16 - Breach of Trust

Source - Unlocking Trusts

This is another important chapter under Trust Law. Following is it summary:

1) Breach of trust and measure of liability - Based on the restitution principle. See how it works in the case unauthorized investment, failure to dispose off unauthorized investments, improper sale of authorized investment, trustees making profit, tax deductibility and interest

2) Contribution and indemnity between trustees - Joint and several liability, contribution under Civil Liability (Contribution) Act, see how indemnity it works in case of advice from a solicitor, the rule of Chillingworth v Chambers

3) Defences to an action of breach of trust - (a) Knowledge and consent of beneficiaries (b) Impounding the interest of beneficiaries (c) Relief u/s 61 of Trustees Act (d) Limitations and latches (equity aids the vigilant and not the indolent)

4) Proprietary remedy - Tracing (a) under common law (b) under equity (Watch out that there many cases and principles here). Also see limitations to tracing.