14 Remedies for Breach of Trust

Question 1

True or False: As with all actions for breach of trust, the right to trace is subject to the six-year limitation period.

Answer 1

False. Tracing is an equitable remedy and is not subject to the usual limitation period. Instead, the doctrine of laches applies.

Question 2

True or False: Tracing is not available against someone who has paid for the trust property.

Answer 2

The answer depends on the purchaser’s knowledge.
If they knew that the property was sold in breach of trust, they have recipient liability and are liable as a constructive trustee. Tracing is available against them.
However, if they purchased the property in good faith having no knowledge of the breach, they are considered a bona fide purchaser and are not subject to tracing.

Question 3

What are the requirements of tracing?

Answer 3

• There must be a fiduciary relationship