Section 61 of the Trustee Act 1925: Deus Ex Machina?

Section 61 of the Trustee Act 1925 provides that: “61. Power to relieve trustee from personal liability If it appears to the court that a trustee, whether appointed by the court or otherwise, is or may be personally liable for any breach of trust, whether the transaction alleged to be a breach of trust occurred before or after the commencement of this Act, but has acted honestly and reasonably, and ought fairly to be excused for the breach of trust and for omitting to obtain the directions of the court in the matter in which he committed such breach, then the court may relieve him either wholly or partly from personal liability for the same.” This provision affords the court the power to excuse a trustee’s breach of trust. It was originally intended to ensure that lay persons would not be deterred from acting as trustees, since the court could exercise its discretion under section 61 to relieve them from liability if they acted honestly and reasonably. But given the increasing prevalence of professional trustees, it was thought that section 61 might become of much reduced importance. One leading study suggested that,“[l]eft alone, section 61 may continue to lie dormant, rising only occasionally to rescue a lay trustee from liability for a technical but negligent breach of duty”.