Duties

Question 1

Re Harari’s Settlement Trust

Answer 1

Investment clauses are now given their plain meaning

Question 2

Speight v Gaunt

Answer 2

Equitable duty of care- ‘a trustee ought to conduct the business of the trust in the same manner that an ordinary prudent man of business would conduct his own’

Question 3

Re Whiteley

Answer 3

Such care as the prudent man would take would take if he were minded to make an investment for the benefit of other people for whom he felt morally bound to provide

Question 4

Nestle v National Westminster Bank

Answer 4

‘Modern trustee’s acting within their investment powers are entitled to be judged by the standards of current portfolio theory, which emphasises the risk of the entire portfolio rather than the risk attaching to each investment taken in isolation’

Lord Hoffman and Staughten: weak authority that beneficiaries do not have to be treated equally

Question 5

Re Lucking’s Will Trust

Answer 5

Special considerations apply when the trust is a controlling shareholder in a company

Question 6

Barlette v Barclays Bank Trust

Answer 6

A higher standard for paid trustees- this case was prior to the act and was made orbiter

Question 7

Cowan v Scargill

Answer 7

Moral objections-

Mine workers pension fund. Refused to accept investment plan on the basis of union policy.

Question 8

Harries/ Bishop of Oxford v the Church commissioners for England

Answer 8

Trustees of a charitable trust are equally under a duty to get the maximum financial return consistent with commercial prudence but in limited circumstances they can refuse to make certain investments even though there may be risk of financial detriment-
In this case not possible unless it would cause no financial detriment

Question 9

Re Chapman

Answer 9

S5(2)

No liability for mere errors of judgement

Question 10

Nestle v NWB

Answer 10

T was a corporate trustee which made some bad mistakes- COA held: no breach of trust
Staughton LJ emphasises that the trustees performance must not be judged with hindsight

Question 11

Tang Man Sit v Capacious Investments

Answer 11

Personal liability- election between remedies
Two separate causes but to compensate the same loss from slightly different perspectives- couldn’t enforce both of them, had to choose

Question 12

Target Holdings v Redferns

Answer 12

Mortgage fraud

Redferns were not liable to pay the money as their breach had nothing to do with the ultimate loss

Question 13

AIB Group v Redler

Answer 13

But for test applies to all breaches of trust

Question 14

Swindle v Harrison

Answer 14

But for test I’m the context of fiduciary duty

Question 15

Carson Enterprises v Boughton

Answer 15

Claimant in breach for failure to disclose an improper profit. Held:
La Forest: ‘the difference between damages and compensation is by no means clear, not many cases where compensation awarded for breach of fiduciary duty in context of intervening fault of a third party

Question 16

Dimes v scott

Answer 16

The basic rule- no set off is possible

Question 17

Fletcher v Green

Answer 17

Exception- where the profit and loss can be said to arise from the same transaction or breach of trust

Question 18

Re Pauling’s

Answer 18

A beneficiary who participates in or consents to a breach of trust with knowledge will not be able to sue

Question 19

Armitage v Nurse

Answer 19

Can exclude liability for all but dishonesty/wilful fraud

Question 20

Bristol v Mothew

Answer 20

‘A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence’

Question 21

Reading v AG

Answer 21

Staff sergeant stationed in Cairo sat in a lorry with smugglers . HOL held the crown could retain the money for many reasons, including that Mr R was in a fiduciary position and so was required to give up all unauthorised money to his principle

Question 22

Bristol v Mothew

Answer 22

The basic duty- millet J: loyalty is the distinguishing obligation- loyalty has several facets

Question 23

Boardman v Phipps (1)

Answer 23

A fiduciary who is acting outside the scope of his fiduciary duties cannot be liable for breach of duty.
No conflict rule

Question 24

Keech v sandford

Answer 24

No conflict rule- it is very proper that the rule should be strictly pursued and not in the leased relaxed; for it is very obvious what would be the consequences of letting trustees have the lease, on refusal to renew the cestui que trust

Question 25

Guinness plc v Saunders

Answer 25

Court won't authorise remuneration for working if it would in any way encourage T to put himself in a position of conflict of duty

Question 26

Boardman v Phipps

Answer 26

Awarded remuneration for his skill and labour- he had acted honestly and in the best interests of the trust at all times and had made a profit for the trust

Question 27

Wright v Morgan

Answer 27

Self-dealing rule makes voidable any transaction in which a trustee purchases the trust property or more usually sells his property to the trust unless the transaction is specifically authorised, and explicit authorisation are strictly construed

Question 28

Ex p Lacey

Answer 28

Self dealing rationale- trustee would be purchasing from himself which clearly allows for abuse of position

Question 29

Holder v holder

Answer 29

Although he had special knowledge of the property it was not acquired through his position but through the fact that he was the tenant of the farm- in reality holder was not the seller and the buyer

Question 30

Williams v Barton

Answer 30

Incidental profits- A trustee had a contract with a brokerage firm under which he received a commission on work for clients that he had introduced to them; he was accountable to the trust for the commission he earned by directing trust business to them

Question 31

Keech v Sandford

Answer 31

Purchase from a third party- There can be no potential conflict of any kind On the facts even though the landlord refused to renew the lease to the trust, this is a strict rule regardless of circumstances

Question 32

Protheroe v Protheroe

Answer 32

Extended the rule to apply to a trustee who acquired freehold reversion

Question 33

Re Macadam

Answer 33

Trustees who appoint themselves as directors of a company in which the trust has shares cannot keep any remuneration received

Question 34

Re Dover Coalfield Extension

Answer 34

Remuneration as a director- exemption from remuneration is only applicable to trustees who use Trust shares to appoint themselves as directors

Question 35

Re Gee

Answer 35

Hartman J: remunerative employment must account for the benefit obtains

Question 36

Williams v Barton

Answer 36

Cannot keep commission from a third party if it comes from his fiduciary position

Question 37

Lister v Stubbs

Answer 37

Bribe to order goods from a particular supplier

Question 38

AG for Hong Kong v Reid

Answer 38

Acting director of public prosecutions accepted bribes to obstruct the prosecution of criminals- Reid was liable to account for bribes

Question 39

Re Thomson

Answer 39

Competition- yacht broker: sensitive field

Question 40

Aas v Benham

Answer 40

No liability where partner of ship brokers set up a ship building business

Question 41

Regal (Hastings) Ltd v Gulliver

Answer 41

Opportunities arising from the fiduciary position- Leases for two cinema's- the directors had to account to the purchasers for the profits made. The fact that the directors acted as they did for the benefit of the company, in good faith, enabling the company to purchase the leases that it wanted, were all totally irrelevant - consent from a general shareholders meeting

Question 42

Boardman v Phipps

Answer 42

Very controversial, 3-2 majority- B was solicitor to a family trust- 3 trustees one of who were senile, B and one of the testators son's purchase shares in the company to gain control- had consent of 2 of the trustees- B acquired information from the company by purporting to act on behalf of the trust, opportunity to buy shares arose because of his position, Making a profit was in breach- very strict approach- 'possible may conflict' Lord Upjohn: a real sensible possibility of conflict

Question 43

Foster Bryant v Bryant

Answer 43

A director, while acting as such , has a fiduciary relationship with his company

Question 44

Aas v Benham

Answer 44

Use of information would lead to no liability if it was used for purposes wholly outside the scope of the partnership business

Question 45

Industrial development consultants v Cooley

Answer 45

It is an overriding principle of equity that a man must not be allowed to put himself in a position in which his fiduciary duty and his interests conflict

Question 46

O'Sullivan v Management

Answer 46

An allowance may be awarded for work and skill- | Kept some of the profits

Question 47

Murad v Al-Saraj

Answer 47

Supported lord Upjohn, suggested the UKSC take a look at the strict approach

Question 48

Cradock v Piper

Answer 48

The only true exception to the rule disallowed unauthorised profits- a solicitor trustee is allowed his usual charges for litigation work done my himself for the trust so long as his being one of the parties has no added expense on the litigation

Question 49

Re Duke of Norfolks settlement trust

Answer 49

The courts jurisdiction covered not only the power to allow remuneration for past services, and to allow remuneration for future services upon the appointment of trustees, but to increase the level of remuneration beyond that fixed in the trust instrument

Question 50

Sinclair Investments v Versailles Trade Finance

Answer 50

Duty to account for profits

Question 51

Lister v Stubbs

Answer 51

COA clearly regarded the non-trustee fiduciary's liability to account for a bribe to be personal, not proprietary (old law)

Question 52

FHR European Ventures LLP v Cedar Capital Partners

Answer 52

A proprietary remedy in the form of a constructive trust is available in all cases where a fiduciary makes an unauthorised profit from his position