Trusts - 2000

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This page lists 22 cases, and was prepared on 28 October 2012.

Coulthard -v- Disco Mix Club Ltd [2000] 1 WLR 707
2000 CA	Trusts	Casemap 1 Citers
	The expression "constructive trustee" creates a trap.This "type of trust is merely the creation by the court….to meet the wrongdoing alleged: there is no real trust and usually no chance of a proprietary remedy."

Breadner -v- Granville-Grossman [2000] 4 All ER 705; [2000] EWHC Ch 224
2000 ChD Park J	Trusts	Casemap 1 Citers
	"it cannot be right, whenever trustees do something which they later regret and think they ought not to have done, they can say they never did it in the first place" It was not correct to suggest that whenever trustees do something which they later regret and think that they ought not to have done, then they can say that they never did it in the first place. However: "the main ways at present open to the court to control the application of the principle are: (a) to insist on a stringent application of the tests as they have been laid down, (b) to take a reasonable and not over-exigent view of what it is that the trustees ought to have taken into account, and (c) to adopt a critical approach to contentions that the trustees would have acted differently if they had realised the true position."
	Link[s] omitted

Gencor ACP Ltd -v- Dalby [2000] 2 BCLC 734
2000 Rimer J	Company, Trusts	Casemap
	The court was ready to pierce the corporate veil and treat a receipt by a company wholly owned and controlled by a fiduciary as a receipt by the fiduciary himself.

Equitable Life Assurance Society -v- Alan David Hyman [2000] EWCA Civ 5
21 Jan 2000 CA	Financial Services, Trusts	Casemap 1 Cites 1 Citers
	The life company had granted policies to members which had guaranteed certain standards of bonuses. The level of reward became unsupportable and the company imposed terms restricting returns on retirement policies where policy holders sought to purchase annuities outside the society. Held: The absolute discretion given to the company's directors did not extend to allowing them to make such a distinction, even though the terminal bonuses had not been guaranteed.
	Link[s] omitted

Houghton and Others -v- Fayers and Another
9 Feb 2000 CA	Trusts
	A party could be held liable as a constructive trustee in respect of moneys received in breach of trust, even if there was no finding of actual dishonesty against him. The requirements were to show the payment in breach of a fiduciary duty, the traceability of the funds, and the knowledge of the recipient that the funds were paid to him in breach of a fiduciary duty.

Banner Homes Group Plc -v- Luff Developments and Another [2000] EWCA Civ 18; [2002] 2 All ER 117; [2000] EWCA Civ 3016; [2000] 2 WLR 772; [2000] Ch 372
10 Feb 2000 CA Chadwick LJ	Trusts, Equity, Company	Casemap 1 Cites 1 Citers
	Competing building companies agreed not to bid against each other for the purchase of land. One proceeded and the other asserted that the land was then held on trust for the two parties as a joint venture. Held: Although there was no formal agreement, the first company had allowed its position to be worsened relying upon the expectation which the second party had allowed to arise, and had not informed the claimant before the purchase of its intention not to honour the agreement. At the date of exchange: "It is clear, therefore, that, to Banner's knowledge, exchange of contracts was to occur, and did occur, before the parties were signed up to any formal written agreement. It is equally clear that Luff had given Banner to understand that it was content to exchange contracts without requiring any form of separate guarantee committing Banner to contribute one half of the costs of the net site and that the reason for this was that the mutual rights and obligations of the parties would be set out in the shareholder agreement. It is also clear that both sides intended to enter into the shareholder agreement as soon as possible, the only reason for the delay being Mr. Vass's absence on holiday. At no stage was any indication given that reasons existed why the agreement should not be entered into. Specifically nothing was said on either side to indicate that any difference of principle existed which would prevent the parties from agreeing terms."
	Link[s] omitted

Mortgage Corporation Ltd -v- Shaire and Another [2000] 1 FLR 973; [2001] Ch 743; [2000] EWHC Ch 452
25 Feb 2000 ChD Neuberger J	Land, Banking, Trusts	Casemap 1 Citers
	The claimant had an equitable charge over the property, and sought a possession order after failures to keep up repayments. The order was sought under the Act, and the claimants asserted that the conditions for the grant of possession were unchanged. Held: Parliament had clearly intended a change. The interests of a chargee ranked alongside those of, for example, children living in the house. This might act to the detriment of banks, and the old authorities, whilst not entirely irrelevant, should be viewed with caution. Where the parties have reached a consensus on the beneficial interests in the property, the court will give effect to it, unless there is very good reason for not doing so, such as a subsequent renegotiation.
	Trusts of Land and Appointment of Trustees Act 1996 14 15 - Law of Property Act 1925 30
	Link[s] omitted

Federal Bank of the Middle East -v- Hadkinson and Others [2000] 1 WLR 1695
16 Mar 2000 CA	Litigation Practice, Trusts	1 Cites 1 Citers
	A Mareva injunction in its standard form operated only to attach and freeze assets in which the person injuncted had some interest. They did not affect funds of which he was a bare trustee without any beneficial interest in the assets. The legal title did not mean that the assets were 'owned' by him in the relevant sense. Such assets could not be used to satisfy any claim against the person injuncted and were therefore not covered by the standard wording.

Adam and Company International Trustees Ltd and Others -v- Theodore Goddard (A firm)
17 Mar 2000 ChD	Trusts
	It was not possible for two trustees to retire, and be replaced by and leaving only one trustee, not being a trust corporation. The two trustees were not therefore discharged from the trust, and the solicitors who had advised them in the exercise had been negligent. A discharge of the second trustee could only be obtained via section 39.
	Trustee Act 1925 36 39

X -v- A, B, C [2000] EWHC Ch 121
29 Mar 2000 ChD	Land, Nuisance, Environment, Trusts	Casemap 1 Cites
	Trustees sought guidance from the court as to investment in land which might become a liability because of clean up costs associated with the Act when it came into force. Would the trustees have a lien over other property of the deceased to pay the costs? Held: A trustee has a lien over the trust fund for his proper costs and expenses extending to an indemnity against all future liabilities of the trustee as such. The wide powers of investment did not displace the duty to act with prudence and fairly as between the beneficiaries. Whilst the trustees may not be obliged to act under the direction of the beneficiaries it remained proper to require the trustees to consult with them on such decisions.
	Environmental Protection Act 1990
	Link[s] omitted

Wight and another -v- Olswang
18 Apr 2000 ChD	Trusts, Financial Services	Casemap 1 Cites 1 Citers
	When assessing the actions of a trustee in making investment decisions, the presence of breaches of trust did not require any higher standard of decision making, and no claim by disappointed beneficiaries could succeed without showing that the decision was one which no reasonable man of ordinary prudence in that trustees circumstances of knowledge and background could have made.

Foskett (Suing on His Own Behalf and On Behalf of All Other Purchasers of Plots of Land at Mount Eden, Herradodo Cerro Alto Diogo, Martins, Algarve, Portugal -v- Mckeown and Others [2000] UKHL 29; [2000] 3 All ER 97
18 May 2000 HL Lord Browne-Wilkinson, Lord Steyn, Lord Hoffmann, Lord Hope of Craighead, Lord Millett	Insurance, Equity, Trusts	Casemap 1 Cites 1 Citers
	Two groups of innocent parties disputed the rights to a death benefit of about £1m. paid by insurers pursuant to a whole life policy. A trustee had misappropriated trust funds and used them in part to pay premiums on life insurance policies for the benefit of his own children. Held: The misappropriated funds could be traced through the insurance policies into the hands of the beneficiaries of the policies. Where part of the premiums had been paid properly, a mixed fund, akin to a bank account, was created, and the interest was according to the proportions. The interest was a property interest in the fund, and the court had no discretion as to its distribution. There is no rule in English law that in the case of a mixed substitution the beneficiary is confined to a lien. "Where a trustee wrongfully uses trust money to provide part of the cost of acquiring an asset, the beneficiary is entitled at his option either to claim a proportionate share of the asset or to enforce a lien upon it to secure his personal claim against the trustee for the amount of the misapplied money. It does not matter whether the trustee mixed the trust money with his own in a single fund before using it to acquire the asset, or made separate payments (whether simultaneously or sequentially) out of the differently owned funds to acquire a single asset." Lord Millett said: "Following is the process of following the same asset as it moves from hand to hand. Tracing is the process of identifying a new asset as the substitute for the old. Where one asset is exchanged for another, a claimant can elect whether to follow the original asset into the hands of the new owner or to trace its value into the new asset in the hands of the same owner…. Tracing is thus neither a claim nor a remedy. It is merely the process by which a claimant demonstrates what has happened to his property, identifies its proceeds and the persons who have handled or received them, and justifies his claim that the proceeds can properly be regarded as representing his property. Tracing is also distinct from claiming. It identifies the traceable proceeds of the claimants' property. It enables the claimant to substitute the traceable proceeds for the original asset as the subject matter of his claim. But it does not affect or establish his claim." Lord Steyn: "In truth tracing is a process of identifying assets: it belongs to the realm of evidence. It tells us nothing about legal or equitable rights to the assets traced."
	Link[s] omitted

Attorney General of the Caymen Islands and others -v- Even Wahr-Hansen [2000] UKPC 26; [2001] 1 AC 75; [2000] 3 All ER 642
26 Jun 2000 PC Lord Browne-Wilkinson, Lord Simonds	Charity, Trusts, Commonwealth	Casemap 1 Citers
	(Caymen Islands) A memorandum of agreement that proceeds of a trust fund should be paid to 'any one or more religious, charitable or educational institutions . . or . . operating for the public good' was not charitable since it the objects were not exclusively charitable, and was also void for perpetuity. It would be wrong to extend the rule allowing trusts for small localities to be extended to make charitable general gifts. The absence of time limits to the vesting of interests and exercise of the powers were fatal.
	Link[s] omitted

Barclays Bank Trust Co Ltd -v- McDougall and Others
27 Jun 2000 ChD Rimer J	Trusts	Casemap 1 Cites
	The deceased had created a trust with constructive trusts for his four children for life, and protective trusts for remoter issue. The last child had now died, and the initial trust period had expired. The trust provided that at this point the fund was held on trust for the grandchildren and remoter issue who had attained 21 equally and per stirpes. A grandchild was 21 at the date of the settlement but died without issue before the trust period expired. The court was asked whether his interest had vested and was to take a share. Held: Once a deed created an apparent vested interest, clear words would be required to convert the same gift into a contingent one. A gift to grandchildren who had attained the age of 21 years, created vested interests. It did not create an interest contingent on them surviving the trust period. No sufficient words had been used in the trust to create a double contingency, and the requirement was to either survive the trust period or to attain the age of 21, but did not require both.

Melville and Others -v- Inland Revenue Commissioners
27 Jun 2000 ChD	Trusts, Inheritance Tax, Capital Gains Tax	Casemap 1 Cites 1 Citers
	A settlor created a common form discretionary trust save only that it included a right to require, after 90 days, the trustees to revest the settled fund in the settlor. A chargeable transfer was calculated at the reduction in value of his estate after the transfer. The clause meant that the sums remained 'rights and interests of any description' belonging to the settlor. The Revenue had not established that the statutory definition of property should not apply.
	Inheritance Tax Act 1984

Walker and others -v- Stones and others [2000] Lloyds Rep PN 864
19 Jul 2000 CA Sir Christopher Slade	Company, Legal Professions, Trusts, Equity, Vicarious Liability	Casemap 1 Citers
	Beneficiaries under a trust sought damages from a solicitor trustee, and the firm of which he was a partner. Held: Where a trustee acted in breach of trust in a claimed belief that he was acting in the interests of the beneficiaries, but no reasonable trustee in his place could have that belief, then an allegation against him of dishonesty should proceed. A trusteeship is not part of the normal duties of a partner of a firm, and the firm is not vicariously liable for the acts of a partner in such trusts. The court rejected the 'Robin Hood' test of dishonesty (a person is only regarded as dishonest if he transgresses his own standard of honesty, even if that standard is contrary to that of reasonable and honest people) saying: "A person may in some cases act dishonestly, according to the ordinary use of language, even though he genuinely believes that his action is morally justified. The penniless thief, for example, who picks the pocket of the multi-millionaire is dishonest even though he genuinely considers that theft is morally justified as a fair redistribution of wealth and that he is not therefore being dishonest." "a claimant is entitled to recover damages where: (a) the claimant can establish that the defendant's conduct has constituted a breach of some legal duty owed to him personally (whether under the law of contract, torts, trusts or any other branch of the law) AND (b) on its assessment of the facts, the Court is satisfied that such breach of duty has caused him personal loss, separate and distinct from any loss that may have been occasioned to any corporate body in which he may be financially interested. I further conclude that, if these two conditions are satisfied, the mere fact that the defendant's conduct may also have given rise to a cause of action at the suit of a company in which the claimant is financially interested (whether directly as a shareholder or indirectly as, for example, a beneficiary under a trust) will not deprive the plaintiff of his cause of action; in such a case, a plea of double jeopardy will not avail the defendant."

Equitable Life Assurance Society -v- Hyman [2000] UKHL 39; [2000] 3 All ER 961; [2000] 3 WLR 529; [2002] 1 AC 408
20 Jul 2000 HL Lord Steyn	Trusts, Financial Services	1 Cites 1 Citers
	Where a life assurance company had issued retirement policies which guaranteed certain returns, the policy holders had a proper and reasonable expectation that those promises would be met. The discretion given to the directors to set the levels of returns must be read to be subject to the prior expectation created, and must be exercised accordingly subject to those expectations. Lord Steyn emphasised that the test for the implication of a term into a contract is one of strict necessity. The test was a stringent one and the term that the Court was there prepared to imply was "essential to give effect to the reasonable expectations of the parties." and "If a term is to be implied, it could only be a term implied from the language of [the instrument] read in its commercial setting."
	Link[s] omitted

D'Abo -v- Paget and Others (No 2)
10 Aug 2000 ChD	Trusts, Wills and Probate, Costs
	Where a beneficiary having brought successful action against the trust fund, the rule in In re Buckton should still apply, but where the trustees could have brought the same action themselves, and had been ready and willing to do so, the beneficiary should not be awarded costs out of the trust fund. Under the new procedure, the court should take a more robust attitude to such claims. In effect the sole reason for the claimant's participation was to make a claim for costs if the trustees failed.

Bath and Wells Diocesan Board of Finance and Another -v- Jenkinson and Others
6 Sep 2000 ChD	Land, Charity, Trusts
	Where there was a gift of land on charitable trusts, but where the gift was first expressed to be unlimited in time, but later in the deed provided powers for revocation, and conditions for defeasance, it must remain a matter of construction of the particular deed to decide whether the gift was in perpetuity. In the current cases the reversionary provisions were void for remoteness, and the trustees had acquire a possessory title for charity on the trusts of the original deeds.

Lohia and Another -v- Lohia
7 Sep 2000 ChD	Land, Trusts
	Land was transferred from son to his father with no consideration expressed. The father died and the son claimed that the absence of consideration meant that the house was to be held upon trust for the donor and donee as beneficial joint tenants in equal shares, and that accordingly upon the death of the father he was entitled to his share. It was held that the section was clear and that a conveyance for nil value meant what it said. A person seeking to establish a resulting trust had to prove it. The voluntary conveyance was effective in the terms in which it was expressed.
	Law of Property Act 1925 60 (3)

T Choithram International S A and Others -v- Lalibai Thakurdas Pagarani and Others [2000] UKPC 46; (Appeal No 53 of 1998)
29 Nov 2000 PC	Trusts, Charity
	(British Virgin Islands) A gift in trust, once vested in one trustee was complete even though it might later be required to vest the property in other trustees also. Unless there were other factors to suggest that he not had intended an immediate gift, the gift was completed once vested in any one of the trustees. A donor made gifts of substantial shareholdings to a foundation, but died before other trustees were registered as shareholders. There were was nothing in the donor's behaviour to suggest that the gift was in any way revocable. If it was intended to be immediate and unconditional, a need for later acts to effect the transfer into further trustees names did not mean that the gift had not been completed.
	Link[s] omitted

Wight and Wight -v- Olswang [2000] EWCA Civ 310
7 Dec 2000 CA	Trusts	Casemap 1 Cites 1 Citers
	Link[s] omitted