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Malignant Decided to Commit a Breach of Trust by Selling

Question 8

Multiple Choice

Malignant decided to commit a breach of trust by selling shares in a company owned by the trust for £80,000. Malignant enlisted the help of his personal agent, Trusting, to make the sale. Malignant told Trusting that the sale was to raise money for investment and the proceeds should be paid to him to speed up any subsequent investment. Trusting did as instructed and gave the proceeds to Malignant, saying 'This is not normal procedure, but I'd rather not know what you are up to'. Malignant has now spent the £80,000 on a weekend trip to Las Vegas.
Hopeful, the beneficiary, wants to know if he may have an action against Trustingt


A) Hopeful will not have an action against Trusting, as Trusting did not know that the sale was in breach of trust.
B) Hopeful has no action against Trusting, as Trusting is not a trustee of the trust.
C) Hopeful may have an action against Trusting, as Trusting did not act as an honest and reasonable person would in the circumstances.
D) Hopeful may have an action against Trusting, as he received trust property in breach of trust.

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