Warrack's Trustees v. Warrack [1919] ScotLR 472 (14 June 1919)

Warrack's Trustees v. Warrack [1919] ScotLR 472 (14 June 1919)

Shipping shares are wasting securities within the meaning of the trust-deed. Trustees, having absolute discretion, made annual apportionments of dividends between capital and income, and these appropriations, once made and minuted without reservation, are final and binding on all parties. Trustees cannot subsequently reallocate sums from capital to income.

Citation
[1919] ScotLR 472
Parties
First Parties (trustees): John Warrack and others (Trustees under the trust-disposition and settlement of the late John Warrack); Second Parties (liferent Beneficiaries): Charles Cumming Warrack and others (Surviving liferent beneficiaries); Third Parties (fiars/contingent Fiars): John Warrack and others (fiars or contingent fiars)
Jurisdiction
Scotland
Judgment Date
14 June 1919
Procedural Posture
Special Case (court of Session, Inner House, Second Division) / Judgment on Questions of Law Regarding Trust Administration
Outcome
First and second questions of law answered in the affirmative; appropriations were final and within trustees' powers; remaining questions not answered.
Legal Topics
Wasting Securities, Trustee Discretion, Apportionment of Returns, Capital Vs Income, Finality of Appropriation
Trusts and Estates Property Law Wasting Securities Trustee Discretion Apportionment of Returns Capital Vs Income Finality of Appropriation

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Parties

John Warrack and others (Trustees under the trust-disposition and settlement of the late John Warrack)

First Parties (trustees)

Charles Cumming Warrack and others (Surviving liferent beneficiaries)

Second Parties (liferent Beneficiaries)

John Warrack and others (fiars or contingent fiars)

Third Parties (fiars/contingent Fiars)

Procedural Posture

Special Case (court of Session, Inner House, Second Division) / Judgment on Questions of Law Regarding Trust Administration

Legal Issues

  1. 1 Whether shipping shares are 'wasting securities' under the trust-deed
  2. 2 Whether trustees' annual apportionments of dividends between capital and income were final and irrevocable
  3. 3 Whether trustees could reallocate surplus dividends previously credited to capital as income

Ratio Decidendi

Shipping shares are wasting securities within the meaning of the trust-deed. Trustees, having absolute discretion, made annual apportionments of dividends between capital and income, and these appropriations, once made and minuted without reservation, are final and binding on all parties. Trustees cannot subsequently reallocate sums from capital to income.

Court Disposition

First and second questions of law answered in the affirmative; appropriations were final and within trustees' powers; remaining questions not answered.

Orders

  • Trustees' annual apportionments of dividends between capital and income are final and irrevocable.
  • No further apportionment or reallocation from capital to income is permitted.