TRUSTEE APPOINTMENT, REMOVAL AND DUTIES
➢ The leading legislation is the trustee act but must look to express trust itself first – the duties
and powers contained in the deed are the absolute starting point, and the act is the default
where no provision has been made or is missing
WHAT IS A FIDUCIARY
• Trustee relationship to beneficiary is fiduciary
- Must act in the sole interest
Bristol and West Building Society v Mothew 1998 Ch 1 at p.18
- Someone who has undertaken to act for or on behalf of another…in circumstances
which give rise to a relationship of trust and confidence
- The distinguishing obligation is loyalty
- The principal is entitled to the single-minded loyalty of his fiduciary
The facets of such a duty:
a. Must act in good faith
b. Must not make a profit out of his trust
c. Must not place himself in a position where his duty and his interest may conflict
d. May not act for his own benefit or the benefit of a third person without the informed
consent of his principal
- Not exhaustive, but the ‘defining characteristics of the fiduciary’
APPOINTMENT
- Trust will never fail for want of a trustee
CEASING TO BE A TRUSTEE
A. DISCLAIMER
- At commencement by deed or conduct
Cunningham v Cunningham
,A was appointed trustee by a will but never expressly accepted the position. The subject matter was
the rents of a plantation in Scotland. A acted as the agent for the plantation and received the rents
in doing so as they came in
- By receiving the rents, A accepted position as trustee
- Can be implied
- Does not require positive action – idle action w/out positive action to the contrary which
would indicate repudiation of trustee position will amount to acceptance
B. RETIREMENT
➢ Can be by express clause
➢ Consent of beneficiaries
TRUSTEE ACT 1983
S 11
1. Where there are more than two trustees
If one of the by deed desires to be discharged and the co-trustees and any other person that
is empowered to appoint trustees: consent to the discharge and to the vesting in the co-
trustees of the trust property
- Shall be discharged and deemed to have retired.
- Unless contrary provision in instrument
C. REMOVAL
Either by:
a. Express clause in the deed setting out circumstances for removal
b. Inherent jurisdiction of the court
General principle
- This jurisdiction should be exercised if the welfare of the beneficiaries so demand
Spencer v Kinsella [1996] 2 ILRM 401
- Primary consideration will always be the welfare of the beneficiaries
Will be exercised when:
Arnott v Arnott [1924] 58 ILTR 145
- Act dishonestly, incompetently or are seen to be wilfully obstructing the administration
of the trust
, Kirby v Barden High Court Caroll J 12 March 1999
- Where there is conflict of interest between the trustee’s personal interests and the
interests of the trust
MK v JB unrep High Court 26 February 1999
- The court will refuse to remove a trustee where the applicant is merely dissatisfied with
how a sale is being conducted
- Will only grant removal where it can be shown that the sale would be contrary to the
welfare of the Bs
D. SUBSTITUTION
TRUSTEE ACT 1983
S 25
- Inherent power of the court to appoint a trustee
S 10
- Where a trustee is dead, remains out of the UK for more than a year or desires to be
discharged from all or any of the trusts or powers reposed in or conferred on him or
- Refuses/ is unfit to act
- Incapable of action
- Another person can be appointed – various people can appoint under s 10 or court under 25
– default is that the last surviving trustee or personal representative will take over OR if
there is a nominated person in the trust deed then they will
RIGHTS OF BENEFICIARIES
• The rights of beneficiaries are often considered through the lens of the duties owed.
Fixed trust
Saunders v Vautier [1841] 4 Beav 115
- Where the beneficiaries are sui juris and are entitled to the entire beneficial interest
absolutely, they may demand a transfer of the trust property to them, bringing the trust
to an end
Discretionary
Distribution is mandatory within a reasonable time – trustees discretion limited to choice of
recipients and shares of TP each gets.
➢ The leading legislation is the trustee act but must look to express trust itself first – the duties
and powers contained in the deed are the absolute starting point, and the act is the default
where no provision has been made or is missing
WHAT IS A FIDUCIARY
• Trustee relationship to beneficiary is fiduciary
- Must act in the sole interest
Bristol and West Building Society v Mothew 1998 Ch 1 at p.18
- Someone who has undertaken to act for or on behalf of another…in circumstances
which give rise to a relationship of trust and confidence
- The distinguishing obligation is loyalty
- The principal is entitled to the single-minded loyalty of his fiduciary
The facets of such a duty:
a. Must act in good faith
b. Must not make a profit out of his trust
c. Must not place himself in a position where his duty and his interest may conflict
d. May not act for his own benefit or the benefit of a third person without the informed
consent of his principal
- Not exhaustive, but the ‘defining characteristics of the fiduciary’
APPOINTMENT
- Trust will never fail for want of a trustee
CEASING TO BE A TRUSTEE
A. DISCLAIMER
- At commencement by deed or conduct
Cunningham v Cunningham
,A was appointed trustee by a will but never expressly accepted the position. The subject matter was
the rents of a plantation in Scotland. A acted as the agent for the plantation and received the rents
in doing so as they came in
- By receiving the rents, A accepted position as trustee
- Can be implied
- Does not require positive action – idle action w/out positive action to the contrary which
would indicate repudiation of trustee position will amount to acceptance
B. RETIREMENT
➢ Can be by express clause
➢ Consent of beneficiaries
TRUSTEE ACT 1983
S 11
1. Where there are more than two trustees
If one of the by deed desires to be discharged and the co-trustees and any other person that
is empowered to appoint trustees: consent to the discharge and to the vesting in the co-
trustees of the trust property
- Shall be discharged and deemed to have retired.
- Unless contrary provision in instrument
C. REMOVAL
Either by:
a. Express clause in the deed setting out circumstances for removal
b. Inherent jurisdiction of the court
General principle
- This jurisdiction should be exercised if the welfare of the beneficiaries so demand
Spencer v Kinsella [1996] 2 ILRM 401
- Primary consideration will always be the welfare of the beneficiaries
Will be exercised when:
Arnott v Arnott [1924] 58 ILTR 145
- Act dishonestly, incompetently or are seen to be wilfully obstructing the administration
of the trust
, Kirby v Barden High Court Caroll J 12 March 1999
- Where there is conflict of interest between the trustee’s personal interests and the
interests of the trust
MK v JB unrep High Court 26 February 1999
- The court will refuse to remove a trustee where the applicant is merely dissatisfied with
how a sale is being conducted
- Will only grant removal where it can be shown that the sale would be contrary to the
welfare of the Bs
D. SUBSTITUTION
TRUSTEE ACT 1983
S 25
- Inherent power of the court to appoint a trustee
S 10
- Where a trustee is dead, remains out of the UK for more than a year or desires to be
discharged from all or any of the trusts or powers reposed in or conferred on him or
- Refuses/ is unfit to act
- Incapable of action
- Another person can be appointed – various people can appoint under s 10 or court under 25
– default is that the last surviving trustee or personal representative will take over OR if
there is a nominated person in the trust deed then they will
RIGHTS OF BENEFICIARIES
• The rights of beneficiaries are often considered through the lens of the duties owed.
Fixed trust
Saunders v Vautier [1841] 4 Beav 115
- Where the beneficiaries are sui juris and are entitled to the entire beneficial interest
absolutely, they may demand a transfer of the trust property to them, bringing the trust
to an end
Discretionary
Distribution is mandatory within a reasonable time – trustees discretion limited to choice of
recipients and shares of TP each gets.
