ABSTRACT

ANSWER The personal liability of a trustee for breach of trust extends to all loss which can be causally linked to the breach (Target Holdings v Redferns (1996)) and it is generally no defence to the imposition of liability that the trustee was innocent, honest or was acting in the best interests of the trust.1 Furthermore, as we shall see, although the liable trustees may have rights of contribution against each other, the liability of trustees for breach of trust is joint and several, such that a beneficiary may sue any one or all of the trustees in order to recover the full amount of compensation (Jackson v Dickinson (1903)). In order to ensure that liability for breach of trust is not entirely overpowering, and to protect trustees from unscrupulous or culpable beneficiaries, there are a recognised number of defences to a claim of breach of trust. It should be noted, however, that these are ‘defences’ in a peculiar sense. They do not prevent the liability of the trustee from arising but may, if certain conditions are satisfied, relieve the trustee of the full consequences of that liability. In this way, the strict nature of breach of trust liability is preserved, but some protection is offered to trustees.2