Trustees Act 2000 is an Act which regulates the duties of trustee in the English legal system, this Act sets out the duties and powers of a Trustee. Below I shall explain the facts of the case we are analysing (Louise V Stephen and Charlotte).
Alan died in 2006, He settled £200,000 on trust for his children, Stephen and Charlotte with equal shares, he also asked his wife Louise to manage the trust fund for the benefit of his children and out of respect for his will, Louise agreed despite having knowledge about investment. She kept the money for the first four years (2006-2010) in her current with HSBC, the fund went up to £204,000 in December 2010 instead of the £240,000 it should have gone up to if it had been invested. January 2011, Louise heard from a friend Derek who told her that investing in a gas exploration company “FrankGas Ltd” could be profitable. But she didn’t care to find out if he had any professional qualifications. After comparing other companies with FrankGas Ltd, she finally followed Derek’s advice and invested the entire £204,00 in the shares. In 2003, the shares dropped to £170,000.
Under the Trustee Act 2000, Section 5(1) provides that “Before exercising any power of investment, whether arising under this part or otherwise, a trustee must (unless the exception applies) obtain and consider proper advice about the way in which, having regard to the standard investment criteria, the power should be exercised (Pettit, 2012). In Jeffery v Gretton and Russell, the high court held that trustee holding a dilapidated property should have sought professional advice as to the suitability of carrying out repairs or whether to sell the property (Panesar, 2012).
The appellant (Louise) who failed to obtain any form of professional advice before investing the entire fund with FrankGas Ltd even tho she took interest in other companies and investment markets, with this breach of duty of care set out in s5 of the trustee Act to obtain and consider...