INTRO- what is his topic about?
This session is a topic on fid nature of trusteeship- and in this lec looking thru the one that kleans in truts law those to be a trustee and well In partic exploring certain rules does and donts of trusteeship being precise to looking at certain rules and sya certain thigns cant do as trustee, law draws lines were law says trustee cannot do ceetain things.
So legalm rule of bus develop safeguard and jealousy protect interest of benfeciares here rules developed toset out basic moralities trjstee can or cant do and by doing that it sets out .. Role of trustee.
INTRO - what is trusteeship?
Trusteeship is a fid relationship. Trustees owe their loyalty and committee to beenficaires. Their interest first. That is whole point of fid rels. Touched on this last week.
INTRO - what can trustees cannot generally do?
Trustes cannot generally personal rpogcate from their position fo beign trustee unless cts auth or trust itnsrument allows it. But thereare certain prcinipes that underpin the trustee ben rels.
INTRO- what does it give us?
Which give us red lines ceetian rulescannot do this that an that swhat gonnabe looking at today.
INTRO - in more partic?
In more partic detail fid natur eof trustee ship.
INTRO - remember what?
Rmeebr what underpins all these rules, looking at is this diea that as it’s a fid rels.
INTRO- what is the duty essentially?
Its sential duty owed by in trustes in ben is by comm loyalty, has to put his own int of back burner. Amnaging btw assets with th eint and beneficiaries on forefotn of his midn. Puttin their int above his own. Fofice of sort of selflessness in that sens.e
Fiduciary Nature of Trusteeship- what is first thing trustess do?
(i) Trustees act voluntarily and can only claim remuneration if specifically entitled to the same, viz:
Fiduciary Nature of Trusteeship- set out what - just look or go voer slide
Trustees act vol r.a.w
Set out intervivod trust r prhabte turst. Such trust isn’t may have an expres privsion which allows trustee to reieve payment. Taken on responsibility. Man years ago trust were..??
Fiduciary Nature of Trusteeship- nowadays what- look or go over slide
Nowadya smodrn dec trust broaden off an doften we have now professional trustees own trusy prop. Solicitors, probate deparmtnet scouncillors, trutee. And instrumenet fudn trustees , much more professional type of filling for where turtsee ..?? Cant hear
Fiduciary Nature of Trusteeship- now what do we have?
Now we have professional managed trustee where turstees now professional people some descript corporation abnks accounts solicitors.. Its very common problem law find profviosnal ffor thei remuneration in mangign truts prop.
Fiduciary Nature of Trusteeship- what is express remuneration clause?
Soa n express rem clause, exist trust isnrument
-Express Remuneration Clause in Trust Instrument;
Fiduciary Nature of Trusteeship- trustee act 200?
Posion in trustee act 2000- r.a.w ans fhey complain rem stat based uner act where trustees also..?
-Trustee Act 2000 S.29 remuneration for professional trustees/trust corporations
Fiduciary Nature of Trusteeship- what can truste also recover?
Trustee also can recover any expnses from managing trust funds or prop
-Trustee can recover out of pocket expenses
Fiduciary Nature of Trusteeship- what is remuneration authorised by?
Remuneration authorised by the Court under its inherent jurisdiction, where work done has been of substantial benefit to the trust, see:
Fiduciary Nature of Trusteeship- what did ct do for many years?
Ct for many years agve inehrnt jursi to alow for trustees to be remunerate. So trust inst doesn’t say anything.
Fiduciary Nature of Trusteeship- what do trustees want?
The trustees want money for discretion of doing they could apply for law court, where court chancery has a parternlistic jurisdci to try and make sure trust work properly and effeicentl and effectively.
Fiduciary Nature of Trusteeship- gift effect to what?
Gift effect to the testor or settlement intervibs lifetime trust itnnetion.
Fiduciary Nature of Trusteeship- although equit juris decretion make feel well?
Althoguh equit jursi discretion make feel well worth fone perhaps lot of work been substancial ben to trust. Genrallt ct may feel approperite to … auhor truust? Micr not worki-mtusttes being rmeurrnated from c dsicrrtion remun.
Fiduciary Nature of Trusteeship- what about duke of norflock?
Duke of Norfolk’s Settlement [1982]
Increase in remuneration for work done authorised.
Duke of Norfolk settle case there – ct could increase in rem –m has its general discreito to help police an dmonsitor..
Fiduciary Nature of Trusteeship- whats the next case?
O’Sullivan v Management Agency and Music Ltd [1985]
Fiduciary Nature of Trusteeship- whats the next cases?
Foster v Spencer [1996]
Boardman v Phipps [1967]
Fiduciary Nature of Trusteeship- what about those 3 cases in depth?
O sulican r.aw foster and boarman- case wgere gis trutss perosnaly involed trust fund account for any profits or changes made we have construcit trust last more thsn 5th elem??? O=contact certi info used to ?? Managig tust fun and eult that shrrsa company lwo value. Hel that hat roop mad eeprosnally consruive trust ben ,partic trustee . So perosla gains he made account for ben for … creative csntrutcie trust. And so for trustee of chinfo. … trustee which elads to this personal enrichment that enrichment comes through share sor…all info came into hishead hroygh his capacity ofbebign ttustee. ??? On a consturice trust for benefic. Duty og selfnessnesspraciting itnee benefiare, ery srric but in
broadan v phips- innconetly no.. So had maide gain as result what gibso in cap reciev info gain made busiens sopp..?????????
Fiduciary Nature of Trusteeship- what about boardman$
Mic not working look at case se
But could .. Remuneration will work and inovle work done via solitiocr trustee that case BOARMAN VERY IMPROTNAT CASE- RLEVANT TO EXAM AND TUTORIALS-
Fiduciary Nature of Trusteeship- what about remuneration?
that remuneration
Remunartion used to be accpetion but nowadays norm. and isntnt future eof trusteeship. Being trustee repsonsbility.
Fiduciary Nature of Trusteeship- what about 200 years ago?
Not like 200 yrs ago ladies managing prop for mate who died its now become profesisnal isnittuin which requires proper remuneration fo thos involved in amangement in propert.y under these stiect rules have to selfless manage prop for benefit of others. Very ltitle [personalgian e.eg boadman Phipps and fhr case.
Fiduciary Nature of Trusteeship- what happened in craddock v piper?
Craddock v Piper (1850)
A solicitor trustee may charge costs if he acted for a co-trustee as well himself in relation to trust business in court, provided that his activities have not increased the expenses.
Fiduciary Nature of Trusteeship- craddock in other wrods?
Craddock – r,a.w , so rem persisits trustee always been allowed. Costs have to be reasonable of course. Ct has to inherent jursidc to alow that
BOOK- what case to define fid duties?
Bristol and West Building Society v Mothew Millet LJ described the fidiciary relationship in the following terms
BOOK- how did the case describe the term
A fid is someone who has undertaken to act for or or on behalf of another in a particular matter in circumstance which give rise to a relationship of trust and confidence. The distinguishing obligation of a fid is the obligation of loyalty
📖- what do fid have?
Number of duties designed to prevent any conflict arising btw the interests of the trustee and those of the beneficiaries- these duties strictly enforced by courts
📖- what about this
Although this can sometimes be said to lead to the unfair treatment of innocent fid, the exacting nature of these duties discouraged them from undertaking any action which might be said to conflict with their paramount duty of loyalty to beneficiaries
📖- what about unauthorized profits?
Fidiciares cannot retain any unauthorized profits generated by their connection to the trust
📖 trust in relation to this?
Bray v ford
📖 what about the profits
Any profits will be held on constructive trust for the benefirces
📖 case for this
Keech v Sanford
📖What after case?
It will not make a difference if the fiduciary generates a profit for both himself and the trust
📖 case for the next case?
Boardman v Phipps
📖If fid makes a profit from his or her company’s dealings with the beneficiary what will happen?
His or her share of the profit will be subject to a constructive trust for the beneficiary - Williams v Barton
📖What about bribes?
A fid who receives a bribe from a 3rd party is clearly in breach of his or her fid duty not to make an unauthorized profit
📖However with bribes
The extent of the remedy available to the beneficiary against a fid who takes a bribe has been questioned
📖 In the case of which?
Lister v co v Stubbs - the court of appeal held that the c could not establish proprietary interest in bribes recieved by their fid as those monies had never belonged to the company
📖 however to libs?
Attorney general for Hong Kong v Reid - privy council held that the c was able to establish a proprietary interest in the bribe monies received by Reid on the basis of the equitable maxim
📖 equitable maxim ?
Equity sees as done that which ought to be done
What did this meant ?
This meant d held prop purchase with bribe money which had increase in value on constructive trust for the c
📖 what about both approaches
Both can be seen controversial
Lister - reduces the extent to which fid can be held accountable by the beneficiaries and seems to run contrary to the principle that fid should not be balled to profit from their position
Attorney- clearly seeks to send a strong message that any explotation of a fid relation will not be tolerated, but did so through the creative use of an equitable maxim which trampled upon 100 yrs of established legal principle
When was this debate re opened?
Sinclair investments uk Ltd v Versailles trade finance Ltd in administration - when the court of appeal declined to follow att general - and reasserted that beneficiary will only have a personal claim against a fid in respect of prop which neither belonged to the benefi nor was acquired by taking advantage of an opportunity that rightfully belonged to the beneficiary
📖 however few years late?
Later in fhr European ventures llp v attorney- in a careful and thordough review of the authorized
📖what did lord neuburger argue?
argues that the importance of ensuring fid loyalty is the key to understanding the rules in this area and not the question of whether the bribe money belonged to the principle
📖 as such what?
As such accepting a bribe should be considered to fall within the general principle that an agent who acquires a benefit through their fid psosition to be treated as having acquired it in behalf of their principal
📖 what does this approach provide?
Provides the principal with both propertiAry and personal remedies from which to chose and means that the value of bribes and any subsequent additional profit can now be potentially recovered
📖 where’s this strict approach taken by the courts?
By courts in relation to the duties of fid is illustrated by the following decision
📖 which decision
O donnell v shanahan
Trustees Must not be Purchasers- whats the 1st thing
(A) Purchase of Trust Property
Trustees Must not be Purchasers-
Trustees must not place themselves in a position where their role and personal interests conflict.
Trustees Must not be Purchasers-
trustees who sell trust property have an overriding duty to obtain the best price
Trustees Must not be Purchasers-
case buttle v saunders- an injunction was awarded preventing trustee from accepting an offer to purchase property for reasons of morality when a higher offer had been recieved
Trustees Must not be Purchasers-
Trustees must not become owners of the Trust Property. Campbell v Walker (1800); Ex p Lacey (1802); Movitex v Bulfield [1988]
whats the sub rule?
Sub rule truse must not purchse trust prop
The self dealing rule?
The sale of trust property to a trustee is voidable by a beneficiary
📖 what about this rule nature
Here the nature of fid rels operates to prevent the risk of trustee putting his or her own commercial interests before the fid obligation to obtain the best price for the trust
📖 what did this rule do
The rule is strictly enforced and in general it does matter if the property is processed in good faith and for full value
Ex p james or even after the trustee retires - wright b Morgan unless a significant period of time has since elapsed - re boles and British land company company’s contract
📖 where did one interesting exception occurred in holder v holder?
Holder v holder case
📖 the decision in holder v holder?
Sit oddly with the CT’s generally strict approach to fid duties , and it is often questioned whether these rules need to be relaxed
📖 court of appeals approach?
The court of appeals approach in this case might be said to be more typically equitable in character as it pays much closer attention to the whole circumstances of the case and broader questions of fairness than the more usual strict application of rules would allow
📖 in this sense what?
Holder b holder has much in common with the minority approach taken in boardman v phipps in which lord upjohn argues that a real conflict of duty and interest must be identified before the rule is applied
sub rule from slide?
Such a contract can rescinded irrespective of fairness of price etc.
holder v holder facts?
Holder v Holder [1968]
After some minor acts as Executor (trustee), X renounced his executorships and took no other part in the administration of the will. He later purchased at auction for fair price a farm belonging to the estate. He was previously tenant. CA let contract stand. X had not interfered with administration of the will;
more holder v holder facts?
had taken no part in the organisation of the auction; there was no conflict at time of purchase; any special knowledge about the farm was acquired by X as former tenant not executor. Further, beneficiaries had acquiesced in the sale.
book- what is the fair dealing rule?-Such a contract can rescinded irrespective of fairness of price etc.
a trustees purchase of a benfeciaries equit int in property will not be voidable as long as the trustee acts honestly , makes full disclosure to the beneficiares and pays a fair price
coles v trecothick
extra facts for this part?
Generally a trustee purchase of trust property is voidable at option of beneficiary.
Burrell v Burrell Trustees [1915]
A sale to a trustee’s spouse will be looked upon with suspicion (sale upheld on facts however).
Re Thompson’s Settlement [1986]
Sale by trustee to a company in which he has a substantial interest/majority shareholder will be set aside.
what happened in kane?
Kane v. Radley-Kane [1999]
Widow was sole administratrix appropriated £50,000 of unquoted shares to herself in satisfaction of the statutory legacy to which she was entitled on her husband’s intestacy, but without the consent of her stepsons, who were also entitled, subject to her rights.
The estate at the time was worth only £93,000.
-Kane – no will less admisntrastrion-s he takes out lets admin becomes appointed by ct of administrator of her husband estate. R.a.w
Late t time worth 93,000 sdidnt se
widow seemed to entitle what?
Widow seemed entitled to it all. She sold shares 2 years later for over £1 million. Held: appropriation of the shares breached the self-dealing rule, was a purchase of trust property by trustee. Share proceeds held for the estate on constructive trust.
whart about trust instrument?
A trust instrument can permit trust property to be purchased by a trustee/court may permit.
(B) Purchase of Beneficial Interest - what about this?
2nd rule
what will equity do here?
Equity takes less stringent view of trustee s purchasing beneficial interests. Onus is on trustee to show he gave full value and beneficiary gave informed consent/arms length transaction:
Thompson v Eastwood (1877)
Coles v Trecothick (1804)
Williams v Scott [1900].
what did 1st rule say and what is 2nd rule saying?
1st rule said trustee cannot purchase trust prop if they do, good or bad set aside
2nd rule- red line in terms of defing default posit-was this call which in theory prevent trustee from buying not trust prop but beneficial equ inte. Here equ takes slightlty less strict view and here the trustee purachseas a ben inte.
e.g of both these rules?
E.g mill pouns trust a for life b for lfie reaminder c and x is trustee, x wants to buy c’s ll.. In that trust fund .. Carry out actuarl evaluation obvs if a and b die capital goes to c. by tiem a and b alive interest fund, b dies dries out whole cpa goes to c. trustee wants to buy c’s remainder itn.
do that remainder what?
Do that remainder int , how much is it worth? But if a and b 18 5th then c’s int gap .. Is solely mil pounds future.. Gonna … much… market value now. So now ened to have… actuarl evaluation has to take palce to work out what the market val now is, rik if a and b died etc, try fix value of the rest int capital for c. talk about risks etc… actuarial evaluation
what happns if pruchase goes aheas?
What happens if that purchase goes ahead?
Trustee expires c’s. how much pay mil punds?…how much worth now? Buy tht lump sum. How much think worth. So buys it but obvs tied up with c’s… so work out.. What positon there? Not as strict as 1st. General rule is truste can buy and equit int in trust prop, money shares land ming vaset etc, but the ownwers understand if trustee can show further proof on him. Get trecision unless trustee can show a full value, beneficiary gave informed consent, no undue influence or duress or misrep.
what is it for trustees?
So its in trustees itn to get settled actual eval.. Bearing in mind…so firmly on trustee to show general consent , beneficiary etc, show market value, discretion that eval. Erm then the contract will stabnd. Similarly barn..evaluation how much that worth. Kick in and b dies , barn accepts equit interest in land trustee land becomes .. Money. Then seeps remainder interest… so transaction finally equit stabnd also logn..
what about trustees and conflict of interest?
Trustee con c find b slight interest..?? How much b;s life itnerst worth – again u need actual evalu- how old a how logn got to live what risk from dying? If go seen then itn right o income.. Whats interest rates. Whats 1% mill quid a year 10,000 duration bs life , if trustee buys that he egts that int. becomes interest ultra vine. Howlong actual eval then work out prie. Ammunity. So trustees combine ben interest ionce show= actual eval. Life interest income u recieev int eveyr year rest of ur life. How much that worth of the market. So deponds.
So if beneficiary or a benef then change mind, can recing
Thompson
Coles
what can you buy?
U can buy benfical int but if ur challned trustee has b.op form geneuine consent given and a fair markwr value paid.
Obvs if ur buying something way below actual market estimated value.. Ct think what going on here an dtrial decision.
what about Incidental Profits?
Generally, see Lecture 8: ‘Renewal of Leases and Purchase of Reversions’:- Keech v Sandford (1726) Re Biss Protheroe v Protheroe [1968]
incidential profit 2
Ide if trustee benefits profits personally, as jogs informational opportunites whichc ureently sway during trusteeship, steward ship. And he gains personally all this infof rom b=… account for beenficairs poritt mad, any proit has made
what about keech v sanford?
Keech v Stanford- right tor eciev lciense fees, lease ran out land lord didn’t want to renew to minor who benefit. Lease held on trust under trust of these profits for minor. When that run out. Trustee claimed new leas ein own right so keep profits. But bc opp come into his kwnoldhe and presented itself as result him being truste.. New lease was renewed to him personally, whos held that must account profits received to the beenficary. Minor ben under the old trusts. So basically held renewed lease on c.t for the former beneficairs. So clear red line in san dover naturw of self gaining for ur own ben as rreuslt exploting opp come ur way which u received in capcit fo trustee
what happened in re bliss?
Re bliss
Prother- last weke
Incidental profits wil be held on c.t for beneficaires
what about this Trustees as Company Directors?
Can trustees who obtain directorships by virtue of their office keep their director’s remuneration?
extra in regard to re mcadam?
Trustees as company directors
Trustee buy shares in company , that bring sint scenario. Shares u see, … but obvs decl .. Ben but the shares themselves … when shares whites of comapn where shares trustee who can control their…. So can trustees obtain company diretprshis by virtue of their office as a trustee of .. Shars keep their directors .. Where directors emunretaion… if the trustee lose the ploss of shars which they hold trustee/benefic- los voting rights hars appointed onto companies dirctos, salaries or rrmun.. Keep money personally or …??bc ur exposing rights agains torop shardes…onc ehold that rem on c..y … this is q question about identifying causal link
Re macadam… r.a.w
Perosaml prop come thie way but only come as capacity as trustee
what happened in re macadm?
Re Macadam [1946]
Trustees had power by the articles of a company to appoint two directors. They appointed themselves and were remunerated.
Held: They had to account to the trust for their remuneration, acquired because of their office.
what happened in re dover?
Re Dover Coalfield Extension Ltd [1908]
Remuneration paid as directors to trustees could be kept if trustees became directors before they had become trustees.
what happned in re gee?
Re Gee [1948]
Remuneration as directors who were also trustees, could be retained if trustees were appointed independently of the votes of the shares of the trust owned by the trust.
more on re gee?
look a , see how many if turst only few shares of company. And u excersie those rights trustee dpo..the company says u ned x … cnat hear
So small not in causual link of .. Director.. Remunerated – soq looka t is there enough show evidential cuase link btw trust and shareholder… nd appointment trustee and directorship??
what happened in re lewis?
Re Lewis (1910) Remuneration to directors who were also trustees could be kept if the trustee did not obtain that remuneration by use of his position as a trustee but by an independent bargain with the firm employing him.
general point of re lewis?
it’s the gernal point NEED CAUSAL EVIDENTALM LINK- DID U GET PERSONAL REMU OF DIRECTOR – cos of ur trust and shares trust cintroled, voting right trust to be controlel, thas theat contributed to u in dirction rec rem. Answer yes cnat keep have to keep on c..t for ben. Answer is no the turst int and voting rights u can keep the money personally.
what did cohen say in re mcadam?
Re Macadam (above) Cohen J : ‘The root of the matter really is: Did the trustee acquire the position in respect of which he drew the remuneration by virtue of his position of trustee?
what happned in rellewllins?
Re Llewellin’s WT [1949]
Trustees may be expressly authorised by the trust instrument permits them to self appoint themselves as directors and receive remuneration.
what happened in re keelers st?
Re Keeler’s ST [1981]
Court may sanction appointing trustees as directors and their fee retention.
extra for re keelers?
Re keelers- settlement rust said – r.aw – could give green light fi that happens??? So if in doubt,apply to ct an dmake them sort it out
Other Profits Earned by Trustees - what about this?
Default rules which defin red ines helfd define antgur eof trusteeshiup
Other prif tr..a.w
what happened in williams v barton?
Williams v Barton [1927]
A trustee who introduced business of the trust to a firm of which he was a member was compelled to account for the profit.
what happened in sugden?
Sugden v Crossland (1856)
A trustee who received a sum of £75 to induce him to retire had to account to the trust for this sum.
cases in depth?
Williams- r.a.w – so very strict illustration of the no profit all tjere
Sudden- r.a.w – again by virtue of this office of trustee he obtained personal gain and a c.t will be imposed to make trustee account for that sum of money to eh beenficairs. Very strict appl to rule there
what happened in brown?
Brown v IRC [1965]
A trustee who used trust funds in his own business was required to account for the profits received.
more on brown?
obvs borrowed money from trusy and that created a return and that coukdn be allowe to stand
Trustees must not be in Competition with the Trust- what is meant by this?
Re Thompson [1930]
Executors of a will were directed to carry on the business of the T who had been a yacht broker. One of the executors was intending to set up on his own account as a yacht broker in competition.
Held: He must not set up in a competing business.
book- re thompson short?
the fid obligations of trustees towards beneficaires entail that they should not compete with the trust
book- how to get extra marks
the q of how strictly fid duties should be enforced raises many q’s about the nature of teh fid relationship, and the courts attitude towards them. impress exam wwith good knowledge of these issues- read jones unjust enrichment fid loyalt- the natur of fid loyalty and collins the no onflcit rule : the acceptance of traditional equtiable values
Use of Confidential Information
Conf info r,a.w –interesting area.. Agin touched ont his abit gorden Phipps but other cases more spec in relation to this isusue
what about this?
A fiduciary who makes use of confidential information belonging to his principal will be liable for any profit that he makes.
- and truste canot exploit of fid confidential info which hes acquired in his capa s fid or trustee an dif personal gai made, that money hel d on c.t and account has to be made to ben for pinciuple of ..
what happened in ag ?
AG v. Guardian Newspapers No.2 [1990] 1 AC 109 HL
HL held that the Sunday Times was liable to account for the profits made by its publication of extracts of ‘Spycatcher’ a book written by a former member of the British Security Services, who stood in a fiduciary relationship to the Crown and which contained confidential information.
ag longer?
held couldn’t cos former meebr of britsh meebr of secuite service, he stod as fid in a fid rels with the crown who was his pricmnipe he was affectively fid agent if the crown and he had breached his fid duty by oublshjing book and this case advance book coming out selling extratcs if iut , he reciev comm and helf he ahd o account to crown fro that moenyr eveivd, why he was secreta gen he ahd fid loyalty trust and conf to crown and couldn’t profit personaly exploiting rels. So secret agents are fid and cannot profit form reaching oblig. Secreacy to cronw.. So any prof he gained had to hold on c..t and pau to crown
what happened in peter pan?
Peter Pan Manufacturing Corp. v Corsets Silhouette Ltd [1964] 1 WLR 96
The defendant company’s designer was shown a sample copy of the design of a new brassiere in confidence by the plaintiff company. When the defendants subsequently manufactured it Pennycuick J irdered that they account for their profits.
peter pan in other words?
Peter pan r.a.w in comerical context- held judge had to acoit for profits made conf relationship here. Fid rels kicked in on back fo cofn rles btw 2 companies. Compamnu which abuse that tirsy conf, advantage manufacturing bra on profits made form those sales on c.t .. Of that desing. So conf info in commeicalcontx t, fid rels which abuse so profit made on indiviall. Fid rels co.t kick sin. Gai has to hold mone in equity or company will suffer iss
Also a liabity r,a,w
Establish in lack mineral r.a.w
extra
Liability on the basis of the exploitation of confidential information was also estbalished in:
LAC Minerals Ltd v International Corona Resources Ltd (1989) 61 DLR 14. Here LAC received confidential information from Corona during the course of negotiations with a view to establishing a
extra 2
joint venture to exploit minerals from land owned by Corona, which indicated that adjacent land was also likely to contain mineral deposits. LAC subsequently purchased the adjacent land in their own right and exploited the minerals themselves. The Supreme Court held that there was a fiduciary relationship between the parties and that LAC should the land on constructive trust for Corona because of their breach of confidence.
extra 3
See also on exploitation of confidential information and the imposition of constructive trusts: Boardman v Phipps [1967] 2 AC 46 HL; Regal v Gulliver [1967] 2 AC 134; AG v Blake [1998] 1 AER 833; Satnam v Dunlop Heywood [1999] 3 AER 652.
extra 4
Remedy for Breach of Fiduciary Duty: Account of Unauthorised Profits, Bray v Ford [1896] AC 44; Regal v Gulliver [1967] 2 AC134; subject to reasonable allowances see,Boardman v Phipps [1967] 2 AC 46 & O Sullivan v Management agency [1985] QB 428.
extra on this all?
r.a.w
So cts are I when conf rels btw 2 parties crown or crown srvants btw 2 companies comer neg, the cts can bc of the conf rels . Cts can engraft ontot hat rels that fid rels to person who bene repose din relation int in conf, treated as fid and this exploits that conf abusies it self gain and be hel dacoutn for any proftis made, c.t will ?? Fid which creates and protects conf rels. And in that sens protect conf situ. That dec has faced some criticism ** might be potential exam q and if been enrich based on that conf rel engraft that c.t to make person reach ac
So where conf begin…?? Think dec..so what exten should law get invovledd ot gthat extent
Duty reme for breach fid utyc sse- duty esstentialy is to acocutn for unauth prifits made form abusg t hat decl, that fid duty that trust and conf , impose injury, duty to account some people duty to account rofits made.
book - duty of provide info?
while trustees are expefcted to act in interests of beneficiaries , it is th ebenefciiares who will hold the trustees to account. to do this, they clearly require some access to info about the trust , but what is the extent of trustess duty to keep beneficiaires informed about the trust.
what do trustess not have to give reasons for ?
trustees frequently have toe xcercise their discretion in carryign out their duties.
for e.g?
trustess may have a duty to take advice before making an investment , but it is they who ultimately defcide whether or not to follow the advice
another common e.g?
trustees discretion to choose which memebrs of a class to benefit in a discretionary trust
what case?
case of re beloved wilkes charity, estbalished that trustees do not have to give reasons for the use of their discretion,. while this deciision limitis trustees accoutnaibility , it also allows trustees to fulfil their role as fid:
fid?
- for trustess to act impartially they ,ust be free of pressure from bene
- in the context of family trusts, protecting trustees from hsving to explain their decision may prevent family conflict
what is to note?
lord truro added tat teh cour can supervise and possible inteverne where
- there is evidence if bad faith or fishonesty or
2. the trustees provide reasons for their actions - in these cirucm the court can consider their concl
if trustess are not required to give reasons for the use of their discrion to what information are ben entitled
other info about trust- accounts!
all trustess mut keep accoutnd and make them avail to the ben for inspection - pearse v green. thisd invlufrd ben under a discretionary trust, although this right may be limited whete they are part of a large class- murphy v murphy
info about the trust-
in or rouke v darbshire- the house of lords states that the ben right to info ewas based on their properiaryt interest in hte trust. this entitled ben to access all trust docs
in re londenderryhs settlemetn?
salmon lj attempted to define trust docs
defintionm
- they are docs in the possession of trustess as trusteess
- they contain info about the trust , which ben are entitled to nnow
- the ben have a propr inter in the docs and acccordignly are entitle to see them . if any parts of a doccontain info which the ben are entieled to know, i doubt whether such part s can truly said to be integreal parts of the doc
what about def?
hw this dif does little to clarify the scope of the term- trust doc addition, the court stressed that the bene right to see trust docs did not include
not include?
doc which might revela how the trusteess had excercised their discretion
confidential info, including the agendas of trustee mettings correspondence among trustees or ben
a different apreoach taken whete?
privy council in schmidt v rosewood trust
what hapepend in schmit?
looki in book
following schmit?
benficiares no longer have an automatic right to demand info. this could also be said to permit trustess to eb secretuve as the cost of lit may discourage benficr from complainign
on the other hand?
the privy council apprach means that tge court could potentially order the disclosure of any documentation it deems rel, thus enhancing the accoutn of trustees
what does schmit also offer?
the ct flecibity to respond to diff cirumstance by allowing the ct to balacne the interest of trustees benefic and any third parties.
what do we see?
breakspear v acklnad- where briggs j accepted the trustees argumnet that disclousre of teh settlors LETTERS OF EWISHE wwould cause family conglict and refust order disclosure
WHAT TO NOTE HER?
briggs j empahises that conf issue identified in re londe settlemet shuld be seen as improtant but not decisievie factore in resolving questions of disclosure.
while schmidt v rose?
is a privy council decision, and therefore, striclty ppersuasive only it is arguable that lord walkers reasoning provides a more wotrableable conceptually satifying approach to the quesiton ben right to inf
extra marks?
the unsettled nature of law in this are make it prime subject for AN ESSAY Q ON ACCIOUNT TRUSTEEA- improve ur marks by demon knowledge of both current law and calls for greater account. kirby p argues for greater account in his minority judgment in aurstrialian case haritngan nominess property ltd v rydge . a good discussion of the debate can also be found in sir gavin lightmans article- the trustees duty to provide indo to beenficiar
