Auctor In Rem Suam Flashcards
Relationship between trustees and beneficiary is
Fiduciary in nature
Based upon good faith
Trustee is fiduciary in that he is the party which the trustee has entrusted trust property and who the beneficiaries have trusted to implement that purposes of the trust
Auctor in rem suam
Actor in his own cause
Holds no fiduciary May place himself in a position where he might have a conflict of interest
Trustee may not transact with the trust estate
Trustee may not take profit, personal advantage
Trustee is not entitled to remuneration
Transactions with trust estate
Trustees may not transact in their personal capacity with the estate.
Any transaction is capable of reduction and voidable at the instance of a number of parties
Aberdeen Railway
V
Blaikie Bros
No one having fiduciary duties to discharge are permitted to enter engagements in which they have a personal interest conflicting with the interest of whom they are bound to protect
Contract deemed voidable
University of Aberdeen
V
Town Council of Aberdeen
Trustee engaged in sale of heritable property to and from the estate
Voidable transaction which was reduced 70 years later due to breach of trust
Cherry’s Trs
V
Patrick
Trustee continued to supply goods to the business of the truster continued by trustees after his death
Sale of goods to and from trust
Held: profit obtained from series of sales were to paid back to trust by trustee
Indirect transactions and related 3rd parties
May occur when trustee does not transact with trust estate but with a beneficiary who has in turn transacted with the trust in relation to the same matter
Transactions could be challenged if it seems to be prearranged scheme in an attempt to avoid being caught under auctor in rem suam principle
Clark
V
Clark’s Exx
Executor concluded contract to sell part of deceased’s estate to third party who then assigned their right to receive property to executor in her personal capacity
Assignation reduces due to conflict of interest between executors duty and personal interest
Burrell
V
Burrell’s Trs
Purchase of shipping shares belonging to trust estate by one of trustees wives was held to be valid as
She had bought out of own initiative, her own estate and for adequate consideration causing no prejudice to the trust
Henderson
V
Watson
Where trustee is a partner in a partnership which carries out work for trust and is paid fees for doing so, the trustee will be obliged to hold the proportion of those fees to which he is entitled under partnership agreement in constructive trust for beneficiaries
Trustee may not take any personal advantage
Where a trustee uses his position to obtain property for himself the trustee becomes a constructive trustee or any property he obtains as a result of the breach of trust and any profit or advantage he gains for said breach
University of Aberdeen
V
Town council of Aberdeen
Personal adv
Trustees sold land to themselves
Then obtained lease for salmon fishing on the land
Transaction reduced, land had to be returned as well as the profits gained from fishing rights
University never had fishing rights in first place but profits were gained due to abuse of position as trustee
Inglis
V
Inglis
Must not take personal advantage or profit
Where a trustee has a power to exercise discretion, he must not exercise it in his favour
By putting a person as an executor, you disable them self from choosing them self, chose to transfer lease to himself out of a list of possibilities
Transfer reduced
Trustee may not charge fees
Unless stated otherwise
Charging of fees is a prima facile breach of duty not to act with a conflict of interest
Trustees are therefore under an obligation to act gratuitously
Lewis’s Trs
V
Pirie
The charging of fees by a trustee may be authorised by an express clause in the deed
