Trusts - 1995

The case shown here are derived from the lawindexpro case law database. lawindexpro is a low cost case law database, with over 260,000 case listings, and over 200,000 links to full text judgments. The free service below shows the core information on the case, but is restricted in several ways. A small proportion of cases do allow access to the full lawindexpro information. These cases are selected at random, and may be different on your next visit. The active links through to lawindexpro are extremely powerful allowing full access to all linked cases.  

This page lists 9 cases, and was prepared on 28 October 2012.

Warman International Ltd -v- Dwyer [1995] 128 ALR 201
1995	Trusts, Commonwealth	Casemap 1 Cites 1 Citers
	(High Court of Australia) A fiduciary diverted a business in breach of his fiduciary duty. Held: "The outcome in cases of this kind will depend upon a number of factors. They include the nature of the property, the relevant powers and obligations of the fiduciary and the relationship between the profit made and the powers and obligations of the fiduciary. Thus, according to the rule in Keech v. Sanford, a trustee of a tenancy who obtains for himself the renewal of a lease holds the new lease as a constructive trustee, even though the landlord is unwilling to grant it to the trust. . . . A similar approach will be adopted in a case in which a fiduciary acquires for himself a specific asset which falls within the scope and ambit of his fiduciary responsibilities, even if the asset is acquired by means of the skill and expertise of the fiduciary and would not otherwise have been available to the person to whom the fiduciary duty is owed. But a distinction should be drawn between cases in which a specific asset is acquired and cases in which a business is acquired and operated. Such a distinction was drawn by Upjohn J in In re Jarvis (decd) in the context of considering a defence of laches, acquiescence and delay. However, in our view, the distinction is also relevant in the context of the fiduciary's liability to account for profits." Their Honours continued: "In the case of a business it may well be inappropriate and inequitable to compel the errant fiduciary to account for the whole of the profit of his conduct of the business or his exploitation of the principal's goodwill over an indefinite period of time. In such a case, it may be appropriate to allow the fiduciary a proportion of the profits, depending upon the particular circumstances. That may well be the case when it appears that a significant proportion of an increase in profits has been generated by the skill, efforts, property and resources of the fiduciary, the capital which he has introduced and the risks he has taken, so long as they are not risks to which the principal's property has been exposed. Then it may be said that the relevant proportion of the increased profits is not the product or consequence of the plaintiff's property but the product of the fiduciary's skill, efforts, property and resources. This is not to say that the liability of a fiduciary to account should be governed by the doctrine of unjust enrichment, though that doctrine may well have a useful part to play; it is simply to say that the stringent rule requiring a fiduciary to account for profits can be carried to extremes and ... in cases outside the realm of specific assets the liability of the fiduciary should not be transformed into a vehicle for the unjust enrichment to the Plaintiff".

Boscawen and Others -v- Bajwa and Others; Abbey National Plc -v- Boscawen and Others [1996] 1 WLR 328; [1995] EWCA Civ 15
10 Apr 1995 CA Millett LJ, Stuart-Smit LJ, Millet LJ	Equity, Trusts	Casemap 1 Cites 1 Citers
	The defendant had charged his property to the Halifax. Abbey supplied funds to secure its discharge, but its own charge was not registered. It sought to take advantage of the Halfax's charge. Held: A mortgagee whose loan is used to repay another charged debt is subrogated to that debt, and can rely on that charge. Millett LJ: "If the plaintiff succeeds in tracing his property, whether in its original or in some changed form, into the hands of the defendant, and overcomes any defences which are put forward on the defendant's behalf, he is entitled to a remedy. The remedy will be fashioned to the circumstances. The plaintiff will generally be entitled to a personal remedy; if he seeks a proprietary remedy he must usually prove that the property to which he lays claim is still in the ownership of the defendant. If he succeeds in doing this the court will treat the defendant as holding the property on a constructive trust for the plaintiff and will order the defendant to transfer it in specie to the plaintiff. But this is only one of the proprietary remedies which are available to a court of equity. If the plaintiff's money has been applied by the defendant, for example, not in the acquisition of a landed property but in its improvement, then the court may treat the land as charged with the payment to the plaintiff of a sum representing the sum by which the value of the defendant's land has been enhanced by the use of the plaintiff's money. And if the plaintiff's money has been used to discharge a mortgage on the defendant's land, then the court may achieve a similar result by treating the land as subject to a charge by way of subrogation in favour of the plaintiff."
	Link[s] omitted

Foster and Others -v- Spencer
14 Jun 1995 ChD	Trusts
	Trustees of a non-charitable trust entitled to payment of past remuneration and expenses.

Royal Brunei Airlines SDN BHD -v- Tan [1995] 2 AC 378; [1995] UKPC 4; [1995] 3 All ER 97
22 Jun 1995 PC Lord Nicholls of Birkenhead, Lord Nicholls	Trusts, Commonwealth	1 Cites 1 Citers
	(Brunei) A dishonest third party to a breach of trust was liable to make good a resulting loss even though he had received no trust property. The test of knowledge was an objective one: "“knowingly” was better avoided as a defining ingredient of the liability, and that in that context the Baden categorisation was best forgotten. Although my own view is that the categorisation is often helpful in identifying different states of knowledge which may or may not result in a finding of dishonesty for the purposes of knowing assistance, I have grave doubts about its utility in cases of knowing receipt. " and "Recipient liability is restitution-based; accessory liability is not". Lord Nicholls summarised the ingredients of liability for dishonest assistance: "Drawing the threads together, their Lordships' overall conclusion is that dishonesty is a necessary ingredient of accessory liability. It is also a sufficient ingredient. A liability in equity to make good resulting loss attaches to a person who dishonestly procures or assists in a breach of trust or fiduciary obligation. It is not necessary that, in addition, the trustee or fiduciary was acting dishonestly, although this will usually be so where the third party who is assisting him is acting dishonestly. "Knowingly" is better avoided as a defining ingredient of the principle, and in the context of this principle the Baden scale of knowledge is best forgotten."
	Link[s] omitted

Armitage -v- Nurse and Others
3 Jul 1995 ChD	Trusts	Casemap 1 Citers
	A clause exonerating trustees from responsibility for breaches of duty will be construed strictly against them.

Midland Bank Plc -v- Cooke and Another [1995] EWCA Civ 12; [1995] 2 FLR 915; [1996] 1 FCR 442; [1995] 4 All ER 562
7 Jul 1995 CA Stuart Smith, Waite, Schiemann LJJ	Family, Trusts	Casemap 1 Citers
	Link[s] omitted

Midland Bank -v- Cooke and Another [1995] 4 All ER 562; [1995] 2 FLR 915
13 Jul 1995 CA Lord Justice Stuart-Smith, Lord Justice Waite and Lord Justice Schiemann	Equity, Trusts	Casemap 1 Citers
	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.

Target Holdings Ltd -v- Redferns (A Firm) and Another [1996] 1 AC 421; [1995] UKHL 10; [1995] 3 All ER 785
21 Jul 1995 HL Lord Browne-Wilkinson	Legal Professions, Trusts, Damages	Casemap 1 Cites 1 Citers
	The defendant solicitors had acted for a purchaser, Crowngate, which had agreed to buy a property from a company called Mirage for £775,000. Crowngate had arranged however that the property would first be passed through a chain of two intermediate purchaser companies, Panther and Kohli, with Kohli then selling to Crowngate at a stated price of £2,000,000. Crowngate applied to Target for a loan to fund the purchase from Kohli based on this higher sale price, supported by a valuation of the property at £2m. The solicitors also acted for Target and were aware of the chain arrangement that inflated the purchase price, but did not disclose it to Target which agreed to lend £1.7m on the security of the property, of which about £1.5m was to fund the price payable to Kohli. The solicitors received the £1.5m on 28 June 1989. The following day they paid most of it to Panther (not Kohli) and on 30 June Panther used part of those funds to complete its purchase from Mirage at the agreed price of £775,000. Held: A solicitor, when he receives the money, does so as agent of the lending institution and holds it as bare trustee for the lending institution. Such a trustee acting in breach of trust is liable only for damages flowing from the breach itself. Trustees are not liable for a beneficiary's loss if that loss is not a consequence of the breach. Damages payable for money paid out in breach of trust may be reduced by inevitable losses which would have run in any event. Lord Browne-Wilkinson held the basic rule to be: "that a trustee in breach of trust must restore or pay to the trust estate either the assets which have been lost to the estate by reason of the breach or compensation for such loss. Courts of Equity did not award damages but, acting in personam, ordered the defaulting trustee to restore the trust estate. If specific restitution of the trust property is not possible, then the liability of the trustee is to pay sufficient compensation to the trust estate to put it back to what it would have been had the breach not been committed."
	Link[s] omitted

Drake -v- Whipp [1996] 2 FCR 296; [1995] EWCA Civ 25; [1996] 2 FCR 296; (1996) 28 HLR 531; [1996] CLY 5780
30 Nov 1995 CA Peter Gibson LJ, Lord Justice Hirst and Mr Justice Forbes	Trusts, Family, Housing	Casemap 1 Citers
	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 appealed against a finding that she had only a 14.9% interest on a resulting trust, in the house she and the defendant had occupied together. The property had been purchased for £61,000 of which she had contributed £24,000, with later additional contributions to conversion works. She complained that working on a resulting trust, the costs of acquisition were given undue emphasis. Held: A beneficial interest in a family home could be presumed from the intention of the parties and their acting in detriment. There was a constructive trust. There was undisputed evidence that she was to have an interest in the property, and she had acted to further that intention and to her detriment. The appeal was allowed, and her interest set at one third. "it is not easy to reconcile every judicial utterance in this well-travelled area of the law. A potent source of confusion, to my mind, has been suggestions that it matters not whether the terminology used is that of the constructive trust, to which the intention, actual or imputed, of the parties is crucial, or that of the resulting trust which operates on a presumed intention of the contributing party in the absence of rebutting evidence of actual intention."
	Link[s] omitted