As a general rule, directions given in a trust deed must be followed by the trustee. It follows that if the unit trust deed directs the trustee to follow the decision of the manager in the making or disposal of investments, the direction is imperative. But is this always the case?

Several cases in which third parties were given powers to direct the trustees have bearing on this point. Three aspects emerged. First, in all these cases, the courts approached this as a question of construction of the particular power involved. Read the rest of this entry »