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4 Est. & Tr. Q. 180 (1977-1979)
Indemnification of Trustees: The Rule in Hardoon v. Belilios

handle is hein.journals/espjrl4 and id is 194 raw text is: INDEMNIFICATION OF TRUSTEES: THE RULE IN HARDOON v. BELILIOS A. H. Oosterhoff* All that is necessary to establish the relationship of trustee and cestui que trust is to prove that the legal title was in the plaintiff and the equitable title in the defendant.' Such a broad statement of equitable principles one might ex- pect to find in an American trusts case. One would not seek it in the opinion of the highest appellate tribunal of the British Empire more than 75 years ago. Yet this statement and others like it came from Lord Lindley who delivered the opin- ion of the Judicial Committee in Hardoon v. Belilios.2 This re- markable and interesting case held, thereby differentiating English from American trust law, that a beneficiary who is suijuris may in certain circumstances be personally bound to indemnify his trustee for expenses incurred by him in the ad- ministration of the trust, and that it is irrelevant that the ben- eficiary did not originally create the trust but accepted a transfer of the beneficial interest with notice of the trust.3 Indemnification Generally The general principles of indemnification of trustees are well established. In the leading case, Worrall v. Hartford,4 Lord Eldon said: It is in the nature of the office of a trustee, * Of the Faculty of Law, The University of Western Ontario, and of the On- tario Bar. 1Hardoon v. Belilios, [1901] A.C. 118 (P.C.), at p. 123, per Lord Lindley. 2 1W. 3 In the United States trust beneficiaries are not liable personally to indem- nify the trustees unless they have agreed to do so: A.W. Scott, The Law of Trusts, 3rd ed. (Boston, Little, Brown & Co., 1967), vol. 3, para. 249. 4 (1802), 8 Ves. Jun. 4, 32 E.R. 250.

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