TRUSTS LAW: DA & KR DEFENCES (TERM 2 WEEK 5)

Defences

1. Bona Fide Purchaser

 Significance: Proving D purchased property in good faith for value w/o notice of Beneficiary’s trust right can CANCEL OUT A CLAIM FOR KR.
 Absence of KR or DA

2. Change of Position

Requiring D to account for KR of property when D changed her position in reliance on receipt of property VS Injustice of denying C an account from D = to her loss

3. Release

D defend C’s claim of DA and/or KR by saying D was released from liability by beneficiaries.

The Particular Q of Liability to Account in Corporate Contexts

1. Personal Liability to account of employees of companies & liability of that company for personal liability to account –

 General principle: AH Pg 837-838

 Controlling Mind of Company  Same person as person who carries on management of company  whether person is conducting day to day
management of company or just mere figurehead…
 But we must see from case to case, transaction to transaction IF Controlling Mind of Company = Same person as person who carries on management of
company (El Ajou v Dollar Land Holding)
 Test to show company has knowledge of something is that of controlling mind OR directing mind and will of company had knowledge of whatever has
been alleges  think of RBA v Tan.

2. Personal Liability to account of financial advisors & financial institutions

Personal Remedy in Re Diplock

1
 Where beneficiary under will underpaid or unpaid, beneficiary can bring personal action against any beneficiary who has been overpaid from assets of will
trust.
 Personal Remedy  against overpaid person for overpayment.
 Not clear if this remedy available in relation to trust created inter vivos OR in relation to will trust itself (Re Diplock)
 Ordinary trust, intestacy… Shouldn’t make difference for availability of remedy.