chapter  14
17 Pages

Remedies for Breach of Trust

A trustee commits a breach of trust if he fails to carry out his duties in relation to the trust or if he exceeds his powers. There are many varieties of breach ranging from, on the one hand, serious misconduct (such as misappropriating trust funds) to ‘innocent’ breaches (such as failing to follow directions in the trust instrument concerning the appointment of additional trustees). So long as a trustee strictly observes the terms of the trust instrument and the requirements laid down by statute or the general law, he will not be in breach; though it would be unusual if a trustee never committed a minor or technical breach during his term of offi ce; indeed, in one case the court gave its approval to trustees committing ‘judicious breaches of trust’. 1 Other examples of breaches are:

(a) investing trust funds in unauthorised investments; (b) paying trust money to the wrong person; (c) making an unauthorised profi t from the trust; (d) carelessly allowing trust money to remain in the hands of one trustee only; and (e) failing to exercise a discretion in relation to trust matters.