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Breach of Trust (Defences (Beneficiary consents (Sui juris beneficiary…

- - - - Acted honestly, and...
      - Reasonably, and...
      - Ought to be fairly excused
        
        Perrins v Bellamy (1898) - Kekewich J: "absence of all dishonesty is a condition precedent to relief"
        
        Re Evans (1999) - did everything possible to find missing beneficiary and took out insurance - returned and tried to claim but court found missing beneficiary insurance preferred way to claim
        
        Dreamvar - recent case that is a good example of how high the threshold is - acted honestly and reasonably but defence not allowed - Dreamvar had lost a lost of money that couldn't be recovered, and the respondent had insurance - felt loss should fall on them - policy reasons
      - Burden of proof falls on trustee
      - Professional trustee vs amateur trustee
        
        National Trustee Co of Australasia v General Finance Co (1905) - circumstance should be taken into account
        
        Re Pauling's ST (1964) - not sufficient for trustee to have breached as a result of incorrect legal advice - but defence allowed in Perrins v Bellamy
  - - - Consents/acquiesces
      - Barred from suing for breach
        
        Fully informed
        
        Exercising independent judgement (no undue influence) - Re Pauling (1963)
    - - Beneficial interest impounded - Re Pauling (1963) - high threshold
      - Section 62 Trustee Act 1925
        
        Instigates
        
        Requests, or
        
        Consents in writing - this requirement applies only to consent, not instigation or request - Re Somerset (1894)
- - - - Trust deed
      - Statute
      - Common law
    - - In Target the loss was actually the result of a fraudulent property valuation, not the breach
    - - Equitable compensation + interest (Wallersteiner v Moir (No.2) (1975); Westdeutsche v Landesbank Girozentrale v Islington LBC (1996))
        
        Sometimes the value of the trust rises but there is a still a breach
- - - - Gains and losses - Bartlett v Barclays Bank Trust Co Ltd (No 1) (1980)
        
        Professional corporate trustee
        
        Majority shareholding
        
        Set-off - same speculative policy
- - - - Applies to trustees - s6(1)
      - Court has a broad discretion
        
        Contribution - "such [amount] as may be... just and equitable" - s2(1)
        
        Complete indemnity - s2(2)
        
        Courts are reluctant to do this
        
        Fraud - Re Smith (1896)
        
        Special qualifications
        
        Re Partington (1887) - Claimant actively misinformed by co-trustee - her will to act properly as a trustee had been overborne
        
        Head v Gould (1898) - claimant unable to obtain an indeminity merely because her co-trustee was a solicitor and handled the legal aspects of the trusteeship - distinguished from re Partington because Mr Gould did not use his influence to sway her
        
        Trustee-beneficiary
        
        Chillingworth v Chambers (1896) - where a beneficiary who is also a trustee has participated in the breach, they must indemnify the co-trustee to the extent of their beneficial interest - where it is insufficient, they share the excess liability equally
        
        Re Mulligan (1998) - where trustee-beneficiary is a life tenant and makes decisions benefitting them over remaindermen - co-trustees must act diligently to prevent this - not open to one trustee to defer to the wishes of the other
        
        Trustees are unequal
- - - - No limitation
      - E.g. Williams v Central Bank of Nigeria