REMEDIES

A breach of trust occurs where a trustee fails to perform any of his duties or improperly exercises any of his powers. The beneficiaries may proceed against a trustee who commits a breach even where the trustee did it in good faith.

3 main remedies:

INJUNCTION: to prevent anticipated breaches (unauthorised sale, unnecessary mortgage...)

PERSONAL ACTION AGAINST TRUSTEE: trustee is personally liable to the beneficiaries for any resulting personal benefit or loss suffered by the trust.

VICIARIOUS LIABILITY: no vicarious (indirect) liability of the breach of co-trustee if the trustee himself has not actively participated in the breach.

• No liability either for the dishonesty or neglect of agents who acts for the trust.
• BUT trustee is vicariously liable if there is deliberate default (state of mind, objectively).
• Case: a trustee, by his own neglect, allowed the other co-trustee to sell the principal asset of the trust at undervalue -> even if no active participation in the breach.

JOINT LIABILITY: where 2 or more co-trustees are involved in committing a breach, their liability is joint and several and the beneficiaries may sue all or any of them.

• Originally, equity required each trustee to make an equal contribution but now under the law, the court can define the level of each trustee's contribution to reflect the extent of his responsibility for the breach. à Depending on their respective profits or loss caused to the trust.
• If any co-trustee is sued, he may claim contribution from other trustee who is also liable.
• Where two trustees are jointly liable for a breach, one may claim an indemnity for the other, in particular, in "solicitor-trustee" case or if fraud from the other.
• Defence available: if B consented or participated, or knew after and acquiesced.