1. EQUITY & TRUSTS II: C3 TRUSTEES
. Appointment
. Retirement
. Removal
. Fiduciary nature of trusteeship
. Duties
. Powers
1. APPOINTMENT
GR
. Phua Chiu Har v Amanah Raya Bhd; ct under
no duty to determine the reasons
E
. Re Lysaght; T will fail if provided that no one
else shall act as trustees
. S. 39(1) TA 1949 (GR)
. S. 39(2) TA 1949 (E)
. S. 40(1) TA 1949
. S. 45(1) TA 1949
. Re Tempest; on appt, ct look into 1) wishes
2) duty 3) execution
2. RETIREMENT
. S. 40(1) TA 1949
. S. 43(1) TA 1949
. S. 45 TA 1949
3. REMOVAL
. S. 23(1) TA 1949 - death of trustee
. S. 40(1) TA 1949
. S. 44(3), 48 TA 1949 - vesting of T prop
. Ligar Fernandez v Eric Claude; >10m
absence from MY render him as tt
. Titterton v Oates; conflict of interest between
tt and bene. wont necessarily remove a tt
. Re Wrightson; ct recognised tt can be
removed even when there is no misconduct
. Letterstedt v Broers; guides to when tt may
be removed based on welfare, abuse, breach
confidence, and prevent execution
. Re Lister; for disclaimer to be effective, it
must be of the whole T and not just part of the
T.
4. FIDUCIARY NATURE OF TRUSTEESHIP
- TT cannot expect remuneration for
performing duties
- Remuneration may be provided for in T
instrument under 3e
- authorized by T instrument
- authorized by ct
- authorized by statute
. S. 35(2) TA 1949
. Barret v Hartley; where provision is made by
the settlement for the payment of a
professional service by the tt, the usual
charges may be made and allowed
. Re Chapple; was held not to be entitled to
charge for work performed by him in the
administration of a trust which could have
been done by someone other than a solicitor
because his charging clause only allowed him
to recover for work of a strictly professional
character
. Boardman v Phipps; profit made by using
info acting on behalf of T, must be
accountable to trust for profit made
. Re Orwell’s Will Trusts; a clause authorized a
trustee to charge for services performed by
him “or his firm”
5. DUTIES
GP :-
I. TT have discretion whether to exercise
power or not
II. If on bona fide TT decide to not exercise,
bene. Cannot complain
III. Duties and power according to T
D1 - Duty of Invest
. S. 2(2) TA 1949
. S. 3 | 6 | 8 | 9 | 12 | 13 | 14 | 15 | 59 TA 1949
. Re Power; purchase of house but without
producing an income =/= investment
. Re Whitely; TT ought to conduct the
business of the trust in the same manner that
an ordinary prudent man of business would
conduct his own
. Re Harari’s Settlement Trust; TT had power
under plain meaning under which investment
he think is desirable
. Learoyd v Whiteley; duties of TT include
avoiding investment which may bring hazard
. Jones v AMP Perpetual Trustee Company NZ
Ltd; “prudent person rules” TT has duty to
seek advice, and had all decision making
power
. Bartlett v Barclays Bank Trust Co Ltd; TT’s
obligation is to restore to the trust estate the
assets of which he has deprived it, higher
standards may be expected from professional
TT
. Wilkie v Equity Trustees Executors and
Agency Co Ltd; property is held by TT in T for
a tenant for life & remainderman, & the TT
have powers of management, the TT may
make such repairs to keep the property in a
good state of preservation for the
remainderman. The cost of effecting ordinary
recurring repairs, is to be borne by income
2. D2 - Duty to convert
. A duty to deal with under-productive prop.
TT owe a duty to the bene. To convert or re-
investment the prop into securities produce
higher rate of earning
. Nestle v Westminster Bank Plc; The claimant
had failed to establish either a breach of T or
any loss flowing from it, though there was not
much for the bank to be proud of in its
administration of the T
. Howe v Earl of Dartmouth; two limbs of
investment and apportionment
D3 - Duty to apportion
. When there’s duty to convert, there is a duty
to apportion fairly between life tenant and the
remainder man.
. Re Earl of Chesterfield’s Trusts; requires the
proceeds of the conversion of certain
investments to be apportioned between
capital and income
. Howe v Earl of Dartmouth; two limbs of
investment and apportionment
D4 - Duty to distribute
. Failure to distribute would amount to breach
of T
. S. 32 TA 1949
. Eaves v Hickson; TT had to make good the
loss for paying the wrong person based on a
forged document
. Re Aldhous; where no beneficiaries
responded to the advertisement. The executor
then paid estate money to the Crown.• Held:
Executor not liable.• The section shall apply,
regardless of any contrary provision in the
trust instrument
D5 - Duty to provide account and
information
. TT required to maintain accurate accounts
which ought to be made available on demand
for inspection by the bene.
. S. 27(4) TA 1949
. Pearse v Green; the first duty of an
accounting party whether an agent, TT, a
receiver or an executor…to be constantly
ready with his accounts.”
. Schmidt v Rosewood Trust Ltd; The
settlements were badly drafted, but that
should not be used to excuse a court fulfilling
its duties. The right to seek disclosure did not
depend upon a fixed and transmissible
beneficial interest
D6 - Non-delegation of duties
. GR: TT cannot delegate his duties to another
person (delegates non potent delegare)
. Exception: unless they have authority to do
so
. S. 28, S. 30 TA 1949
. Robson v Flight; such T are supposed to
committed by TT as appointed and it would
be wrong to permit them to be exercised by
another
. Pilkington v IRC; the law is not that TT
cannot delegate, it is that TT cannot delegate
unless they have authority to do so
. Re Vickery; delegation is allowed, TT should
use his discretion in choosing agent, if any
loss occur due to delegation, TT will not be
liable, agent will.
D7 - Other duties
. S. 36 TA 1949: Maintenance
. S. 37 TA 1949: Advancement
6. POWERS
P1 - Power sale of trust property
. Power to sell some or all trust property is
usually given by T instrument
. S. 16, 17 TA 1949
. Fry v Fry; TT are liable to make up out of
their own money, difference between selling
price and the offer price
P2 - Power to insure
. TT are under no duty to insure the T property
unless power to insure is stated expressly in T
instrument
. S. 24 TA 1949
. Re McEacharn; trustees are under no
obligation to insure even in circumstances
where a reasonable prudent person would do
so
P3 - Power to compound liabilities
. TT are given a wide discretion in settling
claims which may be made by third persons
against the T
. Re Shenton; The power to compromise given
has been held to authorise the TT of a deed of
arrangement of a debtor with his creditors to
grant preferential treatment to an employee of
the debtor in respect of workmen's
compensation payments
