ESTATE PLANNING

INTRODUCTION TO TRUSTS
Keeton in his book ‘The Law of Trusts’ defined a trust as a relationship which
arises whenever a person called a trustee is compelled in equity to hold property
for the benefit of some persons or some object in such a way that the real
benefit of the property accrues not to the trustee but to the beneficiaries or
other objects of the trust.

Bakibinga in ‘Equity & Trusts’ defines a trust as a relationship which is

recognized in equity. It arises where property is vested in a person (trustee) who
is under duty to hold it for the benefit of others known as cestui que trust
(beneficiaries).

From the above definitions, it follows that three persons have to be there to
create a trust namely a settlor, trustee and beneficiary.

Blacks Law Dictionary defines a settlor to mean the grantor or donor in a deed of
settlement. He is also the one who creates a trust.

The same Blacks Law Dictionary defines a trustee as one who, having legal title
to property holds it in trust for the benefit of another and owes a fiduciary duty
to that beneficiary.

A beneficiary is defined by the Blacks Law dictionary to mean a person whose

benefit property is held in trust especially one designated to benefit from an
appointment, disposition or assignment or receive something as a result of a
legal arrangement or instrument.

For there to be a properly constituted trust, the position of the law as enunciated
by Lord Langdale in Knight V Knight is that there has to be three certainities
namely certainty of the intention, subject matter and object. The subject matter
is the trust property whereas object of a trust is the beneficiary.

Question 1: Discus the capacity of the following to act as trustees.

It is a general rule that any person is able to hold property as a trustee as long
as that person is of full age and has legal capacity. However, there are some
qualifications and limitations as it can be seen in the discussion on the capacity
of the following persons to act or be appointed as trustees.

(a) Mukisa aged 15 years

Article 31 of the Constitution and section 2 of the Children’s Act does refer to
a child as a person under the age of eighteen.

The general rule is that infants do not have capacity to act as trustees in a trust
arrangement. This general rule is affirmed in section 35(1) of the Trustees Act.

However, there are certain instances where an infant may be capable of acting
as a trustee especially in resulting trusts. For example in Re Vinogradoff
(1935), a woman had transferred 800 pounds of war loan stock into the joint
names of herself and granddaughter. When the woman died, in the absence of
evidence proving a gift, the granddaughter held the stock on resulting trust for
the woman’s estate.

From the above discussion, Musika can only act as a trustee on a resulting trust
and if not that, Musika who is an infant generally can’t act as a trustee.

(b) Mrs. Mugaga (Married woman)

Historically, trust law in UK never allowed married women to act as
trustees for reason being this would require their husband’s consent.
However, with enactment of the married women property Acts 1882-1893
(UK), women have capacity to Act as trustees.

In Uganda, before the enactment of the 1995 constitution, the Married

Women Property Act of UK was also applicable in Uganda. However, the
decision of Uganda Motors Ltd V Wavah Holdings noted that all
statutes of general application the Married Women Property Act inclusive
are nolonger applicable in Uganda.

Currently, the constitution under various provisions does impute capacity

on women to act as trustees i.e Art 21 on Equality & Freedom from
discrimination, Article 26 on the right to protection from deprivation of
property and Article 31 on men and women having equal rights in
marriage.

Further, the Trustees Act under section 35(1) does not exclude women
as being capable of acting as trustees. The section provides for power of
 appointing new or additional trustees as the existing ones are incapable of
acting or are substituted.

From the above discussion, it’s evident that Mrs. Mugaga can act as a
trustee

(c) Hannington Hospital, a beneficiary named in Hannington’s

Will to receive UGX. 2 Billion to run a clinic for teenage mothers.
Generally, a beneficiary can be a trustee though such arrangements are
discouraged.
Much as such arrangements are discouraged, the position of the law is
that a beneficiary has capacity to act a trustee under a trust.

The above position was illustrated in Forter V Abraham, where Court

held that a beneficiary can be a trustee. This case involved the sole acting
trustee appointing the testator’s widow together with another as additional
trustees for the testator’s estate of which property had been devised in her
favour as a beneficiary.
Court held that the power to appoint new trustees had been well exercised
there being nothing in the Will to prevent such appointments and a
principle being laid down in the case that a beneficiary can be appointed
as a trustee under a trust.

Further Stevens Isaac J in Banque PRIVEE Edmond Vs Dominic

Queiraza, while citing Forster’s case stated that as long as the
certainties exist in a trust, then a beneficiary can be appointed a trustee
under a trust.
 It should also be noted that although a beneficiary under a trust is capable
of being appointed a trustee, the position of the law in Gray V Harriet
Lane Home for Invalid Children is that such appointments are
discouraged as they may lead to a conflict of interest between the
beneficiary and trustees’ duties.

From the foregoing discussion, Hannington Hospital is capable of acting as

a trustee under a trust where it has already been named in the will as a
beneficiary following the principle laid down in the Forster case.

(d) Kamanzi who was declared bankrupt by the High Court but
had prior to that been appointed as trustee by the Late Benjamin.

The general rule is that a bankrupt is not excluded from acting as a trustee
if he is not declared bankrupt due to his fraudulent acts.

The general rule can be read into section 40(2) of the Trustees Act
which provides that “Without prejudice to the generality of section
40(2), the Court may make an order appointing a new trustee in
substitution for a trustee who is convicted of a felony, or is a person of
unsound mind or is a bankrupt or is a corporation which is in liquidation or
has been dissolved. The use of the word ‘ MAY’ does imply that a bankrupt
can continue to act as a trustee until he is removed from that office of a
trustee.
The Insolvency Act under section 37 provides for vacation of the office of
a trustee. It does provide that the office of a trustee shall become vacant
 if the person holding office is removed from office under sections 52 or
209 resigns, dies or becomes unqualified under section 204 of the
Insolvency Act.

Section 204(2) of the Insolvency Act does provide for vacation of office
a trustee among which includes an undischarged bankrupt.

From the reading of section 40(2) of the Trustees Act, section 204(2)
and in the case of Re Banker’s Trust. It is the duty of court to remove a
bankrupt trustee.

It is also important to note that upon the trustee being declared bankrupt,
the trust property that person is holding does not vest to that person’s
trustee in bankruptcy and this was illustrated in Taylor V Plumer, where
Court laid down the principle of tracing in respect of property that belongs
to the principal on the trustee becoming bankrupt as long as such property
is capable is being identified and distinguished from other property.

From the foregoing, Kamanzi being declared bankrupt by the High Court,
he cannot continue acting as a trustee even when he was appointed by
the Late Benjamin before declaration.

(e) Hunk Advocates who were appointed as trustees to the

Childcare Trust Fund but they have been providing legal services
to this fund since its establishment
Generally, a solicitor can act as a trustee in a trust arrangement. The issue
in the above scenario is whether solicitors to the trust are capable of
acting as trustees in the same trust?

The position of the law in Re Norris is that Solicitors to the trust may also
be appointed trustees although in principle, the court does not make or
sanction such appointments. In Re Norris, the case involved the
appointment of trustees by the continuing trustee, who was the solicitor to
the trust of which this happened upon one of the trustees retiring. What
was in contention was that the trustee who was appointed to replace the
retiring one was a son and a partner in the business of the continuing
trustee who was already a solicitor to the trust. Parson J noted that court
would not sanction such an appointment of such a trustee. Citing the case
of Wheel Wright V Walker, it is noted that c’estui que trust are entitled
to have independent trustees in such circumstances.

It should also be noted that a solicitor must fully and only act for the best
interests of beneficiaries. Competence of a person is also key which Court
looks at.

Therefore in the instant case, Hunk Advocates who were appointed as

trustees to the Childcare Trust Fund, it having been in provision of legal
services to the fund does not bar it from acting in such capacity as
trustees.
(f)Corporation
A trust corporation is defined by the Trust Corporation (Probate &
Administration) Act to mean a body corporate which is authorized by the
instrument constituting it or defining its powers to act as executor of the
will or administrator of the estate of a deceased person or as trustee of a
settlement.

A corporation may act as a trustee, if so expressly authorized by the

charter or MOA. Where it is a public corporation, provision should appear
in the law of statute creating it. In the case of a public trustee who is a
corporation sole under the public Trustee Act, relevant provisions are
inserted therein.

Section 1 of the Public Trustee Act does give the Minister Power to
appoint some fit and proper person to be public trustee for Uganda,
competent to discharge any of the duties and exercise any of the powers
of the public trustee. Section 2 of the same Act does provide the public
Trustee as being a corporation sole by the name of the public trustee. A
public trustee may by virtue of section 5 also be appointed as a trustee by
a person creating trust by the trust deed.

In order to sun up the above discussion, Court in Bankers Vs Salisbury

Diocesan Council of Education noted that there is no authority that
bars a corporation from being a trustee.
APPOINTMENT OF TRUSTEES
A trustee may be appointed in 3 modes namely appointment by the settlor or
testator, appointment under the statutory provisions and lastly appointment by
Court.

(a) Appointment by settlor/testator

The original trustees are normally appointed under a deed of instrument
(inter vivos) by a settlor or under a will by the testator.

In case of a trust created under will, the position of the law in Re

Smirthwaite’s Trusts (1871) is that the trustees appointed must
predecease the testator.

It should be noted that apart from his power to appoint the first trustees
when creating the trust, the settlor in a voluntary trust (inter-vivos) has as
such, no power to appoint new or additional trustees unless such a power is
expressly reserved to him by the trust instrument.

(b) Appointment under an Express power.

It should be noted that it’s not usual to insert an express power of
appointing new trustees. The operation and effect of an express power is,
ofcourse a question of construction of the particular words used, and it
seems that such a power will be strictly construed. This is the position of the
law in Stones V Rowton and Re Norris.

Further, section 35(2) of the Trustees Act is to the effect that where a
trustee has been removed under a power contained in the instrument
 creating the trust, a new trustee or new trustees may be appointed in the
place of the trustee who is removed as if he were dead, in case of a
corporation, a corporation is discharged from trust.

(c) Appointment under statutory provisions (Sec 35(1) of Trustees

Act)
Section 35(I) of the Trustees Act provides that where a trustee, either
original or substituted and whether appointed by court or otherwise is dead,
or remains out of Uganda for more than 12 months, or desires to be
discharged from all or any of the trusts or powers referred in or conferred on
him or refuses or is unfit to act therein or is incapable of acting there in or is
an infant, then, subject to the restrictions imposed by this Act, on the
number of trustees:-
(a)The person(s) nominated for the purpose of appointing new trustees by
the instrument, if any, creating the trust or
(b)If there is no such person able and willing to act, then the surviving or
continuing trustees or trustee for the time being, or the personal
representatives of the last surviving or continuing trustee; may, in writing,
appoint one or more other person(s) whether or not being the persons
exercising the power) to be a trustee or trustees in the place of the
trustee so deceased, remaining out of Uganda, desiring to be discharged,
refusing or being unfit or being incapable or being an infant as a fore
said.
The statutory power may be exercised in the following circumstances:-
i. Where a trustee is dead. It is specifically provided under section 35(8)
of the Trustees Act that this includes the case of a person nominated as a
trustee in a will, but dying before the testator, thus resolving the doubts
previously caused by the differing views of the judges. This was affirmed
in Walsh V Gladstone and in Re Hadley.

This statutory provision does not occur where in an inter-vivos trust; a

trustee appointed is already dead. Where all trustees appointed in the
inter-vivos trust are already dead at the date of the dead, there will be no
valid trust at all.
ii. Where a trustee remains out of Uganda for more than 12
months. This means an uninterrupted period of twelve months, and it
was accordingly held in Re Walker (1901), that the event upon which
the power arose had not happened when the period had been broken by
a week’s visit to London. If however, the event has happened and the
power has become exercisable, the position of the law in Re
Stoneham’s Settlement Trust (1953) is that the trustee who has
remained out of the UK can be removed against his will. However, this
does not apply where the trust include a power to appoint non-resident
trustees.
iii. Where a trustee desires to be discharged from all or any of the
trusts or powers reposed in or conferred on him. It will be observed
that this provision specifically authorizes a trustee to retire from a part
only of the trusts or powers reposed in or conferred on him, thus getting
over the difficulty caused by cases that held that this could only be done
 with the aid of the court. This is the position of the law in Savile V
Couper (1887).
iv. Where a trustee refuses to act therein . The position of the law in
Viscountees V Bertrand is that this statutory power covers the case of
a trustee who disclaims the trust.

v. Where a trust is unfit to act therein. It seems as noted in Re Roche,

which a trustee who is bankrupt is, prima facie unfit to act, although in
Re Wheeler, the court did not rely on this, saying that, whether or not a
trustee who becomes bankrupt was for that reason alone unfit to act, one
who became bankrupt and absconded certainly was.

vi. Where a trustee is incapable of acting therein . The better view as

observed in Re Bignold’s Settlement Trusts & Turner V Maule
seems to be that the incapacity to act must be personal incapacity such
as old age with consequent bodily and mental infirmity or mental disorder
as noted in Re East, but not bankruptcy as noted in Turner V Maule.

vii. Where a trustee is an infant. Although the appointment of an infant to

be a trustee in relation to any settlement or trust is void, the position of
the law in Re Vinogradoff is that an infant may be a trustee under a
resulting, implied or constructive trust.

viii. Where a trustee has been removed under a power contained in

the instrument creating the trust as provided under section
35(2) of the Trustees Act. In such a case, the statutory power arises
and operates in the case of a trustee who is removed, as if he were dead,
 and in the case of a corporation, as if the corporation desired to be
discharged from the trust. It should be observed that this provision
applies only in the case in which a trustee has been removed under a
power contained in the trust instrument. It does not confer any power to
remove a trustee.
It should be noted that new trustees may be appointed if none of the events
under section 35(1) of the Trustees Act have occurred provided (i) none of the
existing trustees is a trust corporation, the position of the law under section
35(6) is that the appointment would not bring the number of trustees to more
than four.

(d) Appointment by Court

Section 40(1) of the Trustees Act provides that the Court ‘ May’ whenever it is
expedient to appoint a new trustee or new trustees, and it is found inexpedient,
difficult or impracticable so to do without the assistance of the Court, make an
order appointing a new trustee or new trustees either in substitution for or in
addition to any existing trustee or trustees or although there is no existing
trustee.

Section 40(2) provides that without prejudice to the generality of subsection

(1), the Court ‘may’ make an order appointing a new trustee in substitution for a
trustee who is convicted of a felony, or is a person of unsound mind or is a
bankrupt or is a corporation which is in liquidation or has been dissolved.

The use of the word ‘May’ does imply that the appointment by Court is not
mandatory or it may even be delayed. This was observed in Re Pauling’s
Settlement where Court delayed making an appointment in order to protect the
old trustees against possible liability for costs and estate duty.

Cases in which the Court has made an appointment under the statutory
power, apart from those specifically referred to in section 40 include:-
i. Where all of the named trustees predeceased the testator as seen in Re
Smirthwaite’s Trusts.
ii. Where no trustees were named as seen in Re Gillett’s Trusts (1876).
iii. Where a trustee had gone abroad with the intention of residing there
permanently as noted in Re Bignold’s Settlement Trusts.
iv. Where a trustee was incapable of acting by reason of old age and
consequent bodily and mental infirmity as observed in Re Leman’s
Trusts.
v. Where a trustee was, so far as was known in enemy – occupied territory
as was the case in Re May’s Will Trusts.
vi. Where there was a doubt as to whether the statutory or an express power
of appointment was exercisable as noted in Re Woodgate’s
Settlement.
vii. Where an infant had been nominated to appoint new trustees, because
although an appointment by an infant may not be void, it is at least liable
to be set aside and, accordingly, it would not be safe to act upon it as
seen in Re Parsons.
viii. Where there was friction between trustees, there being no disputes as to
the facts, even though this involved removing a trustee against her will as
evidenced in Re Henderson.
 It is apparent that the powers of appointment under the section 35(I) of
the Trustees Act must be exhausted before an application is made to court
for appointment of new trustees. Thus in Re Higginbottom, it was
established that the Court has no jurisdiction under the statutes to appoint
a new trustee against the wishes of persons who have statutory power to
appoint under the sections of the Act. This is so even where the
application to court has been made by a majority of beneficiaries.

Turner LJ in Re Tempest laid down three guidelines on Court appointment of

trustees and they are:-
(i) The Court takes into account the wishes of the persons by whom the trust
has been created, if expressed in the trust instrument or can be clearly
collected from it.
(ii) The Court does not appoint a person to be a trustee with a view to the
interest of some of the persons interested under the trust in opposition
either to the wishes of the testator or interest of others or the Cestui que
trust.
(iii) In appointing a trustee, the Court will consider the issue of whether his
appointment will promote or impede the execution of the trust since the
purpose of the appointment is that the trust may be better into execution.

Revision question: Discuss the power of Court to appoint the

following to act as trustees:-
(a)Mbenu International Co. Ltd
A trust corporation is defined by section 1 of the Trust Corporation (Probate &
Administration) Act to mean a body corporate which is authorized by the
instrument constituting it or defining its powers to act as executor of the Will or
administrator of deceased’s estate or as trustee of settlement whether created
by Will or otherwise.
The same provision further states that, for a trust corporation to act as a trustee,
it must have either 2 million or its equivalent as issued capital or a sufficient
security.
A corporation may act as a trustee if so expressly authorized by the charter or
the MOA and where it is a public corporation; provision should appear in the law
or statute creating that corporation.

The capacity of a trust corporation to act as a trustee was illustrated in the case
of Bankes V Salisbury Diocesan Council of Education, where inter alia the
issue was whether a corporation sole can hold property under trusteeship. It was
held that as a general rule, a corporation sole may hold property upon trust
either alone or jointly with one or more individuals.

The rationale behind appointment of corporations to act as trustees is

that it reduces the costs associated with retirement. It’s also effective as far as
timely administration of the trust is concerned.

Further section 40(1) of the Trustees Act does grant court power to appoint
new trustees whenever it is expedient to do so. Section 40(2) also grant court
powers to make an order appointing a new trustee in substitution for a trustee
who is convicted of a felony, or a person is of unsound mind or is a bankrupt or
is a corporation which is in liquidation or has been dissolved.

From the foregoing discussion, it’s trite law according to section 40 of the
Trustees Act and in the case Bankes V Salisbury Diocesan Council that
Mbenu International Company can be appointed by court to act as a trustee
provided it has share capital that is not below 2 million or its equivalent in issued
capital and the MOA expressly authorizes the same.

(b)Administrator General
Article 247 of the constitution provides that parliament shall by law establish an
efficient, fair and expeditious machinery for the administration and management
of the estates of deceased. The same Article 247 under clause (b) does
provide that the law so enacted in Article 247(a) should ensure that the
services of the department or organization established for the purpose are
decentralised and accessible to all persons who may reasonably require those
services and that the interests of all beneficiaries are adequately protected.

In a bid to give effect to Article 247 of the constitution, parliament enacted the
Trustees Act, the public trustees Act as well as the Administrator Generals Act,
among others.

Section 1 of the Public Trustees Act does give the Minister powers to appoint
some fit and proper person to be public trustee for Uganda, competent to
discharge any of the duties and exercise any of the powers of the public Trustee.

Section 2 of the Administrator General’s Act provides for the appointment of the
Administrator General, who shall be corporation sole with perpetual succession
capable of suing and being sued.

It should be noted that the Administrator General is also referred to as the public
Trustee.
Section 7 of the Public Trustees Act provides for appointment of Public Trustee
by Court. However, section 4(b) of the Public Trustees Act provides that a public
trustee shall always be the sole trustee and it cannot be lawful to appoint the
public trustee to be a trustee with another person.

Further, it should also be noted the law as emphasized in Odekunle V

Williamson, makes it mandatory for the Public Trustee to give consent to be a
trustee of such property (trust property) before an order is made where the
application was not made by the public trustee.

From the above discussion, It’s evident that Court can appoint the Administrator
General as a trustee by virtue of section 7 of the Public Trustees Act.

Question: Discuss the law governing vesting of property in

trustees?

Vesting of property in trustees is provided for under sections 39, 43-53 of the
Trustees Act and section 5(2) of the Public Trustees Act.

To vest according to the Blacks Law Dictionary is to give an immediate, fixed

right of present or future enjoyment. It also means to clothe with possession to
deliver full possession of land or an estate.

The position of the law in Antiobus V Smith (1805) is that a trust is not duly
constituted until the property has vested in the trustee. All steps have to be
taken to vest property in the trustee and the appropriate methods of transfer
must be employed. If the intending donor/settlor himself only possesses an
equitable interest in the property, he can transfer that.

It should be noted that mere appointment of the trustees does not itself vest
property in him or her. Therefore, the settlor shall have to perform a sufficient
act to effect transfer of the trustee property and among others. This is governed
by the specific branch of law, practice or form that regulates transfers such
property, the subject matter of the trust e.g
(a)Land. If land is not registered, there must be a deed of conveyance in
writing. If the land is registered, section 92 of RTA requires a settlor
to sign a transfer instrument.
(b)With chattels, there must be delivery of a deed of a gift.
(c) In respect of shares, there must be an entry and registration in the
Companies register of shares following proper instrument of transfer.
(d)With respect to a testamentary trust, the Will operates to vest the
property in the trustees named in the Will.

Questions of transfer and vesting of the property in trustees arise on the

appointment of new trustees, their death, retirement or removal.

How is vesting of property in new or continuing trustees effected?

Section 39 provides for modes of vesting property in new or continuing trustees
and they include:
(a)Through a deed containing a declaration by the appointer (vesting
declaration)
(b)Through vesting by implication of law (presumptive vesting)
(c) Vesting order issued by court.
 (a) Vesting declaration (Deed containing a Declaration)
Section 39(1)(a) of the Trustees Act provides for express vesting if an
appointment of new trustees is made by a deed. A declaration in the deed of the
appointor ‘that the property shall vest in the trustee’ (a vesting declaration) is
sufficient to vest the property in the new trustees.

As for retiring and continuing trustees, section 39(2)(a) of the Trustees Act is
to the effect that where by a deed a retiring trustee is discharged under the
statutory power without a new trustee being appointed, if the deed contains
such a declaration as aforesaid by the retiring and continuing trustees or any
person empowered to appoint trustees, the deed shall without any transfer or
assignment, operate to vest in the continuing trustees alone as joint tenants.

Section 39(1)(a) and 39(2)(a) read together with section 38 are to the
effect that such a deed is only effective for vesting if it is executed by the retiring
trustees, the continuing trustees or any person with power to appoint new
trustees.

(b) Presumptive Vesting

This is provided for under sections 39(1)(b) and section 39(2)(b) of the
Trustees Act.

The above provisions are to the effect that if the deed (of appointment) is
executed after the commencement of the Trustees Act, a vesting declaration is
implied in absence of an express provision to the contrary.
For this provision to come into play, the deed must have satisfied the
requirements for the appointment by the appointor, but silent as far as the
vesting is concerned, it operates as if it had contained such a declaration by the
appointor.

Section 39(3) expands the body of section 39(1)(b) and 39(2)(b) to the
effect that “where the vesting declaration is express whether made before or
after the commencement of the Act, shall not withstanding that the estate,
interest or right to be vested is not expressly referred to and provided that the
other statutory requirements were or are complied with, operate and be deemed
always to have operated (but without prejudice to any express provision to the
contrary contained in the deed of appointment or discharge) to vest in the
persons respectively referred to in subsections (1) and (2) as the case may
require, such interests and rights are capable of being and ought to be vested in
those persons”. The subsection cures the defect of not expressly referring to the
subject matter of the trust property or any rights) incidental to the appointment
in respect of such property, so long as the statutory requirements that governs
such transfer were complied with, property shall be deemed to have vested.

It should be noted that the power of a vesting declaration in transferring or

vesting property in trustees is limited according to section 39(4) of the
Trustees Act. Such property excluded include:-
(a)Any estate or interest in land which is only transferable in the manner
directed by or under the RTA.
(b)Any share, stock, annuity or property which is only transferable in
books kept by a company or other body, or in a manner directed by or
under an Act of Parliament.
 (c) In UK, even land conveyed by way of mortgage for securing money
subject to the trust except land conveyed on trust for securing
debentures or debenture stock.
(d)In UK, even land held under a lease which contains any covenant,
condition or agreement against assignment or disposing off the land
without license or consent.

The rationale for the exclusion or limitation is that with such property, other laws
have dictated the statutory requirements needed to effect transfers and vesting
e.g
(i) Section 92 of the RTA dictates that transfer of title in such
land can only be effected under a transfer form and requirements
described therein.
(ii) As for company shares, they can only be transferred by
registration of the same in the company register and delivery of
the share certificate.
(iii) As for mortgages, the object is to keep the trusts off the face
of the mortgagor’s title, trustees who lend money on a mortgage
of land do not disclose the fact in the mortgage deed, nor is it
disclosed in transfer of mortgage which must be executed on the
appointment of trustees’
(iv) As for leases, the rationale is to avoid the possibility of
inadvertent breach of covenant, which would render the lease
liable to be forfeited.
 (c) Vesting through a vesting order of Court
Wide powers to make vesting orders are given to court under sections 43-53
of the Trustees Act.

In particular, it is provided under section 43 that where the Court appoints or

has appointed a trustee, or where a trust has been appointed out of Court under
any statutory or express power, the court may make a vesting order vesting land
or any interest therein in the persons who, on the appointment, are the trustees
in any such manner and for any such estate or interest as the court may direct.

Alternatively, Court may under section 49 appoint a person to convey the land
or any interest therein, if it is more convenient.

As for stock and other things in action, court can by virtue of section 50 make
an order vesting in such persons the right to transfer or call for a transfer of
stock, or to receive the dividends or income thereof, or to sue for or recover a
thing in action.

It should be noted that a vesting order can only be granted in relation to

property within the territorial jurisdiction of the court. This is the position of the
law in Webb V Webb (1992)I ALL ER 17.

It has also been observed that for the trust property to vest in the trustee, the
trustee must have consented to the appointment i.e must have accepted the
office of the trustee. This was discussed in the case of Nylander V Thomas
(1968) where three executors appointed were also to act as trustees but only
one of them took probate of the will and administered the will for approximately
ten years. The trustee appointed the respondent to administer the will and the
issue was whether the other trustees who did not prove the will could be
regarded as trustees. It was held that where a testator has appointed a person
an executor and also a trustee, the fact of his renouncing probate and not acting
as a trustee is strong evidence that he has refused the trust. That although there
was no formal renunciation of the probate, the omission to act for ten years
must be regarded as a refusal to act as a trustee. Therefore, in such
circumstances and others of a similar nature, property cannot be said to have
vested in the trustees.

WAYS OF TERMINATING TRUSTEESHIP

There are basically 6 ways in which a trusteeship can be terminated and these
are:-
 By disclaimer
 Retirement
 Removal
 Death
 Bankruptcy
 Vesting orders
(a) DISCLAIMER
Blacks Law dictionary 6th edition, defines a disclaimer to mean a repudiation or
renunciation of a claim or power vested in a person or which he had formerly
alleged to be his.
The general rule in Robinson V Pitt is that a person who is appointed a trustee
is not bound or cannot be compelled to accept the office. The position of the law
in Re Tryon (1884) is that he may disclaim the office at any time before
acceptance.
Acceptance may be either express or implied from the acts or conduct of
the alleged trustee. The position of the law in Jones V Higgins is to the effect
that execution of the trust deed by a trustee will normally be regarded as an
express acceptance of the trust. And, where a person is appointed by will to be
the executor and trustee and he takes out probate of the will, the position of the
law in Mucklow V Fuller and in Re Sharman’s Will trust is that he will be
treated as having thereby also accepted the trust.
Generally, any interference with the subject matter of the trust by a
person appointed trustee will be regarded as an acceptance of the trust, unless it
can clearly be explained on some other ground. Thus, where a man has
permitted an action to be brought in the name of himself and the other trustees
as observed in Monfort V Cadogan, or given directions as to the sale of trust
property and made enquiries as to the accounts as seen in James V Frearson,
he has been held to have accepted the trust.

If the trust has not been accepted, the position of the law in Re Schar is that it
may be disclaimed, the proper form being by a deed pool. The disclaimer deed
should be executed by a person named trustee who refused to accept the trust
because such deed is clear evidence of the disclaimer.

It is trite law that an effective disclaimer may be made by an alleged trustee in

the pleadings in an action brought against him for enforcement of the trust as
seen in Norway V Norway or even by his counsel at the bar as observed in
Foster Vs Dawber.
For a disclaimer to be effective, the position of the law in Re Lister is that it
must be of the whole trust and not just a part of the trust. The effect of the
disclaimer is that if there are other trustees, the property will vest in them. If the
disclaiming trustee was sole trustee or if all the trustees disclaim, then if the
inter-vivos the settlor himself will become the trustee and if the trust was
through a will, the personal representative will hold on trust.

It should further be noted that if one has already intermeddled with the estate or
even already accepted the trust, the position of the law in Nylander V Thomas
is that one cannot turn around to disclaim the trust.

Lastly Court in Urche Vs Walker, held that the essence of the disclaimer is to
remove all difficulties and vest the estate in other trustees. A party who releases
and declares that he will not take the trusteeship gives the best evidence that he
will not act as a trustee.

Further, the position of the law in Nylander V Thomas is that rejection of

probate on the other hand may be strong evidence for disclaimer of trust.
(b) RETIREMENT
Formerly, a trustee could not retire save under stringent express powers or by
order of court or by consent of all the beneficiaries.

Currently, a trustee may retire from his duties by being discharged from the
same and this could be by express provision in the trust instrument, by statutory
provisions or by an order of the court. The above is possible through the
following ways:-
(i) Under an express power in the trust instrument.
It is possible for a trust deed to contain a provision for the automatic retirement
of trustees, particularly where a trust is likely to continue beyond a single
generation. The trust instrument may contain provisions such as for a trustee to
retire upon reaching a certain age, requested to do so by his co-trustees or by
one or more of the beneficiaries and or for the automatic retirement of trustees
at set intervals (for example every five years) again if so requested.

However, where no such provision is included in the trust instrument, it has been
held in Davis V Richards and Wallington Industries that the power to resign
arises by implication and that a trustee could retire from his trusteeship by
writing a letter of resignation to the secretary of the trust.

(ii) Under provisions of Statute

It is trite law under section 38(1) of the Trustees Act that a trustee may be
able to retire without a new appointment. Section 38 provides that ‘where a
trustee is desirous of being discharged from the trust, and after his discharge,
there will be either a trust corporation or atleast two persons to act as trustees
to perform a trust, then if the trustee as aforesaid by deed declares that he is
desirous of being discharged from the trust, and if co-trustees and such other
person as is empowered to appoint trustees, by deed consent to the discharge of
the trustee and to the vesting in the co-trustees alone the trust property, the
trustee shall be deemed to have retired from the trust and shall by deed be
discharged from the trust. This can also be referred to as voluntary retirement.

However, it appears under the provision that for one to retire under section
38(1), there has to be atleast two trustees to remain performing the trust duties
or a corporation. Secondly, the retirement has to be by deed.
A trustee may also retire by virtue of provisions of section 40 of the Trustees Act.
This is done by court subject to appointment of new trustees. Section 40 is to
the effect that court may, under this section, on the appointment of a new
trustee, remove an existing trustee. It will not, however, simply discharge a
trustee without appointing a new trustee as emphasized in Re Harrison’s
Settlement Trust, nor Will it exercise its statutory jurisdiction to remove a
trustee where there is a dispute as to the facts as observed in Re Combs.

For retirement under section 40 to take effect, the trustee has to move Court.

It should also be noted that where a sole trustee wishes to retire and it is
impossible to find anyone who is willing to become the new trustee, the Court
will not discharge him so as to leave the trust without a trustee. An order may,
however, be made in such a case for the administration of the trust by the court
and although the trustee retains his office, the position of the law in Courtenay
V Courtenay is that the court will take care in working out the order that the
trustee does not suffer

(iii) By consent of all beneficiaries

It is possible for a trustee to retire where all the beneficiaries of full age consent
to such retirement and they are also absolutely entitled to all the beneficial
interests of the trust. This is based on the fact that the beneficiaries in such
cases could validly terminate the trust as they are entitled to request the trustee
to hand over the trust property to them thereby putting an end to the trust.
However, it should also be noted that where the beneficiaries consent to the
retirement of the trustee, none of them will thereafter be able to call that trustee
to account for anything that happens after the date of retirement.

(c) REMOVAL
As it is with the case under retirement of trustees, trustees could also be
removed by virtue of provisions to that effect of the trust instrument under
statutory provisions and by an order of court. The above ways are discussed
below:-
(i) By express provisions in the instrument . A trustee could be removed for
any reason which may be specified in the trust instrument.

(ii) Statutory provisions

Section 35(1) of the Trustees Act provides for the statutory grounds for the
removal of a trustee and these include where one stays outside Uganda for more
than 12 months, where one is incapable of acting as a trustee, where one is an
infant, where one refuses to act.

As for being unfit to act, a trustee can be removed if he is found to be unfit to

act by virtue of being declared bankrupt or where he has absconded.

On the ground of incapacity to act, the position of the law in Re East (1873) is
that a trustee may be removed from his trusteeship if he has become senile or
can no longer exercise good judgment by reason of old age.
 (iii) Removal by an order of court
It should be noted that court has inherent jurisdiction to remove a trustee with
or without appointment of a new one, as it can be seen in the decisions below:-

In Adesege V Williams, Court held that Court has powers to remove a trustee
from that office if his continued stay will be prejudicial to the trust.

In Lettersdet V Browers, trust and respect between the Trustee and the
beneficiaries had broken down and where even though no evidence of
misconduct had been alleged by the beneficiaries, the court allowed an
application for removal of the trustee in exercise of its inherent jurisdiction.

In Clarke V Heathfield (1985) ICR 606, Court removed trustees of the funds
of the National Union of Mineworkers on grounds of attempt by the trustees to
place the trust property abroad and out of reach of sequestrators appointed by
the court, placing the trust funds in jeopardy, making trust funds unavailable for
the purposes for which they were contributed by the general membership.

(d) DEATH
Trustees are invariably joint tenants and, accordingly, on the death of one of two
or more trustees, the trust estate, by reason of the ‘jus accrescendi’, devolves on
the surviving trustee or trustees. This was affirmed in Warburton V Sandys.

Termination by death can also be read in section 18(1) which provides that
‘where a power or trust is given to or imposed on two or more trustees jointly,
the same may be exercised or performed by the survivors or survivor of them for
the time being. In addition to that, section 35(1) provides for the appointment
of new or additional trustees where a trustee is dead.

It’s further provided under section 18(2) that upon the death of a sole or last
surviving trustee, the trust estate devolves on his personal representatives and
that such representatives (excluding an executor who has renounced or has not
proved as per sec 18(4)) shall be capable of exercising or performing any
power or trust which was given to, or capable of being exercised by, the sole or
last surviving or continuing trustee.

It should also be noted as held in Re Benett and Re Ridley, that such a

personal representative of a deceased trustee has an absolute right to decline to
accept the position and duties of trustee if he chooses so to do.

(e) BANKRUPTCY
Whereas section 2 of the Insolvency Act does not define bankruptcy, it defines
a bankrupt to mean an individual in respect of whom a bankruptcy order has
been made under section 20. The ground for bankruptcy is inability to pay debts.

It should be noted that bankruptcy per se does not terminate trusteeship. The
position of the law in sections 37 and 204 of the Insolvency Act and section
35(1) of the Trustees Act is that it renders a person unfit to act as a trustee.

Therefore, Court has to be moved in order to have the bankrupt trustee

removed. This was reiterated in the case of Re Barker’s Trusts, where Jessel
M.R, stated that ‘it is the duty of the court to remove a bankrupt trustee who has
trust money to receive or deal with, so that he cannot misappropriate it. There is
an exception under special circumstances e.g where a trustee has no money to
receive he ought not to be removed merely because he has become bankrupt.

Another exception is where his insolvency has arisen solely from misfortune and
he is himself entirely free from any moral stigma.

(f)VESTING ORDERS IN GIVEN CIRCUMSTANCES

Sections 44-54 of the Trustees Act authorize the court to vest property on
given occasions. Sections 44 and 51 are specially significant in their effect on
the office of a trustee. By section 44(b), if a trustee in whom land is vested,
either solely or jointly with other persons
(a)Is under disability or
(b)Is out of the jurisdiction, or
(c) Cannot be found, or
(d)Being a Corporation, has been dissolved, plus a number of other
situations, the Court may make an order vesting the land in any person
in such manner as the Court thinks fit.

By section 51, provision is made for the transfer of stocks and shares and
things in action in similar terms to those indicated in section 44. These
provisions have the effect of causing a trustee to vacate his office in the
circumstances indicated.
POWERS OF A TRUSTEE
Trustees commonly have many and varied powers that may be conferred on
them by the trust instrument or by statute. Many of them will be administrative
but they may be dispositive giving them power to decide which of potential
beneficiaries shall take an interest and what the extent of that interest shall be.

It is trite law in Swales V IRC that trustees cannot fetter the exercise by them
at a future date of discretion, possessed by them as trustees. In the exercise of
their discretionary powers, the position of the law in Pitt V Holt is that trustees
must take into account all relevant considerations and disregard irrelevant
considerations.

The powers of a trustee among others include the power of sale, power to
insure, power of maintenance, power to give receipts, power of advancement,
power to raise money by sale, mortgage, power to delegate, power to employ
agents.

(a)Power of sale
This is provided for under section 12 of the Trustees Act. This power may be a
creature of statute, trust instrument, or by court’s authority or by the consent of
all beneficiaries.

While exercising this power, the position of the law in Buttle V Sounders is
that a trustee has an obligation of obtaining the best price he can for
beneficiaries and he must act prudently.
The test for the duty of care while exercising power is that ‘would a reasonable
prudent business man take that offer’.

Where a trustee fails to do so, the position of the law in Wheelwright V

Walker is that a beneficiary can seek an injunction from court restraining the
sale.

Where the sale has already taken place, the position of the law in section
13(1) of the Trustees Act which position was affirmed in Dance V Goldingham
is that a beneficiary has a right to apply to have the sale impeached if it appears
the consideration rendered was inadequate.

It was also stressed in Cowan V Scargill that trustees must throughout the sale
process put beneficiaries’ interests as paramount.

To avoid mismanagement of trust funds, the position of the law in Hankock V

Rinehart is that the trustee must ensure that any money realised from the sale
is deposited onto the trust bank account and beneficiaries have the right to
inspect trust accounts and documents.

(b) Power to Insure

Generally, the position of the law in Bailey V Gould, Re Bennett and Re
McEacharn (1911) is that trustees were under no duty to insure the trust
property and accordingly would not be liable for failure to insure the trust
property if destroyed or damaged except where there is some express provision
in the trust instrument.
The trustee’s duty of care and management however makes it imperative on him
to give serious consideration to insurance but where the trustee after such
consideration decides not to insure, he will not be liable for any loss or damage
resulting to the trust property.

Section 19 of the Trustees Act confers power on all trustees, whenever the
trust is created, to insure any trust property against loss or damage by fire and
to pay the premiums for such insurance out of the income of the building or
property subject to the trust without obtaining the consent of any person who is
a beneficiary to such income.

From the wording of section 19(1), it does not impose a duty to insure. The
imposition of such a duty might cause difficulties if the trustees had no funds out
of which to pay premiums and a trust fund comprising trustee investments, such
as government bonds, would be secure without insurance. In Re McEacharn,
Eve J, held that insurance was not to be maintained at the expense of the tenant
for life, but expressly decided nothing as to whether the trustees ought to insure
the premises at the expense of the estate generally, because he had not been
asked that question.

In case of happening of any peril, the position of the law under section 20(4)
of the Trustees Act and as illustrated in the case of Sinnot V Bowden is that
subject to obtaining consents specified in the instrument if any money realised
from the insurance policy will under the direction of court be used in rebuilding,
reinstating, replacing or repairing the property lost or damaged.
(c) Power to compound liabilities
This is provided for under section 15 of the Trustees Act. It provides that a
personal representative, or two or more trustees acting together or subject to
the restrictions imposed in regard to receipts by a sole trustee not being a
trustee corporation, a sole acting trustee whereby the instrument, if any,
creating the trust or by law, a sole trustee is authorized to execute the trust and
powers reposed in him or her, may, if and as he/she or they think fit:-
(i) Accept any property before the time at which it is made transferable or
payable.
(ii) Sever and apportion any blended trust funds or property
(iii) Pay or allow any debt or claim on any debt or claim on any evidence
that he/she or they think sufficient.
(iv) Accept any composition or any security movable/immovable, for any
debt or for any property, movable/immovable, claimed.
(v) Allow any time for payment of any debt or
(vi) Compromise, compound, abandon, submit to arbitration or
otherwise settle any debt, account, claim or thing whatever relating to
the testator’s or intestate’s estate or to the trust.
It was also stressed in De Cordon (1879) App. Cas 692 that the
trustee must however ensure that a compromise is not detrimental to
the trust.
(d) Power to give receipts
Section 14 provides for this power. Notwithstanding anything to the contrary in
the instrument as per section 14(3), section 14(1) provides that the receipt
in writing of a trustee for any money, securities, investments or other personal
property or effects payable, transferable, or deliverable to him under any trust or
power shall be sufficient discharge to the person paying, transferring or
delivering the same and shall effectually exonerate that person from seeing to
the application or being answerable for any loss or misapplication thereof.

Section 14(2) however does provide that section 14 does not, except where
the trustee is a trust corporation, enable a sole trustee to give a valid receipt for
the proceeds of sale or other capital money arising under a disposition on trust
for sale of land. There is need for accountability and transparency. Failure to do
so, the sale may be impeached.

(e) Power to raise money by sale or mortgage (Section 16 of T.A)

This power according to section 16 may arise either from the trust instrument
or by statute. It gives the trustee powers to raise the money required by sale,
conversion, calling in or mortgage of all or any part of the trust property for the
time being in possession.

It should be noted that section 16(2) excludes the exercise of this power in
respect of property held in charitable trusts.

(f)Power to deposit documents for safe custody

Section 21 gives the trustees power to deposit any documents held by them
relating to the trust or to trust property, with any banker or banking company
and any sum payable in respect of the deposit shall be paid out of the income of
the trust property.
(g) Power to delegate
The general rule is that the office of a trustee cannot be delegated because it
is one of confidence. However, there are exceptions to the general rule as it
can be seen below:-
 (i) Where the trust instrument allows the trustee to delegate.
(ii) When it is reasonably necessary
(iii) When the agent is engaged in the ordinary course of affairs.
Sec 23 allows the trustee to employ agents to perform specific tasks such as
lawyers, auditors among others. However, the trustee remains personally liable
for any breach in the trust although he may not be liable for the negligence of
the employed agents if he has acted reasonably in relying on these qualified
persons.
(iv) When the trustee is abroad
Section 25 allows the trustee intending to remain out of Uganda for a period
exceeding one month power to delegate to any person the execution or exercise
of trustee duties. The trustee can only delegate by Powers of Attorney which
have to be attested to and registered with URSB as a document.

It should also be noted that the donee only acts when the trustee has left
Uganda and when the trustee returns, the POA are revoked and the trustee
assumes his powers.

It should also be observed as illustrated in Fry V Tapson that a trustee is

required to be prudent in his choice and supervision of an agent and must
exercise the care of a prudent man of business in his choice of agent and should
not employ an agent to perform an act outside the scope of the agent’s business.

(h) Power of maintenance

Section 31(1) gives a trustee powers to apply income for the maintenance of a
beneficiary during his minority. The payments made under section 31 may be
made to the parent or guardian of the infant for his maintenance, education or
benefit yet there may be a person bound by law to maintain the infant.

Section 31(2) is to the effect that during the infancy of the beneficiary, if his
interest so long continues, the trustees have powers to accumulate all the
residue of that income in the form of compound interest by investing the same
and the resulting income thereof from time to time in authorized investments
and shall hold those accumulations for the benefit of the beneficiary.

(i) Power of advancement

Section 34 of the Trustees Act provides for the power of advancement. Court in
Pilkington V IRC, defined advancement to mean the establishing in life of the
beneficiary who was the object of the power or at any rate some step that would
contribute to the furtherance of his establishment.

Court went to describe an advancement as any use of money in which will

improve the material situation of the beneficiary.

It is trite law under section 32(1) that a trustee may at any time pay or apply
any capital money subject to a trust for the advancement or benefit of the
entitled beneficiaries. However, the money so paid or applied shall not exceed
half of the presumptive share that the beneficiary may be entitled and the
money so applies shall be brought into account as part of the beneficiary’s share
at the time of distribution.

Much as the trustee has powers of advancement, the position of the law in
Molyneux V Fletcher is that he must exercise such powers in a bonafide
manner and failure to do so will amount to breach of trust and the trustee can
be held liable.

Secondly, the trustee as noted in Re Pauling’s Settlement Trusts, has a duty

to see the money paid to the beneficiary is spent on the purpose for which it was
advanced.

DUTIES OF A TRUSTEE
Upon being appointed a trustee, the starting point is that a trust has a duty to
disclose any potential conflict of interest. This was stressed in the case of
Peyton V Robinson (1823), where Court emphasized that before a person
accepts a trusteeship to which a discretionary power is annexed, he is bound to
disclose any circumstances in his situation which may give him in a bias or an
interest against the due exercise of that discretionary power. If he accepts the
trusteeship without disclosing such circumstances in his situation, he cannot
afterwards exercise the discretionary authority for his benefit.

(a) Duty to reduce property into possession

Where a trustee has been appointed and he accepts to act, the position of the
law in Hallows V Lloyd, is that he is required to inquire and ascertain the
whereabouts of the trust property, locate them and secure them by taking
possession of the same.

It is trite law as held in Re Brodgen, that where a trustee fails to perform this
duty, he will be held personally liable. The law of trusts imposes duties or
obligations on a trustee and the moment these duties are breached, the trustee
will be held liable.
The trustee should also ensure that he transfers to himself any property which
did not pass to him under the deed of appointment as well as the transfer of all
the documents affecting the trust property such as title deeds and share
certificates.

In instances where the trust fund includes an equitable interest, the trustee’s
duty is to give notice as soon as possible to the person in whom the legal estate
is vested. This is the position of the law in Dearle V Hall (1828), where court
noted that where the equitable owner of an asset purports to dispose equitable
interest on two or more occasions and the equities between the claimants, the
claimant who first notifies the trustee or legal owner of the asset shall have a
first priority claim.

The purpose of the notice was discussed in Jacob V Lucas where court noted
that it enables the claimant to obtain priority over any subsequent encumbrance.

If the trust estate includes a chose in action, the trustee should get in at the
earliest opportunity and if he fails to do so, the position of the law in Re
Brodgen is that he would be liable. A chose in action is rights to property which
a person does not have present enjoyment but can recover it through an action.

Where trust property includes chattels, the position of the law in England V
Downs (1842), is that the trustees should ensure that there is a proper
inventory.

If there is a convenant in a marriage settlement by a wife to settle after acquired

property, the position of the law in Exp. Greaves (1856), is that it is the duty
of the trustees of the settlement to ensure that trust property is settled
according to the settlement.

i. Time for realisation

As far as the time for realisation is concerned, the position of the law in Re
Chapman (1896) is that there is no absolute rule that indicate that a particular
time within which the trustee must realise trust property. The trustee has
discretion.

Where a trustee fails to realise the trust property within at least a year of the
testator’s death, the position of the law in Grayburn V Clarkson is that the
trustee has a burden to justify the delay.

Where the testator has given the executor/trustee an absolute discretion to

postpone the sale and conversion of the estate, the position of the law in Re
Norrington (1879) is that the executor/trustee is not under compulsion to
convert within a year and in the absence of bad faith, he is not responsible for
loss resulting from failure to convert.

ii. Money
The general principle of law is that a trustee/an executor should never allow
trust money to remain outstanding on the personal security of a debtor because
the quality of the debtor may change from day to day. This was laid in Re
Medland.
If the trustee/executor fails to recover the debt within a reasonable time,
the position of the law in Lawson V Copeland, is that a trustee himself
becomes the debtor’s surety (guarantor).
In addition, it’s trite law in Holmes V Dring, that trustees should not generally
lend money on personal security even with a guarantor. However, an exception
to this rule as stated in Pickard V Anderson is where Court held that if a
trustee is expressly authorized to lend on personal security, he may do so.

iii. Operation as suis generis or by agent

In instances where there are more than one trustee of the property, the position
of the law in Lewis V Nobbs, is that it should be left in the control of all
beneficiaries and not in one of them.

Further, section 23 gives a trust powers to delegate as well as employing

agents without being responsible for defaults of such agent if such trustee acts in
good faith. However, the trustee has a duty of ensuring any money or property
which he hands over to the solicitor does not remain under the control of that
solicitor longer than necessary. The solicitor must hand it over to the trustees.

Section 15 also gives a personal representative or two or more trustees acting

together power to accept property before the time when it is due to be
transferred, power to give time for payment of a debt among others.

iv. Legal proceedings

As far as legal proceedings in respect of trust property, the position of the law in
Burgess Vs Wheater, is that a trustee may institute legal proceedings in
respect of the trust property for purposes of executing his duties and powers.
 (b) Duty to invest
The trustee’s duty to invest is provided for under Part II of the Trustees Act.
Investment in this context as defined in Re Wagg and in Will of Sheriff
(1971), refers to the employment of trust funds in the purchase of anything
from which interest or profit is expected.

The trustee has to consider the life tenant and the remainder man that is the
investment must not only produce income but also capital. Much as a trustee has
a duty to invest, a trustee is required to take due care as an ordinary prudent
man would take when investing trust property. This is the position of the law in
Re Whiteleg.

In instances where a trustee mismanages trust fund while hiding behind

investments, he will be held liable for the mismanagement.

(c) Duty to distribute

It is trite law as held in Low V Bouvery, that one of the cardinal duties of a
trustee is the distribution of the trust property i.e of income and capital to the
beneficiaries.

A trustee is therefore liable for breach of trust if he fails to do the above or

where he makes payments to wrong persons. This was reiterated in Eaves V
Hickson.
 In order to properly ascertain those entitled to benefit from the trust
fund/property and avoid paying to wrong persons, section 27 of the Trustees
Act lays down the procedure to be followed in this regard. The trustee is required
to identify the beneficiaries by giving notice through advertisement in the
Gazette or in a daily/weekly newspaper circulating in Uganda. The notice lasts
not less than two months. A beneficiary who fails to bring his claims within the
time specified in the notice cannot according to section 27(2) of the T.A, make
the trustee liable for any distribution made which excluded him.

Where there is uncertainty as to the existence or otherwise of a beneficiary i.e

where a beneficiary has left Uganda and has not been heard of for seven years,
there is a presumption that he is dead as observed in Re Benjamin. In such a
situation, the trustee or executor can apply to court for a Benjamin order so that
court allows the distribution of the whole of the assets of the estate though with
missing beneficiaries.

However, if those entitled receive nothing under the distribution so ordered, the
position of the law in Lord Woodhouselee V Dalrymple is that they may later
come forward and establish their claim.

In situations where the trustee overpays a beneficiary in good faith, he can ask
for a refund of the amount over paid or deduct the same from any future
payments due to the particular beneficiary. This was affirmed in Re Musgrave.

Where trustees are in doubt on whether to pay a beneficiary in full or whether

the claimant is really entitled, section 60 of the Trustee Act allows the trustee
to pay the money or property into court and the certificate of the officer of court
as illustrated in Re Jones will discharge them from liability.

When the trustee has fully distributed the trust property, the trustees should
present their final accounts to the beneficiaries and obtain a discharge from
them, which can appropriately be done through a release by Deed and the trust
is thereby determined. A trustee who makes an erroneous distribution may by
virtue of section 58 be relieved by court from liability if he acted honestly and
reasonably and ought to be fairly excused.

(d) Duty to maintain equality between beneficiaries

A trust should not favor one beneficiary at the expense of another. He ought to
act impartially between all the beneficiaries.

The trust requires that all beneficiaries should benefit other than waiting to
accumulate at the expense of others. For example, the trustee should act
impartially between a life tenant beneficiary who is entitled to income out of the
trust property and the remainder man, who is entitled to the capital under the
trust.

Hoffman J in Nestle’ V National Westminster Bank Plc. (1996) at pg. 115,

while responding to the argument that the investment policy of the trustee had
unfairly favoured the life tenant commented that, ‘it would be an inhuman law
which required trustees to adhere to some mechanical rule for preserving the
real value of the capital when the tenant for life was the testator’s widow who
had fallen upon hard time and the remainder man was young and well off’.
Similarly sentiments were expressed by Slaughton LJ in the same case of
Nestle in the COA where he stated that ‘if the life tenant is living in penury and
the remainder man already has ample wealth, common sense suggests that a
trustee should be able to take that into account, not necessarily by seeking the
highest possible income at the expense of capital but inclining in that direction’.

(e) Duty to provide accounts and information

It is trite law in Pearse V Green that a trustee should keep accounts and be
ready to produce them to the beneficiaries at any time.

The same was reiterated in Low V Bouvery, where it was stated that it is a
cardinal duty of a trustee to provide accounts of the trust property and equally
furnish necessary information as regards the same, as may be required by the
beneficiaries.

Lord Wrenbury in O’Rouke V Darbyshire noted that beneficiaries have a right

to access and inspect all trust documents.

Section 22(4) of the Trustee Act provides that trustees may in their absolute
discretion cause the accounts of the trust property to be examined or audited by
an independent accountant and this should be done once in three years. Where
a trustee fails to keep accounts of the trust, the beneficiaries on application to
the court can compel him to do so.

The right of access to trust documents was qualified by Re Londonderry’s

Settlement (1965) in relation to documents which record the reasons for the
exercise of the trustee’s discretions. Documents involving exercise of discretions
is confidential.

The right in the above decision was fortified by the Privy Council in Schmidt V
Rosewood Trust (2003) where court held that:-
 No beneficiary has any entitlement as of right to trust documents.
 The right to seek disclosure was an aspect of the court’s jurisdiction.
 The court had to carry out a balancing exercise weighing the
interests of claimants, trustees and third parties.

FIDUCIARY DUTIES
A fiduciary was defined in Bristol and West Building Society V Mothew to
mean a person who has undertaken to act on behalf of someone else.

Fiduciary duties are duties imposed by equity with a view to ensuring that a
trustee’s interests do not conflict with those of the trust.

The fiduciary duties of a trustee include non-remuneration and reimbursement, a

duty not to purchase trust property and a duty not make incidental profits.

(f)Remuneration and Reimbursement

The general rule as noted in Barrett V Hartley, Robinson V Pett and Re
Barber is that a trustee cannot receive any profit or remuneration out of the
trust estate. He is by the rules of equity a volunteer and therefore expected to
act gratuitously without any remuneration notwithstanding the onerous tasks
placed upon him by the trust.
This will also be the case even if the trustee renders services of personal or
professional nature, whether a solicitor or a member of a firm of solicitors acting
for the beneficiaries. This strict principle stems from the stringent fiduciary
obligations attached to the trustee position as set out in Keech V Standford
(1726).

Just like other general rules, there are exceptions to this rule as
discussed below:-
(i) Authority by the trust instrument.
A trustee may be remunerated where the trustee instrument expressly sets out
that remuneration may be granted. The trustee’s right to remuneration under the
express clause is not contractual. It is a derivation of the settlor’s power to direct
how her property may be dealt with. Remuneration could take the form of
income from the estate as held in Public Trustees V IRC and payment there
out is regarded as a legacy to the trustee as observed in Re Pooley.

It is also trite law as noted in Re Chandiler & Herrington that charging

clauses must be interpreted strictly.

(ii) Authority by statute

Statutory provisions may allow trustees to charge fees as fixed by the
government for their services. For example, section 11 of the Public Trustee Act
provides that there shall be charged in respect of the duties of the public trustee
such fees.
Section 41 of the Trustees Act provides that where court appoints a person or
corporation, other than the public trustee, to be a trustee either solely or jointly
with another person, the court may authorize the person or corporation to
charge such remuneration for his/her or its services as trustees as the court may
think fit. This is also the position of the law in Re Masters.

(iii) Authority by the court

It is trite law in Re Worhington that court has both inherent and statutory
power to authorize remuneration or increase the rate of authorized remuneration
for a trustee.

However, court in Ayliffe V Murray stated that the inherent power can only be
exercised in exceptional circumstances such as where the execution of the trust
is very difficult.

(iv) Authorization by beneficiaries.

The position of the law in Re Hill (1924) is that remuneration may also be
charged where there is a valid and enforceable agreement between the trustee
and all beneficiaries entitled to the trust and where it is approved by court.

However, such an agreement may be impeached on ground of undue influence.

(v) Remuneration under the Rule in Craddock V Puper.

Here, the rule is that a solicitor cannot recover remuneration for professional
services as solicitor where he acts for himself alone but if he acts for co-trustees,
he can recover.
 (g) Trustee should not purchase trust property.
The general rule is that trustees should not acquire either absolutely or by way
of lease, trust property. This is the position of the law in Bright V Morgan
where it was stressed that a trustee should not purchase the trust property.

Wynn-Parry J in Buttle V Saunders (1950) stated that trustees who decide to

sell trust property have an overriding duty to obtain the best price which they
can for their beneficiaries. If a trustee is able to purchase trust property he will
be tempted not to seek the best possible price.

The general prohibition on purchasing trust property is justified on the grounds

of fairness, it would be very difficult for a trustee to act in the best interest of the
beneficiaries when purchasing property for his own benefit.

In Chan V Zachara (1984), Deane J felt that, wherever the trustee acquires
trust property, there is an irrebutable presumption that is has been obtained by
reason of the position of advantage occupied by the trustee, which can only be
defended by proof of consent or authorization. Whenever the trustee purchases
trust property, he or she holds it in the capacity of constructive trustee for the
beneficiaries.

The second justification was stated in Holder Vs Holder, where the COA held
that a trustee may purchase the trust property with the fully informed consent of
all the beneficiaries for a fair price. This rule is referred to as the ‘fair dealing’
rule. Herman LJ stated that the reason for prohibition was that a man cannot be
both a vendor and purchaser. If such a purchase does occur, the position of the
law in Tito V Waddell, is that equity has evolved the self-dealing rule under
which a sale of trust property to a trustee is voidable by beneficiary.

Points should be noted regarding the self-dealing rule:-

(a)A sale to a trustee may set aside if he bought in good faith and a fair
price. This is the position of the law in Ex P James (1803) and Ex P
Lacey (1802).
(b)If the arrangement is that trust property will be sold to a trustee after
he retires, the sale may also be set aside. This is the position of the law
in Wright V Morgan (1926). However, the purchase is allowed
where the sale takes place long after his retirement as noted in Re
Boles (1902).
(c) A sale of trust property may be set aside where a trustee is in effect
indirectly buying it through another person as observed in Delves V
Gray (1902) or through a company in which he has a substantial
shareholding as noted in Re Thompson’s Settlement (1986).

Exceptions to the general rule

(i) Where there are special circumstances which in the court’s view
make it inappropriate to set aside the sale as observed in
Holder V Holder. In this case, the defendant (an
executor/trustee) purchased an equivalent of trust property. The
defendant had previously purported to renounce the
executorship but had not done so effectively. Court of Appeal
held the purchase was not void in that the defendant had not
acted as seller and buyer (he played no part in sale or fixing the
price). He had no conflict of interest since he made his intention
 to bid for property clear and not secretly, so the beneficiaries did
not expect him to protect their interests. In addition the price
paid was higher than the market value.
(ii) Where the purchaser is made a trustee after contracting to
buy trust property but before completion as held in Re
Mulholland’s WT (1949) and Spiro V Glencrown (1996).
(iii) Where the purchaser is a bare trustee with no active duties to
perform as Parkes Vs White (1805). A bare trust is basically
the trust relationship in which the trustee performs no activity
except actions dictated by the beneficiaries. The property is held
in the name of the trustee but the trustee has no discretion over
the assets held in trust. The bare trustee is a mere nominee.
(iv) Fair dealing rule. The position of the law in Exparte Lacey
(1802) is that the self-dealing rule does not apply where a
trustee purchases a beneficiary’s interest in trust property. Court
in Coles V Trecothick and Thompson V Eastwood noted
that the purchase will be allowed if the trustee has given full
value and all the relevant information has been given to the
beneficiary at the time of sale. However, where undue influence
is established, the purchase may not stand. In Coles V
Trecothick the beneficiary took complete control of the sale
(which was by auction) approving the auctioneer, the plan of
sale and the price. The sale was held to be regular.
(v) Where all beneficiaries sui juris and consent to sale with full
knowledge of facts.
 (vi) Where the trust instrument authorizes sale to the trustee. In
Morse V Oroyo (1806), it was held that the trustee can
purchase a beneficial interest where it is provided for.
(vii) Where a trustee obtains court’s consent.

(h) Duty not to make incidental profits

The general rule as reiterated in Aberdeen Town Council Vs Aberdeen
University is that if profits come to a trustee in his capacity as such, he must
hand them over to the beneficiaries.

Trustees must account for personal profit gained as a result of use of trust
property, or opportunity/information gained as trustee. Alternatively,
beneficiaries may make a proprietary claim that the profit is held on constructive
trust for them.

Where trustees are acting as director the question arises as to whether trustees
who become directors by virtue of their trusteeship remuneration. In Re
Madam, the trustees had power under the AOA by virtue of their office to
appoint two directors of a company. They appointed themselves. It was held that
they were liable to account for the remuneration they received because they
acquired it by use of their powers as trustees court stated that ‘the root of the
matter is did the trustee acquire the position in respect of which he drew the
remuneration by virtue of his position as a trustee?

Where a trustee attempts to acquire a new lease or freehold for personal benefit,
the position of the law in Keech V Sandford is that he has to account to the
beneficiaries. In Kent V Sandford, the Trustee held property on trust for B, a
life remainder for C. trust property included a lease of a farm which was about to
expire. The Trustee’s request that the landlady grants further lease to the trust
was refused. The trustee then renewed the lease for his own personal benefit.
The issue was whether B & C can claim benefit.

As for profits made from opportunities or information gained as a trustee, the

position of the law in Boardman V Phipps (1967)2 AC 46, is that he must account
for those profits.

In Williams V Barton (1927)2 Ch. 9, any commission accepted by trustee is a

profit made out of his position and must be surrendered to the trust.

Exceptions to the general rule

In Re Dover Coal Field Extension, in case of directorship of a company, the
remuneration could be retained if the trustees were directors before they
become trustees.

In Re Gee, court held that if the trustee becomes a director without trust share
voting being decisive and they were appointed independently, the trustee can
keep the shares.

Where the trustee did not obtain remuneration by the use of his position as a
trustee but by an independent bargain with the firm employing him, the position
of the law in Re Lewis is that a trustee may not be accountable for the
incidental profits made.
 (i) Trustee not to compete with the trust
It is trite law in Boardman Vs Phipps that a trustee should not place himself in
a position where his duty and his interest conflict.

A conflict may occur between the duties of a trustee and his personal interest
where the trust estate includes a business and the trustee is found to be
conducting a business of his own in competition with the trust.

An example of such a conflict arose in Re Thompson (1930). In this case, the

executors of a will directed to carry on the business of a testator who had been a
yacht broker. One of the executors intended to set up on his own account as a
yacht broker in competition. It was held that he could not set up in a competing
business. An injunction was granted to restrain a trustee from embarking on this
line of business in the same town.

BREACH OF TRUST
A breach of trust basically occurs where a trustee fails to perform any of his
duties or improperly exercises any of his powers.

Millet LJ observed in Armitage V Nurse (1997)2 ALLER 705 that ‘A breach

of trust may be deliberate or inadvertent. It may consist of an actual
misappropriation or misapplication of the trust property or merely of an
investment or other dealing which is outside the trustee’s powers. It may consist
of a failure to carry out a positive obligation of the trustees or merely of a want
of skill and care on their part in the management of the trust property. It may be
injurious to the interests of the beneficiaries or be actually for their benefit.
According to David Bakibinga in Equity & Trusts, a breach of trust may
include:-
(i) Direct intermeddling with trust property for improper purposes
(ii) Failure to exercise proper care in discharging a duty.
(iii) Mala fide exercise of discretion.

Where beneficiaries as a result of the trustee’s breach of trust suffer a loss, a

trustee will be liable to make good such loss to the beneficiaries.

It should be noted that the act in question need not be in respect of fraud or
dishonesty before it can amount to a breach of trust. Indeed, it may be a just act
of honest mistake or technical error, but that will not absolve a trustee from
liability. This same position was noted in Re Brogden (1888) where court
observed that ‘the beneficiaries may proceed against a trustee who commits a
breach even when where the trustee believed that what he was doing was in the
best interest of the trust.

LIABILITY OF A TRUSTEE

(a) PERSONAL LIABILITY

The general rule as observed in Knott V Cotte (1852) is that a trustee shall
make good the loss that his breach has caused to the estate.

The trustee as held in Re Dawson is normally bound to restore the estate to the
position it would have been had the breach not occurred. If the loss was an
inevitable one and the breach merely increased the loss, the trustee shall be
liable only to the extent to which the breach increased the loss as seen in Lord
Grainsborough Vs Watcombe Terra Cotta Co. (1885).

A trustee will not, however, be vicariously liable for the breaches of his co-
trustees or dishonesty or negligence of agents who act for the trust, unless there
has been willful default on his part as happened in Townley Vs Sherborne
(1634), where a trustee was affixed with liability for allowing rents collected on
trust property to remain in the hands of his co-trustee who misapplied the
money.

In Segbedzi V Segbedzi (1999), A trustee who by his own neglect allowed his
fellow trustees to sell the principal asset of the trust at an undervalue was held
liable even though he did not participate actively in the breach.

(b) LIABILITY OF INCOMING AND RETIRED TRUSTEES

The position of the law in Re Strahan (1856) is that an incoming trustee is not
liable for breaches committed by his predecessors but, if he becomes aware of
such breach after assuming office, he must take steps to remedy it. This can be
by instituting an action against the former trustee.

It is also trite law in Head V Gould (1898), that a retired trustee will, for his
part, be liable for breaches he committed while in office but not for breaches
committed by other trustees after his departure, unless his retirement was
intended to pave the way for the commission of the beach in question.
(c) JOINT LIABILITY
Where two or more trustees are involved in committing a breach, their liability is
joint and several and the beneficiaries may sue all or any of them. This is the
position of the law in Income Tax Act section 71(7).

If anyone trustee is sued, he may claim a contribution from any other trustee
who is also liable.

Where two trustees are jointly liable for a breach, one may be able to claim an
indemnity from the other. In particular:-
(i) An indemnity may be claimed against a solicitor trustee by his co-trustee
who has placed complete reliance on the solicitor in the affairs of the trust
as seen in Re Linsley (1904) but not by a co-trustee who acting on his
own judgement, has actively participated as seen in Head V Gould.
(ii) An indemnity may also be claimed by a trustee against his co-trustee
where the latter has acted fraudulently in initiating the breach as noted in
Re Smith. However, where a trustee has been made liable for a breach of
trust which was not due to his fault, the position of the law in Bahin V
Hughes.

Further, court in Re Partington(1887) noted that a trustee in some cases can

claim indemnity for damages sustained by him from the co-trustees but such
damage must not be due to his fault.

Where a trustee who also doubles as beneficiary has committed a breach of

trust, the position of the law in Re Daire(1916) is that such a
trustee/beneficiary is not entitled to his beneficiary interest until he has remedied
such breach.

(d) THE MEASURE OF A TRUSTEE’S LIABILITY

Once a breach of trust is established, it becomes necessary to determine the
extent of the trustee’s liability. This is usually done by reference to the profit
which he made or the loss occasioned to the trust estate by the breach.

In Target Holdings V Redferns (1994), the COA went so far as to hold that
the obligation to make good the loss arising from a breach remained even if that
loss would have been incurred without the breach. This was however rejected an
appeal by the HOL which held that a trustee’s liability to make good a breach
was fault based.

The courts have laid various contexts upon which liability of trustees
can be determined and these include:-
(i) Where a trustee makes an unauthorized investment , the position of the
law in Knott V Cottee is that he is liable for all loss that is incurred when
the investment is realised i.e he is liable to pay the difference between the
cost of the investment and the price at which it is sold.
(ii) Failure to invest. Where, however, trustees were not directed to invest in
one specified investment, but were given a choice and yet made no
investment at all, the position of the law as held in Sheperd V Mouls &
Robinson Vs Robinson is that they are only liable to replace the trust
fund, on the ground that it would be impossible to say which investment
they would have chosen and for what other sum they could be held liable.
Also in Nestle V National Westminister Bank, trustees who fail to
 follow a proper investment policy may be required to make good to the
trust fair compensation.

Where trustees were directed to make a specific investment and either made no
investment at all or invested in something else, they will be required to provide
the amount of that specified investment that could have been purchased with
the trust funds at the time when the investment should have been made as seen
in Pride V Fooks.

(iii) Improper retention on sale. Where the trustees were under a duty to sell
unauthorized investments and neglected or delayed doing so, they will be
liable for the difference between the price for which they could have been
sold at the proper time and the price eventually obtained on the actual
sale as was the case in Grayburn Vs Clarkson.
(iv) Breach of fiduciary duty. It has been said as noted in Swindle Vs
Harrison (1997) that the considerations that apply to a breach of trust
‘apply to a claim for breach of a fiduciary duty’. The claimant for a breach
of a fiduciary duty must show that the loss that he has suffered has been
caused by the defendant’s breach of duty. Furthermore, unless the breach
could properly be regarded as fraud, the claimant is not entitled to be
placed financially in the same position as he was in before the breach
occurred. In Nationwide Building Society Vs various solicitors (No.
3) (1999) (PNLR) and in Harrison (Properties) Ltd V Harrison, it
was said that the correct approach to equitable compensation for breach
of fiduciary had acted dishonestly or in bad faith, is to assess what actual
loss had resulted from the breach, having regard to the scope of the duty
broken.
DEFENCES OF A TRUSTEE TO PROCEEDINGS FOR BREACH OF TRUST
(a)Exemption clauses. The efficacy of a trustee exemption clause was
affirmed by the COA in Armitage Vs Nurse, in which a clause in the
settlement provided that no trustee should be liable for any loss or
damage to the fund or its income ‘ unless such loss or damage shall be
cause by his own actual fraud’. It was held that the clause was effective
no matter how indolent, imprudent, lacking in diligence, negligent, or
willful the trustee might have been, so long as he had not acted
dishonestly. The test of dishonesty was considered by Sir Christopher
Slade in Walker V Stones (2004)4 ALL ER 412, and the tests are:
first, that the deliberate commission of a breach of trust is not necessarily
dishonest, secondly, that it is only dishonest if the trustee committing it
does so either knowing that it is contrary to the interests of the
beneficiaries or being recklessly indifferent whether it is contrary to their
interests or not’.
(b)Beneficiary’s participation/consent or concurrence in a breach. A
trustee has a defence against a beneficiary who participates in or consents
to a breach even if the latter derived no benefit. It is trite law in Brice V
Stokes (1805) & Nail V Punter (1832) that a beneficiary who consents
to or concurs in a breach of trust will not in general be able to succeed in
a claim against the trustees, whether or not he has derived any benefit
thereby as noted in Fletcher V Collis (1905)2 Ch.24.

To rely on this defence, the position of the law in Re Pauling WT (1963)

and Holder V Holder (1968) is that the trustee must show that the
beneficiary acted of his own free will and understood what he was doing.
 It’s trite law in Fletcher V Collis (1905) that this defence cannot be
raised against any beneficiary apart from the one who
participated/concurred in the breach.

(c) Release and acquiescence by beneficiary. A trustee will also have a

good defence against a beneficiary who learns of a breach after its
commission and then releases the trustee from liability as noted in Egg V
Devey & Walker V Cymonds or otherwise acquiesces in the breach as
noted in Holder V Holder and John V James.

(d)Impounding the beneficiary’s interest.

Where a breach is committed at the instigation or with the consent of a
beneficiary, the court may order that his interest should be impounded and
applied towards repairing the breach either under its inherent jurisdiction.

Where a breach is requested/instigated by the beneficiary, his interest can

be impounded whether or not he benefited from it as seen in Trafford V
Bochen (1746) and Fuller V Knight (1843).

Where the beneficiary merely consented, his interest will be impounded

only where he benefited from the breach as noted in Booth V Booth
(1838) and Chillingworth V Chambers (1896).

However, the position of the law of in Re Somerset (1894) is that a

beneficiary’s interest will not be impounded if he asks the trustees to
perform an act which is not in itself a breach but the act is carried out by
them in a manner which gives rise to a breach.
 (e)Statutory relief from liability by virtue of section 59 of the
Trustees Act. This relief is available at court’s discretion where a trustee
has committed a breach but in so doing has acted honestly and reasonably
such that it would be fair to excuse him from liability.

Byrne J in Re Turner (1897) explained that the courts have not sought
to lay down strict rules for deciding whether to grant relief but are guided
by the circumstances of each.

Cases in which courts were prepared to grant this relief include:-

(i) In Perrins V Bellamy (1899), where trustees sold leaseholds
belonging to the trust on the erroneous advice of their solicitors
(ii) Re De Clifford (1900), where trust money entrusted by trustees
to a solicitor in good faith to defray rtust expenses was lost on the
solicitor’s bankruptcy.
(iii) Evans V Westcombe (1999), where a personal
representative had, on legal advice, taken out an insurance policy in
favour of a missing beneficiary who later reappeared and brought a
claim for an account and lost interest in respect of his share of the
estate.

By contrast, cases in which such relief was refused include Re Barker (1898)
where a trustee, on the advice of a commission agent improperly retained an
authorized investments for 14 years.
 (f) Statutes of Limitation & Laches
The Limitation Statute Cap 80 under section 20 provides that an action to
recover money or other property or in respect of any breach of trust may not be
brought against a trustee or any person through him after the expiration of six
years from the date on which the right action accrued. However, there are
exceptions to this general rule where there is fraud, where beneficiary is entitled
to a future interest, disability.

(g) Discharge in bankruptcy.

REMEDIES AVAILABLE TO A BENEFICIARY FOR BREACH OF A TRUST

 Compelling performance of the trust (Specific performance)
 Injunction
 Tracing of trust properties

(a) Compelling specific performance of a trust

If a trustee neglects the administration of the trust of the trust or defaults in
protecting the trust estate, the position of the law in Forey V Burnell (1783) is
that a beneficiary may take steps to ensure that he takes the necessary actions
in the interest estate.

Examples of these actions

 Where a trustee fails to renew leaseholds or a certificate of
occupancy as noted in Bennet V Collely
 Where trustees are about to sell at an undervalue as observed in
Anon (1821).
  Where the character of the trustee is such as would endanger the
trust fund in Keeling V Child (1678).

(b) Injunction and receivership

The position of the law in Fletcher V Fletcher (1884) and Millgan V Mitchel,
is that the court can make an order of injunction to restrain a trustee from
performing his duties in respect of the trust property, if the trust property is
endangered and a receiver may be appointed in respect of the same.

(c) Following and tracing

It is trite law as held in Re Diplock’s Estate (1948) that whenever there is an
initial fiduciary relationship, the beneficial owner of an equitable proprietary
interest in property can follow or trace it into the hands of anyone holding the
property except a bonafide purchaser for value without notice of title as usual is
inviolable as held in Sinclair V Brougham (1914) AC 938.

(d) Doctrine of unjust enrichment

It has been suggested that proprietary remedies cannot be fully understood
without some appreciation of the doctrine of unjust enrichment.

Basically, this doctrine is to the effect that where the defendant is unjustly
enriched at the expense of the plaintiff, the defendant must make restitution to
the plaintiff.