Lecture notes
Equity & Trusts term 2 lecture notes
- Module
- Equity & Trusts
- Institution
- University Of Exeter (UoEX)
Lecture notes of 16 pages for the course Equity & Trusts at UoEX
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Trusts lectures Term 214/1/14
• The role of the trustee
• Nature of trusteeship
• Essential position of trustee
• Role of trustee
• Unanimity
• The fiduciary position of a trustee
• The voluntary nature of trusteeship
• Appointing and removing a trustee
• Appointment
• Termination of trusteeship
Defining the trust
• Trustee is absolutely key in the whole existence of the trust - he holds the
(legal) title to the property, owed obligations to the beneficiary and they are
enforced by equity
• Trust property must be specific property and may be a single asset or fund
• Beneficiary has benefit of the property and can enforce trust against trustees
• Equity operating on the trustees conscience
Nature of trusteeship
• Trustee is thus essential component of trust
• Trustee holds (usually) legal title to property
• Equity operates on the conscience of the trustee
• Trustee has obligations to the beneficiary, who can enforce the trust against the
trustee
• Content of trusteeship differs according to trust
• But there is an ‘irreducible core of obligations’
• “there is an irreducible core of obligations owed by the trustees to the
beneficiaries and enforceable by them which is fundamental to the
concept of a trust. If the beneficiaries have no rights enforceable against
the trustees, there are no trusts. ... The duty of the trustees to perform the
trusts honestly and in good faith for the benefit of the beneficiaries is the
minimum necessary to give substance to the trusts.” Millet LJ, Armitage v
, Nurse [1998] Ch 241
• “[The] basic right of a beneficiary is to have the trust duly administered in
accordance with the provisions of the trust instrument, if any, and the
general law” Lord Browne-Wilkinson, Target Holdings v Redferns [1996] 1
AC 421 - basic idea that beneficiaries are ultimately entitled to enforce the
trustees to do what he is supposed to do
Trustee’s role
• Trustee does not just hold property, but must also manage the property in
accordance with the trust (and the law) for the benefit of the beneficiary
• Trustee must act for benefit of someone else
• Must exercise powers properly, must observe duties
• Any failures means he is in breach of trust with the remedies that flow from that
• Lack of personal benefit - supposed to be a selfless role
• Role is recognised as potentially onerous
• ‘The office of trustee is attended with no small degree of trouble ... it is an act of
great kindness in anyone to accept it.’ (Lord Hardwicke LC)
• Knight v Earl of Plymouth (1747) 1 Dick 120, 126
• So why be a trustee? “To this there are two answers. First, professional
trustees undertake the work only where they are entitled to be paid. ...
Secondly, members of the family of the settlor or testator will often consent
to be trustees out of feelings of duty to the settlor or testator.” (Hanbury &
Martin, 530)
• Looking after the trust property for the benefit of someone else
Trustees must act unanimously
• Trusts usually have more than one trustee
• Reduces opportunity for abuse of position as there is someone else keeping an
eye on them
• Unless modified by the trust instrument, trustees must act unanimously
• “There is no law ... which enables the majority of trustees to bind the minority.
The only power to bind is the act of [them all]” (Jessel MR, Luke v South
Kensington Hotel (1879) 11 ChD 121 Eg Tempest v Lord Camoys (1882)
21 ChD 571
• Accordingly acts of trustees acting individually cannot bind the trust estate and
trust fund should be under control of all trustees
• But see later on delegation
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