Forms of Consent C can consent through conduct through expressimplied agreement

Forms of consent c can consent through conduct

This preview shows page 27 - 28 out of 29 pages.

- Forms of Consent - C can consent through conduct + through express/implied agreement with the trustee + through representation not to sue the trustee which has been detrimentally relied upon by the trustee + where beneficiary has agreed to release the trustee from liability AFTER the breach has occurred and the trustee has provided consideration for the release from liability. - Bristol & West BS v Mothew (1998): Millett LJ - D NOT liable for breach of fiduciary duty where principal gave FULLY INFORMED CONSENT to the fiduciary's actions - requires full/frank disclosure of the breach if the consent is given AFTER the breach. IMPOUNDING OF A BENEFICIARY'S INTEREST - Trustee Act 1925 s.62 - Where trustee has breached trust at instigation/request or with written consent of a beneficiary, the court has a DISCRETION to IMPOUND all/part of a beneficiary's interest in the trust estate in order to indemnify the trustee/any person claiming through the trustee - does NOT exclude trustee's liability for breach of trust BUT means that the burden of that liability, in practice, lies with the beneficiary who instigated the breach of trust. - Effect of Impounding - Compensation for breach of trust provided out of the beneficiary's share of the trust fund up to the value of that beneficiary's interest + NOT paid by the trustee BUT the beneficiary is NOT required to indemnify the trust fund out of his/her personal assets (i.e. beneficiary's entitlement under the trust fund reduced by the amount of compensation due in respect of the breach of trust they instigated). - Re Somerset (1894) - Discretion will only be exercised to impound beneficiary's interest where it is JUST to do so - only where the beneficiary ACTIVELY ENCOURAGED the act/omission which constituted the breach of trust KNOWING of the circumstances which would amount to a breach of trust will impounding be ordered BUT NOT necessary to show that the beneficiary was actually aware that D had breached the trust as a matter of law. - Re Dacre (1916) - Where trustee is also beneficially entitled to trust property + misappropriates part of trust property, trustee is taken to have acted properly + to have received his share of the trust property as a beneficiary = trustee NOT then entitled to receive any more of the trust property when it is distributed (i.e. trust property which the trustee misapplies in the course of their breach of trust = portion of the trust property to which they were entitled as a beneficiary). LIABILITY BETWEEN TRUSTEES - General Rule - Liability of trustees to compensate the trust for loss suffered as a result of their breach of trust is PERSONAL NOT VICARIOUS = trustee NOT liable for acts of his/her co-trustees. - Re Smith (1896) - 2 trustees committed breach of trust when not acting in best interests of beneficiaries when investing in debentures of company which became insolvent - held that only the trustee who had accepted a bribe in return for the investment + acted in bad faith was liable for breach of trust + all loss caused to the trust fund - innocent
Image of page 27
Image of page 28

You've reached the end of your free preview.

Want to read all 29 pages?

  • Fall '19
  • Trust law

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture