Chapter 12 Scenario Questions

Bert, Barry, and Belle are beneficiaries under a trust. The trustees are Terence and Tyler. The beneficiaries want to direct the trustees to appoint Anna as a trustee. The trust instrument nominated Delilah as responsible for appointing trustees, but Delilah has since died. Bert, Barry, and Belle are all over the age of 18, they all have capacity, and they are absolutely entitled to the trust property. They phone the trustees and direct them to appoint Anna.
What should the trustees do?

Bert, Barry, and Belle cannot direct the trustees to appoint a person to act as trustee, so the trustees must ignore the request.

The trust instrument nominated Delilah as responsible for appointing trustees, so no one is able to do so.

The trustees must comply with the beneficiaries' request.

The trustees would have to comply with the beneficiaries' request, but it was not in writing, so they cannot do so.

Trevor, Tillie, and Tyrone are trustees. The trustees are under a duty to sell the property but have a power to postpone the sale if they wish. Trevor votes to sell the property but Tillie and Tyrone vote to postpone the sale. The trust instrument allows for majority decision-making.
What is the result?

The decision was not unanimous so the duty to sell prevails over the power. They are obliged to sell the property.

The decision was not unanimous, so they have to go back and reach a decision.

Trustees only ever need to decide by majority, so the sale is postponed.

The trust instrument allows the trustees to act by a majority, so the sale is postponed.

Peter is a trustee. In exercising his fiduciary powers, Peter signs the relevant documents given by Simone, the settlor of the trust.
What is the consequence of Peter simply signing the documents given to him?

Peter does not have to give reasons for his decision, so it does not matter how he exercises his powers, even if he just signs documents given to him.

The exercise of the powers will be voidable as Peter has acted dishonestly.

The exercise of the powers will be void because Peter failed to exercise his discretion.

The beneficiaries can apply to the court as the trust is a sham.

Gregory is a trustee and exercises a power of appointment in favour of Gemma. Gregory sought tax advice before exercising the power, but the tax advice was incorrect, and Gemma was liable to pay a large amount of tax.
Under the rule in Re Hasting's Bass, what would the result be?

Gregory acted in bad faith, so the exercise of the power was void.

Gregory failed to exercise his discretion, so the exercise of the power was void.

Gregory failed to consider the tax consequences, so the exercise of the power was voidable and may be unwound.

Gregory sought professional advice, so the exercise of the power was valid.

Gregory is a trustee and exercises a power of appointment in favour of Gemma. Gregory sought tax advice before exercising the power, but the tax advice was incorrect, and Gemma was liable to pay a large amount of tax.
Under the reformulation in Pitt v Holt, what would the result be?

Gregory failed to consider the tax consequences, so the exercise of the power was voidable and may be unwound.

Gregory sought professional advice and so has acted reasonably and cannot unwind the exercise.

Gregory sought professional advice, but the advice was wrong and so the exercise of the power was voidable.

Gregory should not have followed the advice and so acted in breach of fiduciary duty such that the exercise of the power was voidable.

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