Skip to main content
United States
Jump To
Support
Register or Log In
Support
Register or Log In
Instructors
Browse Products
Getting Started
Students
Browse Products
Getting Started
Return to The Principles of Equity & Trusts 4e Resources
Chapter 17 Scenario Questions
Liability for breach of trust and fiduciary duty
Quiz Content
*
not completed
Catrin is a trustee. She discovers a lucrative investment opportunity that would significantly increase the value of the trust. She decides not to invest as a trustee and plans to invest in her personal capacity for her own benefit. The beneficiaries claim that she is liable for acting in breach of trust. The trust instrument states the following: 'the trustee will not be liable for any loss suffered by the trust fund irrespective of how that loss was caused'.
Would Catrin be liable for breach of trust?
No, her liability has been excluded by the clause in the trust fund.
correct
incorrect
No, she acted negligently and so her liability has been excluded by the clause in the trust fund.
correct
incorrect
Yes, she breached her fiduciary duty not to profit from her position and so, irrespective of the exclusion clause, she is liable for the breach.
correct
incorrect
Yes, she acted dishonestly and so her liability cannot be excluded.
correct
incorrect
*
not completed
Jemima is a professional trustee. In her capacity as a trustee, she invests in a business which is excluded from the trust instrument and so by investing she has acted in breach of trust. The business is about to declare bankruptcy. Jemima genuinely believed that investing in the business was in the best interests of the beneficiaries. It was obvious, however, that the business was in trouble and was a very bad investment. The trust instrument includes a clause exempting the trustee from all liability other than 'dishonesty'.
Is Jemima liable for acting in breach of trust?
Jemima is not liable because she did not know that the breach would have a detrimental effect on the beneficiaries. She was acting in what she believed were the best interests of the beneficiaries.
correct
incorrect
Jemima is not liable because the court would always relieve liability under section 61 of the Trustee Act 1925.
correct
incorrect
Jemima is liable because she acted in breach of fiduciary duty and this can never be excluded.
correct
incorrect
Jemima is likely liable as her belief that she was acting in the beneficiaries' best interests was unreasonable.
correct
incorrect
*
not completed
Lenny is entitled to a future interest under a trust. He is to become entitled to the trust property upon the death of his mother, Lea. The trustee, Lucifer, dishonestly misappropriated half of the trust property in breach. Seven years after Lucifer's breach, Lea died. Lenny then acquired a present interest in the remaining trust property. Four years after Lea's death, Lenny brought a claim against Lucifer for breach of trust.
Is Lenny likely to succeed in his claim in the light of the limitation period?
Lenny is bringing his claim more than six years after the date of breach and so the limitation period has expired.
correct
incorrect
Lenny is bringing the claim within six years of his becoming entitled to the property and the limitation period has not yet expired.
correct
incorrect
There is no limitation period for breaches of trust and so there is no issue with the period of time between the breach and Lenny bringing the claim.
correct
incorrect
Lenny will succeed as Lucifer acted fraudulently and so the limitation period does not apply.
correct
incorrect
*
not completed
Danny is a trustee. In his capacity as a trustee, he discovers a lucrative investment opportunity that he wishes to pursue for his own personal benefit. Danny decides to retire from his position as a trustee in order to pursue the investment opportunity.
Is Danny liable for acting in breach of trust?
Danny is retired and so is not liable for any breaches of trust that occur after his retirement.
correct
incorrect
Danny is liable for all breaches of trust irrespective of whether they occurred before his appointment as a trustee or after his retirement.
correct
incorrect
Danny is liable for the breach of trust as he retired in order to facilitate a breach.
correct
incorrect
There has been no breach of trust in Danny pursuing the investment opportunity and so Danny cannot be liable.
correct
incorrect
Previous Question
Submit Quiz
Next Question
Reset
Exit Quiz
Review all Questions
Submit Quiz
Are you sure?
You have some unanswered questions. Do you really want to submit?
Back to top
Printed from , all rights reserved. © Oxford University Press, 2024
Select your Country