The will of the late Betty Boothby, a resident of Toowoomba, who died on 31st July 2017, included the following provision
The will of the late Betty Boothby, a resident of Toowoomba, who died on 31st July 2017, included the following provision:- I give $1,000,000 to my brother, Albert Arnott (‘my trustee’), on trust to invest that sum in any form of investment permitted by law for trustees and, until the tenth anniversary of my death, to make distributions of the income of those investments to such of my grandchildren in such amounts and at such times as my trustee shall determine in order to assist with their education and advancement in life. On the tenth anniversary of my death, my trustee shall pay the capital of the fund and any undistributed income to the Salvation Army. Albert invested the $1,000,000 in bank term deposits. The rate of interest on the deposits barely kept pace with the rate of inflation. In February 2022, Albert was playing a round of golf with his friend, Fred Flintoff. (Both Albert and Fred were airline pilots but are now retired.) Fred told Albert that shares in Flash in the Pan Gold Mining Limited were ‘undervalued and the price is likely to rise substantially in the next month or so’. Subsequently, Albert closed one of the term deposit accounts and invested $450,000 in shares in Flash in the Pan. At 30th September 2022, there are three living granchildren of Betty Boothby – Caitlin, David and Eric. Caitlin is in her third year studying medicine at the University of Queensland. David is in his second year studying law at Queensland University of Technology. Eric has just commenced an apprenticeship in plumbing. Albert has never made any distributions to Caitlin or David, in spite of repeated requests that he provide assistance with meeting their university-related expenses. Albert has never given Caitlin or David reasons for refusing these requests. By contrast, when Eric commenced his plumbling apprenticeship, Albert made a distribution from the trust funds to Eric to assist Eric to buy work clothes and boots. The distribution to Eric exhausted the income of the trust fund for the previous twelve months. Caitlin and David recall that Albert had previously expressed negative attitudes towards studying at university. When David told Albert about his intention to study law, Albert responded that "university students just go to parties and take drugs’ and that ‘all lawyers are drunks and thieves’. On 15th September 2022, there was a sudden fall in the value of the shares in Flash in the Pan Gold Mining Limited, as rumours circulated that Flash in the Pan was in financial trouble. Albert did not hear these rumours and retained the shares. On 3’d October 2022, Flash in the Pan went into liquidation and its shares were of no value. No dividend had been paid in respect of the Flash in the Pan shares since Albert had acquired the shares. Answer the following questions:- 1. Can Caitlin and David challenge Albert’s decisions to refuse to make distributions in their favour? (10 marks) 2. Did Albert’s dealings with the shares in Flash in the Pan Gold Mining Limited amount to a breach of trust? (10 marks) Do not discuss remedies in respect of any breach of trust committed by Albert
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