Re Dawson (deceased)
A trustee who misappropriates trust property must restore it, and compensation is assessed at the date of judgment rather than the date of the breach.
Facts
An executor of an estate misappropriated trust money in New Zealand currency. By the time of the trial, the exchange rate between the New Zealand pound and the Australian pound had changed significantly. The question arose whether the trustee had to compensate the trust by reference to the value of the money at the date of the breach, or at the date of judgment.
Legal principle
Street J held that the trustee's obligation to restore the trust property was to be measured at the date of judgment. He said that the obligation of a defaulting trustee is essentially one of effecting restitution to the trust estate, and that the obligation is a continuing one, so the measure of compensation is the value at the date of restitution, not the date of the breach. Common law rules about remoteness and foreseeability of loss did not apply. The case has been cited with approval in English courts.
Related cases on breach of trust and defences
- AIB Group (UK) plc v Mark Redler & Co [2014] UKSC 58, [2015] AC 1503
- Armitage v Nurse [1998] Ch 241
- Bahin v Hughes (1886) 31 Ch D 390
- Re Diplock [1948] Ch 465
- Re Evans (deceased) [1999] 2 All ER 777
- Fletcher v Collis [1905] 2 Ch 24
- Head v Gould [1898] 2 Ch 250
- Ministry of Health v Simpson [1951] AC 251
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