Duties and Breaches

Question 1

Powers of investment

Answer 1

A) express
B) statute
C) extension of powers

Question 2

s3 TA 200

Answer 2

Statutory general power of investment:

Powers available unless they are restricted/excluded by trustee or other legislation. The trustee act applies to general trust, there are specific rules in other legislation which deal with specific trusts, authorised unit trusts etc.

s3:
(1) Subject to the provisions of this Part, a trustee may make any kind of investment that he could make if he were absolutely entitled to the assets of the trust.
(2) In this Act the power under subsection (1) is called the “general power of investment”.
(3) The general power of investment does not permit a trustee to make investments in land other than in loans secured on land (but see also section 8).
(4) A person invests in a loan secured on land if he has rights under any contract under which-
One person provides another with credit, and
The obligation of the borrower to repay is secured on land.”
(5) “Credit” includes any cash loan or other financial accommodation.

Section 8
(1)	A trustee may acquire freehold or leasehold land in the United Kingdom-
as an investment,
for occupation by a beneficiary, or
for any other reason.

Question 3

Extension of powers

Answer 3

s57 TA 2000 & s1 VTA

- Need agreement of all Bs (all of age, ascertainable and agree to it)

Question 4

A) Duty of care and skill in investing

Answer 4

Section 1 Trustee Act 2000

Applies to most actions of trustees, does apply to actions of trustees under duty of investment whether they do so under act itself or under trust deed.
This duty will apply unless excluded/modified by trust deed.

Question 5

Trustees of the British Museum v Attorney General.

Answer 5

Trustees are under obligation to act honestly and in good faith, in best interests.
What that involves varies depending on what duty being looked at.

But in relation to duty of investment, content comes from case law and statute.

Question 6

B) Fiduciary obligations in choosing investments

Answer 6

1. Taking into account relevant criteria (s4 TA)
   fairness between Bs, moral objections,
2. Ts must obtain proper advice (s5 TA)
3. Duties in retention of investments: Periodic review (s4(2))

Question 7

s4 TA 2000

Answer 7

Specifies certain criteria that trustees must take into account when making decision. Referred to as the standard investment criteria.

(1) In exercising any power of investment, whether arising under this Part or otherwise, a trustee must have regard to the standard investment criteria.
(3) The standard investment criteria, in relation to a trust, are-
(a) the suitability to the trust of investments of the same kind as any particular investment proposed to be made or retained and that particular investment as an investment of that kind, and
(b) the need for diversification of investments of the trust, in so far as is appropriate to the circumstances of the trust

Question 8

Nestle v Natwest Bank 1993

Answer 8

fairness between Bs and moral objections

paramount duty is to act in best interests of all Bs which normally means best financial interests.

Question 9

Cowan v Scargill

Answer 9

Concerned mineworkers’ pension fund.

Personal objections to a plan could not be taken into account. Trustees not allowed to take own views into account. Held to be breach of duty to refuse to accept investment plan.

Question 10

Bishop of Oxford v The Church Commissioners for England [1992] 1 WLR 1241.

Answer 10

Trustees under charitable trust also under duty to obtain max financial return consistent with commercial prudence, but in limited circumstances can refuse to invest even though they are in risk of financial detriment.

• Ts should not make arrangements which conflict with the aims of a charitable trust in question.
• except in such limited circumstances, financial critieria and motivations prevail. Moral objections connected with charity only relevant if it would not of no significant detriment to do so.

Question 11

s5 TA 2000

Answer 11

Duty to seek advice:

Section 5 TA 2000

(1) Before exercising any power of investment, whether arising under this Part or otherwise, a trustee must (unless the exception applies) obtain and consider proper advice about the way in which, having regard to the standard investment criteria, the power should be exercised.
(3) The exception is that a trustee need not obtain such advice if he reasonably concludes that in all the circumstances it is unnecessary or inappropriate to do so.
(4) “Proper advice” is the advice of a person who is reasonably believed by the trustee to be qualified to give it by his ability in and practical experience of financial and other matters relating to the proposed investment.

advice from people like tax experts/property advisors.
Look to whether its reasonable to not take advice (small investment + large legal costs, not worth it?)

Question 12

s4(2) TA

Answer 12

Duties in retention of investments:
Periodic review of investments“

A trustee must from time to time review the investments of the trust and consider whether, having regard to the standard investment criteria, they should be varied.”

Section 5(2) TA 2000
“When reviewing the investments of the trust, a trustee must (unless the exception applies) obtain and consider proper advice about whether, having regard to the standard investment criteria, the investments should be varied.”

Question 13

Re Chapman (duties in retention of investment)

Answer 13

No liability imposed on trustee for mere error in judgments whilst carrying out duties in retention of investment

Question 14

Bartlett v Barclays

Answer 14

Where Trustee owns a controlling interest in a private company…

The company managed real property and embarked on a programme of hazardous and, as it turned out, disastrous property development. The trust company took little notice and simply relied on the company directors. They only received such information as was available at AGMs.

Held: Obligation to receive the information they would have received if they were on the board of directors: Bartlett v Barclays Bank Trust Co Ltd (No 1) [1980] Ch 515.

Question 15

PROVING BREACH OF TRUST

Answer 15

The beneficiary must prove that he has suffered loss because of investment decisions that cannot be justified. Not enough to assert that T acted for the wrong reasons, need to show unjustified decision making was the cause.

Hard to prove breach

Question 16

Nestle v Natwest

Answer 16

• T was a corporate trustee which had undoubtedly made some bad mistakes: it had failed to understand the width of the investment clause in the trust deed and took no legal advice and had also failed to comply with the obligation to review investments.
• The fund was worth £50,000 in 1922 and £270,000 in 1986.
• Had the fund maintained its real value it would have been worth £1 million.
• Had it kept pace with the average increase in the value of shares it would have been worth £1.8 million.
  Leggatt LJ went so far as to say that no-one would choose this bank for effective management of his investment.

Held: Failed to show that no reasonable trustee would have made same decisions- no breach of trust.

Question 17

PERSONAL LIABILITY FOR BREACH OF RUST/DUTY

Answer 17

1. Election between remedies
2. Equitable compensation
   - But for test
   - Profit in one transaction and loss in another

Question 18

Tang Man Sit v Capacious Investments

Answer 18

There is an obligation to elect remedy between inconsistent ones after judgment to prevent double recover for a loss.

• Joint venture for development of land: D provided the land, C provided money for the development.
• Agreement D would transfer some houses to C when built. Effect of agreement was that D held property on trust, and the failure to transfer was a breach of trust.
• D rented the properties out
• C claimed:
  a) an account of profiles from rent, made by D on basis they were unauthorised profits in breach of fiduciary duty
  b) damages for loss caused by breach of trust (rents C could have obtained from properties if he owned them himself)

Question 19

Equitable compensation

Answer 19

T liable to pay equitable compensation if Bs have suffered any loss.

Question 20

How is liability measured for compensation?

Answer 20

“But for test” (Target Holdings v Redfern)
- Applicable to breach of trust and breach of fiduciary duty

If D can show that the loss would have been suffered anyway, trustee not required to pay compensation.

But for test applies to all claims for equitable compensation for breach of trust… under the but for test, need to show loss was caused by D and not otherwise.

Question 21

remedy for proving but for test?

Answer 21

If successful, C entitled to be put in the position he would have been in had there been no breach.

compensation is assessed at the date of judgment. If trust fund still in existence, trustee may pay compensation into trust fund.

Question 22

Target Holdings v Redfern

Answer 22

The defendant solicitor held money in his client account for the claimant, to be released upon completion of a property purchase
The solicitor released some of the money early, making a significant personal profit
- Early release (before borrower acquired legal estate) and released to another body in chain of companies, not borrower itself.

HL: Solicitors only liable if can be shown that fraud wouldn’t have gone ahead without the early release of money.
Although there was a breach of fiduciary duty (early release), it would not have changed the financial position of the claimant had it not occurred.The loss did not result from the defendant’s act

Question 23

Swindle v Harrison

Answer 23

• Breach of fiduciary duty by a solicitor who had failed to disclose to his client that he was making a profit on a bridging loan which he made to enable her to complete the purchase of a hotel to be run as a family restaurant business and on the security thereof.
• The client had also raised money on the security of her house.
• The restaurant failed and the client’s house, the value of which had fallen, was repossessed.
• Relying on Brickenden, the client argued that all she needed to show to recover her loss was that the solicitors’ breach of duty enabled her to complete the transaction. Attempted to argue that it was irrelevant whether or not she would have completed the purchase regardless.

HELD: she was not entitled to recover as damages or as equitable compensation the value of her equity in her house at the time of the transaction: the probabilities, as found by the trial judge, were that the client would still have entered into the bridging loan even if the
solicitors’ breach of fiduciary duty had not occurred because she would still have borrowed the money to complete the purchase of the hotel whatever independent legal advice she had received.

Question 24

Canson Enterprise v Boughton

Answer 24

• C had bought property. His solicitors were in breach of fiduciary duty in failing to disclose an improper profit being made by the sellers.
• The claimant built a building which was defective due to the negligence of the builders and engineers.
• It was claimed that the solicitors were liable to pay compensation for the defective building on the grounds that if there had been no breach of duty the claimant would not have bought the land and consequently would not have built the building.

Held: Obviously a fiduciary should not be held liable for loss that does not flow from a breach of fiduciary duty. In a claim for loss suffered as a result of non-disclosure amounting to a breach of a fiduciary duty, the plaintiff is required to prove that the loss flows from the
breach of the duty.

Question 25

Profit in one transaction and loss in another

Answer 25

No set off possible (Dimes v Scott) | Ts should not be encouraged to speculate and commit further breach of duty in the hope of making some profit.

Question 26

Fletcher v Green

Answer 26

Exception to Dimes v Scott is where profit and loss can be said to arise from same breach of trust Trustees had made an unauthorised investment, sold it at a loss, the proceeds were paid into court and invested and a gain was made. Could that profit be set against the loss, reducing the amount of compensation? --> Court said yes but no reason given.

Question 27

Dimes v Scott

Answer 27

By selling unauthorised investment later than he should’ve done, trustee was able to buy more of authorised investment than he would’ve otherwise been able to so beneficiaries entitled to capital ended up with more of investment than he would’ve otherwise- that profit could not have been set against it. - Same wrongful breach of trust had led to profit and loss - hard to reconcile Fletcher with Dimes

Question 28

Bartlett v Barclays Bank Trust

Answer 28

Breach of trust by failing to supervise Ds of a private company in which the trust had a controlling interest. - The company had invested in two property development schemes: one was a great success; the other was a disaster because there was no planning permission. Held: Both of those property development schemes stemmed from the same policy of the company and part of the profit from the successful scheme was used to finance the unsuccessful scheme.

Question 29

LIABILITY BETWEEN TRUSTEES

Answer 29

A) Joint & several liability ... T can then claim i) contribution ii) Indemnity

Question 30

Joint and several liability

Answer 30

Bs can sue either one of the Ts for the full amount of the loss suffered. If A is sued and has to pay compensation for whole amount of loss. Trustee then applies for either contribution or indemnity

Question 31

Contribution

Answer 31

Civil Liability (Contribution) act 1978 (CLCA) ``` Section 1(1) ... Any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise). ``` Section 2 (1) ... In any proceedings for contribution under section 1 above the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage in question. (2) ... the court shall have power in any such proceedings to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity. ``` Section 7(3) The right to recover contribution in accordance with section 1 above supercedes any right, other than an express contractual right, to recover contribution (as distinct from indemnity) otherwise than under this Act in corresponding circumstances ... ```

Question 32

Indemnity

Answer 32

Trustee A can claim full indemnity from co-trustee B where... * Where one trustee is (alone) guilty of fraud. * Where a trustee is a solicitor and has a controlling influence: Head v Gould [1898] * Where a trustee has exclusively benefited from the breach of trust. * Where a trustee is a beneficiary and his interest is capable of being impounded: Chillingworth v Chambers [1896] 1 Ch 685. (Trustee primarily liable for compensation up to the amount of the beneficial interest)

Question 33

DEFENCES

Answer 33

A) Participation or consent of the beneficiary B) Exemption clauses C) statutory relief (s 61 TA 1925) D) Limitation

Question 34

Participation or consent of Beneficiary

Answer 34

A beneficiary who participates in or consents to a breach of trust with knowledge will not be able to sue: Re Pauling's ST [1964] - B must have full mental capacity and ability to freely give consent rather than subject to undue influence. - Requires participation on consent with knowledge (knows facts and fully understands as a question of fact, what he is consenting to). Does not need to know he is consenting to a breach of trust. only prevents B who has participated/consented to a breach of trust. Other B can still sue

Question 35

How can the interest of a beneficiary be seized?

Answer 35

where B instigated, requested, consented to breach with knowledge and motive of getting a personal benefit, and actually getting a benefit if he simply consented

Question 36

(s62(1)) TA 1925

Answer 36

Gives court a discretion to impound all/any part of Bs interest and court has power: "Where a trustee commits a breach of trust at the instigation or request or with the consent in writing of a beneficiary, the court may, if it thinks fit, make such order as to the court seems just, for impounding all or any part of the interest of the beneficiary in the trust estate by way of indemnity to the trustee or persons claiming through him." - Consent needs to be in writing. Instigation/request need not be, - B must have had motive of gaining personal benefit and have actually obtained personal benefit (s62 does not refer to motive/actual benefit) - Power in s62 discretionary

Question 37

Exemption clauses

Answer 37

A professional trustee is not liable for gross negligence. - Can exclude liability for all but actual FRAUD (Armitage v nurse)

Question 38

Statutory relief (defence) under s61 TA 1925

Answer 38

"If it appears to the court that a trustee, whether appointed by the court or otherwise, is or may be personally liable for any breach of trust ... but has acted honestly and reasonably, and ought fairly to be excused for the breach of trust and for omitting to obtain the directions of the court in the matter in which he committed such breach, then the court may relieve him either wholly or partly from personal liability for the same." - Discretionary - Strict interpretation - For trustee to satisfy court on all 3 points (honest, reasonable, ought fairly to be excused) - Reasonableness includes things like whether he sought legal advice from appropriate expert. Result of relief: B will not receive the compensation for the loss.

Question 39

What is the process of statutory relief?

Answer 39

Courts weigh up excusing trustees, so Bs not compensated.. or not to excuse Ts so Bs compensated. - Courts consider things like interests of creditors in weighing up. - Where Bs are insured against the loss, courts generally prepared to excuse T from liability because Bs will be compensated anyway. Limitation: Action must normally be brought within 6 years of breach of trust/duty, except for proprietary claims and fraud where extended.

Question 40

FIDUCIARY DUTY OF LOYALTY & UNAUTHORISED PROFITS

Answer 40

Trustee fiduciary is under a duty to act honestly and in good faith, in the best interests of Bs. It also involved negative factors to prevent fids from abusing position and acting in own interests as the expense of principals.

Question 41

The existence of a fiduciary relationship

Answer 41

Some are obvious - Trustee & Beneficiary - Company & Director - Banker & Client - Lawyer & Client - 2 partners - confidential employers & employees

Question 42

Bristol & West Building soc v Mothew per Millett LJ:

Answer 42

“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.” Courts can find fid relationships to give a remedy

Question 43

Reading v AG 1951

Answer 43

* R was a staff sergeant in the British Army stationed in Cairo. * He was paid by Egyptian smugglers to sit in lorries carrying contraband goods wearing his uniform. * The fact that he was there meant that the lorries were simply waved through civil police checkpoints without being searched. * The British authorities seized some of the money he had been paid and he brought an action for its return. Held: Court found fid relationship with the crown, he had acted in breach of this duty by his actions. The law is there to ensure fids act in the interests of principals and do not abuse their position

Question 44

DUTY OF LOYALTY

Answer 44

One of duties of fiduciaries

Question 45

Bristol & West Building soc v Mothew per Millett LJ

Answer 45

“The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. - A fiduciary must act in good faith; he must not make a profit out of his trust; - he must not place himself in a position where his duty and his interest may conflict; - he may not act for his own benefit or the benefit of a third person without the informed consent of his principal. This is not intended to be an exhaustive list, but it is sufficient to indicate the nature of fiduciary obligations. They are the defining characteristics of a fiduciary. … he is not subject to fiduciary obligations because he is a fiduciary; it is because he is subject to them that he is a fiduciary. … “The nature of the obligation determines the nature of the breach. The various obligations of a fiduciary merely reflect different aspects of his core duties of loyalty and fidelity. Breach of fiduciary obligation, therefore, connotes disloyalty or infidelity. Mere incompetence is not enough.”

Question 46

Boardman v Phipps (scope of loyalty)

Answer 46

A fiduciary who is acting outside the scope of his fiduciary duties cannot be liable for breach of duty

Question 47

Loyalty: remuneration of trustees

Answer 47

Cannot be remunerated for acting as trustee. Must act voluntarily, otherwise would be paying themselves out of trust property & risk conflict of interest. (Only unauthorised remuneration) Court has wide jurisdiction for past and future work. Trustees are not entitled to remuneration UNLESS 1. Trust instrument provides it 2. Authorised by statute 3. Beneficiaries agree to it 4. Authorised by court

Question 48

Cradock v Piper

Answer 48

Where solicitor-trustee is acting for a co-trustee as well as himself in litigation, court will not reward remuneration as it would encourage him to put himself in a position of conflict of interest/duty.

Question 49

Boardman v Phipps

Answer 49

A solicitor to a family trust was awarded remuneration for his skill and labour when he was required to disgorge a profit he made from investing in shares. He had acted honestly and in the best interests of the trust at all times and had made a profit for the trust. -->

Question 50

Remuneration of other fiduciaries

Answer 50

Remuneration depends on terms of agreement. court can award remuneration

Question 51

Purchase of property: self- dealing rule

Answer 51

Gives rise to potential conflict of interest, as would be both seller and purchaser. Applies to all trustees Ex P Lacey: A trustee cannot buy trust property unless it is authorised by A) Trust instrument B) Court C) Beneficiaries (Trustee cannot simply resign and buy the property- as would still allow them to take advantage of their position) - If Ts have already sold property on, must account for any profit made. Only can prevent conduct by fid if unauthorised. (Court authorisation)

Question 52

Dealings with principal: Fair-dealing rule

Answer 52

Concerned with buying interest of Bs or principal, not their property. - Purchase from Principal voidable unless fid can show that 1. he did not abuse position 2. Acted honestly and fairly 3. made full disclosure to principal (full value, sought independent legal advice)

Question 53

Incidental profits, conflict of interest and duty

Answer 53

A fiduciary will be liable to his principal in relation to all secret or incidental profits made from his position. Fiduciary may not take a property simply because is in that position and it enables him to make a profit. May acquire opportunity/knowledge in his position, which enables him to make a profit. Equally cases based on simple conflict of interest in duty. ``` A) use of Principal's property B) Purchase from 3rd party (Keech v Sandford) C) Remuneration as Director D) Bribes and secret commissions E) Competition ```

Question 54

(i) Use of the principal’s property

Answer 54

Breach of duty of loyalty, liable to any profits made. When talking about use of property belonging to principal this includes confidential information.

Question 55

(ii) Purchase from a third party; the rule in Keech v Sandford

Answer 55

Prohibits a fiduciary from purchasing from a 3P in circumstances. Keech v Sandford: - T held a lease of the profits of Romford market. He requested a renewal of the lease for the benefit of the trust but the landlord refused. - T consequently took a renewal of the lease in his personal capacity. - Held that trustee held renewal of lease on CT, there was a strict inflexible rule applicable regardless of circumstances that a trustee cannot take renewal of a lease in his own personal capacity. - Created to prevent possible abuse otherwise a trustee might be tempted to persuade landlord to refuse to renew in favour of the trust. - Clear potential for abuse and conflict of duty. Trustee got opportunity because he was a trustee. Rule extended in:

Question 56

(iii) Remuneration as a director

Answer 56

Trustees who appoint themselves as directors of a company in which the trust has shares cannot keep any remuneration received for being a director: Re Macadam [1946] Ch 73. Ban is on trustees who become directors because they are trustees. Didn’t apply in RE Dover because were already directors when they were appointed trustees. Hadnt become directors because they had become trustees so could keep renumeration.

Question 57

Re Dover

Answer 57

Equally if it can be shown that a trustee would’ve been appointed as director even if voted against appointment, rule doesn’t apply and can keep any renumeration received. Logic: opportunity to becoming director came directly through fiduciary position and is real conflict of interest. Trustee may not be best person to be director but may choose to appoint regardless. Trustee can keep renumeration if authorised, if trust instrument authorises appointment and impliedly can be paid for it or if court authorises it or the B.

Question 58

(iv) Commission

Answer 58

Williams v Barton [1927] 2 Ch 9. T was a clerk at a firm of stockbrokers. He appointed this firm to act for the trust. He was entitled to commission from the firm for introducing new business. Potential for conflict of interest and duty this firm might not have been the best to appoint.

Question 59

(v) Bribes and secret commissions

Answer 59

Reading v A-G: Soldier who sat in lorries carrying smuggled goods, not allowed to keep bribes received. Lister v Stubbs (1890) 45 Ch D 1, CA: Fiduciary received a bribe/secret commission from a supplier to persuade him to order goods from that supplier. No dispute here, clear abuse by fiduciary.

Question 60

(vi) Competition

Answer 60

Clear that a fiduciary cannot operate in competition with the trust.

Question 61

Re Thomson 1930

Answer 61

- Executors were directed to carry on the testator's business as a yacht broker. - One of the executors was prevented from setting up his own business of the same. - Yacht brokering highly sensitive to competition. - There is no problem if fiduciary was already owning own business when he became a fiduciary.

Question 62

(vii) Opportunities arising from the fiduciary position

Answer 62

…without consent from principal. Cases make it clear that it is true even if principal isn’t interested in opportunity or if cannot take up the opportunity. If opportunity arises from fiduciary position no profit can be made without consent.

Question 63

Regal (Hastings) Ltd v Gulliver

Answer 63

- A company set up a subsidiary to acquire the leases of two cinemas. - The subsidiary had to be fully subscribed for the purchases to go ahead. - The company had not got the resources to purchase all the shares in the subsidiary and therefore the directors bought them in their personal capacity. - They made a profit when the company and the subsidiary were sold. - The new owners claimed the profits. They did have to account for the profit to the company. Their good intentions, actions made profit fro the company, fact that their actions enabled the company to do something it wanted to do regarded as totally irrelevant. There was potential for abuse and a real possibility of conflict and duty.

Question 64

Boardman v Phipps

Answer 64

Everything that had been done by fiduciary had been done honestly and with good intentions, trust had made a profit and from all evidence would appear that would have otherwise made a profit as trust would not and could not have bought additional shares. - Nevertheless it was held by bare majority that B and P were in a fiduciary relationship to trust and couldn’t keep profits they had made. - B was awarded liberal remuneration for work and skill. But was held to be liable to account for profits he had made - Q: whether he could keep that profit and what grounds for position. - --> Maj took v strict approach. Fiduciary position arose form fact that B was solicitor to trust and purported to represent the trust

Question 65

Industrial Development Consultants Ltd v Cooley

Answer 65

- C was a director and general manager of a company providing construction consultancy services. - He tried to interest the Gas Board in a project but they refused to employ the company. They offered him a profitable contract in his personal capacity. - He took this and in order to fulfil it he falsely told the company that he was ill. - Held accountable for profits made. (Even though gas board had refused to enter into contract with the company, this was the type of contract Cooley should have been acquiring for the company and should have passed on to company, the info about it). Not relevant that gas board refused to contract with company: still breach of fid duty as he didn't pass on info.)

Question 66

Boardman v Phipps (work and skill allowance)

Answer 66

Under this case, rule developed to allow for remuneration for work and skill. Even a fiduciary who is less honest can be awarded allowance for skill and work

Question 67

O'sullivan v management agency & music

Answer 67

Had made contributions, give percentage of profits but this was less than he would’ve been awarded had he been honest throughout.

Question 68

Guinness v Saunders

Answer 68

In discussing ability of court to reward remuneration, will only do it in exceptional circumstances… where work is of substantial benefit to principal and someone else would otherwise have been paid to do the work. HL will never award remuneration where it would encourage fiduciary to put themselves in positoon of conflict.

Question 69

Authorised profits

Answer 69

- A fiduciary is only liable in respect of unauthorised profits. - True consent, full disclosure - sometimes there is question as to whose consent is required. Boardman: 1 lord said Ts permission, Hodson and Cohen said Bs, Din said both and Upjohn said def Ts, not commenting on Bs. Seeking confirmations from court on this would take time.

Question 70

Remedies where there is an Unauthorised Profit

Answer 70

1. Duty to account for profit | 2. Proprietary remedy

Question 71

1. Duty to account for profit

Answer 71

Fiduciary who profits 10k must pay over 10k to Principal (personal liability to pay sum equivalent to profit made) -Duty to account is only for original unauthorised profit made from position- no duty to account for any further profit.

Question 72

2. proprietary remedy

Answer 72

* Original priority was decision in Lister v Stubbs where held that in the case of a bribe or secret commission, there is only ever personal liability- duty to account for value of bribe and CT will not be imposed. * One of the main reasons given by Lindley in Stubbs was issue of giving

Question 73

Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd

Answer 73

A proprietary remedy is available only where the asset or money acquired in breach of fiduciary duty "is or has been beneficially the property of the beneficiary or the trustee acquired the asset or money by taking advantage of an opportunity or right which was properly that of the beneficiary".

Question 74

FHR European Ventures LLP v Cedar Capital Partners LLC

Answer 74

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