o Laches less successful in breach of trust cases than fiduciary cases, especially if trustee is holding the trust property - Delay of 7 years was not acquiescence or laches Reader o Usually argue both - For e.g. of claim of acquiescence and laches, see Reader v Fried
56 Trustee’s rights Trustee right of indemnification Introduction: 1. Under general law and s 36(2) of the Trustees Act , a trustee can be indemnified for all properly incurred expenses. - Can pay directly out of the trust property (right of exoneration) or if already paid, can reimburse yourself. 2. Trustee would argue that they have a ROI to the expense of _______________. 3. All contracts , debts, liabilities etc. are incurred by the trustee personally (unless other contracting party agrees the trustee is not to be personally liable) o Document must clearly express that trustee is not meant to be bound; e.g. § ‘J Smith, trustee’ is only descriptive ✘ • That’s not enough. Just a description of who you are § ‘J Smith, as trustee and not otherwise’ indicates no personal liability • This will rule out trustee liability • Don’t need to go through ROI? § Words must be clear to establish that 4. Examples of expenses: - All costs associated with running the trust - Eg legal fees - Agent fees - Stock broker fees - Accountancy fees for preparation of accounts - Expenses incurred by damages claim (against T) Re Raybould - Legal costs for defending an action for breach of trust bought by a beneficiary e.g. Hayman v Equity Trustees o Hayman v Equity Trustees : Facts: life tenant sued trustee. Held: Trustee was successful in the action, cost of defending action for breach was a properly incurred expense. o However, if trustee is unsuccessful , you would expect costs against the trustee , and for the trustee to bear their own legal cost o Taking out missing beneficiary policy. Premiums on the policy was a properly incurred expense Re Evans Has the ROI been excluded by the trust deed? ( Query if this is possible) 1. Uncertainty whether this is permitted, no HC decision. 2. In Victoria, the ROI may be excluded by the trust deed where there is clear language of exclusion ( RWG per Brooking J) - Based on the fact that s 2(3) of Trustee Act states that powers, duties and discretions conferred by the Act are subject to the trust instrument. - S 197 of the Corps Act also implies parliament intends for a trust instrument to be - able to exclude a ROI 3. Not permitted in QLD, NSW ( Jonco ) 4. Policy arguments: - Trustee should be aware of the terms on which they take the trust
57 - Beneficiaries have benefit so should also bear the burden - Some creditors can’t consider terms on which money is owed (Eg tort victim) What is a properly incurred expense? 1. For a ROI, the expense must be properly incurred. 2. Apply both Nolan and Gatsios to the facts The Victorian approach per Ornmiston JA in Nolan: 1. Ormiston JA in Nolan stated that expenses do not need to be both reasonable and proper.
You've reached the end of your free preview.
Want to read all 180 pages?
- Three '18
- Dr Susan Barkehall Thomas
- The Bible, Wills and trusts, Trust law