Bartlett v Barclays Bank Trust Co Ltd

Bartlett v Barclays Bank Trust Co Ltd 1 Ch 515 in an English trusts law case. In it Brightman J gave a comprehensive discussion of the duties of trustees in connection with companies whose shares are part of the trust property. Despite the commonly used name of the rule, the case only restated law that had been accepted since Speight v Gaunt.

Facts

Barclays Bank was the sole trustee of the Bartlett trust, and the sole asset of the trust was 99.8% of the issued shares in the family company. On the company board were two surveyors, an accountant and a solicitor. The trustee appointed none. In an attempt to raise cash, the trust appointed merchant bankers to consider taking the company public. The bankers advised that a public offering would be much more successful if the company expanded its business from managing property to developing property as well. Barclays Bank as trustee agreed to this policy (so long as the income available to the beneficiaries was not affected). The board then embarked on speculative developments, one of which ended in disaster when planning permission could not be obtained for a large development (the Old Bailey project), and the trust suffered a significant loss.

Judgment

Brightman J held that the bank, as trustee, had not discharged its duty as trustee in failing to supervise the new ventures of the company. He held that, given the size of the shareholding, the bank should have obtained the fullest...
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