Sunday, March 7, 2021
Article: The New Section 100A Trustee Act 1925 (NSW): When a Beneficiary is Personally Liable to Indemnify a Trustee
Joseph Campbell recently published an article entitled, The New Section 100A Trustee Act 1925 (NSW): When a Beneficiary is Personally Liable to Indemnify a Trustee, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article.
Over the years since 1901 there has been a recognised principle in the law of trusts, derived from the Privy Council decision in Hardoon v Belilios , under which a beneficiary of a trust who was sui juris and absolutely entitled had, prima facie, a personal obligation to indemnify the trustee for liabilities that the trustee had incurred. In November 2019 a new section 100A of the Trustee Act 1925 (NSW) came into effect in New South Wales, which in terms abolished the “rule in Hardoon v Belilios”, with some minor exceptions, and made other alterations to the law concerning the liability of a trust beneficiary to indemnify a trustee. This paper considers how section 100A has affected the law in New South Wales, and the extent to which it will have effect outside New South Wales. It considers some of the circumstances in which, notwithstanding the enactment of section 100A, a beneficiary of a trust might still have an obligation to indemnify a trustee.