Trust lect Trustee Duties PDF

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Trust lect Trustee Duties RECAP: What is a trust? 2 Key components: 1. Property – Trustee holds property for beneficiary 2. Obligation - Trustee must exercise rights on behalf of beneficiary OBLIGATIONS • Trustee owes obligations towards beneficiary • Beneficiary has personal rights against trustee (i.e. they can sue the trustee for breach of trust) Armitage v Nurse (1998) – “Irreducible core of trusteeship” Fundamental duty to perform trust honestly for beneficiaries Module Timeline -

“Equity operates on the conscience of the owner of the legal interest. In the case of a trust, the conscience of the legal owner requires him to carry out the purposes for which the property was vested in him (express or implied trust) or which the law imposes on him by reason of his unconscionable conduct (constructive trust)”  Westdeutsche Landesbank v Islington [1996] AC 699

Power and Duties –

Distinguish: Powers – Things the trustee(s) may do Duties – Things the trustee(s) must do Sources of Trustee Powers and Duties 1. Trust deed (trust instrument) 2. Statute (Trustee Act 1925 / Trustee Act 2000) 3. Common law General Obligations 

Must become familiar with: • The terms of the trust • The subject matter of the trust • The range of objects • Other trustees (Nestle’ v National Westminster) • Other documents in connection with the trust including (Tiger v Barclays Bank): • Trust accounts • Scope of investment (Nestle v National Westminster) • Statement of investment criteria

Specific Obligations     

Trustee is bound by the obligations set out in trust instrument (if not, breach of trust Clough v Bond) If trust instrument is silent about certain duties, then provisions from TA 1925 and TA 2000 apply ‘The duty of care does not apply if or in so far as it appears from the trust instrument that the duty is not meant to apply.’ (TA 2000, Schedule 1, para. 7) Should neither the trust deed nor statute assist then look at CL Other obligations arise in relation to the type of property held on trust - e.g. investing money (Moyle v Moyle) or investment (Cowan v Scargill)

CONT’D ON SLIDE TRUSTEE DUTIES...