An obvious starting-point is Chappell v Somers & Blake [2004] Ch 19, where it is held that (in effect) a personal representative can sue for the loss to the estate, despite not being personally damnified, and thought that a trustee is in the same position. Cf the position in tort (Malkins Nominees Ltd v Société Financière Mirelis SA [2004] EWHC 2631 (Ch)); and see the extended discussion in the Scotch case of Marquess of Aberdeen and Temair v Turcan Connell
[2008] CSOH 183; 2009 S.C.L.R. 336; [2009] P.N.L.R. 18.


Happy days

Andrew




On 21/06/2011 11:19, Jason Neyers wrote:

 

I post on behalf of Mindy Chen-Wishart:

 

Grateful for any thoughts on this:

a trustee (T) hires a solicitor (S) to do a job for the trust. S does it negligently, and T sues S for breach of contract. My question is, how are the damages quantified?

Assume (1) that T acted negligently in hiring S, in the sense that it was reasonably foreseeable that S would perform the job negligently (maybe the job was outside S's area of expertise). T will be in breach of trust and so liable to the beneficiary (B) for the resultant loss. This loss seems, I think, to be that occasioned by S's own breach. So it is possible to say that T suffers that loss personally, meaning that T's claim against S will naturally be for that amount. This is the easier case.

Now the harder case. Assume (2) that T did not act negligently in hiring S. T has now committed no breach of trust, so is not liable to B, so suffers no loss personally. As a result, we might expect that T's claim against S would be nominal only. But is it? Or does it yield damages quantified by reference to B's loss (which S would then hold for B)? And if so, by what reasoning? In particular, is B's trust right somehow brought into the reckoning? (Should we see the answer to this as yes on the strength of Colourquest? But again, by exactly what reasoning?)

Incidentally, I cannot see that it matters, in either case, whether B requires T to sue S (whether really, or using the Vandepitte procedure): even if so, the claim is surely still T's.

Mindy

 

--
Jason Neyers
Associate Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435