Personal claims Flashcards
What is a personal claim for a trustee?
A claim for monetary compensation against a wrongdoing party.
They must satisfy the claim out of their own pockets.
Are trustees vicariously liable for the actions or omissions of their fellow trustees in respect of a personal claim?
No - the individual trustee themselves must be in breach of the trust.
Can more than one trustee be in breach?
Yes, for example where a co-trustee is passive to another trustee’s actions.
Who can beneficiaries choose to pursue if there is more than one trustee in breach?
They can choose to pursue one person or all them from from the same loss.
What must be established for a personal claim against a trustee?
Breach of the duty and causation (the ‘but for’ test).
What defences are available to a trustee for a personal claim from a beneficiary?
Valid exemption clause in the trust instrument.
All adult beneficiaries consented.
The court has discretion to excuse them when they acted honestly and reasonably (though this is a high threshold).
What are the limitation periods to bring a personal claim against a trustee?
No limitation period for fraudulent breaches of trust.
Six years for all other breaches.
The time period will start when the interest falls into possession (when life tenants die) and when minor beneficiaries turn 18.
Can trustees recover anything from their co-trustees?
An indemnity - for the full cost.
Contribution from the court which is just and equitable according to their responsibility.
What happens to recovery of money if a breach of trust is committed at the instigation of a beneficiary?
The court has the ability to impound some or all of the beneficiary’s equitable interest to meet the claim.
This depends on whether the beneficiary benefited or intended to benefit.
