The Trust Cases

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Buttle v Saunders [1950] 2 All ER 193

Facts: The trustee (i.e. the defendant) agreed to sell some land to someone, but had not created a formally binding document yet. Someone else offered a higher purchase price than the first offer, but the trustee refused to sell to them since he had already come to an informal agreement with the first person for the sale of the land. The second person applied for an injunction against the sale to the first person, alleging the duty of the trustee was to obtain the highest price for the land

Held: The court held that the trustee has a duty to gazump, or break an agreement which has not been not been completed into a formal and binding contract i.e. on a sale of property, trustees have an overriding duty to obtain the best price which they can for their beneficiaries → so the injunction was granted by the court

Hunter v Moss [1994] 3 All ER 215

Facts: Moss, the owner of shares in a private company declared, in the course of a conversation, that he held some of his shares in the company on trust for Hunter, one of the directors of the company.

Held: The trust was upheld by the court.

In re Goldcorp Exchange Ltd [1995] 1 AC 74

Facts: The case concerned a gold bullion (i.e. gold bars) exchange which went into insolvency. The exchange entered into standard contracts that required the exchange to acquire bullion for their customers and to hold the amount of their customers’ orders in their vaults

Those contracts purported to create proprietary rights in favour of the customers over the bullion that the exchange was required to acquire on their behalf → so they were told they were holding the gold on trust for the customers

The exchange broke its contractual promise and did not hold the entire lot of the customers’ bullion → so when the exchange went into insolvency it could not meet its customers’ orders

The Claiaments were clients of the exchange who were seeking to demonstrate that bullion was held on trust for them as a result of their contracts with the exchange → and therefore trying to claim the bullion remained their property in equity i.e. they sought to avoid the exchange’s insolvency by having themselves accepted as being secured creditors under the trust

Held: Court held there was no trust and they didn’t get a penny back

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Re Bowden [1936] Ch. 71

Facts: A nun transferred her property to beneficiaries. She later changed her mind and wanted to recover the property to herself absolutely

Held: The settlor cannot unwind a trust, so she was unsuccessful.

Thorpe v Revenue and Customs Commissioners [2009] Pens. L.R. 139

Facts: Mr Thorpe had a pension scheme held in trust for himself, his wife, and dependents. His wife had died and he had no children, so he asked the pension trustees to transfer the fund to him, as the sole beneficiary, under the rule in Saunders v Vautier

Held: The court refused this because there was still a chance there may be some dependents in the future (i.e. unborn child). In other words, Mr Thorpe could not end the trust because it was possible, though unlikely, that there could be other beneficiaries

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