''Re Montagu's Settlement Trusts''

987 Year 987 ( CMLXXXVII) was a common year starting on Saturday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * February 7 – Bardas Phokas (the Younger) and Bardas Skleros, two membe ...

Ch 264 is an

English trusts law English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the ...

case, concerning breach of trust and knowing receipt of trust property.

Facts

In December 1923, the future tenth Duke of Manchester assigned his trustees, under clause 14, 'all articles of furniture plate pictures and other chattels' that he would be entitled to after the ninth Duke’s death, and under clause 14(B) the trustees should make an inventory of the chattels, which would be included in the settlement, and hold the residue for the future tenth Duke absolutely. When the ninth Duke died in February 1947 the trustees did not make the inventory, and released them to the tenth Duke. His solicitor knew that this was not following clause 14(B), but said in a letter on 15 November 1948 that he was free to sell the items. The Duke sold some. He died in 1977. The eleventh Duke brought a claim for breach of trust by failing to make any selection or an inventory of the chattels, and release them all to the tenth Duke, who was a constructive trustee when he received them.

Judgment

Sir Robert Megarry VC Sir Robert Edgar Megarry, PC, FBA (1 June 1910 – 11 October 2006) was an eminent British lawyer and judge. Originally a solicitor, he requalified as a barrister and also pursued a parallel career as a legal academic. He later became a High ...

held that the solicitor’s knowledge of clause 14(B) should not be imputed to the tenth Duke so as to affect his conscience. Even if the tenth Duke had known, he probably would not have remembered when he received the chattels. So although the trustees were in breach of their fiduciary duty in 1948, the Duke had received nothing as a constructive trustee. The touchstone of liability is unconscionability. There is a defence if one knows of a breach but genuinely forgets before receipt. One must have, at least, wilfully and recklessly failed to make inquiries that an honest person would. In his view there are some people who, though not sufficiently innocent to not be bona fide purchasers for value, they may not be sufficiently guilty or knowledgeable to be knowing recipients. He said the following.

Ch 264, 272-3, 277-278

Notes

References

* {{DEFAULTSORT:Re Montagu's Settlement Trusts English trusts case law High Court of Justice cases 1987 in United Kingdom case law

Facts

Judgment

See also

Notes

References