13. Dispositive Powers

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter begins with a definition of the nature of dispositive powers and duties and how they relate to the distribution of trust property to beneficiaries or objects. They are sometimes referred to as ‘beneficial’ powers and duties. It is hard to draw the distinction between dispositive and administrative powers and duties, but it is a necessary distinction since different rules relate to administrative and dispositive powers and duties. Trustees may have various powers relating to the appointment of trust property to beneficiaries, and there are various consequences of a dispositive power not being exercised. These include liability for breach of trust and the court’s exercising the power instead. Sometimes the trustees may be authorized by the court to exercise the power late.

8. Resulting Trusts

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter discusses resulting trusts and its two principal categories — ‘presumed’ resulting trusts and ‘automatic’ resulting trusts. Resulting trusts are a limited category of trusts that arise on certain facts where neither an express trust nor a constructive trust exists. Automatic resulting trusts arise where an express trust fails initially or subsequently, while presumed resulting trusts arise where a person voluntarily transfers property for no consideration in return, or contributes to the purchase of property in the name of another. There is a controversy regarding the basis of resulting trusts; the better view is that resulting trusts do not respond to unjust enrichment, but reflect a presumed intention of the transferor to have a beneficial interest in the transferred property.

3. The Requirements of an Express Trust

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter elaborates on the requirements of an express trust, which include certainty of intention, subject matter, and objects — referred to collectively as ‘the three certainties’. A trust requires that it be clear to which objects, whether people or purposes, the trustees can and cannot appoint the property. Also, there needs to be someone in whose favour the trustees, and in default, the court, can enforce the trust. This is known as the ‘beneficiary principle’. Certainty of subject matter is assessed objectively and problems may arise if the property is not clearly ascertained. Different tests are used to establish the certainty of objects: for a fixed trust, a complete list of beneficiaries is needed unless the trust is subject to a condition precedent. For discretionary trusts and fiduciary powers, it needs to be certain whether any given person is or is not within the scope of the class of objects.

17. Personal Claims and Remedies

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter considers the personal liability of trustees for breach of trust and studies proprietary remedies, which involve the claimant’s recovering particular property from the defendant, or obtaining a security interest in the defendant’s property. Proprietary remedies provide the crucial advantage of providing the claimant with priority over other creditors in the event of the defendant’s insolvency. Personal claims, by contrast, do not enjoy such priority over the claims of others. However, where the defendant is solvent and the property in question has fallen in value, a personal remedy for the value of the claimant’s loss or defendant’s gain may be preferable to a proprietary remedy. Personal remedies are also to be preferred when the property in which the claimant had a proprietary interest has been dissipated, because in such circumstances no proprietary remedy will be possible.

15. Variation of Trusts

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter shows how a variation of trust occurs in cases where all the beneficiaries of a trust are of full age, under no disability, and in agreement to terminate the trust and resettle the trust property on a new trust, varying the original trust. In cases of necessity, the court has an exceptional inherent jurisdiction to vary a trust. The Variation of Trusts Act 1958 enables the court to consent to the variation of a trust on behalf of certain actual or potential beneficiaries who are unable to consent to the variation. The Act enables the revocation of an existing trust and establishment of a new trust, but only where the new trust can be regarded in substance as similar to the old trust.

11. General Principles Relating to Trustees

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter focuses on the nature of trusteeship and its variations depending on the type of trust. Appointed trustees possess a wide variety of powers, and the misuse of these powers will constitute breach of trust. However, the determination of when the exercise of powers can be characterized as invalid and the consequences of misusing a power raise many significant and controversial issues. The chapter also discusses the different types of trusteeship and the various rules relating to the appointment, retirement, and removal of trustees. Although trustees are not generally compensated for fulfilling their responsibilities in administering the trust, in some circumstances they can receive payment to reimburse them for expenses or to pay for their services.

7. Constructive Trusts

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter focuses on constructive trusts, which arise by operation of law without regard to the intentions of the parties. They are triggered by a defendant’s unconscionable conduct; however, in some cases, a constructive trust will be recognized even though the defendant has not acted unconscionably, such as the constructive trust that arises once a contract to sell land has been made. A remedial constructive trust is recognized by some jurisdictions, whereby equitable proprietary rights arise through the exercise of judicial discretion, but such a trust is not recognized in England and Wales. As with express trusts, title over particular property that is held on constructive trust is split between trustees and beneficiaries, but a constructive trustee is not subject to the same duties as an express trustee.

19. Third Party Liability

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter focuses its discussion on personal claims, where the claimant seeks a sum of money from the defendant but does not assert any right to any particular property. However, even where the defendant is solvent and could satisfy a personal claim, a proprietary claim might often be more desirable. If the property has risen in value, then that uplift in value will necessarily benefit the claimant if the claim is proprietary, but not if the claim is personal. A personal claim for the value of the property at the time of the third party’s wrong might be preferred where the property has fallen in value. Moreover, a personal claim will be the only possible type of claim available to the claimant if the property in question has been dissipated and no longer exists. In such circumstances, a proprietary claim is impossible and a personal claim alone can be pursued.

14. Fiduciary Obligations

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter begins with a definition of fiduciary relationships as presented by a retired judge of the High Court of Australia, Sir Anthony Mason. According to Mason, the relationship is a ‘concept in search of a principle’. Fiduciary relationships are voluntary, and some relationships, such as solicitor–client, are well recognized as fiduciary in nature. However, fiduciary relationships can arise in a wide variety of situations. A fiduciary owes a duty of loyalty to his or her principal, always acting in the best interests of said principal. Fiduciary obligations are strict, and any profits made by the fiduciary in breach must be disgorged to his or her principal. Where the profits are made from property that rightfully belonged to the trust, a constructive trust may be imposed upon the profits.

12. The Administration of Trusts

All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter elaborates on the issues regarding the administration of a trust and its relation to the trustees. Trustees are responsible for the administration of the trust and are subject to certain duties and have a number of powers relating to trust administration. To assist with the administration of the trust, trustees have the option, collectively and individually, to delegate certain functions to others. They are required to perform their administrative responsibilities diligently, and are subject to a duty to comply with the standard of skill and care expected of all trustees. Trustees have a duty to act in the interests of all the beneficiaries, maintaining a fair balance between them. They are also responsible for safeguarding the trust assets for the benefit of all beneficiaries, and, as such, have a duty to invest trust assets in the best interests of present and future beneficiaries.