Fiduciary duties

Question 1

What is a fiduciary duty?

Answer 1

Duty owed by someone who looks after property for the benefit of another.

Duty to act in good faith with honesty
- Duty not to profit from position
- Duty to not to put oneself in position where interest and duty conflict

Question 2

What is the no-profit rule?

Answer 2

• No renumeration
• No director salary
• No taking opportunities
• No commission

Question 3

Exceptions to rule no renumeration

Answer 3

1. Reasonable expenses
2. Professional trustee + all other Ts agree in writing (not a sole trustee) + reasonable fee

Question 4

Exceptions to rule no director salary?

Answer 4

1. Position pre trust appointment
2. Could have been appointed as D without trust votes in favour of appointment

Question 5

What is the no conflict rule

Answer 5

• No purchase of trust property or selling property to trust (if so Bs could void within reasonable time)
• No purchase of B’s beneficial interest

Question 6

When may T have a defence to breach of fiduciary duty?

Answer 6

• Authorised in trust instrument
• Informed consent of all Bs + All Bs over 18 and of sound mind
• Exemption clause (not fraudulent breach)

Question 7

Remedies to Bs for breach of fiduciary duty

Answer 7

Personal or proprietary action for profit T gained

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