McLauchlan & Anor v Prince & Anor

[2001] WASC 43

Supreme Court of Western Australia

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Interrogate

Catchwords

1. Equity
2. › Trusts
3. › Trustees
4. › Breach of trust
5. › Wilful default
6. › Passive breach
7. › Failure to supervise co-trustee
8. › Whether passive indifference to co-trustee's investment decisions constitutes wilful default
1. Equity
2. › Trusts
3. › Remedies
4. › Account on basis of wilful default
5. › Summary procedure
6. › Whether account on basis of wilful default may be ordered on summary application
7. › Rules of the Supreme Court WA 1971, O 45 r 1
1. Equity
2. › Trusts
3. › Remedies
4. › Interest
5. › Compound interest
6. › Whether compound interest appropriate measure where trustee guilty of wilful default but no dishonesty
7. › Basis of award of compound interest
8. › Whether awarded as compensation or to ensure presumed profit paid to beneficiaries
1. Practice and Procedure
2. › Summary procedure
3. › Account
4. › Analogy with summary judgment
5. › Evidentiary onus on defendant to show preliminary question to be tried
6. › Rules of the Supreme Court WA 1971, O 45 r 1, O 14 r 2(1), O 14 r 3(1)

Quick Take

An account on the basis of wilful default may be ordered on a summary application under O 45 r 1 where there is no conflict of evidence on the affidavits. A trustee's passive failure to supervise a co-trustee's investment decisions constitutes wilful default. Compound interest may be awarded in wilful default cases not as compensation but to ensure the profit equity presumes would have been made is paid to beneficiaries, even where there is no dishonesty on the part of the defaulting trustee.