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Equity law > Fiduciary Duties > Flashcards

Fiduciary Duties Flashcards

1
Q

Fiduciary definition

A

A trusteeship, fiduciary arises from custody and control of someone’s wealth and property and the power and discretion afforded in managing it.
- Keech v Sandford

Negative obligations = obligation of loyalty

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2
Q

Meinhard v Salmon

A

A trustee is held to something stricter than the morals of the market place

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3
Q

Ex p Dale

A

wrong arises…same remedy between wrongdoer and principal as between a trustee and beneficiary

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4
Q

Canson Enterprises

A

one party pledges herself to act in the best interest of the other

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5
Q 
Categories
Boardman v Phipps
Guinness plc 
Docker v Somes 
Mothew 
Featherstonhaugh v Fenwick 
Kelly v Cooper 
Eze v Conway
A 
Trustee-beneficiary
Director-company 
executor-legatee
solicitor-client
partner-partnership
agent-principal
non-fiduciary agent
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6
Q

Hospital Products

A

commercial transaction parties are dealing at arms length…reluctant to impose a fiduciary duty

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7
Q

Galambos v Perez

A

voluntary assumption of responsibility

power imbalance not necessary

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8
Q

Voltaire

A

strictness of fiduciary duty is salutary

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9
Q

Bray v Ford

No Profit

A

inflexible rule of equity that a person in a fiduciary position…unless expressly provided, entitled to make a profit

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10
Q

Bray v Ford

A

He is not allowed to put himself in a position where interest and duty conflict

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11
Q

Boardman v Phipps

Facts

A

A testamentary trust for widow and 3 children was set up

Boardman obtained approval from Fox and Noble for plan to buy shares personally, he did not seek approval from the widow

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12
Q

Loyalty: Penner

A

“The application of the rules governing fiduciaries is not about ensuring loyalty. The rule addresses the fact that where an exercise of a power is taken in cases where the trustee’s judgment is impaired, that exercise can be set aside”

If you are in a position to act in a way that is not in the best interests of the principal, it is hard to not make an unbiased decision. This rule protects you from yourself

Positions of conflict do not depend on any fault, but rather from breaching a duty owed

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13
Q

Fiduciary: Motive

A

Your motives are irrelevant to whether it is a breach of fiduciary duty or not. It is enough that there is a mere possibility of conflict even if on the facts there was no possibility

Boardman v Phipps (Lord Hodson)
“Even if the possibility of conflict is present between personal interest and the fiduciary position the rule of equity must be applied”

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14
Q

Self-Dealing

A

Tito v Waddell:
“the self-dealing rule is that if a trustee sells the trust property to himself, the sale is voidable by any beneficiary ex debito justitiae, however fair the transaction”

Risk of potential for exploitation. The transaction is voidable regardless of how fair the transaction was

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15
Q

Wright v Morgan

A

self-dealing

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16
Q

Fair-Dealing

A

If you purchase the beneficial interest as a beneficiary, the court will look at the character of that transaction

Tito v Waddell:
“the fair-dealing rule is that if a trustee purchases the beneficial interest of any of his beneficiaries, the transaction is not voidable ex debito justitiae, but can be set aside by the beneficiary unless the trustee can show that he has taken no advantage of his position and has made full disclosure to the beneficiary, and that the transaction is fair and honest”

17
Q

Coles v Trekowick

A

fair-dealing

18
Q

Remedies for breach of FD

A

Account of profits: the gains you make as an unauthorised profiteer must be handed over to the principal

Constructive trust: the principal has a proprietary interest in the money or assets

Rescission of transaction

Equitable compensation: a requirement to make good to the trust fund

Such claims will have the advantage of the avoidance of limitation periods

19
Q

Moody v Cox

A

conflicting duties

20
Q

Commercial Situations

Lord Briggs, The Denning Society Annual Lecture

A

The problem about having such a broad principle of equity is that it “can only be expressed at such a high level of generality that it provides little useful guidance” (Lord Walker in Cobbe v Yeoman’s Row)

The growing role of professional fiduciaries in an economy focussed on services coincides with the need to impose higher standards of conduct on them that has not been met by regulation. Thus, equity has become the dominant source of relevant law, as regulation has not provided a satisfactory alternative

21
Q

Mothew + Fiduciary Duties

A

A

“The expression “fiduciary duty” is properly confined to those duties which are peculiar to fiduciaries and the breach of which attracts legal consequences differing from those consequent upon the breach of other duties. “ per Millet LJ

Fiduciary relationships impose specific obligations that may coincide and be concurrent with other duties, but the fiduciary duties are narrower and are linked to the specialness of the relationship

22
Q

First Principles

A

Hospital Products
“accommodate itself to the terms of the contract”

  1. An undertaking to act in the interests of another
  2. Delegation of power and discretion
  3. Need for self-denial
  4. Vulnerability
  5. Danger of sub-horning autonomy of the principal (power imbalance)
23
Q

Remedies

Account of Profits (Disgorgement)

A

FHR v Chester - proprietary constructive trust
CMS - fiduciary pay money (NDR)
Murad - ‘but for’ not needed

24
Q

Equitable Compensation

A

loss > gain

Swindle - fiduciary disprove cause of loss

25
Q

Election

A

no double recovery
Tag Man Sit - one over other
Birks - remedies mutually exclusive

26
Q

Measure, Apportionment, Allowance

A

CMS - costs for profits
Guinness - allowance not contrary to deterrent
Docker - personal money = apportionment

27
Q

Forfeiture of Remuneration

A

To forfeit salary paid for work
Keppel v Wheeler - breach of good faith - loss or FoR
Kelly v Cooper - dishonesty = sufficient
Imagineview - “harmless collaterality”

28
Q

Recission

A

transfer = reversed
Tito v Waddell
self and fair-dealing

29
Q

Shipway (Chitty J)

A

real evil is not the payment of money but the secrecy attaining it

30
Q

Oranje

A

full and frank disclosure of material facts

31
Q

Ross River

Consent

A

Consent is narrow

32
Q

Kelly v Cooper

Consent

A

Consent is strict/narrow

33
Q

Boulting

A

“properly and honestly give services to advantage of both

34
Q

First Principle Fiduciaries

Examples

A 
Ross River - joint venture 
Fishel - employee
Sinclair - sales puff
Eze - chivvier 
Oranje  general secretary
35
Q

Armitage v Nurse

A

Dishonesty connotes a minimum of intention -

D was knowing or recklessly indifferent to contrary of interests

36
Q

Cooke v Deeks

A

Breach - No-Profit

interception of corporate oppurtunity

37
Q

Boardman v Phipps

A

No Profit

profit with no suffering of principal

38
Q

Aas v Benham

A

Scope
No satisfaction of no conflict rule
Ship building and ship broking is separate

39
Q

Lord Wilberforce (Oranje)

A

may be an FD where quoad some parts his activities are not quoad to other parts

Equity law (6 decks)

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