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Trustees (Rights of Trustees (Right to Call upon Bs for (authorised) costs…
Trustees
Rights of Trustees
Right to Call upon Bs for (authorised) costs incurred by the T: Hardoon v Belilios Cf JW Broomhead (VIC) Pty Ltd (in liq) v J W Broomhead Pty Ltd where B only liability in proportion to B interests and loss carried by the T.
Right to reimbursement and exoneration: By trust instrument Franknelly Nominess PL v Abrugiato; TA 1973 s 72
Right to draw directly from trust funds to discharge their duties: Savage v Union Bank of Australia Ltd. If expenses not properly incurred, indemnity denied. Must first make good any loss from breach of trust. 'Clear accounts' rule: RWG Management Ltd v Comm for Corporate Affairs
Right to contribution: TA s 71, failure to take simple precautions will result in liability: Dalrymple v Melville. Default by passive but honest T that allows co-trustee to breach results in liability: McLaughlin v Prince
Right to be relieved from breach of trust. Inherent jurisdiction to relieve TA s 76. Must have acted in good faith and for the welfare of the trust Goldie v Getley
Right to Impound: When breach committed by T with Bs consent, advise or assistance, T may impound Bs interest to satisfy trust losses: Fletcher v Collis
Right to Court Directions: TA s 96 for protection under TA s ??, not about hypothetical matters and protection only if T intended to follow judicial advice: In the Application of NSW Trustee & Guardian
Appointment
If Will and trustee doesn't take up office, office will fall to personal rep until new trustee is appointed: Re SMithwaite's Trusts
If Inter vivos and trustee doesn't take up office, will fall back to settlor: Pearce v Pearce
- By express terms of trust deed.
- via powers contained in the trust deed
- by statutory power per TA s 12. Statutory limit of 4 per TA s 11 (does not apply to charitable trusts). If more than 4, first 4. If additional non-trustees continue to act, liable as trustees de son tort: Barnes v Addy
- By the Court's inherent power TA s 80 (appoint, replace or remove): Sinnot v Hockinn. Must be expedient and for the advantage of the B's interests or the security of the trust: Porteous v Rinehart. Can appoint new trustee is corporate trustee wound up: King of Hannover v Bank of England. Company may be reappointed if re-reg: Danich Pty Ltd Re Cenco Holdings PL
Cessation of Appointment
Retirement
By writing with consent of remaining trustees if trustee corp or at least 2 individual trustees: TA s14. May be retired (replaced) by operation of TA s 12. Statutory jurisdiction to permit trustee to retire: TA s 80.
Death
Replace upon death: TA s 12. Office continued by surviving Ts taking over: TA s 16(1). If sole T, PT exercises trust powers until personal rep takes up appt or new trustee appointed: TA s 16(2)
Disclaimer
Appointee may disclaim the appointment: Robinson v Pett. usually by deed but implied by oral declaration or refusal to act: Re Clout & Frewer's Contract
Removal
Powers in trust instrument or exercised under TA s 12. TA s 10 Pt 2 applies whether or not provided for in the instrument.
Inherant jurisdiction arises from Court's 'principle duty to see that trusts are properly executed: Ngarluma Aboriginal Corporation RNTBC c The AG of WA. Court to look at 1 interests of beneficiaries, 2 security of trust property and 3 efficient and satisfactory execution of the trust: Miller v Cameron
Statutory Powers: TA s 98(1). Court will consider predominantly the welfare of the B by looking at 1 the creators wishes, 2 potential conflicts of interest and 3 whether appointment would promote or impede the execution of the trust: Hancock v Rinehart
Why: T unfit for office: Officer v Haynes. T hopelessly conflicted Hill v Fry. T incapable of action, maybe declared bankrupt Mill v Cameron. T who fundamentally misunderstand their duties: Mansour v Mansour. Tardy T not necessarily removed: Re Grief but if effective administration of trust has broken down: Smith v Smith. Disagreement between B and T not sufficient: National Westminster Bank plc v Lucas. Friction betw B and T not sufficient: Kershaw v Micklethwaite.But 'insoluble conflict ' that 'destroys the T's capacity to carry out duties': Titterton Oastes
Appointment of infant not void but court can replace: TA s 12(1)(g). Appointed minor can take on role upon attaining majority: Re Gartside's Estate
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Capacity
Bankruptcy does not exclude a natural erson from being a trustee: Bankruptcy Act s116(2)(a), although grounds for application for trustee to be discharged: Trusts Act s 80(2)
Anyone capable of holding property, a statutory trustee company or PT may be a T.
Court has inherent power (Trusts Act s 80) to appoint, replace or remove trustees: Sinnot v Hockinn see egs at [26.9]
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