Boardman [1965] Ch 992
1965
CA
Lord Denning MR
Trusts
Affirmed
1 Cites

1 Citers


 
In Re Jones Will Trusts [1965] 1 Ch 1124
11 Jan 1965
ChD
Buckley J
Contract, Trusts
Buckley J said that the words "unless the contrary intention applies" mean "unless the contrary appears from any surrounding circumstances which carry conviction to the mind of the court". He also agreed with the submission "that the evidence indicating a contrary intention must be strong".
1 Citers


 
Re Clore's Settlement Trusts [1966] 1 WLR 955; [1966] 2 All ER 272
1966
ChD
Pennycuick J
Trusts, Charity
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, in default of which the capital went to his issue if any and subject thereto to his sister and her family in trust. Held: It was open to the trustees to make the advance: i) the improvement of the material situation of the beneficiary is not confined to his direct financial situation but could include the discharge of certain moral or social obligations particularly in relation to provision for family and dependants. And ii) the court has always recognized that a wealthy person has a moral obligation to make appropriate charitable donations and that: "a beneficiary under a settlement may indeed in many cases be reasonably entitled to regard himself as under a moral obligation to make donations towards charity. The nature and amount of those donations must depend upon all the circumstances, including the position in life of the beneficiary, the amount of the fund and the amount of his other resources. Once that proposition is accepted, it seems to me that it must lie within the scope of a power such as that contained in clause 8 of this settlement for the trustees to raise capital for the purpose of relieving the beneficiary of his moral obligation towards whatever charity he may have in mind. If the obligation is not to be met out of the capital of the trust fund, he would have to meet it out of his own pocket, if at all. Accordingly, the discharge of the obligation out of the capital of the trust fund does improve his material situation. The precise amount which the trustees can in any given case apply for this purpose must depend, I think, on the particular circumstances, and in this respect quantum is a necessary ingredient in the proper exercise of the power. It is difficult, for example, to see how the trustees under a power such as that in clause 8 could validly pay over the whole authorized two-thirds to charitable purposes. On the other hand, it is certainly not for the court to say precisely where the line is to be drawn." iii) rejecting the argument that direct material advantage could only be shown if, for example, the beneficiary was under such pressure, public or otherwise, that it would be detrimental to his material position if the donation were not made, that that was: "too narrow a view of what represents a benefit in a material sense to the beneficiary. Once the beneficiary regards the payment as a moral obligation, then it may be for his benefit to be relieved of it." Earlier he said: "Once he recognises this obligation the trustees may properly regard it as improving his material situation to discharge the obligation out of the trust fund, and as I have said, the proportion they propose to apply for this purpose is not excessive."
1 Citers


 
In re Lysaght (deceased) [1966] Ch 191
1966

Buckley J
Trusts, Charity
A general charitable purpose (or intention) should be recognised and given effect to, even though some particular directions given by the charity's founder are (or become) impracticable.
1 Citers


 
Pathirana v Pathirana [1967] 1 AC 233; [1966] 3 WLR 666; [1966] UKPC 14
28 Jun 1966
PC
Guest, Pearce, Upjohn, Pearson LL, Sir Frederic Sellers
Commonwealth, Company, Trusts
A partnership between the parties had held a contract for the exclusive supply of a foreign company's goods in Ceylon. One of the partners cancelled the partnership's contract and took a new contract in his name alone. This contract was said to be personal to that partner. Held: The Privy Council advised that this new contract was to be treated as partnership property, since it arose out of the substantial goodwill which the partnership had generated.
After termination, one partner carries on the partnership business using the capital of the other, that partner is liable to account to the partnership.
[ Bailii ]
 
Phipps v Boardman [1966] 3 All ER 721; [1967] 2 AC 46; [1966] UKHL 2
3 Nov 1966
HL
Lord Upjohn, Lord Hodson
Equity, Trusts, Information
A trustee has a duty to exploit any available opportunity for the trust. "Rules of equity have to be applied to such a great diversity of circumstances that they can be stated only in the most general terms and applied with particular attention to the exact circumstances of each case. The relevant rule for the decision of this case is the fundamental rule of equity that a person in a fiduciary capacity must not make a profit out of his trust, which is part of the wider rule that a trustee must not place himself in a position where his duty and his interest may conflict."
"The whole of the law is laid down in the fundamental principle exemplified in Lord Cranworth's statement [in Aberdeen Railway Co v. Blaikie]. But it is applicable, like so many equitable principles which may affect a conscience, however innocent, to such a diversity of different cases that the observations of judges and even in your Lordships' House in cases where this great principle is being applied must be regarded as applicable only to the particular facts of the particular case in question and not regarded as a new and slightly different formulation of the legal principle so well settled." and "The phrase 'possibly may conflict' requires consideration. In my view it means that the reasonable man looking at the relevant facts and circumstances of the particular case would think that there was a real sensible possibility of conflict; not that you could imagine some situation arising which might, in some conceivable possibility in events not contemplated as real sensible possibilities by any reasonable person, result in conflict."
The court considered the circumstances under which information has been acquired which impose a duty of confidence: "The true test is to determine in what circumstances the information has been acquired. If it has been acquired in such circumstances that it would be a breach of confidence to disclose it to another then courts of equity will restrain the recipient from communicating it to another. In such cases such confidential information is often and for many years has been described as the property of the donor, the books of authority are full of such references: knowledge of secret processes, 'know-how', confidential information as to the prospects of a company or of someone's intention or the expected results of some horse race based on stable or other confidential information. But in the end the real truth is that it is not property in any normal sense but equity will restrain its transmission to another if in breach of some confidential relationship."
Lord Upjohn said: "In general, information is not property at all. It is normally open to all who have eyes to read and ears to hear. The true test is to determine in what circumstances the information has been acquired. If it has been acquired in such circumstances that it would be a breach of confidence to disclose it to another, then courts of equity will restrain the recipient from communicating it to another. In such cases such confidential information is often and for many years has been described as the property of the donor, the books of authority are full of such references; knowledge of secret processes, 'know-how', confidential information as to the prospects of a company or of someone's intention or the expected results of some horse race based on stable or other confidential information. But in the end the real truth is that it is not property in any normal sense, but equity will restrain its transmission to another if in breach of some confidential relationship".
1 Cites

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[ Bailii ]

 
 In re Tilley's Will Trusts; ChD 1967 - [1967] Ch 1179
 
Holder v Holder; In re Frank Holder dec [1967] EWCA Civ 2; [1968] Ch 353; [1968] 1 All ER 665; [1968] 2 WLR 237
8 Dec 1967
CA
Harman LJ, Danckwerts LJ, Sachs LJ
Wills and Probate, Trusts
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.
1 Citers

[ Bailii ]
 
Holmden's Settlement Trusts, Re Holmden's Settlement, Re [1968] AC 685; [1967] UKHL 7
13 Dec 1967
HL
Lord Reid, Lord Guest, Lord Wilberforce
Trusts, Torts - Other
Under the 1968 Act, the court is not in the position of a statutory settlor. Lord Reid described the provisions of the 1958 Act: "Under the Variation of Trusts Act the court does not itself amend or vary the trusts of the original settlement. The beneficiaries are not bound by variations because the court has made the variation. Each beneficiary is bound because he has consented to the variation. If he was not of full age when the arrangement was made he is bound because the court was authorised by the Act to approve of it on his behalf and did so by making an order. If he was of full age and did not in fact consent he is not affected by the order of the court and he is not bound. So the arrangement must be regarded as an arrangement made by the beneficiaries themselves. The court merely acted on behalf of or as representing those beneficiaries who were not in a position to give their own consent and approval.
So we have an alteration of the settlement which was not made by the settlor or by the court as being empowered to make it, but which was made by the beneficiaries quite independently of the settlor or of any power, express or implied given or deemed to have been given by him."
Lord Guest: "Section 1 of the Act enabled the court to give approval to an arrangement on behalf of such persons as were unable by incapacity or otherwise to give their approval. The court thus supplied the capacity which the incapax lacked."
Lord Wilberforce: "If all the beneficiaries under the settlement had been sui juris, they could, in my opinion, have joined together with the trustees and declared different trusts which would supersede those originally contained in the settlement. Those new trusts would operate proprio vigore, by virtue of a self-contained instrument - namely, the deed of arrangement or variation. The original settlement would have lost any force or relevance. The effect of an order made under the Variation of Trusts Act, 1958, is to make good by act of the court any want of capacity to enter into a binding arrangement of any beneficiary not capable of binding himself and of any beneficiary unborn: the nature and effect of any arrangement so sanctioned is the same as that I have described."
Variation of Trusts Act 1958 1
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[ Bailii ]
 
Gartside v Inland Revenue Commissioners [1968] AC 553; [1967] UKHL 6; [1968] 1 All ER 121; [1967] TR 309; [1968] 2 WLR 277
13 Dec 1967
HL
Lord Reid, Lord Wilberforce, Viscount Dilhorne
Trusts, Inheritance Tax
Before his death, the deceased had advanced sums to his sons. The House was asked whether they were liable to Estate Duty. Held: Lord Reid said: "no object of a discretionary trust has, as such, any legal right to or in the capital", although he may possess limited equitable rights against the trustee; "mere expectancy or hope of consideration by the trustee'" and "'In possession' must mean that the interest enables you to claim now whatever may be the subject of the interest. For instance, if it is the current income from a certain fund your claim may yield nothing if there is no income, but your claim is a valid claim, and if there is any income you are entitled to get it. But a right to require trustees to consider whether they will pay you something does not enable you to claim anything. If the trustees do decide to pay you something, you do not get it by reason of having the right to have your case considered: you get it only because the trustees have decided to give it to you."
Lord Wilberforce said that the circumstances in which a beneficiary under a discretionary trust may seek protection, and the nature of the protection he may expect to obtain, will depend on the court's discretion.
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[ Bailii ]

 
 Selangor United Rubber Estates Ltd v Cradock (No 3); ChD 1968 - [1968] 1 WLR 1555; [1968] 2 All ER 1073

 
 The Carnegie Trustees for the Universities of Scotland v The University of St Andrews; HL 1968 - 1968 SC (HL) 27
 
in Re Wallace's Settlements [1968] 1 WLR 71
1968
ChD
Megarry J
Trusts
A judge considering an application to vary trusts should approach it with "a fair cautious and enquiring mind".
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Re Ball's Settlement Trusts [1968] 1 WLR 899
1968
ChD
Megarry J
Trusts
Megarry J said: "If an arrangement, while leaving the substratum, effectuates the purpose of the original trusts by other means, it may still be possible to regard that arrangement as merely varying the original trusts, even though the means employed are wholly different and even though the form is completely changed."
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Re Weston's Settlement Trusts [1969] 1 Ch 223; [1968] 3 All ER 338
1968
CA
Lord Denning MR
Trusts
The settlor applied for the approval of an arrangement for the export of his trust to Jersey, where he had gone to live. The court considered its powers under the 1968 Act. Held: The court should not consider merely the financial benefit to the infants or unborn children, but also their educational and social benefit. There were many things in life more worthwhile than money. In this case, his Lordship found that it was not for the benefit of children to be uprooted from England and transported to another country simply to avoid tax.
Lord Denning MR said: "In exercising its discretion, the function of the court is to protect those who cannot protect themselves." The proposed variation was not for the benefit of the specified class and the court refused to approve it.
Beneficiaries who are sui juris and together absolutely entitled to the trust property have the right to defeat the intention of the settlor by varying or revoking the trust as they see fit.
Variation of Trusts Act 1958 1
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Ulrich v Ulrich and Felton [1968] 1 WLR 180
1968
CA
Lord Denning MR and Diplock LJ
Trusts
The parties had married, but bought a house when engaged. She had paid one-sixth of the acquisition cost in cash, and he raised the balance by a mortgage in his name. Held: It was wrong to treat a mortgage contribution as equivalent to a cash contribution.
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Protheroe v Protheroe [1968] EWCA Civ 7; [1968] 1 All ER 1111; [1968] 1 WLR 519; (1968) 19 P & CR 396
1 Feb 1968
CA
Lord Denning MR, Danckwerts, Widgery LJJ
Land, Trusts
If a trustee who owns the leasehold gets in the freehold, the freehold belongs to the trust and the trustee cannot take the property for himself.
[ Bailii ]

 
 Barclays Bank Ltd v Quistclose Investments Ltd; etc; HL 31-Oct-1968 - [1970] AC 567; [1968] UKHL 4
 
Whishaw v Stephens (on appeal from In re Gulbenkian's Settlement) (No 1) [1970] AC 508; [1968] UKHL 5
31 Oct 1968
HL
Lord Upjohn, Lord Reid, Lord Hodson, Lord Guest, Lord Donovan
Litigation Practice, Trusts
Parties disputed the effect of clauses describing the beneficiaries of a trust. Held: The clause did not make sense as it stood. In a fixed non-charitable trust (as opposed to a discretionary trust) the court must be able to draw up a list of beneficiaries before a trust can be recognised. The modern approach of a court is not to reject any part of a legal document as meaningless without first trying hard to give it a sensible meaning.
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[ Bailii ]
 
in Re: Abrahams' Will Trust [1969] 1 Ch 463
1969
ChD
Cross J
Trusts
The trustees of a 1948 settlement had advanced funds in 1957 by way of a new settlement, the terms of which did not comply with the rule against perpetuities. Not all the terms of the 1957 settlement would infringe the rule against perpetuities, but the effect of the rule was extensive. For example a child had a life interest subject to protective trusts. The effect of the rule was that the life interest was valid but that the discretionary trusts arising on forfeiture would be invalid, so that, upon a forfeiture, the property would be held on the trusts of the original 1948 settlement. The argument in favour of holding the advancement wholly void was advanced by the Inland Revenue. Held. The revenue succeeded.
Cross J said: "The power which the trustees purported to exercise by setting up Carole's fund (to take her as an example) and declaring the trusts of it which are contained in the 1957 settlement was a power exercisable for the benefit of Carole, and for nobody else. The various other persons to whom the settlement purported to give benefits were not objects of that power of advancement. The position was that the trustees had a discretion as to the manner in which they would benefit Carole, and they considered that an appropriate way to benefit her would be to create this settlement under which beneficial interests were given to other members of her family besides herself. If one looks at the matter in that way, it seems to me reasonable to hold that the effect of the invalidity of some of the limitations in the settlement by reason of the rule against perpetuities may not be the same as it would have been had the settlement been created by the exercise of a special power of appointment under which all the supposed beneficiaries were objects. It is one thing to say that if a trustee has power to appoint a fund to all or any of a class of objects and he appoints a life interest to one object which is not void for perpetuity and remainders to other objects which are void, then the life interest survives the invalidity of the remainders; but it is another thing to say that if a trustee has power to benefit A. in a number of different ways and he chooses to benefit him by making a settlement on him for life with remainders to his issue, which remainders are void for perpetuity, then A can claim to obtain that part of the benefit intended for him which is represented by the life interest. The interests given to separate objects of an ordinary special power are separate interests, but all the interests created in Carole's fund were intended as part and parcel of a single benefit to her." and
"Of course, it may well be that, if the invalidity caused by the operation of the rule against perpetuities is quite small as compared with the parts of the settlement which are unaffected by the rule, the court might be prepared to say that the valid parts of the settlement would survive intact. Thus Lord Evershed MR held in the Vestey case that the exercise of the discretion there could be upheld notwithstanding the fact that the trustees were to some extent under a misapprehension as to what its effect would be. But here there is no doubt that the effect of the operation of the rule is wholly to alter the character of the settlement. In my judgment the result of that must be that there never was a valid exercise by the trustees of the power of advancement."
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Denvir v Denvir 1969 SLT 301
1969


Scotland, Trusts

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Carl Zeiss Stiftung v Herbert Smith No.2 [1969] 2 WLR 427
1969
CA
Edmund Davies LJ
Equity, Trusts
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."
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Re CL [1969] 1 Ch 587
1969


Trusts
Trustees sought the court permission to distribute assets in such a way as to extinguish the beneficiary's interest in favour of her adopted children with a consequent saving of estate duty on her death with no real detriment to the material position of the beneficiary. Held: The word benefit included the proposed arrangement.
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In Re Holt's Settlement [1969] 1 Ch 100
1969
ChD
Megarry J
Trusts, Children
An application was made to vary the terms of a trust in favour of children. Held: The court was ready to receive evidence from a mother whose children were due to become entitled to funds at the age of 21 that she believed it most important that young people should be reasonably advanced in a career and settled in life before they were in receipt of an income sufficient to make them independent of the need to work. Megarry J, "speaking in general terms" fully concurred, and approved an arrangement which postponed vesting of their interests.
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In re Abrahams' Will Trusts [1969] 1 Ch 463
1969

Cross J
Trusts
The trustees sought to mitigate estate duty by terminating a life interest, and accelerating the interest fo the next generation. Held: There had been no valid exercise of the power of advancement. Cross J rejected an argument approximating an advancement by way of resettlement to the exercise of a power of appointment. Although they were treated in the same way for perpetuity purposes, in his view the similarity ended there: "The interests given to separate objects of an ordinary special power are separate interests, but all the interests created in Carole's fund were intended as part and parcel of a single benefit to her."
1 Citers


 
In re Windeatt's Will Trusts [1969] 1 WLR 833
1969


Trusts
It was possible to appoint a foreign resident trustee of an English trust.

 
In re Denley's Trust Deed [1969] 1 Ch 373
1969
Chd
Goff J
Trusts
The trustees of land in Gloucestershire were to maintain the land as a sports ground for the benefit of the employees of a company and also for "such other person or persons (if any) as the trustees may allow to use the same . . ." The Deed contained a perpetuity clause providing that if (a) the number of employees subscribing 2d per week each should be less than 75% of the workforce, or (b) if the land was no longer required as a sports ground, or (c) if the company went into liquidation, then the trustees were to convey the land to the General Hospital Cheltenham or as it should direct. The court was asked whether the trust and the gift over were valid. The company argued that the trust was invalid because of the absence of certainty as to beneficiaries, and the fund was therefore held for the company. For the employees it was argued that the trust was valid, but the gift over was invalid. It was held that the trust and the gift over were valid. "Where, then, the trust, although expressed as a purpose, is directly or indirectly for the benefit of an individual or individuals, it seems to me that it is in general outside the mischief of the beneficiary principle. . . The trust in the present case is limited in point of time so as to avoid any infringement of the rule against perpetuities and . . . it does not offend against the beneficiary principle; and unless, therefore, it is void for uncertainty, it is a valid trust. As it is a private trust and not a charitable one, it is clear that, however it be regarded, the individuals for whose benefit it is designed must be ascertained or capable of ascertainment at any given time …"
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 Pettitt v Pettitt; HL 23-Apr-1969 - [1969] 2 WLR 966; [1969] 2 All ER 385; [1970] AC 777; [1969] UKHL 5
 
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