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Trustee liability

This category contains 99 posts

Hastings-Bass revisited

The “Rule” in Hastings-Bass (more properly the rule in Mettoy) invites a court to “wave the judicial magic wand” and void decisions made by trustees, together with the attendant consequences,  when trustees have made decisions with consequences from which they now with to resile.    The logic of “the “Rule” was to protect beneficiaries.  However, where … Continue reading

US Sham trust decision

The judgment in Full-Circle Staffing, LLC, Watchman Investment Trust, Financial & Tax Services, Inc., Trustee, Tax Matters Partner, Et Al. v Commissioner of Internal Revenue (Full Circle) is a consolidated judgment of the United States Tax Court. The background facts are complicated but can be summarised as follows: Mr and Mrs Pudlo restructured their freight forwarding … Continue reading

Not very hidden

New Zealand may seem a long way away from the rest of the world.  However, as demonstrated in Trident Trust Company (NZ) Ltd v Bozo, not so far away as might be thought.  The case involves a New Zealand trustee of a trust settled by a non-resident settlor for the benefit of himself his wife and … Continue reading

A little light on Beddoe applications

Glasgow Harley Trustee v McLaughlin  relates to an application for orders approving the trustees’ decision to defend proceedings against them.  As noted at [3]: “Applications of this kind are commonly referred to as Beddoe applications. A succinct description of a Beddoe application appears in Garrow and Kelly Law of Trust and Trustees: The general rule is … Continue reading

Mistakes abound

CIR v Robertson relates to the recovery of GST paid by the Commissioner of Inland Revenue from the liquidator of corporate trustee Hukatere Coastal Trustees Limited (Hukatere) that received the GST in question. The case is a relevant reminder of the importance of recognising the corporate aspects of trustees and the risks to liquidators when … Continue reading

Never presume

H.W. Fowler’s opinion was that in using presume, the speaker believes the supposition is true and will believe it until he learns otherwise. In using assume, the speaker feels no certainty that his supposition is true or not. In a legal context, presume means “to take as proved until contrary evidence is presented.” Ex. The … Continue reading

More trustees sent to the naughty corner

Clement v Lucas concerns a family farming enterprise and illustrates the difficulties when beneficiaries cannot agree on how to give effect to the protections parents have put in place for the benefit of the beneficiaries. The contest at the heart of the matter was whether the trustees should distribute the trust assets equally between the … Continue reading

Myths and liability

Trustees act personally.  As noted in the Supreme Court judgment in Macalister Todd Phillips Bodkins v AMP (emphasis added): “Liabilities incurred by a trustee in relation to a trust are always the personal liabilities of the trustee … A creditor has a personal right to sue a trustee and to get judgment and make the … Continue reading

The blessing of the court

Being a trustee is hard, and at times quite possibly boring (to paraphrase from the movie An Education: Emma Thompson and Carey Mulligan).  And worse, if you get it wrong the beneficiaries can sue you, no matter how hard a trustee might try to get it right. Fortunately, help is at hand in the form of … Continue reading

Trustees “fortunate” to be liable for only 50%

The Rex White Family Trust (RWFT) was found to have failed by reason of uncertainty. While the Court accepted it was appropriate for the trustees to have sought directions from the Court, it was found that they had acted unreasonably by pursuing an argument as to the existence of the RWFT, which was lacking in merit.  … Continue reading