Alsop Wilkinson v Neary and Others
| Jurisdiction | England & Wales |
| Judgment Date | 25 October 1994 |
| Date | 25 October 1994 |
| Court | Chancery Division |
Chancery Division
Before Mr Justice Lightman
Trust - dispute - duty of trustee
A trustee against whom hostile litigation had been brought challenging the validity of a settlement did not have a duty to defend the trust but rather was obliged to remain neutral and offer to submit to the court's directions leaving it to the rival claimants to the beneficial interest in the trust property to fight their battles.
Mr Justice Lightman so held in the Chancery Division, when delivering a reserved judgment in open court, after a hearing in chambers, dismissing the summons of (i) Elizabeth Mary Le Poidevin, (ii) Geoffrey William Fisher and (iii) Abacus Trustees (Jersey) Ltd, trustees of property settled upon them by the first defendant, Anthony Neary, seeking directions whether or not to defend an action brought by the plaintiff, Alsop Wilkinson, for an order under section 423 of the Insolvency Act 1986 setting aside the trusts.
Miss Sonia Proudman, QC, for the trustees; Miss Lindsey Stewart for the plaintiff; Mr Robert Sterling for the first defendant.
MR JUSTICE LIGHTMAN said that the trustees had issued a summons in the plaintiff's action seeking directions whether or not to defend the plaintiff's action, in effect a BeddoeELR application ((1893) 1 Ch 547).
The beneficiaries under the trusts were the settlor's wife, who had threatened proceedings for breach of trust if the trustees failed to defend the action, infants and unascertained persons.
His Lordship said that trustees might be involved in three types of dispute:
1 A "trust dispute", namely one as to the trust on which they held the subject matter of the settlement which might be friendly, for example, the true construction of the trust instrument, or hostile, for example, a challenge as in the present case to the validity of the settlement;
2 A "beneficiaries dispute", namely one with one or more of the beneficiaries as to the propriety of any action which the trustees had taken or omitted to take and
3 A "third party dispute", namely one with persons other than beneficiaries in respect of rights and liabilities, for example, in contract or tort, assumed by the trustees in the course of administration of the trust.
Trustees were entitled to an indemnity against all costs, expenses and liabilities properly incurred in administering a trust and of the costs of proceedings properly brought or defended for the benefit of...
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Re Hall
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