Ch 12 - Remedies Against Trustees - Personal Claims Flashcards
What are the two types of claims a trust can bring against a wrongdoing trustee?
- Personal claims: For monetary compensation.
- Proprietary claims: For the return of trust property or substitute property.
What must be established to bring a personal claim against a trustee?
The trustee must be in breach of trust, and causation must be established (i.e., the breach caused the loss).
Can a trust sue a co-trustee for actions taken by another trustee?
No, trustees are not automatically liable for the actions of co-trustees. The individual trustee must be in breach for a personal claim to be brought.
What happens if multiple trustees breach trust?
The beneficiaries can sue all breaching trustees or just one for the full loss.
How is causation established in a personal claim?
The trust must prove that the trustee’s breach directly caused the loss, using the ‘but for’ test.
What defenses are available to a wrongdoing trustee?
- Exemption clauses in the declaration of trust.
- Adult beneficiaries consented to the breach.
- The court can excuse the trustee if they acted honestly and reasonably (Section 61 of the Trustee Act 1925).
What is the time limit for bringing a personal claim for breach of trust?
The claim must be brought within six years from the breach. For minor beneficiaries, the time starts when they turn 18 or when their interest falls into possession after a life tenant’s death.
Is there a time limit for fraudulent breaches of trust?
No, there is no statutory limitation period for fraudulent breaches of trust.
What can a defending trustee do if other trustees also breached the trust?
The defending trustee can seek indemnity or contribution from co-trustees.
What is the difference between indemnity and contribution for a trustee?
Indemnity: Full recovery from another breaching trustee, often in cases of fraud or professional influence.
Contribution: Partial payment or indemnification from other trustees based on their responsibility.
