Trusts

Investment decision by trustee - alleged breaches of trust during decision-making process - trustee liable only if ultimate decision one that no reasonable trustee could makeWight and others v Olswang: ChD (Neuberger J): 6 April 2000

The defendant was the co-trustee of a fund consisting largely of a holding in a quoted public company.

The claimants, who were the beneficiaries of the trust, brought an action for breach of trust, contending that by reason of various alleged breaches of the trust, the trustees had lost chances in May and September 1991 to sell the shares at a considerably higher price than that ultimately obtained.Alan Steinfeld QC (instructed by Barlow Lyde & Gilbert) for the defendants.

Charles Turnbull (instructed by Hecht & Co) for the claimants.Held, summarily dismissing the claim, that even if there had been a breach of trust, the claim could only succeed if no man of ordinary prudence, managing his own affairs, and in the position of the defendant in May and September 1991, would have retained the shares as at that time; that it would be surprising if a trustee should have his duty assessed in a wholly different way when it consisted of failing to sell shares from that of a professional man having his breach of duty assessed for a similar alleged failure; that, accordingly, irrespective of breaches of trust during the decision-making process, the beneficiaries of a trust did not have a claim against a trustee who made an investment decision unless they could establish that the decision was one that no reasonable trustee could have made; and that, since the decision to retain the shares did not satisfy that test, there was no claim against the defendant.