chapter  13
9 Pages

BREACH OF TRUST

Defences of a trustee Indemnity against a co-trustee Bahin v Hughes (1886) Trustees are jointly and severally liable for a breach of trust and cannot claim to be indemnifi ed because they have not taken an active role in the breach of trust Head v Gould (1898) A lay trustee can claim to be indemnifi ed against a professional trustee if the other trustee has exercised such a degree of infl uence over the other trustee that the other trustee has been unable to exercise an independent judgment Benefi ciaries consent Re Pauling’s Settlement Trusts (1964) Trustees would not be liable for a beach of trust where the benefi ciaries had expressly given their consent s 61 Trustee Act 1925 Bartlett v Barclay’s Bank (1980) s 61 cannot be used where the trustees have acted negligently and cannot claim to have acted reasonably

Liability for breach of trust Target Holdings v Redferns (1995) If the claimant can show that the loss would not have occurred but for the breach then the trustee would be liable

Key Facts A clause inserted into a trust deed which exempted the trustees from liability for any loss whatsoever ‘unless such loss or damage shall be caused by his own actual fraud’ was upheld.