Hostile claims by beneficiaries--the burden of costs: Close Trustees (Switzerland) SA v Vildosola

Trustees were incurring significant costs in defending hostileproceedings brought against them by the life tenant of the trust.To ensure that they would ultimately be able to reimburse themselvesout of income, the trustees proposed to retain part of futureincome to form reserve fund, but the Court was not preparedto sanction that proposal. The most significant aspect of thiscase was the Court's analysis of what principles might ultimatelybe applied to determine whether income or capital would bearthe costs of indemnifying the trustees.