Personal claim for compensation against a trustee who is in breach of trust - What is the extent of liability ?
3 important questions on Personal claim for compensation against a trustee who is in breach of trust - What is the extent of liability ?
If the court finds that the breach to the trust has caused loss, what could the beneficiaries seek to recover?
The trustee will be ordered to recover the value of the trust fund before the breach and pay interest 1% above the minimum lending rate or rate allowed on the court's short-term investment account.
Under what conditions will the beneficiaries be able to recover the loss to the trust?
The beneficiaries will be able to recover so long as EACH trustee committed a breach of trust. Liability can be joint and several which means the beneficiaries can choose to sue all of the trustees or only one for the whole loss.
Explain how the case of Nestle v National Westminster Bank is important in showing what constitutes a loss?
By failing to properly invest the trust fund, i.e. failing to review the investments regularly, the bank trustee breached its duty of care. However, it could not be shown that the breach caused loss to the trust because the trust was not worth less than it would have been under the management of a reasonable trustee.
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