Legal remedy under section 61 of the Trustee Act 1925: The court may release a trustee, in whole or in part, from personal liability for breach of trust if it is determined that the trustee acted honestly and reasonably and should be reasonably excused for the breach and because he or she has not received court orders. ⇒ Target Holdings v Redferns [1996] stated that while the court ensures that the trust is properly managed, this does not mean that it will always grant a remedy for infringement, a second aspect of the debate among those advocating substantial merger is (beyond whether the rights to trusts are personal or exclusive), what underlying “event” to which various trusts “react”. In addition to Gaius` plan,[292] which held that obligations arose from contracts and injustice, advocates of unjust enrichment emphasized that their domain was a neglected tertium. According to the most influential scheme advocated by Peter Birks, obligations are divided into consents, injustice, unjust enrichment and “various” other events. From this perspective, explicit trusts (such as contracts, gifts or forfeitures) were based on consent, some constructive trusts were, while others produced constructive trusts (exclusive or priority in the event of bankruptcy) for wrongdoing, and other constructive trusts and all resulting trusts were established for unjust enrichment. Unjust enrichment is seen as the basis of a final group of constructive cases of trust, although this remains controversial. In Chase Manhattan Bank NA v. Israel-British Bank (London) Ltd,[199] Goulding J. found that a bank that had accidentally paid money to another bank was entitled to the money under a constructive trust. A mistake today would generally be considered an unjustified claim to enrichment, and there is no debate about whether the money could be recovered in principle.
However, it was asked whether the request for money should be exclusive in nature and whether constructive trust should be created, in particular if it was binding on third parties (for example, if the beneficiary bank had become insolvent). In Westdeutsche Landesbank Girozentrale v. Islington LBC,[159] Lord Browne-Wilkinson stated that constructive trust could only have been created if the conscience of the addressee had been affected at the time of receipt or before the intervention of the rights of third parties. In this way, it is controversial whether unjust enrichment underpins constructive trusts, although it is not clear why a person`s conscience should be affected should make a difference. [200] The final “certainty” required by the courts is to know, to a reasonable extent, who should be the beneficiaries. [75] Here too, the courts have become increasingly flexible and intend to maintain trust to the extent possible. In Re Gulbenkian`s Settlements (1970),[76] a wealthy Ottoman oil entrepreneur and co-founder of the Iraq Petroleum Company, Calouste Gulbenkian, had left a will that gave his directors “absolute discretion” to pay money to his son Nubar Gulbenkian and his family, but also to anyone with whom Nubar was “employed or resident from time to time.” This provision of the will was challenged (by the other potential beneficiaries, who themselves wanted more) because they were too uncertain as to the identity of the beneficiaries. The House of Lords concluded that the will was still fully valid, because even if a final list of all could not be drawn up, the administrators and a court could be sufficiently secure, with evidence for anyone who “employed or not” employed or housed Nubar.
Similarly, the phrase “is or is not” was applied in McPhail v. Doulton. [77] Mr. Betram Baden created a trust for his company`s employees, relatives and dependents, but also gave the trustees “absolute discretion” to determine who it was. The agreement was challenged (by the city council, which would receive the rest) on the grounds that the idea of “parents” and “parents” was too uncertain. The House of Lords found that the trust was clearly valid because a court could and would exercise the appropriate power “to carry out the intentions of the settlors or testators.” When the case was referred to the lower courts to determine what the grantor`s intentions really were, the judges of the Court of Appeal in Re Baden`s Deed Trusts[78] unfortunately could not agree. Everyone agreed that the trust was sufficiently secure, but Sachs LJ only found it necessary to demonstrate that there was a category of “conceptually safe” beneficiaries, no matter how small, and Megaw LJ held that a class of beneficiaries should have “at least a significant number of objects”, while Stamp LJ was of the view that the court should limit the definition of “relative” or “dependent” to something clear. as “Next of Kin”. The Court of Appeal in Re Tuck`s Settlement Trusts[79] was clearer. An art publisher of Jewish origin, Baronet Adolph Tuck, wanted to create trust for people who were “of Jewish blood.” Because of the mix of faith and ancestors over generations, this could have meant a very large number of people, but according to Lord Denning MR, administrators could simply decide. The will also said that the Chief Rabbi of London could dispel all doubts, and so it was valid for a second reason. Lord Russell agreed,[80] although Eveleigh LJ disagreed, stating that the Trust was only valid with a rabbi clause.
In some cases, the different points of view continued. In Re Barlow`s Wills,[81] Browne-Wilkinson J. held that concepts (such as “friend”) could always be restricted as a last resort to prevent trust from collapsing. In contrast, a Supreme Court judge noted in a highly political case that West Yorkshire County Council planned to create a discretionary trust to distribute £400,000 “for the benefit of one or all residents” of West Yorkshire, with the aim of informing people of the implications of the imminent abolition of the council by Margaret Thatcher`s government. [82] failed because it was (apparently) “unachievable.” [83] It was not clear whether the compliance of some courts with strict security requirements was consistent with the principles of fair flexibility. Fiduciary (non-statutory) duties: In addition to the legal duty of competence and due diligence, a trustee has a fiduciary duty. This means that a trustee is legally and morally bound to the beneficiaries of the trust. ⇒ Prescription Act 1980 sets a limit of 6 years for breach of trust (section 21(3)) from the date on which ownership passes to the beneficiary or the breach occurs; or, for minors, the time when they reach the age of 18. The most common allegations of breach of trust include (i) the distribution of assets to a beneficiary who is not entitled to them under the trust deed; (ii) the investment of trust assets in a manner that is not permitted; (iii) breach of the duty of loyalty; and (iv) violation of the common law or statutory duty of care.