Topic 2: Performance: Trust remedies

Question 0

What is a proprietary claim and what case?

Answer 0

• It is a claim for an asset in the trustee’s hands, or a third party’s hands that represents the misappropriated trust property: Foskett v McKeown

Question 1

Which remedies for a breach of trust have a perfectionary goal?

Answer 1

1. Proprietary claim of tracing into assets; and
2. Equitable Compensation; and
3. Injunctions to restrain breach of trust

Question 2

What are the facts of Foskett v McKeown?

Answer 2

• RECALL trustee misappropriating funds to pay premiums of life insurance policy
• trustee committed suicide
• beneficiaries wanted claim for money from life insurance policies

Court held:
- beneficiaries entitled to a proportionate share of insurance pay out.

Question 3

When would a beneficiary seek equitable compensation?

Answer 3

• where they can’t point to an asset representing misappropriated trust property.
• It is a personal claim against the trustee to place the trust estate in the position had it carried out it’s duties.

Question 4

What are the main principles for equitable compensation and case?

Answer 4

Re Dawson:

• No remoteness rule, unlike Common Law Damages
• Must establish but for, all losses flowing are recoverable.

Question 5

Where would an injunction for a breach of trust be sought?

Answer 5

In the circumstances where an officer of an unincorporated association breaches one of the rules o the club where the association holds property on trust, an injunction should be available: Wylde v AG (NSW)

Question 6

What are the facts of Wylde v AG?

Answer 6

• Defendant was Wylde, was a bishop of Church in NSW.
• He created a red book which modified constitution of the Church of England that it was tied to.
• The Church in NSW held property (namely the houses and property used to house priests) on trust for Church in England.
• Red book was influenced by Roman Catholic influences and changed how church was used.
• Injunction sought to restrain use of the red book.

Courts held:

• First instance, injunction granted because it was unauthorised use of trust property (the church) for an unauthorised purpose.
• HC said, simply breaking rule of church is not sufficient, something more needed.
• Injunction was narrowed down.

Dissent:
- Court shouldn’t get involved because it’s internal affairs and depended on Doctrine of Church

Question 7

What is another case for injunction for breach of trusts?

Answer 7

Scandrett v Dowling

Question 8

What are the facts of Scandrett v Dowling?

Answer 8

• The defendant announced in 1992, that he was going to ordain someone as priest who was female. At the time none had been ordained in Australia
• P sought injunction to restrain him as D didn’t have authority to ordain woman priests without the General’s giving consent.
• By that stage, the church no longer tied to England in UK.
• Constitution of the church said nothing about whether a woman could be ordained.

Court held:
- Injunction refused. Not a matter for courts to answer (adopted dissenting judgment in Wylde)