Nestle v National Westminster Bank plc [1992] EWCA Civ 12 is an English trusts law case concerning the duty of care when a trustee is making an investment.
Facts
A testator died in 1922 and named his widow, two sons and wives and one grandchild as the beneficiaries. The wife got the family home as a life interest and a tax free annuity. The two sons got annuities between age 21 and 25 and life interests in half the trust with a power to appoint income to their wives and Georgina, the grandchild, got the remainder. In 1922 there was £53,963 and in 1986 when Georgina became entitled, there was £269,203. She claimed that had the fund been invested properly it would have been worth well over £1m. The trust company had failed to conduct periodic reviews of investments. They invested in tax-exempt gilts because the sons were domiciled abroad, meaning exemption from inheritance tax.
Judgment
High Court
Hoffmann J (as he then was) held that there was no breach of the duty of care. He said the following.[1]