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Flashcards in Property Law - Trustee Duties Deck (128):
1

VC Nicholls in Harries v Church Commissioners

Two circumstances to fetter discretion - (1) business runs directly contrary to charity purpose OR (2) likely to lose donors. balancing exercise

2

When there is a breach of fiduciary duty, what can T not rely on?

A clause which excludes his responsibility for such a breach - would allow T to take personal advantage of S's confidence

3

Schmidt v Rosewood general

Late father, object of PoA

4

Re Arnott judgment

Where there is a second 'sleeping T' for the purposes of formalities, no liability if they act in good faith and follow direction of the 'proper' T

5

Downes v Graysbrook general

Selling

6

Breakspear v Ackland

Briggs J held letters of wishes are generally subject to Londonderry principle - predominant purpose is to help decisions, so should be confidential

7

Jeffrey v Gretton

when assets include real estate, s.4 TA2000 requires Ts to consider if property should be sold

8

Millett LJ in Armitage v Nurse

'irreducible core of obligations', showing a right is meaningless unless B is aware of their rights

9

Section 3 TA2000

T can make any investment as if he were absolutely entitled to the property

10

What two cass are examples of Bs using injunctions to prevent T from acting in an unauthorised way?

Fox v Fox; Buttle v Saunders

11

What case rejected the proprietary analysis from Re Londonderry's?

Schmidt v Rosewood

12

Re Whiteley

Higher standard of DoC in investment sphere - ordinary prudent man minded to make investment for the benefit of other people

13

Saif-Ali v Sydney Mitchell

Court treats Ts same as professionals when considering duty of skill and care - needs to be something no member of the profession would reasonable have done

14

What case shows the right to be provided with trust accounts is regardless of possession of trust property?

Armitage v Nurse

15

Bartlett v Barclays Bank judgment

If trust property involves a controlling interest in a private company, should use power to improve running of the company

16

What are the three main duties of a T?

Comply with the terms of the trust instrument and general law; act exclusively in Bs interest, and; take reasonable care

17

Fox v Fox

Payment to a non-B prevented through injunction

18

Failure to render trust property financially productive = BoD

Byrnes v Kendle

19

Schmidt v Rosewood judgment

Rejected proprietary analysis - right is incidence of court's inherent supervisory jurisdiction over administration of trusts. They relied on an enforcement idea linked with supervisory action, AND likely intention of S that his son was to benefit

20

Tierney v King judgment

Court may allow settlor-B to forego right to information nevertheless in cases where, e.g., S holds a sensitive public office

21

Harries v Church Commissioners judgment

Two circumstances to fetter discretion - (1) business runs directly contrary to charity purpose OR (2) likely to lose donors. balancing exercise

22

Speight v Gaunt

Ts held to standard of ordinary business person dealing with their company for DoC

23

Section 4 TA2000

Requirement to review investments and economic portfolio theory (Langbein)

24

Section 1 Trustee Act 2000

T needs to exercise care and skill, with regard to special knowledge he holds himself as having (subjective) and what is reasonable to expect him to know in the course of his business (objective)

25

Brittlebank v Goodwin

Sui juris B needs to be told he is a B, and T owes a concomitant duty to tell B

26

'Perhaps the most important duty of a T' is the duty to comply with the trust instrument

Youyang Pty Ltd v Minter Ellison

27

How can Bs stop Ts acting in an unauthorised way?

Injunction

28

Nestle v Natwest judgment

Remarkable inactivity was not enough for BoD - needs to be a decision no reasonable T would have made

29

Companies Act 2006

Clearly distinguishes between duty to act within powers and duty based on loyalty without reference to fiduciary duties at all

30

Part 4 Charities Act 2011

Registration requirements for charitable purpose can be seen as a duty to inform AG and CC in enforcer capacity of existence of the trust

31

What case is said to have caused the 'tortification' of equitable rules?

Donoghue

32

What distinction does Hayton point to under duty of care?

Between gross negligence and recklessness - only liability for the former can be excluded due to positive disregard for the trust in the case of recklessness

33

Armitage v Nurse on provision of trust accounts

The right exists regardless of possession of the property

34

Baxendale-Walker v Middleton general

Lending

35

If the core duties are excluded from a trust, what happens?

Conceptually, S cannot have created a trust

36

Part 8 Charities Act 2011

Similar function by Charity Ts filing accounts with CC as Bs having access to trust accounts

37

Kemp v Burn

B can exercise right to inspect Ts accounts on whereabouts of trust property at reasonable intervals

38

what case shows there may be exceptions to the right of Bs to information?

Tierney v King

39

Hayton on Armitage v Nurse

Jacob J went too far - T needs to at least be under a duty to act conscious of the terms of the trust

40

Economic portfolio theorist

Langbein

41

Bank of Nova Scotia Trust v Ricart de Barletta

Give regard to letter of wishes before ANY discretionary decision

42

What are two issues with the proprietary analysis from Re Londonderry?

Hard to explain why any should be confidential, and suggests objects should not be entitled to disclosure

43

When lending, Ts must secure commercial rate of interest

Baxendale-Walker v Middleton

44

Cowan v Scargill general

Miners, energy products, investment policy

45

ordinary prudent man minded to make investment for the benefit of other people

Re Whiteley

46

What does Hayton argue the greater the reduction in T duties?

Greater the need for full and frank disclosure to beneficiaries

47

Hayton on notification with Bs AND objects of PoA

If there are both, objects have no right to info as existence of Bs means the objects rights are not crucial to the trust

48

Who said S cannot reserve an overriding power to release Ts from liability as it makes T only accountable to S, repugnant to the trust concept?

Hayton

49

What did Hayton argue about S reserving certain powers?

S cannot reserve an overriding power to release Ts from liability as it makes T only accountable to S

50

What judge and in what case thought letters of wishes are generally subject to Londonderry principle?

Breakspear v Ackland

51

Baxendale-Walker v Middleton judgment

When lending, Ts must secure commercial rate of interest

52

Re Manisty's Settlement on several objects of PoA

If there are several objects, it may be that only the primary needs to be informed of his potential benefit

53

Buttle v Saunders judgment

Prevented T from following through with the morally obligated but legally void agreement

54

Re Arnott general

'Sleeping' T

55

What section of what Act gives both an objective and subjective element to determine DoC of T?

Section 1 Trustee Act 2000

56

Re Jeffrey

All duties of care can be excluded in relation to investment, except the duty of good faith

57

Mismanagement and T inaction

Bartlett v Barclays Bank

58

what Act clearly distinguished between a duty to act intra vires and a duty based on loyalty without reference to 'fiduciary'?

Companies Act 2006

59

What two cases show no BoD unless something no reasonable T/professional would have done?

Said-Ali v Sydney Mitchell; Nestle v Natwest

60

How can we see the notification of Bs reflected in statute?

Part 4 CA2011

61

Miners, energy products, investment policy

Cowan v Scargill

62

Who and in what case allowed exemption of T from liability unless damage caused by 'actual fraud'?

Armitage v Nurse, Jacob J

63

Who wrote extra-judicially that the prohibition in Cowan v Scargill on investment policies might be defeated by professional advice confirming equal financial benefit of other investments?

Lord Nicholls

64

What section of what Act gives a requirement to review investments and economic portfolio theory (Langbein)

Section 4 TA2000

65

Buttle v Saunders general

Gazump

66

Mowbray and Hayton on protectors and supply of information

They hold the right to obtain information solely as a fiduciary - the power cannot be purely personal to him

67

Re Londonderry's Settlement judgment

Material that is not either trust accounts or another trust document (e.g. correspondence) need not be disclosed - proprietary analysis of trust documents such that B equitably owns them

68

Nestle v Natwest general

Failing to review investment suitability, 10x more if Tracker Fund

69

Byrnes v Kendle

Failure to render trust property financially productive = BoD

70

Who believes T's duty should not be described as a fiduciary duty, as causes confusion with other fiduciary duties?

Mitchell

71

What case gives the standard individuals are held to under DoC?

Speight v Gaunt

72

Cowan v Scargill judgment

Illegitimate policy and no interest of Bs anyway in prolongation of mining because they're retired

73

what part of statute reflects common law requirement to provide trust accounts?

Part 8 CA2011

74

B can exercise right to inspect Ts accounts on whereabouts of trust property at reasonable intervals

Kemp v Burn

75

What type of measure is the fiduciary duty to act in Bs exclusive interests?

A prophylactic measure

76

How does Hayton characterise gross negligence?

A positive disregard for the terms of the trust

77

What have courts recently begun to say in the context of a fiduciary duty to act in Bs exclusive interests

Breach of the fiduciary duty not only results in invalidation of the agreement/contract/transfer, but also the incurrence of liability to pay compensation, following inequitable primary/secondary obligation distinction from contract

78

What section of what Act allows section 1 TA2000 to be excluded by an express term?

Schedule 1, paragraph 7 TA2000

79

How does Mitchell argue the term fiduciary duty causes confusion?

In a solicitor/client relationship, it suggests a duty of undivided loyalty, not just of care; it suggests acting ultra vires is itself dishonest for a T, which is not true unless solicitor/client relationship; and Companies Act 2006

80

'Unethical', Bishop of Oxford

Harries v Church Commissioners

81

What three things can a T do if he goes against the terms of the trust (he must do one)?

Return misapplied assets in specie, obtain and deliver replacement property or pay in current monetary value the missing property

82

Lord Nicholls extra-judicially on Cowan v Scargill

If Ts gain professional advice that other investments are equally satisfactory from a financial point of view, they can choose these investments instead

83

Who gave the two circumstances to allow fetter of discretion in investment of trust property, and in what case?

VC Nicholls in Harries v Church Commissioners

84

What cases exemplify the adoption of an illegitimate investment policy by Ts?

Cowan v Scargill; Harris v Church Commissioners

85

What was the common law position for settlors prior to TA2000?

Had to exclude restrictive common law limitations on Ts

86

what does Mitchell argue about T's duty being fiduciary?

Causes confusion with other fiduciary duties, e.g. solicitor and client

87

What case gave a proprietary analysis of trust documents?

Re Londonderry's Settlement

88

What is the economic portfolio theory?

Whether or not high-risk investment is negligent depends on the proportion put into it, which is crucial to achieving purposes of the fund - 40:60 ratio for equity and property is ideal. THE NEED TO BALANCE OUT RISK.

89

Failing to review investment suitability, 10x more if Tracker Fund

Nestle v Natwest

90

Youyang Pty Ltd v Minter Ellison

'Perhaps the most important duty of a T' is the duty to comply with the trust instrument

91

Who applauded the Companies Act 2006 for avoiding the fiduciary duty confusion?

Mitchell

92

Tierney v King general

settlor-B, public office

93

What section of what Act gives situations when a DoC applies to T?

Section 2 Trustee Act 2000

94

If a T acts against a wish in a latter of wishes, what could this mean?

Although they are not legally binding, and thus T COULD ignore it, Ts exercise may be seen as capricious as he should act in accordance with S's wishes

95

Chase Manhattan Equities v Goodman

A letter of wishes can override trust deed exceptionally if S intends the letter to be legally binding

96

How can a beneficiary use trust property to benefit B in a non-financial way?

Let them live in the house

97

What case gives the basic rule that a B must be notified they are a B?

Brittlebank v Goodwin

98

All duties of care can be excluded in relation to investment, except the duty of good faith

Re Jeffrey

99

What are restrictions on the exercise of a Ts powers known as?

A disability - no primary/secondary obligation distinction, as in contract

100

How is Schmidt different from Londonderry?

In Schmidt, the son was an object of a PoA, not a B already

101

What case gave a higher standard of DoC in the investment sphere than given in Speight v Gaunt?

Re Whiteley

102

What happens to T duty if the trust property only has financial value?

T must prioritise financial considerations of the property

103

Armitage v Nurse per Jacob J

Allowed exemption of T from liability unless damage caused by 'actual fraud', which didn't include recklessly disregarding the terms of the trust if done honestly

104

what case made it clear that the decision needs to have been one no reasonable T would have made for breach of duty of care?

Nestle v Natwest

105

When selling property, Ts must get best price possible

Downes v Graysbrook

106

A letter of wishes can override trust deed exceptionally if S intends the letter to be legally binding

Chase Manhattan Equities v Goodman

107

What do Ts not have to do when exercising their discretion?

Explain themselves

108

What case show that Where there is a second 'sleeping T' for the purposes of formalities, no liability if they act in good faith and follow direction of the 'proper' T?

Re Arnott

109

Give regard to letter of wishes before ANY discretionary decision

Bank of Nova Scotia Trust v Ricart de Barletta

110

Harries v Church Commissioners general'

'Unethical', Bishop of Oxford

111

Bartlett v Barclays Bank general

Mismanagement and T inaction

112

What does Hayton believe about notification?

Is a core, non-excludable duty, as well as supplying Bs with enough info that they can actually enforce their rights

113

When is T not liable for loss?

When actions are authorised and she performs managerial/administrative functions with skill and care

114

what happens to a letter of wishes if it is made legally binding?

It is able to be disclosed to Bs

115

What case shows Court treats Ts same as professionals when considering duty of skill and care?

Saif-Ali v Sydney Mitchell

116

Downes v Graysbrook judgment

When selling property, Ts must get best price possible

117

What section of what Act enforces that T can make any investment as if he were absolutely entitled to the property?

Section 3 TA2000

118

what is the proprietary analysis of trust documents?

Any trust docs created by expenditure of trust property is equitably owned by B

119

How does Hayton characterise recklessness?

A negative state of lack of attention

120

Re Londonderry's Settlement general

B wanted to challenge small sums proposed to be distributed to her

121

What specific duty of care does Hayton say cannot be excluded?

Duty to act in good faith

122

What case stated that if assets include real estate, s.4 TA2000 requires Ts to consider sale of property?

Jeffrey v Gretton

123

Who said Jacob J in Armitage v Nurse went too far?

Hayton

124

Section 2 Trustee Act 2000

Schedule 1 highlights when DoC applies to T - e.g. investing/buying land

125

what does a lack of a duty to explain on the behalf of Ts mean in practice?

Ts may sometimes do things for a reason inconsistent with S's desire, but lack of transparency may be what S intended to avoid disputes over desires of S told to T

126

Gazump

Buttle v Saunders

127

Why do H&M believe the courts have started to adopt a primary/secondary obligations distinction?

Due to Donoghue - 'tortification' of equitable rules so that judges believe that breach of a duty in private law automatically leads to compensation

128

Schedule 1, paragraph 7 TA2000

Section 1 TA2000 can be excluded by an express term in the trust deed

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