CHAPTER 10 BREACH OF TRUST
A breach of trust will arise when a party to a trust does not respect the term of the trust or the trust act.
This is governed by section 52 of the trust act
There can be 2 circumstances where there is breach of trust; 1. The trustee has not perform his duty 2. The trustee has done things which is not entitle to you
10.2 Consequences for breach of trust
Beneficiary will suffer from the breach of trust resulted from the trustee. The beneficiary can take action against the trustee for breach of trust. The plaintiff – the beneficiary The defendant - the trustee
10.3 Remedies for breach of trust
The beneficiary has to remedy for breach of trust 10.3.1 Personal Claim 10.3.2 Proprietary claim
10.3.1 Personal claim In this case the trustee is personally liable to make good any loss suffered by the beneficiary out of the trustees own fund. The problem with this remedy is that in case if the trustee is bankrupt, the beneficiary will not get anything.
10.3.2 Proprietary claim In this case the beneficiary will acquire a right against an item of specific property in
circumstances in which the trustee does not have sufficient fund to make good any loss suffered by the beneficiary. A proprietary claim will enable the beneficiary to seize a specific property of the trustee.
Tracing apply in the case of proprietary claim
10.4 Personal liability Standard of care The liability of a trustee for breach of duty is strict. There is no need to establish through or even carelessness on the trustee part. The duty of the trustee is to conduct the business of the trust with the same care as the ordinary of a trust that would extend toward its own cost.
Case law of Re-Speight 1883
10.5 Measure of liability or damages The trustee must account for profit made or replace loses made to the trust. This was mentioned in the case of Re Dawson.
A trustee who commits a breach shall be liable for any loss or...
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