Remedies against breach Flashcards
What is a personal claim against trustee?
against the trustee themselves - only as good as personal solvency of trustee.
What is a proprietary claim against trustee?
It is against the asset purchased - more advantageous if it has gained value/
What is a substitution of property?
If a trustee has sold a trust property and purchased another property with proceeds then beneficiaries can claim new asset.
What are beneficiaries options if Trustee uses a mix of trust funds and their own to purchase asset?
A) claim proportionate interest in the asset.
B) Sue trustee for compensation for the loss and take charge over mixed asset.
What are beneficiaries options if Trustee transfers trust money into their own bank and then makes several withdrawals.
1) Tracing rule 1 - Re Hallet = they have spent their own money first
2) tracing rule 2 - Re Oatway = Beneficiary can choose whatever means it isn’t dissipated.
What are beneficiaries options if Trustee mixes two trusts funds in own bank and makes various withdrawals?
1) Tracing rule 1 - Claytons case = FIFO
2) Tracing rule 2 - Clowes v Vaughan = rateable share in remaining assets.
What is equitable person recipient liability?
A third party is allowed to treat trust property as their own up until the point they are made aware that it is trust property. They will not be liable if they were not aware.
With third parties what is a bona fide purchaser for value without notice ?
Had no idea property belonged to trust, they take that free from any equitable interest and no proprietary claim can be sustained.
What is a wrongdoing recipient with third parties?
If they knew then harsher tracing rules apply.
what is an Innocent volunteer with third parties?
If no notice but provided no consideration then can bring a proprietary claim against innocent parties.
What are wrongdoing tracing rules?
- Assert proprietary claim against asset.
- When use it to purchase to buy anything new, proprietary claim against new asset.
What must be true for a personal claim to succeed?
Must be a breach in trust and that the trust has suffered a loss to be liable.
What are elements of a knowing recipient in breach of a trust ?
- Disposal
- Receipt - receipt of assets by the D for his own use and benefit
- knowledge
