UK: The Difficulties in Impeaching Trustees´ Exercise of Discretionary Functions

Last Updated: 14 May 2002
Article by David John Hayton

I am going to deal today with the real difficulties that beneficiaries have in trying to impeach the exercise of discretions by trustees, so that the position of trustees is not as onerous as at first appears. However, it struck me that the first thing I should deal with – particularly to attract your attention – is the situation where it is not the beneficiaries who are suing the trustees for improper exercise of the trustee’s discretions, but the recent development where it has been the trustees who have been taking themselves to court, smacking themselves on their hands and wearing their hair-shirts and saying they had not exercised their discretion properly, so that the court should undo decisions that they had made. Magically, they have been able to undo disastrous tax conduct whereas other taxpayers are not in such a privileged position, which makes you think "Isn’t that too good to be true?". One fundamental rule of life, I think, is that if something looks too good to be true, it must be too good to be true, so we need to look carefully at the Hastings-Bass principle that was relied upon.

There it was Lord Justice Buckley who clearly indicated what this principle was in the context of private family trusts, although it has since been applied in three pension trust cases and then in the two recent private family cases shortly to be considered. He was concerned, as in earlier cases, with situations where the trustees had exercised discretions to make appointments of trust assets but they had overlooked the rule against perpetuities, so that the dispositions did not have the full effect that the trustees intended because the rule against perpetuies struck down the rest of the limitations after a life interest had been created.

Re Abrahams Wills Trust [1969] 1 Ch 163 was a case slightly earlier than Re Hastings-Bass [1975] Ch 25 where two daughters, who were otherwise going in due course to receive half the capital, were instead made the subject of an advancement or appointment on sub-trusts of protective life interests and the remaining limitations were void for perpetuity. Mr Justice Cross, as he then was, held that that clearly was not at all for their benefit. The trustees had not given thought to the rule against perpetuities and the way it dramatically affected these women who lost their half interest in capital for protective life interests only, so that the advancement was null and void as argued by the Revenue.

Subsequently, in Re Hastings Bass itself a full life interest was upheld because in all the circumstances the trustees would still have proceeded to create it even if they had appreciated that the remaining limitations were void for perpetuity. However, the Court of Appeal pointed out that the life interest would have been void or ineffective if ,in fact ,the decision to create it was one that the trustees would not have made make but for ignoring the relevant perpetuities law.

Two cases have recently made one question whether decisions falling foul of the Hastings-Bass principle are really void rather than voidable . There is Green v Cobham [2000] WTLR 1101where the trustees when appointing trust assets on sub-trusts overlooked two key points One was that one UK solicitor -trustee had indicated that he was shortly going to give up his practice as a solicitor. On retirement he would be treated for CGT purposes as UK-resident and would no longer qualify as a non-resident professional trustee helping to run a non-resident trust. The trustees also overlooked the Roome v Edwards [1982] AC 279 factor where you have a main trust and create sub-trusts. You amalgamate all the trustees together to work out where the control is and whether it really is a non-resident or resident trust. Nine years later, when it suddenly dawned on the trustees that, as a result of their appointment, they had achieved a disastrous tax situation by making the non-resident trusts into resident trusts, they sought to have their appointment declared void. It seems that they did not bother to tell the Revenue about this, although of course the Revenue would be much affected. Jonathan Parker J looked at the simple formulation of the Hastings- Bass principle by Lord Justice Buckley:

  • " Where a trustee is given a discretion as to some matter under which he acts in good faith the court should not interfere with his action, notwithstanding that it does not have the full effect intended ,unless (1)what he has achieved is unauthorised by the power conferred on him, or (2) it is clear that he would not have acted as he did (a) had he not taken into account considerations which he should not have taken into account or (b) had he not failed to take into account considerations which he ought to have taken into account."
  • Clearly, the trustees would have acted differently but for ignoring crucially relevant tax rules that caused disastrous tax consequences, so the judge declared the appointment void.

In the second case, Abacus Trust v NSPCC, [2001] WTLR 953 the Revenue were actually told about the case since their interests were directly affected by it, but they chose not to intervene at all. This was a case involving a flip flop tax avoidance scheme where leading counsel had advised that, to avoid jeopardising the scheme ,a proposed appointment to the NSPCC must not be made until the start of the next tax year. Ignoring this, the trustees made the appointment just before expiry of the then current tax year which had disastrous tax consequences unless the appointment was declared void. Mr Justice Patten found that the trustees would not have made the appointment on 3rd April but for overlooking counsel’s advice and held the appointment to be void, following Green v Cobham.

This seems too good to be true. Indeed, Mr Justice Andrew Park in Breadner v Granville Grossman [2000] 4 All ER 705 at 722 took the opportunity to comment that he was a little surprised by Green v Cobham and that there must be some limits to the Hastings-Bass principles. So the question is, what are the limits, because for one sort of tax payer, the trustee ,to be magically able to undo what he has done, while the rest of us cannot amounts to a discrimination in the justice system that is surely too good to be true for trustees and their beneficiaries.z

One possible argument against such discrimination is that, although the case law seems to assume that the decision will be void, be ineffective, be annulled, if you will, one wonders why this should be because, after all, in these cases like Green v Cobham and Abacus Trust v NSPCC, there was no doubt about the trustees on the face of their trust instrument having actual power to appoint the trust assets as they did. Their appointments seemed authorised intra vires dispositions. It just so happened they overlooked something when deliberately exercising these intra vires powers, so why should an apparently valid appointment be void? Why should it be void from the outset as if they had no power whatsoever to do it (or as if they had not exercised their minds at all , but had automatically done what the settlor told them to do)? The assumption, I suppose, is that unless they have all the relevant factors on their mind-and all irrelevant factors off their mind- the decision that they take should be ineffective. But, on the one hand, when a particular appointment on its face is something well within the powers of trustees and on the other hand ,when there may be many relevant factors and even more multifarious irrelevant factors (most of which are peculiarly within the knowledge of the trustees),there is much to be said for vitiated decisions of trustees not being void and ineffective but voidable and effective till set aside by the court, so that trustee-taxpayers cannot (unlike other taxpayers )have second thoughts enabling them to escape tax.

Another approach to achieve the same end is to focus on the words of Lord Justice Buckley that I italicised earlier so that the court cannot interfere unless the trustees’ impugned document does not have the full effect which they intended. In Green v Cobham they intended to make an appointment with sub-trustees holding on the specified sub-trusts, while in Abacus Trustees v NSPCC they intended to make the appointment to the NSPCC: there was no mistake as to the effect of the appointment itself (e.g. due to overlooking perpetuity rules or some provision whereby such appointment provoked forfeiture of some beneficial interest). Of course, they did not intend such appointments to have the incidental knock-on effect of having disastrous tax consequences, but they did intend to do what they actually achieved and therefore why should they be allowed to undo it, just as rectification is unavailable where there is no mistake as to the effect of the transaction itself only a mistake as to its consequences?

So, it seems to me that it is likely that the Revenue will take matters further (via litigation or a Finance Bill) so as to narrow and clarify the impact of Hastings-Bass. I certainly would not recommend trustees taking a particular course of action that they hope will avoid tax in the belief that if it does not work then they will have it nullified under Hastings-Bass. Surely they will be held to have elected for intending to have achieved what appears on the face of the documents they executed.

Another Hastings-Bass point that needs sorting out is the fact that the private trust cases require claimants to prove that the trustee would not have acted as he did (but for ignoring a relevant factor or taking account of an irrelevant factor),while three relatively recent pension trust cases use the terminology might or could without the judges(except for obiter dicta of Mr Justice Lawrence Collins in AMP(UK) Ltd v Baker[2001] WTLR 1265 in favour of could over would) adverting to any distinction between would or could. In Kerr v British Leyland Staff Trustees, a 1986 case reported in [2001] WTLR 1071, there was some beneficiary, some employee, who wanted to retire early under a disability pension. Obviously, he had to produce medical evidence and then further medical evidence was sought, and then a delegate of the trustees wrongly summarised the effect of a second medical expert’s evidence, so that the trustees decided to reject the claim. The beneficiary, irritated that his claim had been rejected, wanted his claim to be allowed or, at least, to be reconsidered in order that the pension be paid to him. At first instance, the Judge did actually order the pension to be paid to him, whereas the Court of Appeal held that this was impossible because the discretion was vested in the trustees who had not surrendered their discretion to the court. However, because the trustees "might well " not have rejected the claim but for not properly considering all the material medical evidence their rejection was ineffective and they had properly to reconsider the claim. In the case of Stannard v Fisons Pension Trust Fund [1992] IRLR 27 the trustees, in deciding how much of their company’s pension trust fund should be passed over to the company that had acquired part of their company’s business (and the employees involved therein) had based their decision on a valuation of the pension trust funds which was quite a few months out of date due to negotiations taking longer than anticipated. It was a situation where Lord Justice Dillon held they "might "have come to a different decision if they had had an up to date valuation rather than the old valuation and therefore their decision to allocate trust funds of the amount in question was a nullity, and the trustees had to come to a new decision based on the proper valuation at the acquisition date.

It is noteworthy that in the three pension cases the situation was not one where the trustees had said to the beneficiary "Well look here, we have reconsidered the situation and taken account of the one relevant factor which we originally overlooked, but we haven’t changed our minds ,so there’s no point in wasting your time or our time further"-and it may be that such a situation is easier to achieve in private family trust cases . Now, if a beneficiary is then going to proceed to trial ,surely in order to succeed he would have to prove that they would have made some different decision. If he did not establish that they would have made a different decision, then the original decision stands so he ought to lose the case and pay all the costs from the date he had been told that the overlooked relevant factor would not have made any difference if taken into account when the original decision was made.

Thus, it makes sense that it is only where there has been no reconsideration of the situation by a trustee and no change of mind( and in the pension trust context there is plenty of scope for argument as to whether proper full consideration has been given to factors relevant to whether or not an employee has a right to early retirement on particular grounds)that it suffices that if a particular rejection of a claim might not have occurred but for ignoring a relevant factor or being influenced by an irrelevant factor, then the court can set aside the rejection . Upon a beneficiary alleging that a relevant factor had been ignored it follows that, to avoid damaging uncertainty as to what has or has not been validly decided, the trustees should reconsider the position and, if this does not change Their minds they should so inform the beneficiary –and ask him to put up or shut up.

Broad Leeway Afforded To Trustees

So much for the Hastings-Bass principle. Let’s now look at the leeway given to trustees in exercising their distributive discretions as opposed to investment or managerial discretions. When there are distributive discretions involving discretionary trusts and discretionary powers of appointment, then it is clear that it is necessary for the trustees to exercise their discretion in good faith, in a responsible manner, according to the purposes for which the settlor conferred the relevant discretion upon them and not for reasons which are irrational or perverse to any sensible expectation of the settlor. There is emphasis on the purposes and expectations of the settlor, so the trustees must consider precisely what were the purposes and expectations of the settlor in conferring a wide range of discretionary functions upon the trustees, and then, so long as they have them in mind, they must act responsibly in good faith. Clearly, if they have an ulterior purpose, as within the fraud on the power doctrine (e.g. where they appoint funds to a beneficiary, but the deal is they get half of the money back for themselves, although not capable of so benefiting under the trust deed),then that fraudulent exercise of a power is a nullity.

The above prerequisites for the exercise of distributive discretions emerged from Victorian case-law summarised in Re Manisty’s Settlement [1974]Ch 17 by Mr Justice Templeman (as he then was)and in Re Hays Settlement Trusts [1982] 1 WLR 202 by the Vice Chancellor ,Sir Robert Megarry. Use of terminology requiring trustees not to exercise powers capriciously, arbitrarily or perverse to any sensible expectation of the settlor may appear out-dated and Victorian but we are now being faced with the modern terminology of public law. Public law considerations are coming to the fore in principles canvassed in pension fund cases e.g. Harris v Lord Shuttleworth [1995] OPLR 79, Wild v PO [1996] OPLR 129, Edge v Pensions Ombudsman [1998] Ch 512 affd [2000] Ch 602 . Judges experienced in public law have started talking about the expectations of the beneficiaries, saying beneficiaries have legitimate expectations that the trustees will not act with Wednesbury [1948] IKB 227 unreasonableness and won’t do anything that no properly informed, reasonable body of trustees could possibly do. One wonders why this is being introduced into the private law field of trust work. The rationale in the public law context for the Wednesbury principle is, of course ,that people who are affected by quasi- judicial administrative decisions have no private rights in contract, tort or trust law and ,therefore ,to assist them, there is this public law development that requires satisfaction of the legitimate expectations of such people that proper procedures will be in place to help ensure that the decision-making body does not make a decision that no properly informed reasonable public body could possibly make in its right mind .

Very well-established private trust law rights of beneficiaries already protect them so surely there is no scope to invoke public law principles. The office of trustee is a private one where much leeway is afforded to a trustee as to how to keep himself adequately informed to be in a position to fulfil his duties. It would be inappropriate to lay down fixed procedural rules as to hearing both sides e.g. to hear what the default beneficiaries have to say before exercising a power of appointment in favour of others . I am pleased to see that in the recent case of R v Charity Commissioners ex p Baldwin, [2001] WTLR 137 a Deputy Judge, Jack Beatson QC did in fact say that in the trust law context where the trustees were working out what benefits they should give to certain people and not to others, their duty was to be properly informed but that they did not have to offer to receive representations from both sides. I think we should be able to hold the line there, particularly when Mr Justice Robert Walker (as he then was) made a similar comment in Scott v National Trust [1998] 2 All ER 705 of 718.

A greater threat to traditional trust law is in the concept of Wednesbury unreasonableness itself. This is unreasonable or exceptional unreasonableness as where no person in his or her right mind could possibly have come to a particular conclusion. Well, of course, it is difficult in applying that to ministers of state and yet there are plenty of reasons for wanting to interfere in the decisions of ministers of state, so you do find that the courts are diluting the concept of unreasonable unreasonableness and, depending on the context ,a decision may not have to be all that unreasonable for the courts to intervene and quosh it. There is a danger that things will slip along the so-called "slippery slope "and you will find counsel and judges, particularly if common lawyers, talking of trustees in exercising distributive discretions being under a duty to act reasonably, so that their conduct can be attacked if they acted unreasonably. "Oh the trustees did not act reasonably". Remember Donoghue v Stevenson [1932] AC 532 and the "neighbour" principle. Trustees must act with due care and consideration for their neighbours. "Who is their neighbour?". "Of course, the beneficiaries are their neighbours!" There is no scope for such common law considerations to contaminate the autonomous trust –unless the settlor expressly wishes to incorporate such into his trust and trustees can be found to accept such extra burdens. That is the real danger that one must be aware of.

One needs also be aware that in pension trust cases the beneficiary-claimants, whose legitimate expectations are to be fulfilled according to some judges, are actually settlors paying in their contributions to the trust fund. Thus in laying down that the pension trustees need to fulfil the expectations of the beneficiaries the judges are indeed echoing the traditional trust law principle that trustees must not act perversely to any sensible expectations of the settlor. Hopefully this will assist experienced Chancery Law Lords and Lords Justices to reaffirm traditional private trust law principles and to reject analogies from public law. They may also bring out differences between family trusts and pension trusts in that when trustees are vicariously exercising their special powers as if standing in the shoes of the settlor, the paterfamilias–settlor of a family trust will expect the trustees to be operating within very broad flexible parameters of discretionary leeway, while the beneficiary-settlors of their pension funds as deferred pay will expect the trustees to operate within more stringent limits. I think one area, however, where even discretions exercised by family trust trustees ought to be more subject to challenge arises when you get away from the distributive functions and you get involved in the investment and managerial side of things, in particular the power of investment and the duties of care in exercising such powers.

In the trustee beneficiary context, when you try and find a case where beneficiaries have actually succeeded in making trustees liable in respect of negligent investment in authorised investments, it is very difficult indeed to find any. There was one, Re Mulligan [1998] 1 NZLR 481, in New Zealand which was an absolutely outrageous case where the settlor’s widow was also a trustee and who, with her co-trustee-friend, ensured they invested all the proceeds of the farm in high income yielding assets and none in stocks and shares, so when she died many years later there was little capital value left in the trust fund. There was a clear breach of duty in solely looking after the interest of the life tenant.

In England of course, the classic case is Nestle v National Westminster Bank [1993] 1 WLR 1260. For approaching 40 years the trustees did not bother to change the investments, not bothering to review or survey the investments from time to time. Moreover the power of investment was appreciated as being an ambiguous power of investment. It was either narrow, I think, to invest in banks and insurance companies and railway companies or, as the court held, it would also include other companies and so it was very broad. Th trustees knew that there was a problem over it and yet, "did they go and get advice to clarify it?" No, they thought they would just stick to the narrow range anyway. In the light of such two egregious blunders you would have thought that the poor remainderman had a pretty good case. However, there were special factors justifying purchasing many UK gilts to avoid death duties if certain beneficiaries died domiciled abroad, while with the passage of time there were problems trying to obtain evidence of actual loss caused by the trustees. At the end of the day, although the Court of Appeal severely criticised the conduct of the trustees, it rejected the claim on the basis of the claimant’s failure to prove that any particular loss flowed from the trustees’ conduct because it was perfectly possible that a trustee acting in accordance with his equitable duties, but having bad luck, could have ended up with as little in the fund as the National Westminster Bank. The decision seems a harsh one, particularly dependent upon the burden of proof. I believe, especially in the light of Armitage v Nurse [1998]Ch 241 which equates recklessness with dishonesty so as to be outside the scope of any exemption clause, that the courts should reverse the onus of proof and place it on the trustees where the trustees are professional trustees making good money out of the trusteeship ,but acting recklessly as opposed to negligently-and ,perhaps ,the National Westminster Bank were very lucky not to have their conduct (or that of the National Provincial Bank before it was taken over)stigmatised as reckless.

In a more recent case, Wight v Olswang (No 2) [2001] WTLR 291, the Court of Appeal allowed an appeal against Mr Justice Neuberger’s striking out of a claim for negligent breach of investment duties, but they were both agreed that the key question is whether any reasonable duly informed trustee could possibly have done what the defendant trustee had done, no liability arising if he could. This follows the lead given by Millett LJ in Bristol & West BS v Mothew [1998] Ch 1that prescriptive equitable duties are to be distinguished from proscriptive (no profit, no conflict) fiduciary duties, so that liability for equitable duties of care by trustees or other fiduciaries should be determined in the same way as liability for breaches of common law duties of care by solicitors, doctors, accountants or valuers. However, even on this basis there seem good prospects of success for the claimant beneficiaries in Wight when the trustees agreed to sell shares in a company that made up most of the value of the trust fund but, on an erroneous ground, failed to implement this decision as soon as practicable, so that a large loss flowed from the later sale of the shares after their value had dramatically fallen. This seems one of the very rare cases where the claimant can discharge the onus of proving that no reasonable trustee with bad luck could possibly have achieved the loss caused by the defendant trustees- and a rare case where on the contra proferentem approach the exemption clause had been held inapplicable (in Wight v Olswang (No 1) (1999) 1 ITELR 783).

Normally ,it would seem the majority of trust deeds exempt trustees from liability for any breach of duty unless involving fraud or dishonesty on the part of the trustee personally-and in Armitage v Nurse the Court of Appeal held such clauses to be valid so that they exclude liability for negligence ,which must cover all negligence whether ordinary or gross since English law (unlike Scots law and other civilian Roman-based laws)makes no distinction between gross negligence and ordinary negligence. However, the Court did not have cited to it binding English case law distinguishing gross negligence from ordinary negligence in distinguishing the liability of gratuitous bailees from that of bailees for reward. Thus, the issue as to whether it is possible to exempt a trustee from liability for gross negligence will remain a live one until the courts consider the issue further or legislation follows from the Law Commission’s current investigation of trustee-exemption clauses.

Restricted Rights To Information Pose Problems

Finally, I turn to the real difficulties beneficiaries have in obtaining enough information to enable them to get a breach of trust claim off the ground. It ought to be appreciated by now that it is trite law that beneficiaries of full age (whether having fixed interests in possession or remainder or contingent interests or discretionary interests)are entitled ,so far as practicable ,to be told they are beneficiaries and then to be able to make the trustee account for its trusteeship via seeing trust documents, like the trust instrument ,trust accounts and records ,and being entitled to supporting information to check the truth of the trust documents. Often, (as in Spellson v George (1987) 11 NSWLR 300), mere objects of a power of appointment will be intended by the settlor to have similar rights to monitor what is going on so that the obligations of the trustees can be properly "policed" e.g where for a considerable period there is only a power of appointment, with a discretionary trust only springing up at the end of the period. However, because it is just the trustee-beneficiary obligation that is necessary for the core content of a trust the settlor, if desired, can exclude objects of a power of appointment from having any accounting, monitoring or enforcement right: it is only vital for the default beneficiaries( to whom ultimately the trust fund belongs) to have such rights, enabling them ,retrospectively if need be, to make the trustees account once the beneficiaries have been ascertained during or at the end of the trust period. Thus, in Rosewood Trust Ltd v Schmidt [2001] WTLR 1081 the Manx Court of Appeal held that objects of a power of appointment had no right to see the trust accounts or to make the trustee account for its trusteeship, such right of the default beneficiaries sufficing for the validity of the trust. The settlor's intention is the key and, no doubt, the Privy Council will focus on this when the pending appeal is heard.

However, a beneficiary or object of a power, who has a right to falsify or surcharge the trust accounts and to impeach improper exercises of discretions, has no right to have the trustees provide reasons for their exercise of discretions: Re Londonderry's Settlement [1965] Ch 918, Re Rabbaiotti's Settlement [2000] WTLR 953. Once a genuine claim has been brought against the trustees then one moves from trust law into the realm of civil procedure, so that documents revealing reasons may come to be disclosed and if the evidential burden of proof switches to the defendant trustees then they will need to justify themselves in the witness box as Robert Walker J pointed out in Scott v National Trust [1998] 2 All ER 705, 719.

The key to whether or not a claim will get off the ground will often be a letter of wishes of the settlor or a trustee's memorandum of the wishes of the settlor - no distinction should be made between the two. Such document will usually be a key document to guide the trustees in exercising exceptionally broad flexible discretions by making clear what are the purposes and expectations of the settlor in conferring such discretions upon the trustees. If the beneficiary cannot ascertain these purposes and expectations how can he possibly allege the trustee did not responsibly exercise its discretion for the purposes of the settlor to fulfil the expectations of the settlor? For him to have a meaningful right to make the trustee account for the exercise of its discretions surely he must have a right to see the letter of wishes as well as the trust instrument (subject to deletion of any embarrassing confidential personal information in such letter).

The court would give short shrift to any submission on behalf of the trustee that the beneficiaries have no right to see the trust instrument because it contained material upon which the trustee's reasons were or might have been based, such material indicating the purposes and expectations of the settlor. Should not similar short shrift be given to a similar submission concerning the letter of wishes as Sheller JA indicated in Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405?

The court would also reject any submission that the settlor had expressly made the trust instrument confidential to him and the trustee so that the beneficiaries were not entitled to see it. Why should the court not also reject any submission that the letter of wishes was expressly made confidential when it provides key guidance to the exercise of the trustee's fundamental discretions and, of course, has to be passed on from one trustee to the next along with the trust instrument? (Further see Hayton & Marshall, Commentary & Cases on Law of Trusts (11th ed) Sept 2001, pp 679-681).

Furthermore, if the letter of wishes is not just legally significant (so it has to be taken into account, but can be disregarded by the trustee exercising its own independent discretion) but is legally binding, then it pro tanto overrides the trust instrument, and the real trust instrument actually comprises the so-called trust instrument plus the incorporated letter of wishes. If the beneficiaries claim the letter is a legally binding letter which is part and parcel of the trust instrument, then they are entitled to see it if their allegation is correct. Such allegation cannot be disproved by the terms of the letter of wishes e.g "This letter is not to be legally binding in any way at all but is only to be significant in that the trustee must take it into account before making a decision within its scope, although I appreciate the trustee may choose whether or not to follow my wishes herein". Such terminology could be a pretence or sham, the arrangement in substance being that the trustee must strictly follow the so-called "wishes", and evidence would be needed to see whether the trustee had obediently complied with the "wishes" so as to support the allegation that they were part and parcel of the trust instrument.

Resolution of this issue would enable the beneficiaries to see the letter of wishes without which they would be unable to find whether or not there was support to institute a claim of improper exercise of discretions. However, a more robust approach of the Court to the availability of letters of wishes (than the weak approach of the Jersey Royal Court in Re Rabbaiotti's Settlement [2000] WTLR 953) ought to make unnnecessary the circuitous tactic of alleging that the letter of wishes was part of the legally binding trust instrument.

I end my talk with a plea for more openness between trustees and beneficiaries. The more one tries to hide things from people the more suspicious they become: no-one likes being treated like a mushroom, being kept in the dark and being fed you know what. Moreover,to finish with the truism with which I began ,is it not too good to be true for the trustee to be able to keep a crucial letter of wishes totally secret from the beneficiaries (whether as an expressly or impliedly confidential document) so as to make the trustee’s exercise of discretions essentially judgment-proof because the beneficiaries cannot get a case off the ground?If they do not have meaningful rights against the trustee where is the trustee’s obligation? Without an obligation to the beneficiaries there is no true trust for them.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances

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Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.