15. Breach of trust: defences and relief

Abstract

Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams and exercises help readers to engage fully with each subject and check their understanding as they progress. A trust must be duly administered in accordance with the provisions of the trust instrument, if any, and the general law. Similarly, a trustee should be liable for a dishonest breach of trust. Not every breach of trust is deliberate or dishonest. Liability may arise due to lack of care and other inadvertent breaches of trust, and even due to an essentially ‘technical’ or ‘formal’ breach of fiduciary duty. This chapter examines the extent of trustees’ civil liability for breach of trust, whether there might be a valid defence to a breach of trust and whether a trustee’s liability should be reduced by some form of relief. It looks at the remedies available against trustees for a breach of trust, a claimant’s election between inconsistent remedies, comparison with common law remedies, capital repayment, interest on the judgment, the Limitation Act 1980, the doctrine of laches, the beneficiary’s instigation of or consent to the breach and the beneficiary’s acquiescence in breach.