Contentious Trusts Handbook has been accepted for publication

I am delighted to announce that my new, and seventh book, the ‘Contentious Trusts Handbook’ has been accepted for publication by the Law Society in 2020.
The book currently runs to 146,610 words, and the Preface and List of Contents are set out below.

I would like to thank:
Toby Graham, Head of Farrer & Co’s contentious trusts and estates group, who is writing the Foreword;
Pandora Mather-Lees, who is a distinguished Art Historian: https://www.artonsuperyachts.com/;
Hector Robinson QC, who is a partner in the international offshore law firm Mourant, and is Head of the Cayman Islands Practice Group for International Trust and Private Client Litigation. www.mourant.com; and
Anthony Trace QC, 4 Pump Court, Temple, England, who won ‘Mediator of the Year’ in the Innovation & Excellence Awards 2019.
for their expert contributions.

Preface
Trust litigation takes place within a sophisticated theoretical and policy framework in which the legal principles governing: (i) the exercise of powers; (ii) the performance of duties; (iii) the rights of beneficiaries; and (iv) the equitable remedies and defences available on a specific set of facts, have been formulated, applied, and developed by courts of equity in England and throughout the common law world, for centuries. Consequently, the building blocks of equity are almost monolithic. The Contentious Trusts Handbook aims to provide a clear practical and comprehensive exposition of the English law principles that apply in commonly encountered trust disputes, and of the practice and procedure governing trust litigation in the English courts. The book also discusses mediation and arbitration in trust disputes, and is accompanied by a suite of precedents.
My aim throughout, has been to write a practical, accessible and authoritative handbook for the busy practitioner, which is a portable reference that covers all aspects of the law and practice governing trust disputes in the English courts. The book contains a comprehensive bibliography of current research sources, and practitioners should note that the new 34th edition of Snell’s Equity has just been published, and the 20th edition of Lewin on Trusts is due to be published in January 2020.

Many of the principles discussed in this book also apply to commercial disputes involving allegations of breach of fiduciary duty/trust. This has recently been illustrated by:
(i) Faichney & Anor v. Aquila Advisory Ltd & Ors [2018] EWHC 565 (Ch), a breach of fiduciary duty/constructive trust claim in which the judge applied the law of illegality and the doctrine of ex turpi causa to breach of fiduciary duty claims following the recent Supreme Court cases of Bilta v Nazir [2016] AC 1 and Patel v Mirza [2017] AC 417;
(ii) Credit Agricole Corporation and Investment Bank v. Papadimitriou (Gibraltar) [2015] UKPC 13, in which the proceeds of an antique collection worth $15 million was misapplied in breach of trust, and the claimant pursued a proprietary claim against the bank which received the money; and
(iii) Stobart Group Ltd v. Tinkler [2019] EWHC 258 (Comm), in which Judge Russen QC found that the former Chief Executive of the infrastructure group Stobart, had acted in breach of his fiduciary duties in: speaking to Stobart’s investors; criticising management; and agitating for the removal of the company’s chairman.
(See also, ‘Breach of Fiduciary Duty Claims and the Quiet Fiduciary Thesis’, by Carl Islam, Trusts & Trustees, Volume 25, Issue 2, March 2019, pp 237–265).
As Lord Briggs of Westbourne said in the 2018 Denning Society Annual Lecture, ‘Equity in Business’, delivered in the Old Hall at Lincoln’s Inn, ‘There can be no general principle which ring-fences all commercial dealings from equitable intervention. Nor is it right that there is less need for the intervention of equity in business rather than personal or family relationships. Business people can be just as abusive, unconscionable and plain beastly to each other as members of a family.’
Company and commercial disputes (including joint-venture and shareholder disputes) that hinge upon proof of breach of fiduciary duty, are on the increase. The bridge that fuses the traditional technical skill-set of company and commercial lawyers with that of trust lawyers (who in solicitors firms used to live in separate boxes), is however, a relatively recent phenomenon outside of the Chancery Bar. I therefore hope, that this book will also be of value to Solicitors who need to apply first principles when confronted with complex and novel facts that engage the ‘super-highway’ of equitable remedies and principles, when proceedings are issued in any of the lists and courts that constitute the Business and Property Courts of England and Wales. That is how equity evolves. Furthermore, for fiduciary disputes, the Rolls Building in London, is used by litigants as the venue to determine high value disputes, worldwide.
Carl Islam
1 Essex Court
Middle Temple, London
Michaelmas Term 2019

Contents

Foreword
Acknowledgments
Preface
CHAPTER 1 – INTRODUCTION
1.1 Aim
1.2 Introduction
1.3 Classification of trust claims
1.4 Trusteeship
15 Trusts and powers
1.6 Terms of the trust
1.7 Irreducible core of the trust
1.8 Duties
1.9 Decision making
1.10 Breach
1.11 Rights to information
1.12 Equitable jurisdiction
1.13 Remedies
1.14 Liability of trustees
1.15 Standing
1.16 Case preparation
1.17 Letter before claim
1.18 Proof
1.19 Disclosure
1.20 ADR
CHAPTER 2 – SUPERVISORY JURISDICTION OF THE COURT
2.1 Introduction
2.2 Supervisory jurisdiction
2.3 Limits
CHAPTER 3 – POWERS OF TRUSTEES
3.1 Introduction
3.2 Administrative or managerial powers
3.3 Dispositive powers
3.4 Powers of appointment
3.5 Simple general powers
3.6 Special powers
3.7 Duties of donees
3.8 Delegation
3.9 Failure to exercise a power
3.10 Fraud on a power
3.11 Rule in Hastings-Bass
CHAPTER 4 – DUTIES OF TRUSTEES
4.1 Introduction
4.2 Fiduciary duties
4.3 Fiduciary relationships

4.4 Scope and content
4.5 Self-dealing rule
4.6 Fair dealing rule
4.7 Statutory duty of care
4.8 Investment

CHAPTER 5 – BREACH
5.1 Introduction
5.2 Breach of trust
5.3 Breach of fiduciary duty
5.4 Quiet fiduciary thesis
5.5 Wrongful distribution
CHAPTER 6 – THIRD PARTY LIABILITY
6.1 Introduction
6.2 Trustee de son tort
6.3 Unconscionable receipt
6.4 Accessorial liability
6.5 Summary
CHAPTER 7 – CLAIMS
7.1 Introduction
7.2 Personal and proprietary claims for breach
7.3 Construction
7.4 Directions
7.5 Benjamin order
7.6 Removal of a trustee
7.7 Declaration of a beneficial interest in property
7.8 Sham trusts
7.9 Illusory trusts
7.10 Capacity
7.11 Undue influence
CHAPTER 8 – EQUITABLE REMEDIES
8.1 Introduction
8.2 Personal and proprietary remedies
8.3 Election
8.4 Rescission
8.5 Equitable compensation
8.6 Account in common form
8.7 Account of profits
8.8 Tracing
8.9 Injunctions
CHAPTER 9 – DEFENCES
9.1 Introduction
9.2 Limitation
9.3 Laches
9.4 Exemption clauses
9.5 Section 61 TA 1925
9.6 Consent
9.7 Set-off
CHAPTER 10 – LITIGATION
10.1 Introduction
10.2 CPR
10.3 Chancery Division
10.4 County Court
10.5 Transfer
10.6 Claim
10.7 Defence
10.8 Case management
10.9 CPR compliance and sanctions
10.10 Disclosure
10.11 Pre-action disclosure
10.12 Non-party disclosure orders
10.13 Norwich Pharmacal Orders
10.14 Bankers Trust Orders
10.15 Privilege
10.16 Part 18 Requests
10.17 Presumptions
10.18 Inferences
10.19 Trial
10.20 Adducing evidence at trial

CHAPTER 11 – COSTS
11.1 Introduction
11.2 Beddoe Orders
11.3 Non-party costs orders
11.4 Security for costs against a non-party
11.5 Part 36 Offers
11.6 Calderbank Offers

CHAPTER 12 – ADR & SETTLEMENT
12.1 Introduction
12.2 Methodology
12.3 Communication
12.4 Mediation
12.5 Arbitration

APPENDICES
A Precedents
A1 Beddoe Application – Details of Claim
A2 Benjamin Order
A3 Calderbank Offer (Equitable compensation)
A4 Calderbank Offer (Rescission)
A5 Confidential Note for Mediator
A6 Draft CMC Directions Order
A7 Draft Order (Interim application)
A8 Initial Disclosure List
A9 Mediation Position Statement & Offer
A10 Norwich Pharmacal Order
A11 Particulars of Claim (Breach of Fiduciary Duty/Accessory Liability/Powers of Investment/Information)
A12 Particulars of Claim (Breach of trust)
A13 Particulars of Claim (Liability to account)
A14 Particulars of Claim (Tracing)
A15 Part 36 Offer (Equitable compensation)
A16 Part 36 Offer (Rescission)
A17 Request For Further Information (‘RFI’) – Letter
A18 Skeleton Argument
A19 Tomlin Order and Tomlin Schedule
A20 Trusts of Land and Appointment of Trustees Act 1996, section 14 Application

B Notes
B1 Art & Heritage Assets – Duties of Trustees, by Pandora Mather-Lees
B2 Trust Litigation In The Cayman Islands, by Hector Robinson QC
B3 A Mediator’s View by Anthony Trace QC, 4 Pump Court, Temple, England

C Bibliography

B – SV = R

When margin is thin, overheads high, product over-priced in a competitive global market, and loss inevitable because of:

(a)  delay in completion/delivery; and

(b)  increased costs of:

      (i)   materials/manufacture;

(ii)  regulatory compliance (because our regime is not aligned with that of our biggest market); and

      (iii) increased tariffs,

the cumulative effect = RSV.

It is a rule of the jungle that you are going to go out of business unless you can preserve and increase SV by relocating to a jurisdiction where you can earn a profit because in that environment the business will not suffer any RSV effect.

RSV ultimately means redundancy (‘R‘).

Redundancy reduces the potential for growth.

That reduces the prospect of future investment.

B may cease to be economically viable as a going concern.

Therefore, unless another B exists or can be created to fill the gap, this means poverty for entire communities whose wealth and standard of living depends upon strategic industries who place SV before politics (and as a fiduciary it is the legal duty of a company director to maximise shareholder value). That is because the existence of a business does not depend upon ‘sovereignty’ and ‘democracy’, it depends upon SV.

Government cannot fill the gap with infrastructure spending. All that does is to increase the structural deficit = a higher burden of interest payments.

There used to be a surplus. Now there is a mountain of debt.

What needs to be done to reduce this debt is to increase productivity.

How can you do that if you cannot sell your product because you are uncompetitive?

This spiral leads to a shrinking economy in which operating costs are higher, interest rates for borrowing will become higher, and to salvage what they can or to plug the hemorrhage, uncompetitive businesses will cease trading.

For those owners whose failing businesses have inadvertently become sitting ducks for take-over (e.g. because they possess a brand name, IPR, and know-how which can be exploited, e.g. by: firing the workforce; keeping on and relocating key talent e.g. designers; selling the land and buildings to developers; and then manufacturing in a more profitable environment) – Britain will not be made great again. It will become a hunting ground for vulture-capitalists and hedge fund managers whose only loyalty is to SV. If you think the predators will be British examine who owns some of the best known brands on the high street and premier league football clubs. Ask yourself who is going to make money out of Brexit: Hedge Fund Managers (and their global clients); Property Developers; or the surviving owners of family owned and run small businesses – which are the backbone of the British economy? Is Brexit about the opportunities that will exist to acquire, break-up, re-structure and sell-on British businesses, or is it all about you?