other cases - ahh Flashcards
(4 cards)
McWilliam v Norton Finance
A credit broker has a fiduciary relationship with borrowers, even in connection with information-only and non-advised sales. This duty will be breached if the broker fails to inform the borrowers of the amount of any commissions that it is likely to receive.
There was a FD on the facts:
the McWilliams’ were not financial sophisticates, and
although it was an information-only and non-advisory sale, Norton’s task was to identify the lender willing to lend to the McWilliams on the most advantageous terms to the McWilliams. At the very least, Norton implicitly told the McWilliams that the terms offered by MLP were the most competitive to which they had access.
Informed Consent
The materials provided to the McWilliams’ stated that commissions might be paid to Norton. However, the Court held that this did not adequately alert the McWilliams to the possibility that Norton might receive a commission in addition to the completion and broker fees, nor did the McWilliams give their informed consent to the receipt by Norton of the additional commission comprising 45% of the PPI premium. The critical point was that the McWilliams’ were not told how much commission would be paid.
in 2006, Norton arranged a loan of £25,000 from Money Limited Partners (MLP) on behalf of the McWilliams. Added to the loan was a £3,745 premium for PPI, a completion fee and a broker fee. The following additional commissions were paid to Norton out of the amount advanced:
£2,675 paid by MLP (representing 8.77% of the loan), and
£1,685.25 paid by the PPI provider (representing 45% of the PPI premium).
In 2009, the McWilliams commenced proceedings, claiming that Norton should account to them for the two additional commissions. The Recorder dismissed the claim, indicating that no fiduciary duty was owed.
The question on appeal was whether the Recorder should have found that Norton owed a fiduciary duty to the McWilliams and, if so, whether there was a breach of that duty.
Webb v Webb
A claim by a purported beneficiary for (i) a declaration that land is held on trust for them and (ii) an order that legal title to the land be conveyed to them, is an action which depends on a personal right against the purported trustee, not a property right in the land itself.
Aquila v CPS
Dismissing the appeal: the SC holds that olding that a company’s proprietary claim for breach of fiduciary duty against its former directors could be asserted in priority to a confiscation order obtained by the Crown Prosecution Service against those former directors following their criminal conviction. In so doing, the Supreme Court has re-affirmed the principles which limit attribution of a fiduciary’s illegality to the fiduciary’s principal. However, a curious feature of the case is that (at first glance) the principal was permitted to profit from the fiduciary’s illegality, in circumstances where the principal ostensibly suffered no direct financial loss.
Two directors of Vantis Tax Ltd (“VTL”) were convicted of fraud and cheating the public revenue. The tax avoidance scheme they employed on behalf of their ultra-high net worth clients was fraudulent. It led to the two directors making a secret profit of £4.55m, in breach of their fiduciary duty.
In the course of confiscation proceedings the judge found the benefit figure to be £4.55m but the available amount to be just over £800,000 for one director, the second was ordered to pay just shy of £650,000.
Aquila Advisory Ltd (“Aquila”) acquired the propriety rights of VTL. Aquila argued that the two directors of VTL were to be treated as having acquired the benefit of that secret profit on behalf of VTL, and therefore the secret profit was beneficially owned by VTL under a constructive trust, the beneficial interest in which had passed to Aquila. And, as all the assets obtained by the directors derived from the secret profit, Aquila has proprietary interest in their assets.
Rogge v Rogge
restitutio ad integrum is impossible will be a bar to recission.
