7331494
Description
Flashcards by Spencer Bienvenue, updated more than 1 year ago
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Created by Spencer Bienvenue
over 7 years ago
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| Question | Answer |
| Ultraframe (UK) Ltd v fielding [2005] EWHC 1638(Ch) at [1513] Fielding | liability for failing to manage the trust assets with due care and skill is based on proof that there has been a breach of trust and that, buy for that breach, there would not have been the loss suffered by the trust fund. the trustee's accounts are surcharged with the amount of the loss case concerns falsifying and surcharging trust funds. |
| Nestle v National Westminster Bank plc [1993] 1 WLR 1260 Nestle | reparation claims: the beneficiary here is effectively claiming that the trust fund has underperformed and therefore seeks payment of an additional sum into the trust fund to bring it up to the value the trustee could reasonably have achieved. |
| Target Holdings v Redferns [1996] 1 AC 421 at 440 Target Holdings | It is only where a fiduciary obtains shares as a bribe that he can be made accountable for his profit based on the highest price that the shares could have been sold for. |
| Bristol & West BS v Mothew [1998] Ch 1 at 18 | where a brach was a failure to manage assets with due care and skill, the award of monetary compensation is based on principles similar to the award of common law damages for negligence. Causation, remoteness of damage and measure of damages defendant being liable if but for his breach, the loss would int have happened. |
| Lloyds TSB v markandan [2010] EWHC 2517 (ch) at [38]-[43] | a fiduciary, however cannot invoke contributory negligence as a defense against his beneficiary who is entitled to trust the fiduciary to act loyally to further the beneficiary's best interests to the exclusion of their own. mortgage fraud was carried out against the bank with a solicitor again being involved as recipient of loan money to be paid over on completion. only was paid over, but before completion occurred. no completion could take place due to non existent entities being involved. The solicitor was strictly liable to restore the money to eh bank, not having acted honestly and reasonable enough o obtain some protection under the Trustee ACT 1925. s 61. |
| Libyan Gorman v Karpnale ltd [1992] 4 All ER 331 at 362. Corporacion nacional del Cogre v Sogemin Metals [1997] 2 All ER 917 at 925 | context of a fiduciary relationship arising in an arms length commercial context when the beneficiary ha become aware that the fiduciary is not to be trusted, losses flowing from he beneficiary's clearly unreasonable passive behavior from a particular date will be judged to have been caused by the beneficiary. |
| Supreme Court in AIB Group (UK) plc v Mark Redler & Co Solicitors [2014] UKSC 58, re. target holdings ltd v redferns | court of appeal held that the firm of solicitors was strictly liable for a misapplication of trust money. It had handed over mortgage monies provided by Target Holdings, which it held on trust to complete the prospective mortgagor's purchase of land in treater for charges upon it., without receiving the security. red ferns was still taken to have theorist morgue monies for which it was strictly liable. target supports a but for test for compensation for breach of trust where there has been a failure to take due care = trustees would only be liable to make good loss if, but for the breach, such loss would not have occurred. |
| AIB Group (UK) plc v Mark Redler & Co Solicitors [2013] EWCA Civ 45 | solicitors negligently discharged only one of two loans secured on property when paying over a £3.3 million re-mortgage advance. This led the lender only able to register a second charge instead of the intended first charge. when the borrower defaulted on their mortgage the property was sold for £1.2 million of which the lender received £900,000. Court of Appeal held that although payment of the whole 3.3 was in breach of trust, losses caused by breach were only 300,000 on the basis that 'but for the breach' the second loan would have been repaid and a first charge would have been granted for lender. who would have then received 1.2 million when the property was sold. |
| Clough v Bond (1838) 40 ER 1016 | If item in trust is stolen or misused etc, trustee must produce item or items value to beneficiary to replace in trust. |
| Coggs v Bernard (1703) 92 ER 107 and 113 and Caffrey v Darby (1801) 31 ER 1159 at 1162 | the courts regarded at trustee as having undertaken an act always in a non negligent fashion, therefore the would always be deemed to act as a good trustee and perform their duties effectively. They would automatically therefore have to restore the trust fund to the value it would have had if the negligent acts had never occurred. |
| Bartlett v Barclays Bank Trust co Ltd [1980] Ch 515 | trustees are not merely liable to compensate the trust in respect of lost capital value, they are generally liable to pya interest in respect of misapplied trust funds. Rate of interest is in the court's discretion. Directors of the company embarked on a hazardous policy of property development. result of the policy decision they embarked on two projects, one a success other a disaster. As the two stemmed from exactly the same policy, it would be unjust to deprive the trustees of this element of salvage in the course of assassin the cost of the shipwreck, allowed the gain in the successful transaction to be set off against the loss of the other. |
| Fiona Trust & Holding Corporation v Primal [2011] EWHC 664 (Comm) at [13]-[16] | court of appeal imposed a commercial rate that was 1% above the London clearing banks' base rate in force at the time. This is still the position for the commercial rate. |
| Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669 | a court may only award compound interest if there is fraud, or if a trustee or other fiduciary made an improper profit from the breach of trust. |
| Re Chapman [1896] 2 Ch 763 | court of appeal held that a trustee was not liable for any loss arising through the retention of an authorized investment unless that loss arose through the trustee's willful default. Lindy LJ said that willful default occurred if a trustee displayed a lack of ordinary prudence. supervised by requirements in Trustee Act 2000 relating to making and reviewing investments to which the duty of care applies. |
| AG v Alford (1855) 4 De GM&G 843 | a trustee must not leave trust money uninvested for an unreasonable period; if they breach this rule they will be chargeable with interest on the invested sum. Yet its seems that the trustee could be liable to an alternative claim for loss of the profit that would have been made if they had exercised their power to invest in a tracker fund. |
| Townley v Sherborne (1634) J Bridg. 35 | a trustee is liable for their own defaults and not those of their co-trustee difficult in practice as their office is a joint one |
| Bahin v Hughes (1886) 31 Ch D 390 | Miss Hughes was the active trustee who made unauthorized investments. Mr Edwards was a passive trustee who sought an indemnity from liability for loss brought about by the actions of Miss Hughes Court of Appeal refused to grant him the indemnity holding that they were equally liable - miss Hughes for making the unauthorized investment and Mr Edwards for his inaction. |
| Re Strahan (1856) 8 De GM&G 291 | a trustee is not liable for breaches of trust committee before their appointments. nor for those committed after they have retired. on being appointed a trustee must examine the trust looks and documents and ensure that all trust property is vested in them. If while making this examination they elect a breach of trust committee before their app. they must take prompt steps to put it right. (I.e. by suing the continuing or retired trustee(s) guilty of breach. If they come across evidence indication and earlier breach of trust but do nothing, they may be liable for failing to pursue the matter. |
| Head v Gould [1898] 2 Ch 250 | although not liable for breaches committed after their retirement, unless they retired in order to facilitate a breach. |
| Re somerset [1894] 1 Ch 231 | trustees lent too much on a mortgage which was a brach of trust. Vere Somerset instigated and consented in writing to lending money on the mortgage. When the secured land turned our to be insufficient, VS Sued the trustees who claimed that VS's life interest be impounded. Court of Appeal refused to impound interest because VS has left the amount of the mortgage to the trustees (amount was what caused breach) Breach had come about because of want of care by the trustees not because Vs had urged a particular form of investment |
| Re Pauling (no. 2) [1963] Ch 576 | the trustee bank, Coutts, claimed atet since the breaches of trust in that case were at the instigation of Ms Younghusband (life tenant) her interest should be impounded. the beneficiaries sought to appoint new trustees and Coutts resisted on the ground that its right to impound would disappear if it were no longer trustee. Court held that the appointment of new trustees would not imperil the right to impound. that right survived the retirement or removal of trustees. Otherwise the court would be obliged not to replace a trustee who had committed clear breaches of trust until the beneficiary's impounded interest indemnified the trustee completely. |
| Re Kay [1897] 2 Ch 518 | an executor and trustee of a will with an estate worth £22,000 and apparent liabilities of only £100 paid out a £300 legacy to the widow before advertising for claims. Subsequently learned that the testator had debts of over £22,000 Court held that he had acted reasonably in assuming that he could make this relatively small payment. |
| Shaw v Cates [1909] 1 Ch 389 | reasonableness is judged by the standard of a prudent man of business. this will still apply in the odd case not covered by the Trustee act 2000, which imposes a duty of care in relation to investment and delegation, requiring the exercise of such care and skill as is reasonable in the circumstances in practice it is likely that there is little difference between the two standards of care |
| Perrins v Bellamy [1898] 2 Ch 521 | trustees sold leaseholds belonging to the trust because they had been incorrectly devised by their solicitors and they had power to do so. the court relieved the trustees of liability under the trustee act 1925 s 61. Kekewich J was unsure how much the phrase 'ought fairly to be excused' added anything to the requirement that a trustee must have acted reasonably. In general a trustee should be relived where they have acted honestly and reasonably. In such a case the court ought to assume that the trustee who acted honesty any reasonably, is one who ought fairly to be excused. |
| Armitage v Nurse [1998] Ch 241 at 261 | object of a discretionary trust or power who has not yet received any property from the trustees can sue at any time to have the trust fund restored to its proper value until six years have elapsed since they received some property thereby acquiring an interesting possession in such property court of appeal held that an exemption clause in an instrument which protected the trustees from liability for any loss or damage unless such loss or damage shall be caused by his own fraud, was valid would not however cover the case where a beneficiary claim did not depend on proof of loss or damage but for ex sought to recover property sold by trustees to one of themselves at a proper price in breach of the self dealing rule. ` |
| Schmidt Rosewood Trust Ltd [2003] UKPC 26 | assume the object of a power is not such a peripheral object act they will not have locus standi ( the ability of a party to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that party's participation in the case) to sue |
| Paragon Finance plc v Thakerar [1999] 1 ALL ER 400 at 408 | court of appeal distinguished two classes of constructive trustee. Class 1: fall in s 21(1) and so liable for an unlimited period Class 2: trustees fell outside s 21(1) and sowers covered by the 6 year limitation period in s 21(3) |
| Williams v Central Bank of Nigeria [2014] UKSC 10 | the supreme court reversed an earlier court of appeal decision to confirm that as such strangers are not true trustees their liability is not unlimited in time under s 21(1) |
| Re Howlett [1949] Ch 767 | where a trustee occupied a trust property until he died it was held that the beneficiary could sue the trustees personal representatives from an occupation rent and no limitation period applied. |
| Eddie v Chichester Constable [1969] 2 Ch 345 | the life tenant secretly sold a valuable painting belonging to the trust the trustees did not discover what had happened until the life tenant died they then sued his estate. court held that the trustees were not time barred because s 32 applied. Sale of the painting constituted a fraud on the beneficiaries and although the life tenant had never said anything actively to deceive the trustees. He had said nothing about it and thus concealed the fraud. |
| King v Victor Parsons & Co [1973] 1 WLR 29 at 33 | deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty. The no appears in s 32(2) but it requires the defendant to be aware that he is committing a breach of duty : RE: Cave v Robinson Jarvis and Rolf [2002] |
| Re Loftus [2006] EWCA civ 1124 at [34]-[41] | Laches doctrine can be used where the statute does not apply such as where a claimant is seeking specific performance or an injunction or where there is no statutory limitation period because s 21(1) applies eg where a trustee retains trust property. |
| Bonham v Blake Lapthorn Linell [2006] EWHC 2513 (Ch) | such a clause should not attract a contra proferentem (interpretation against the draftsman) approach to its construction but could be given a construction appearing on a fair reading of it. 'loss' was held to cover not just amounts payable for loss on surcharging principle for negligent conduct but also amounts payable on falsification principles (treating the defendant as still having the asset or its money equivalent) when there had been ultra vires misapplications of property) |
| Spread Trustees Company Ltd v Hutcheson [2011] UKPC 13 | it appears that trustees may be relieved of liability for any loss caused by their negligence whether ordinary or gross negligence if it were possible to distinguish them so long as they have not acted dishonestly. Privy council has endorsed the possibility of exemption from gross negligence. |
| Walker v Stones | which held that a solicitor-trustee could not rely on an exemption clause where their belief was so unreasonable that no reasonable solicitor-trustee could have held it. |
| Fattal v Walbrook Trsutees Jersey Ltd [2011] EWHC 267 (Ch) | an exception clause could be drafted so that a trustee was only liable for dishonesty. For a professional person to be guilty of dishonesty the claimant must prove 1. a deliberate breach of trust 2. committed by a professional trustee: a) who knows that the deliberate breach is contrary to the interests of the beneficiaries OR b) who is recklessly indifferent whether the deliberate breach is contrary to their interests or not OR c) whose belief that the deliberate breach is not contrary to the interests of the beneficiaries is so unreasonable that by any objective standard no reasonable professional trustee could have thought that what he did or agreed to do was for the benefit of the beneficiaries. |
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