Control of Trusts

Every trust is technically under the jurisdiction and the supervision of the court. However, in practice the court does not exercise a day-to-day function of supervising the activities of trustees, ensuring that they do not abuse their powers and that they carry out their duties properly. The court is dependent on the beneficiaries of the trust to bring complaints regarding the trustees’ conduct to their attention.

If the beneficiaries approach the court before a trustee acts improperly, it will be able to issue an injunction to restrain he proposed breach of trust. Where a breach has already occurred, the beneficiaries will be awarded an appropriate remedy.

Trustees stand in a fiduciary position to the beneficiaries of the trust. This means that they are always expected to act in the interests of the beneficiaries, with the implication that they are not permitted to take advantage of their position for their own benefit. As such, they owe a duty of exclusive loyalty to the beneficiaries.

The beneficiaries are expected to monitor the trustees’ activities and to complain to the court if their is any breach of fiduciary duty or breach of trust.

It is entirely appropriate that this burden should fall to them, as they are the very people who are most interested in the proper performance of the trust.

The “Beneficiary Principle

The beneficiary principle is predicated on the understanding that the beneficiaries are primarily responsible for supervising the trustees. The very reason that equity requires a trust to have identifiable legal persons as beneficiaries is that in the absence of such a beneficiary no one possesses the necessary locus standi to apply to the court in the event of a breach by the trustees, and there is no one in whose favour the court can decree specific performance of the trust {Morice v Bishop of Durham (1804) 9 Ves 399; Bowman v Secular Society Ltd [1917] AC 406; Re Astor’s Settlement [1952] 534; Re Shaw [1957] 1 WLR 729}.

 

 

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