Equity: Trustee Powers (Investment)

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Last updated: October 11, 2023

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Hint	Answer
Historical Development
Case for where duty to invest derives?	Re Wragg [1919]
What act limited investments to two categories?	Trustee Investment Act 1961
Who made the statement, 'Any lawyer who failed to include wider investing powers... would be guilty of professional negligence'?	Lord Goodhart
Investment Powers
S.3 of the Trustee Act 2000	General power of investment
Case that put forth a trustee would not be liable if he acted as the prudent man in the regular course of business?	Speight v Gaunt (1883)
What case endorsed this?	Nestle v National Westminster Bank [1993]
Four points raised in this case	Must not choose investments the trust instrument doesn't allow
	Regard for interests of those entitled to income and future ones
	Avoid all investments that are attended with risk
	Ratio of income:capital considered
S.8 of the Trustee Act 2000	Allows land investments
Duties Relating to Investment
S.4 of the Trustee Act 2000	Standard Investment Criteria
Regard for...	Suitability of investment

Hint	Answer
Regard for...	Diversification of investment
Relevant factors	Structure of trust
	Age and type of beneficiaries
	Value of fund
What is the 'Portfolio Theory'	Should look at whole rather than individual investments
When should a trustee limit investments due to ethics	When it can be proved to be as good as or better than unethical one
What case rationalised this?	Harries v The Church Commissioners for England [1992]
Duty to Take Advice
S.5 of the Trustee Act 2000	Advice rules
What should a trustee seek advice for?	When exercising power S.5(1)
What should a trustee seek advice for?	Diversifying investments S.5(2)
When does the exclusion apply?	When trustee themself has knowledge or expertise S.5(3)
What is defined in S.5(4)?	Proper advice