The trustee is the legal owner or holder of the property; but this is not for the trustees personal benefit. The property belongs, in equity, to the beneficiary and the primary obligation placed upon a trustee is to account for the trust property when called upon to do so. The most useful remedy available for breach of trust in many cases is the order of account. Order of Account This is distinguished from remedy of of profits’. An Account order to – ‘account requires the trustee to account for the trust property itself, and its account management. The remedy of account of profits is used to strip unauthorised profits from the trustee. A trustee may have made personal profits, Boardman v Phipps – increasing trust property an account of profits or constructive trust is – required to strip these profits from a trustee. A beneficiary can call for an account at any time, Beneficiary can call at any time – whether or not there has been a breach of trust. The trustee must product accounts showing receipts and disbursements. if the beneficiary can establish that the trustee has committed Breach of trust – a breach of trust, the trustee is usually ordered to account the basis of ‘on wilful default’ – Perpetual Executors, Trustees and Agency v West Australian Trustee, Executor and Agency Once account is made – The beneficiary can either accept, surcharge or falsify the account If the beneficiary the account, they agree that the trustee Accepts – ‘accepts’ has performed the trust and properly account for the trust property. If the beneficiary surcharges the account, the beneficiary Surcharges – indicates dissatisfaction with the trustee’s management. The trustee must then account for the trust fund as if it were properly managed. If the beneficiary the account where they believe that Falsifies – ‘falsifies’ some of the trust moneys have been misapplied. The trustee must then account for the full amount of the misapplied funds. Account of Profits
The trustee is the legal owner or holder of the property; but this is not for the trustees personal benefit. The property belongs, in equity, to the beneficiary and the primary obligation placed upon a trustee is to account for the trust property when called upon to do so. The most useful remedy available for breach of trust in many cases is the order of account. Order of Account Account – This is distinguished from remedy of ‘account of profits’. An order to account requires the trustee to account for the trust property itself, and its management. The remedy of account of profits is used to strip unauthorised profits from the trustee. Boardman v Phipps – A trustee may have made personal profits, increasing trust property – an account of profits or constructive trust is required to strip these profits from a trustee. Beneficiary can call at any time – A beneficiary can call for an account at any time, whether or not there has been a breach of trust. The trustee must product accounts showing receipts and disbursements. Breach of trust – if the beneficiary can establish that the trustee has committed a breach of trust, the trustee is usually ordered to account ‘on the basis of wilful default’ – Perpetual Executors, Trustees and Agency v West Australian Trustee, Executor and Agency Once account is made – The beneficiary can either accept, surcharge or falsify the account Accepts – If the beneficiary ‘accepts’ the account, they agree that the trustee has performed the trust and properly account for the trust property. Surcharges – If the beneficiary surcharges the account, the beneficiary indicates dissatisfaction with the trustee’s management. The trustee must then account for the trust fund as if it were properly managed. Falsifies – If the beneficiary ‘falsifies’ the account where they believe that some of the trust moneys have been misapplied. The trustee must then account for the full amount of the misapplied funds. Account of Profits
Trusts_Summary.docx