Trust Parties’ Uniquely Easy Access to Rescission: Analysis, Critique and Reform

Abstract

AbstractParties to trusts currently enjoy easier access to judicial avoidance of voluntary dispositions resulting from mistakes and inadequate decision‐making than other persons. The principal doctrinal basis for this advantage has shifted from the rule in Re Hastings‐Bass to rescission in equity. The article argues that this advantage is normatively unjustified, and recommends a uniform legal framework to govern the avoidance of voluntary dispositions resulting from mistakes or inadequate decision‐making, whether or not a trust was involved. Under this framework, dispositions resulting from laypersons’ mistakes and inadequate decision‐making should be avoided, subject to appropriate defences, whenever that causative nexus is present, while dispositions resulting from professionals’ mistakes and inadequate decision‐making should only be avoided where the mistake or deliberative flaw was so serious as to render the transferee's retention of property transferred unjust.