swarb.co.uk - law index
These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.
Trusts - From: 1991 To: 1991
This page lists 8 cases, and was prepared on 02 April 2018.
Harwood v Harwood; CA 1991 - [1991] 1 FLR 274
Stokes v Anderson; CA 1991 - [1991] 1 FLR 391
Re H deceased [1991] FLR 441
1991
CA
Peter Gibson J
Equity, Trusts
The Plaintiff had stabbed his wife to death when under the illusion, induced by a reaction to an anti-depressant drug, that she had just committed an act of infidelity. At his trial, a plea to guilty of manslaughter by reason of diminished responsibility was accepted. A hospital order was made and the trial judge expressed the view that "there was no responsibility left at all". Held: The forfeiture rule was not applied. The court made a comprehensive review of the authorities and asked: "Was Mr H guilty of deliberate, intentional and unlawful violence or threats of violence?" He answered the question in the negative holding that the offender was "not responsible for his acts which were not deliberate or intentional." In those "highly unusual circumstances" the Judge held that, on the Gray-v- Barr test, the forfeiture rule had no application.
1 Cites
1 Citers
Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] ICR 524; [1991] 2 All ER 597; [1991] 1 WLR 589
1991
Sir Nicolas Browne-Wilkinson VC
Company, Employment, Trusts
A company pension scheme had been operating for many years, with increases being provided for under one rule. A new rule was introduced to provide regular increases. The company was taken over, and the trustees sought clarification of the company's obligations. Held: The new rule provided a minimum increase but no right for the trustees to grant unilateral increases above that minimum. It was not possible to imply a condition of reasonableness as to the exercise of the company's discretion, but there was an obligation to act in good faith as in every contract of employment. There existed an implied obligation that the discretion should not be exercised so as to destroy or seriously damage the relationship of trust and confidence between the company and its employees and former employees. The power of the company to withhold consent to benefit increases must be exercised in good faith. "Pension scheme trusts are of quite a different nature to traditional trusts. The traditional trust is one under which the settlor, by way of bounty, transfers property to trustees to be administered for the beneficiaries as objects of his bounty. Normally, there is no legal relationship between the parties apart from the trust. The beneficiaries have given no consideration for what they receive. The settlor, as donor, can impose such limits on his bounty as he chooses, including imposing a requirement that the consent of himself or some other person shall be required to the exercise of the powers. As the Court of Appeal have pointed out in Mihlenstedt v. Barclays Bank International Ltd [1989] I.R.L.R. 522 a pension scheme is quite different. Pension benefits are part of the consideration which an employee receives in return for the rendering of his services. In many cases, including the present, membership of the pension scheme is a requirement of employment. In contributory schemes, such as this, the employee is himself bound to pay for his or her contributions. Beneficiaries of the scheme, the members, far from being volunteers have been given valuable consideration. The company employer is not conferring a bounty. In my judgment, the scheme is established against the background of such employment and falls to be interpreted against that background"
Sir Nicolas Browne-Wilkinson VC discussed the implied term of trust and confidence between employer and employee: "I will call this implied term 'the implied obligation of good faith.' In my judgment, that obligation of an employer applies as much to the exercise of his rights and powers under a pension scheme as they do to the other rights and powers of an employer. Say, in purported exercise of its right to give or withhold consent, the company were to say, capriciously, that it would consent to an increase in the pension benefits of members of union A but not of the members of union B. In my judgment, the members of union B would have a good claim in contract for breach of the implied obligation of good faith: see Mihlenstedt v Barclays Bank International Ltd [1989] IRLR 522".
1 Cites
1 Citers
Stannard v Fisons Pension Trust Limited [1991] Pensions Law Reports 225; [1992] IRLR 27
1991
CA
Staughton LJ, Dillon LJ, Ralph Gibson LJ
Trusts, Equity
Fisons had sold their fertiliser division to Norsk Hydro. Acting on advice of actuaries and thinking that the fund was in deficit, the trustees made a transfer to a new fund to provide for pensions of transferring employees in accordance with a method of calculation which placed upon the new employer the burden of carrying on employer contributions at the current rate. But at the time of the transfer the trustees were not informed that rises in the stock market meant that the fund was in surplus. If they had known, another method of calculation would have been used which would have resulted in a reduction of employer's contributions or the possibility of augmented benefits. Held: There should be a recalculation, because the trustees had failed to take into account a highly material factor. Trustees have a fiduciary duty to follow a correct procedure in the decision-making process. This duty lies at the heart of the Rule in Hastings-Bass, which is directed at ensuring for the protection of the beneficiaries under the trust that they are not prejudiced by any breach of such duty.
Dillon LJ: "I should add that I have no difficulty in reconciling the judgment in Kerr v. British Leyland (Staff)Trustees Ltd. with the decision of this court in Re Hastings-Bass [1975] Ch 25 to which we were also referred. What was material in Hastings-Bass was that in order to save estate duty the trustees wanted by way of advancement to create an immediate life interest in the funds in question. This they had effectively done. Had they appreciated that the trusts in remainder after the life interest which they also purported to appoint would be void for perpetuity, they would no doubt have appointed other, valid, trusts in remainder. But they would still have created the same life interest, and any difference in the trusts in remainder was immaterial to that."
1 Cites
1 Citers
Alliance and Leicester Building Society v Edgestop Unreported, 18 January 1991
18 Jan 1991
Hoffmann J
Trusts, Legal Professions
The plaintiff building society had paid moneys to solicitors and the solicitors had wrongly paid them away in breach of their instructions. Held: The building society obtained orders for interim payment against the solicitors on the grounds that they were liable for breach of trust. If the building society had known the true facts it would not have made the advance. At the date of judgment a certain loss had been demonstrated in that the breach of trust had caused the building society to enter into a transaction in which they would not have participated had there been no breach of trust.
IDC Group Ltd and others v Clark and others [1991] EWCA Civ 3; [1992] 1 EGLR 186
25 Jun 1991
CA
Sir Nicolas Browne-Wilkinson VC
Trusts, Land
Sir Nicolas Browne-Wilkinson VC reviewed the cases about constructive trust claims summarising the result as follows: "That decision [Lyus] was approved by the Court of Appeal in Ashburn Anstalt v Arnold . . The Court of Appeal put what I hope is the quietus to the heresy that a mere licence creates an interest in land. They also put the quietus to the heresy that parties to a contractual licence necessarily become constructive trustees. They also held . . that the mere fact that property is sold subject to a contractual licence is not sufficient to create a constructive trust. They held . . that the mere fact that somebody has purchased with notice of a claim does not give rise to a constructive trust. However, the Court of Appeal plainly considered that Lyus v Prowsa was rightly decided.
The result, as it seems to me, is that in the normal case a conveyance of land subject to or with notice of prior incumbrances or prior interests will not operate so as to make enforceable under a constructive trust such prior incumbrances or interests which would otherwise be unenforceable.
However, in certain circumstances equity raises a constructive trust because it is unconscionable for the person having received such property not to give effect to the terms on which he received it. As the Court of Appeal said, and with respect I would agree:
'In matters relating to the title to land certainty is of prime importance. We do not think it desirable that constructive trusts of land should be imposed in reliance on inferences from slender materials.'
It is important always to bear in mind that it is of the greatest importance that the title to land should be capable of being ascertained in accordance with well-known procedures. To raise constructive trusts which do not fit into the conveyancing machinery currently operating, thereby giving rise to liabilities of which purchasers might otherwise not be aware, is a dangerous course to pursue.
In my judgment, the decision in Ashburn Anstalt does not warrant the creation of a constructive trust unless there are very special circumstances showing that the transferee of the property undertook a new liability to give effect to provisions for the benefit of third parties. It is the conscience of the transferee which has to be affected and it has to be affected in a way which gives rise to an obligation to meet the legitimate expectations of the third party."
1 Cites
1 Citers
[ Bailii ]
Harries and Others v Church Commissioners for England and Another; ChD 25-Oct-1991 - Gazette, 11 November 1991; [1992] 1 WLR 1241; [1992] 2 All ER 300; [1991] 135 SJLB 180; Times, 30 October 1991; Independent, 29 October 1991