Podcast
Questions and Answers
What must a trustee ensure to avoid being liable for a breach of trust?
What must a trustee ensure to avoid being liable for a breach of trust?
- Comply with the trust instrument, statute, and equity doctrines (correct)
- Ignore the provisions of the trust instrument if they seem unreasonable
- Convey full power without considering trust instrument stipulations
- Act in accordance with personal judgment without documentation
Which statement is true regarding the indemnity provisions of a trust instrument?
Which statement is true regarding the indemnity provisions of a trust instrument?
- Equitable remedies do not allow for any indemnity provisions
- Trustee indemnity provisions protect the trustee for all actions taken
- Trustee indemnity provisions cannot be included in any trust document
- Trustees can be indemnified unless acts involved fraud or dishonesty (correct)
In the context of breaches of trust, which of the following is always discretionary?
In the context of breaches of trust, which of the following is always discretionary?
- Trustee resignation procedures
- Legal action against the trustee
- Compensation for breaches (correct)
- Trustee appointment processes
Which clause in a trust instrument could indicate the limiting of trustee liability?
Which clause in a trust instrument could indicate the limiting of trustee liability?
What is one potential implication if a trustee breaches the trust duties as specified in the trust instrument?
What is one potential implication if a trustee breaches the trust duties as specified in the trust instrument?
Under Australian law, how can breaches of trust be interpreted?
Under Australian law, how can breaches of trust be interpreted?
Which of the following describes the vicarious liability of trustees?
Which of the following describes the vicarious liability of trustees?
What role does the trust instrument play in cases of misleading representations by trustees?
What role does the trust instrument play in cases of misleading representations by trustees?
What can a trustee not claim as an indemnity in the event of a breach of duty owed to beneficiaries?
What can a trustee not claim as an indemnity in the event of a breach of duty owed to beneficiaries?
In the context of vicarious liability, who may be held responsible for an agent's wrongful actions under trust law?
In the context of vicarious liability, who may be held responsible for an agent's wrongful actions under trust law?
What is the purpose of section 63 of the Trusts Act as described in the provided context?
What is the purpose of section 63 of the Trusts Act as described in the provided context?
What standard must a trustee comply with in managing trust property?
What standard must a trustee comply with in managing trust property?
Which scenario could potentially disentitle a trustee from claiming indemnity?
Which scenario could potentially disentitle a trustee from claiming indemnity?
What should a trustee do if unsure of how to act regarding management decisions?
What should a trustee do if unsure of how to act regarding management decisions?
How can an agent's breach of the Australian Consumer Law affect a trustee's responsibilities?
How can an agent's breach of the Australian Consumer Law affect a trustee's responsibilities?
What does the interpretation of trusts often depend on under Australian law?
What does the interpretation of trusts often depend on under Australian law?
What is a primary distinction between a trust and a corporation?
What is a primary distinction between a trust and a corporation?
In which circumstances can a trustee be personally liable?
In which circumstances can a trustee be personally liable?
What can be said about trustee indemnity provisions?
What can be said about trustee indemnity provisions?
Which of the following best describes breach of trust implications?
Which of the following best describes breach of trust implications?
How does vicarious liability apply to trustees?
How does vicarious liability apply to trustees?
What is a misleading representation in the context of trusts?
What is a misleading representation in the context of trusts?
Which statement about interpreting trusts under Australian law is accurate?
Which statement about interpreting trusts under Australian law is accurate?
What is the unique feature of corporate trustees in relation to trusts?
What is the unique feature of corporate trustees in relation to trusts?
Study Notes
Trustee Liability
- Trusts are not separate legal entities like corporations.
- Trusts are relationships between a trustee and beneficiaries/objects.
- Trustees personally own all trust property at law and are personally liable for it.
- Trustees are personally liable for obligations incurred for trust administration (e.g. legal advice).
- Corporate trustees combine the benefits of both trust and corporations law.
- Australian law requires awareness of how trusts intersect with other areas of law.
Governing Legal Frameworks
- Trust law governs the relationship between beneficiaries and trustees.
- General law governs contracts, negligence, consumer law, and trustee interactions with third parties.
Trustee Rights and Responsibilities
- Section 63 TA (NSW) allows trustees to seek advice from the court on trust management, administration, and interpretation of the trust instrument.
- The High Court defines circumstances under which a trustee should seek advice under Section 63 TA (NSW), considering the court's discretion and the relationship between Section 63 and Section 85.
Breach of Trust
- If a trustee fails to comply with duties under the trust instrument, statute, or equitable doctrines, they breach the trust.
- Breach of trust does not automatically require compensation; trustees can be excused in various ways.
- Equitable remedies are always discretionary, seeking practical justice.
- Trust instruments can specify clauses that exclude trustee liability for specific actions.
- These clauses are interpreted strictly against the trustee, focusing on the natural meaning of the words.
Breaches of Trust: Defences and Remedies
- Clause 14 Special Powers and Discretions in a sample discretionary trust deed on iLearn excludes trustee liability for specific actions and grants a right of indemnity.
- Clause 14C in the sample discretionary trust deed excludes trustee liability for breaches involving fraud, dishonesty, or a lack of prudence and diligence.
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Description
Test your understanding of trustee liability, legal frameworks, and the rights and responsibilities of trustees within trust law. Explore how Australian law shapes trustee obligations and their interactions with beneficiaries and third parties.
