Defences of conflict of interest Flashcards
Johnstone v Macfarlane
Conflict of interest is authorised by the truster
Sanctions are strictly construed
Where a power to sell trust property to any beneficiary was held not to include a power to sell to a trustee who was also a beneficiary
Coats Trs Ptrs
Conduct of interest authorised by truster
It was held that a power to fell to any beneficiary did include the power to sell to a beneficiary who was also a trustee
Sarris v Clark
Conflict of interest authorised by truster
Modern case
Testator was a farmer who appointed his wife to be the executrix of his will, shortly before death he entered into contract of co-partnery with how wife in which he granted the leases of the farms too
His wife was obviously on both sides of negotiations in different capacities but it was held this would not be a breach of trust
Corsar v Mathers
In the absence of authority from the truster, the trustees may obtain the sanction of the consent of all the beneficiaries and potential beneficiaries to the transaction
A beneficiary was held entitled to not be entitled to object to a trustee being paid for work done for the trust because the beneficiary has approved in the employment of the trustee and had approved accounts containing charges of work
Taylor v hills house trs
In abscence of authority from truster
Onus will fall on the trustee to show that the beneficiaries acted freely and said their consent was suitably formed
Coats trs
Held that you don’t always need consent - unusual case
Trustees of the deceased party wished to sell some of the trust assets including paintings
One of the trustees who was a son of the truster wanted to buy these paintings so asked for a petition and this was granted because none of the beneficiaries said anything
The beneficiaries had consented to the sale anyway so it didn’t matter
Martin v city of Edinburgh district council
Requirement of proper motivation
Edin DC we’re trustees in respect of several trusts and took a policy decision to sell the trust funds in SA because they had political antipathy at this time to the government in SA
Decision was challenged and it was held that it was a breach of trust as the council had been motivated by their own values
Flint v Glasgow Corporation
Requirement of proper motivation
Town council decided to benefit the community by implementing phones in councillors houses around Glasgow to aid communication with councillors
The phones were to be paid out of the common good which was a fund held in trust for the councillors of the burugh
This was challenged by the auditor
Even tho the councillors were advantaged it did not matter because it was small and therefore no breach of fiduciary duty
