In Western Australia, a trustee's right of indemnity in equity is capable of being excluded by the trust instrument and released upon the trustee transferring trust assets to a new trustee, unless the purpose is fraudulently to defeat creditors' rights. The statutory right of indemnity under s 71 of the Trustees Act 1962 (WA) may also be excluded by a contrary intention expressed in the trust instrument, by virtue of s 5(3). A trustee's equitable lien or charge over trust assets may be released by implication from the terms of a deed of separation that allocates specific assets and liabilities to new trustees without preserving the former trustee's lien. Rectification is not available to correct consequences arising from the failure of a plan that the parties assumed would be implemented when the deed was executed.
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