you're reading...
Corporate trustee, Deed of Trust, Fiduciary duties, Removal of trustees, Trustee retirement, Trustees, Trusts

No fraud here

Legler v Formannoij relates to a spirited challenge to the appointment of a corporate trustee to act as the sole trustee of a trust. The arguments put to the court included the contention that this was a fraud on a power as the director and one of the two shareholders was formerly a trustee and was also a beneficiary.

Downs J carefully assessed the chronology of events noting as follows:

Importantly, Maria was not the sole shareholder. See Jacomb v Jacomb, where Cooke J differentiated between a corporate trustee where two of three trustees were the sole directors and shareholders of the third trustee (such that the third (corporate) trustee had no independent voice) and where there was an independent shareholder.

The case highlights relevant considerations regarding the use of corporate trustees and compliance with the terms of the trust instrument. Arguments that the appointment of the corporate trustee was a fraud on a power were unsuccessful. In this regard also see Shaky Ground, which considers whether the exercise of a power to appoint and remove beneficiaries is a fraud on a power.



No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s



%d bloggers like this: