Remedies for breach of trust

Remedies for breach of trust

1. Personal liability

   • Against trustee
   • joint & several liable, unless:
     • only one trustee fraudulent
     • trustee is a solicitor and influences
     • trustee is a beneficiary and participates
   • cannot pursue if fully aware and consented to breach
   • defences
     • s61 TA 1925
     • Limitation: 6 years
     • exemption clause
   • compensate loss suffered by trust
   • liable for own breach, unless:
     • stood by and watched
     • failed to act on discovery
     • released by trustee or beneficiary

2. Proprietary liability

   • Tracing
     • Common law
       • must have legal interest
         • only trustee
       • property identifiable through out
       • defence: third party gave consideration
     • Equitable
       • Property held by someone in fiduciary position
         • Beneficiary can claim
       • Bona Fide purchaser has unanswerable claim
       • leads to proprietary right to propert
     • Mixed funds
       • beneficiary has first charge
       • trustee presumed to withdraw own funds first
       • beneficiary entitled to assets purchased with funds
   • claim to trust property or product of trust property

3. Liability of strangers

   • stranger: someone not appointed as trustee nor beneficiary
   • trustee de son tort: acting like a trustee
   • knowing receipt
     • had knowledge of breach
     • received trust property with that knowledge
   • dishonest assistance
     • Royal Brunei test
   • creates constructive trust