Equity and trusts Essay Example | Topics and Well Written Essays - 750 words

Equity and trusts - Essay Example If Leonard and Nancy demonstrate to the court that they took all the necessary precautions consistent with the actions of an ordinary prudent man when exercising the trust fund, then their breaches will be discharged as exemplified in Speight v Gaunt (Kurt, Peter, Donald and Cecily 2011, p. 202-2012). In this case scenario, it is unlikely that an ordinary person with skills like those of Leonard would have managed the trust in the way he did by proposing the selling of some shares and retain the case. Section 3 (1) of the Trustee Act 2000 provides that trustee make investment decisions which he would have himself done if he was entitled absolutely to the trust assets of the trust. We could therefore say that Leonard would have made the same decisions had he been absolutely entitled to his trust assets and thus his suggestion can be considered to be reasonable. Despite this, his decision does not satisfy the set out standards like shown in the case of Cowan v Scargill where it was asc ertained that any decisions made should be wholly to the benefit of the beneficiaries and not the trustees (Sameera and Jill 2009, p. 202-210) And since this not the case in the study, then we can postulate that a breach of trust is evident. As for the case of Nancy, by the virtue of being a trustee under the trust, she will be also liable for the breaches of Leonard if it can be proved that he acted in a careless manner. From the demonstrations in case of Re Vickey, it was ascertained that a trustee can be found liable for recklessness if it is proved he did not give much regard as whether his act or omission amounted to a breach of trust. Since Nancy omitted in her duties by not raising objections to Leonard’s suggestions, we can say that he is careless and therefore he may be found to have breached his fiduciary duties. Additionally, just like it has been expressed by Abbas and Clements, the trustee is personally obliged to run the trust with part of the duty being to keen ly observe what other trustees are doing and raise objections if something wrong is being done (Antony 1999). Therefore, since Nancy did nothing to ensure that Leonard was exercising the instruments of trust as required, she is thus liable to a breach of trust. Consequently, as spelt out in Bahin v Hughes, there are sufficient reasons not to allow a trustee to escape liability by placing blame on another trustee or other trustees for anything that goes wrong (Bruce, Florin 2009). Nevertheless, if it can be approved that there was an exemption clause to that regard freeing her from the liability, then she shall not be in breach. Therefore, since in this case the trust instrument contains the clause, Nancy cannot be held liable for the breach of trust and should therefore not be sued. The beneficiaries are in a position to seek proprietary claim from Orlando’s property as it falls in the awarding against a specific asset which in this case is the swimming pool. Orlando clearly still is in possession of the swimming pool and thus the beneficiary can clearly assert proprietary claim to the swimming pool. We cannot determine if Orlando had the knowledge that the money she received from her mother was from the trust, but if Orlando had the knowledge then he clearly suffers from the liability to account to trust for value of property received, and