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Trustees contract personally. This means that unless the trustee’s liability is limited by agreement, a trustee is, in most circumstances, personally liable for any losses that arise. This is the case whether or not the trustee can benefit from the trust. “… if the trustees meant to limit their liability, it was for them to … Continue reading
It is commonly believed that professional or independent trustees operate in a different capacity than trustees who can benefit from the trust; and that liability, if it arises, should only be borne by trustees who can benefit from the trust (see Rubber stamp alert). This is not the case. A professional trustee was recently bankrupted … Continue reading
This week’s High Court costs decision in Black v Giltech Precision Castings makes sobering reading for trustees. The judgment follows a substantive decison finding against Mr Black and the trustees of of a trust settled by Mr Black. The independent trustee resigned just prior to the matter being heard. However, when costs were considered, this did little … Continue reading
It is well recognised that arrangements surrounding family trusts are often informal. However, while this is understandable, and explainable, the consequences of this informality can be uncertainty and, at worst, understandings of some parties that are light years from what might have been intended. Regardless of the relationship between the parties, and indeed often because … Continue reading
The decisions in Eden Refuge Trust make sobering reading for any person acting under a trustee’s instructions. The proceedings (see Eden Trust v Hohepa) relate to claims against a trustee for breach of trust and conversion, and claims against the solicitor acting for the trust for breach of fiduciary duty, knowing receipt and dishonest assistance. By way of … Continue reading
Costs decisions could be considered pretty dull reading. However, if you are a trustee of a trust, you might be wise to upskill on how you might fare on the costs front if involved in court proceedings, regardless of whether you are pursuing or defending. While in some circumstances the trustee may be able to recover … Continue reading
A trustee has come out on top against liquidators when the liquidators attempted to recover payments relating to investments made without that trustee’s knowlege. However, whether the beneficiaries will be as sanguine about matters as the court is not clear. See https://mattersoftrust.wordpress.com/trust-law-update/rea-and-sargison-v-russell-trustee-liability-in-the-context-of-voidable-transactions/
Being a trustee is not all honour and glory and can often entail liability and misery. For some of the questions to consider if you are asked to be a trustee see https://mattersoftrust.wordpress.com/trustees-101/ive-been-asked-to-be-a-trustee/.
The words “breach of trust” are frequently bandied around in the context of trusts. It is generally accepted that such breach is bad and is to be avoided. However, the full cost of a breach of trust is not always fully appreciated. While it is understood for the best part, that if a trustee does … Continue reading
It is not often appreciated that trustees act personally. This means that if a trustee defaults on a financial obligation, if the trustee is a natural person, that person can be bankrupted. This point was considered by the High Court in the recent decision in the Bankruptcy of Thomas Joseph Brown where the Court confirmed that a … Continue reading
Matters of Trust 