Soton Equity and Trusts - alastairhudson.com

Nestle v National Westminster Bank plc (No 2)[1993] 1 WLR 1260, [1994] 1 All ER
118
5) The Principles of Liability: liability is personal and compensatory
Re Lucking's Will Trust [1968] 1 W.L.R. 866
(a)
Measure of liability
(i)
"The measure of liability is the loss caused to the trust estate, directly or
indirectly, and the onus is on the complainant to prove a causal connection
between the breach and the loss" (Hanbury & Martin, 18th ed., pp. 683-684)
Bartlett v. Barclays Bank [1980] Ch 515
Target Holdings v.Redferns [1995] 3 WLR 352; [1995] 3 ALL ER 785
Swindle v Harrison [1997]4 All ER 705
Bristol and West Building Society v Mothew [1998] Ch 1
Collins v Brebner [2000] Lloyd’s Rep. P.N. 587; 2000 WL 395
Hulbert v Avens [2003] EWHL 76; 2003 WL 116999; (2003) 100 (12) LSG
301
(ii)
Profit in one transaction, loss in another
Fletcher v. Green (1864) 33 Beav. 426
Bartlett v. Barclays Bank (supra)
(b)
(c)
Liability is joint and several
Liability for acts of retired trustees
Head v. Gould [1898] 2 Ch. 250
2 Liability of trustees inter se
Townley v Sherborne (1633)
Re Lucking’s Will Trust (supra)
(B)
Remedies for breach of trust.
Reading: Hudson, section 18.3
**Target Holdings v. Redferns [1996] 1 AC 421, [1995] 3 All ER 785 HL per Lord
Browne-Wilkinson:-
‘Courts of Equity did not award damages but, acting in personam, ordered
the defaulting trustee to restore the trust estate. If specific restitution of the
trust property is not possible, the liability of the trustee is to pay sufficient
compensation to the trust estate to put it back to what it would have been
had the breach not been committed. Even if the immediate cause of the
loss is the dishonesty or failure of a third party, the trustee is liable to make
good that loss to the trust estate if, but for the breach, such loss would not
have occurred. Thus the common law rules of remoteness of damage and
causation do not apply. However, there does have to be some causal
connection between the breach of trust and the loss to the trust estate for
which compensation is recoverable, viz the fact that the loss would not
have occurred but for the breach.’
There are therefore three forms of remedy here:
1. specific restitution - proprietary obligation,
2. restore the value of the trust fund, or
3. equitable compensation for losses in general.
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