The defendant, the trustee of a trust, hired lawyers to represent it with regard to a dispute between the income beneficiaries and the remaindermen of the trust. In the course of that dispute, the income beneficiary also sued the trustee for maladministration. The issue was the trust’s right to reimbursement for the fees incurred.
The Court found the trust’s retention of counsel to be a prudent action. The Court held that the trustee was entitled to recover the fees it had paid, because its actions fell within the category of "trust administration" and trustees are "entitled to be reimbursed out of the trust property for expenses properly incurred in the administration of the trust." The trustee’s role in the litigation was not passive, as it had a duty to protect the interests of all of the parties. The Court awarded the trustee fees out of the trust property.
The Court also ruled that the trustee was entitled to recover its fees for the maladminstration claims against it, because those claims came about as a direct result of the dispute between the beneficiaries. Furthermore, the trustee had been successful on its defense of those claims.