Duties of Express Trustees Questions and Answers 2025.

Duties of Express Trustees Questions and
Answers 2025
ReABrogdenA(1888)A38AChADA546A(CA)A-ACORRECTAANSWERSA-TopicA-
AAdministrativeADecisionsA(ActingASolelyAinAtheAInterestsAofAtheATrustAObjects,AFamilialA

Harmony)

Facts:AAAtestatorAcovenantedA£10,000AtoAtheAmarriageAsettlementAtrustAofAhisAdaughter,At
oAbeAheldAbyAtheAtrusteesAofAthatAtrustAafterAaAperiodAofAfiveAyearsAhadApassed.AButAsuchAa
ApaymentAwasAnotAmade.AAtAfirstAinstance,AallAthreeAofAtheAtrusteesAwereAfoundAtoAbeAinAbr

eachAofAtrustAandAwereAjointlyAandAseverallyAliableAtoAmakeAgoodAtheA£10,000AtoAtheAtrustAf
und.ATwoAofAtheAtrusteesAwereAinAbreachAasAtheyAhadAfailedAtoAmakeAtheApaymentAtoAtheAtr
ustAbutAtheAtrusteeAwhoAhadAfailedAtoAenforceAtheApaymentAappealed.AWhileAheAhadAinstea
dAacceptedAinsufficientAsecurity,AheAdidAsoAbecauseAheAfearedAinjuringAtheAstabilityAofAtheAf
amilyAfirmAwhoseApartnersAheldAtheAfundsAandAcausingAfamilialAstrife.ATheAfirmAthenAwentAi
nsolventAandAtheAbeneficiariesAsuedAtheAtrustees.

Issue:AWereAallAtheAtrusteesAinAbreachAofAtrustAbyAfailingAtoApursueAlegalAproceedingsAforAt
heAdebtA(theAcovenantedAsum)?

Held:ABreachAofAtrust.

ActingAinAgoodAfaithAandAhonestlyAdoesAnotAsuffice,AtheAtrusteeAmustAactAinAtheAbestAintere
stsAofAtheAtrustAobjects.

SafeguardingADuty:AItAisAtheAdutyAofAtrusteesAtoApushAforApaymentsAofAdebtsAandAifAnecess
aryAtoApursueAlegalAproceedings,AunlessAtheyAhaveAaAwell-
foundedAbelieveAthatAthisAwouldAbeAfruitlessA(whichAtheyAmustAprove).
ButtleAvASaundersA[1950]A2AAllAERA193A(Ch)A-ACORRECTAANSWERSA-TopicA-
AAdministrativeADecisionsA(ActingASolelyAinAtheAInterestsAofAtheATrustAObjects,AGazumpin

g)

Facts:ATheAtrusteesAunderAaAwillAwantedAtoAsellAsomeAfreeholdAproperty.ATheyAhadAnegoti
atedAwithAoneAparty,AandAhadAdraftedAcontracts.ATheAotherApartyAhadAevenAsignedAtheirAco
py.AHoweverAoneAofAtheAbeneficiariesAthenAmadeAaAbetterAoffer.ATheAtrusteesAconsideredAt
hatAtheyAwereAhonourAboundAtoAsellAtoAotherApartyAandArefusedAtheAhigherAoffer.ATheAbene
ficiaryAtookAactionAforAanAinjunctionAtoAretrainAthemAfromAsellingAtrustApropertyAforAanyAsum
AlessAthanAtheAamountAtheyAoffered.




Issue:ADidAtheAtrusteesAhaveAaAdutyAtoAgazump?

Held:AInjunctionAgrantedA(propertyAwentAtoAoriginalAofferorAforAaAhigherAsumAasAaAresultAofA
herAcounter-claim).

,EvenAthoughAfromAtheApointAofAviewAofAcommercialAmoralityAtheAtrusteeAfeltAheAcouldAnotAr
esileAhimselfAfromAtheAnegotiations,AthisAconsiderationAwasAirrelevantAtoAtheAdutiesAofAtheAt
rustee.
CowanAvAScargillA[1985]AChA270A(Ch)A-ACORRECTAANSWERSA-TopicA-
AAdministrativeADecisionsA(ActingASolelyAinAtheAInterestsAofAtheATrustAObjects,ABestAFinan

cialAInterests)

Facts:AThereAwasAaAdisputeAbetweenAtrusteesAofAtheANationalACoalABoardApensionAfundAf
orAminers.AHalfAofAtheAtrusteesAwereAappointedAbyAtheAboardAandAfiveAbyAtheANationalAUni
onAofAMineworkers.AAAformalAplanAwasAsubmittedAtoAtheAboardAbyAaAsub-
committeeAbutAtheAfiveAunionAtrusteesArefusedAtoAapprovedAitAbecauseAofAobjectionsAdueAt
o:Ai)AoverseasAinvestments,Aii)AinvestmentsAinAoilAandAiii)AtheAacquisitionAofAlandAoverseas.A
TheyArefusedAtoAconcurAunlessAtheseAwereAchangedAbecause:Ai)AtheyAwereAcontraryAtoAun
ionApolicy,AandAii)AtheyAobjectedAonAprinciple.ATheyAinsistedAthatAtheAbenefitAofAtheAbenefici
ariesAwasAtheirAsoleAconsideration.ATheAboardAtrusteesAtookAactionAagainstAthemAaskingAt
heAcourtAforAdirectionsAasAtoAtheirAdutiesAowed.

Issue:AWouldAtheAtrusteesAbeAinAbreachAifAtheyAfollowedAunionAinstructions?

Held:ATrusteesAwouldAbeAinAbreachAofAtrust.

BenefitAasAFinancialABenefit:A'WhenAtheApurposeAofAtheAtrustAisAtoAprovideAfinancialAbenefit
sAforAtheAbeneficiaries,AasAisAusuallyAtheAcase,AtheAbestAinterestsAofAtheAbeneficiariesAareAn
ormallyAtheirAbestAfinancialAinterests.'

TrusteeAViews:AAccordingly,AaAtrusteeAcannotAmakeAanAalternativeAinvestmentAwhichApro
ducesAworseAfinancialAreturnsAbasedAonAhisAaApoliticalAorAmoralAstanceAheAtakes.

IfAanAalternativeA(ethical)AinvestmentAwasAequallyAbeneficial,AtheAcriticismAheAmadeAofAinv
estmentsAwhichAwereAlessAbeneficialAwouldAbeA'difficultAtoAsustainAinApractice,AwhateverAth
eApositionAinAtheory'.

QuaereAConsistencyAWith:A'InAconsideringAwhatAinvestmentsAtoAmakeAtrusteesAmustAputAt
oAoneAsideAtheirAownApersonalAinterestsAandAviewsA...AifAinvestmentsAofAthisAtypeAwouldAbe
AmoreAbeneficialAtoAtheAbeneficiariesAthanAotherAinvestments,AtheAtrusteesAmustAnotArefrai

nAfrom
HarriesAvAChurchACommissionersA[1992]A1AWLRA1241A(Ch)A-ACORRECTAANSWERSA-
TopicA-
AAdministrativeADecisionsA(ActingASolelyAinAtheAInterestsAofAtheATrustAObjects,ABestAFinan

cialAInterests)

Facts:ATheABishopAofAOxfordAsoughtAaAdeclarationAfromAtheAcourtAthatAtheAChurchACommi
ssionersAshouldAmanageAtheirAassetsAwithAtheirAcharitableAobjectAofApromotingAtheAChristi
anAFaithAinAmind,AandAwereAnotApermittedAtoAuseAthemAinAanyAotherAway.AAsAsuch,AheAwan
tedAaApolicyAwhichAactivelyAsoughtAoutAinvestmentsAwhichAadvancedAChristianAconcerns.

, Issue:AMustAtheAtrusteesAinvestAsoAasAtoAadvanceAtheAobjectAofAtheAcharitableAtrust?

Held:ADeclarationArefused.

WhereApropertyAisAheldAforAinvestmentApurposes,A'theApurposesAofAtheAtrustAwillAbeAbestAs
ervedAbyAtrusteesAseekingAtoAobtainAtheAmaximumAreturnA...AtheAtrustees'AchoiceAofAinvest
mentsAshouldAbeAmadeAsolelyAonAtheAbasisAofAwell-establishedAinvestmentAcriteria.'

WhereAi)AtheAbusinessAtoAbeAinvestedAinAconflictsAwithAtheAaimsAofAtheAcharityAorAii)AtheAch
arityAmightAloseAsupportersAorAtheAabilityAtoAhelpApotentialAbeneficiaries,AtheAtrusteesAcanAr
efuseAtoAinvest,AevenAifAthisAisAtoAtheAsignificantAfinancialAdetrimentAofAtheAtrust.

InAHarriesAvAChurchACommissioners,AitAwasAsaidAthatAalternativeAinvestmentsAwhichAwere
AnotAtoAtheAsignificantAdetrimentAofAfinancialAreturnAcouldAbeAselectedAbasedAonAtheAtruste

esAapprehensionAofAChristianAmoralityA(givenAthereAwasAaAclashAofAviews).
TrusteeAActA2000AssA1-2AandASchA1A-ACORRECTAANSWERSA-TopicA-
AAdministrativeADecisionsA(DutiesAofASkillAandACare)




AllAtrusteesAareAnowAunderAanAexcludableAstatutoryAdutyAofAcareA'toAexerciseAsuchAcareAan
dAskillAasAisAreasonableAinAtheAcircumstances'AwithArespectAsomeAofAtheirAadministrativeAd
uties,AwhichAlargelyAcodifiesAtheAearlierAcaseAlawA(sA1).

WhenAassessingAtheAstandardAofAcare,AsA1AgivesAguidanceAonAtwoArelevantAcircumstance
s:
a)AanyAspecialAknowledgeAorAexperienceAtheAtrusteeAhasAorAholdsAhimselfAoutAasAhaving,A
and;
b)AwhereAsomeoneAactsAasAaAtrusteeAinAtheAcourseAofAbusiness,AanyAspecialAknowledgeAo
rAexperienceAitAwouldAbeAreasonableAtoAexpectAofAaApersonAinAthatAbusiness.
SpeightAvAGauntA(1883)A22AChADA727A(CA);A(1883)A9AAppACasA1A(HL)A-
ACORRECTAANSWERSA-TopicA-AAdministrativeADecisionsA(DutiesAofASkillAandACare)




Facts:AAAtrusteeApaidAaAbrokerA£15,000AonAtheAstrengthAofAaA'boughtAnote'AsayingAthatAthe
yAhadApurchasedAsecuritiesAofAthatAamount.AInAfactAtheyAhadAnot,AandAwentAbankruptAandA
soAtheAmoneyAwasAlost.ATheAquestionAonAappealAwasAwhetherAtheAtrusteeAhadAfallenAshort
AofAtheirAduty.




Issue:AHadAtheAtrusteeAfallenAshortAofAhisAduty?

Held:ANoAbreachAofAtrust.

'AAtrusteeAdischargesAhisAdutyAifAheAtakesAinAmanagingAtrustAaffairsAallAthoseAprecautionsA
whichAanAordinaryAprudentAmanAofAbusinessAwouldAtakeAinAmanagingAsimilarAaffairsAofAhisA
own.'A(LordABlackburn)