Trustees' Powers and Duties and Personal Liability for Breach - Trust - Remuneration of Trustees

9 important questions on Trustees' Powers and Duties and Personal Liability for Breach - Trust - Remuneration of Trustees

Section 28 and 29 Trustees Act 2000

As a general rule, the office of trusteeship is voluntary and gratuitous, ie unpaid, except that trustees are entitled to be reimbursed for (or to pay directly from the trust fund) expenses 'properly incurred' when acting on behalf of the trust (section TA 2000).

Hardoon v Belilios [1901]

Trustees might also obtain reimbursement of expenses from the beneficiaries.

Circumstance Trustee is Remunerated #1: Authorised by Trust Instrument

Where the trust instrument authorises payment for services and the trustee is a trust corporation or is acting in a professional capacity (section 28 TA 2000), even where the services are capable of being provided by a lay trustee (section 28(2) TA 2000), the trustee will be remunerated.

** Special position for charity trustees where the agreement of a majority of trustees is required to remunerate the trustee  (section 28(3) TA 2000)
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Circumstance Trustee is Remunerated #2: Authorised by Statute

Subject to any provision to the contrary, where the trustee is either a trust corporation or acts in a professional capacity and the other trustees agree in writing, the trustee can be paid 'reasonable remuneration' even where the services are capable of being provided by a lay trustee (section 29 TA 2000).

Circumstance Trustee is Remunerated #3: Authorised by Court


For past or exceptionally future services

Foster v Spencer [1996]

Trustees of the cricket club happened to be the building contractor for the development of trust property. They had a wide range of obligation in the trusteeship. They went to the court to seek for remuneration since they had done so many things for the trust and the court awarded them their remuneration.

Circumstance Trustee is Remunerated #3: Authorised by Court

By way of 'equitable allowance' following a breach of fiduciary duty

Circumstance Trustee is Remunerated #3: Authorised by Court

The Court may increase the amount of remuneration authorised by the trust instrument.

Re Duke of Norfolk's Settlement Trusts [1982]

A trustee company was entitled under a settlement to remuneration. Subsequently, additional property was added to the trust, which involved the trustee in burdensome work. The level of remuneration was low. The trustee successfully applied to the court for the amount of remuneration authorised under the trust instrument to be increased.

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