Equity and Trusts - Fidiciary Trusteeship (bit unclear so might not do) Flashcards
INTRO- what is his topic about?
This session is a topic on fid nature of trusteeship- and in this lec looking thru the one that kleans in truts law those to be a trustee and well In partic exploring certain rules does and donts of trusteeship being precise to looking at certain rules and sya certain thigns cant do as trustee, law draws lines were law says trustee cannot do ceetain things.
So legalm rule of bus develop safeguard and jealousy protect interest of benfeciares here rules developed toset out basic moralities trjstee can or cant do and by doing that it sets out .. Role of trustee.
INTRO - what is trusteeship?
Trusteeship is a fid relationship. Trustees owe their loyalty and committee to beenficaires. Their interest first. That is whole point of fid rels. Touched on this last week.
INTRO - what can trustees cannot generally do?
Trustes cannot generally personal rpogcate from their position fo beign trustee unless cts auth or trust itnsrument allows it. But thereare certain prcinipes that underpin the trustee ben rels.
INTRO- what does it give us?
Which give us red lines ceetian rulescannot do this that an that swhat gonnabe looking at today.
INTRO - in more partic?
In more partic detail fid natur eof trustee ship.
INTRO - remember what?
Rmeebr what underpins all these rules, looking at is this diea that as it’s a fid rels.
INTRO- what is the duty essentially?
Its sential duty owed by in trustes in ben is by comm loyalty, has to put his own int of back burner. Amnaging btw assets with th eint and beneficiaries on forefotn of his midn. Puttin their int above his own. Fofice of sort of selflessness in that sens.e
Fiduciary Nature of Trusteeship- what is first thing trustess do?
(i) Trustees act voluntarily and can only claim remuneration if specifically entitled to the same, viz:
Fiduciary Nature of Trusteeship- set out what - just look or go voer slide
Trustees act vol r.a.w
Set out intervivod trust r prhabte turst. Such trust isn’t may have an expres privsion which allows trustee to reieve payment. Taken on responsibility. Man years ago trust were..??
Fiduciary Nature of Trusteeship- nowadays what- look or go over slide
Nowadya smodrn dec trust broaden off an doften we have now professional trustees own trusy prop. Solicitors, probate deparmtnet scouncillors, trutee. And instrumenet fudn trustees , much more professional type of filling for where turtsee ..?? Cant hear
Fiduciary Nature of Trusteeship- now what do we have?
Now we have professional managed trustee where turstees now professional people some descript corporation abnks accounts solicitors.. Its very common problem law find profviosnal ffor thei remuneration in mangign truts prop.
Fiduciary Nature of Trusteeship- what is express remuneration clause?
Soa n express rem clause, exist trust isnrument
-Express Remuneration Clause in Trust Instrument;
Fiduciary Nature of Trusteeship- trustee act 200?
Posion in trustee act 2000- r.a.w ans fhey complain rem stat based uner act where trustees also..?
-Trustee Act 2000 S.29 remuneration for professional trustees/trust corporations
Fiduciary Nature of Trusteeship- what can truste also recover?
Trustee also can recover any expnses from managing trust funds or prop
-Trustee can recover out of pocket expenses
Fiduciary Nature of Trusteeship- what is remuneration authorised by?
Remuneration authorised by the Court under its inherent jurisdiction, where work done has been of substantial benefit to the trust, see:
Fiduciary Nature of Trusteeship- what did ct do for many years?
Ct for many years agve inehrnt jursi to alow for trustees to be remunerate. So trust inst doesn’t say anything.
Fiduciary Nature of Trusteeship- what do trustees want?
The trustees want money for discretion of doing they could apply for law court, where court chancery has a parternlistic jurisdci to try and make sure trust work properly and effeicentl and effectively.
Fiduciary Nature of Trusteeship- gift effect to what?
Gift effect to the testor or settlement intervibs lifetime trust itnnetion.
Fiduciary Nature of Trusteeship- although equit juris decretion make feel well?
Althoguh equit jursi discretion make feel well worth fone perhaps lot of work been substancial ben to trust. Genrallt ct may feel approperite to … auhor truust? Micr not worki-mtusttes being rmeurrnated from c dsicrrtion remun.
Fiduciary Nature of Trusteeship- what about duke of norflock?
Duke of Norfolk’s Settlement [1982]
Increase in remuneration for work done authorised.
Duke of Norfolk settle case there – ct could increase in rem –m has its general discreito to help police an dmonsitor..
Fiduciary Nature of Trusteeship- whats the next case?
O’Sullivan v Management Agency and Music Ltd [1985]
Fiduciary Nature of Trusteeship- whats the next cases?
Foster v Spencer [1996]
Boardman v Phipps [1967]
Fiduciary Nature of Trusteeship- what about those 3 cases in depth?
O sulican r.aw foster and boarman- case wgere gis trutss perosnaly involed trust fund account for any profits or changes made we have construcit trust last more thsn 5th elem??? O=contact certi info used to ?? Managig tust fun and eult that shrrsa company lwo value. Hel that hat roop mad eeprosnally consruive trust ben ,partic trustee . So perosla gains he made account for ben for … creative csntrutcie trust. And so for trustee of chinfo. … trustee which elads to this personal enrichment that enrichment comes through share sor…all info came into hishead hroygh his capacity ofbebign ttustee. ??? On a consturice trust for benefic. Duty og selfnessnesspraciting itnee benefiare, ery srric but in
broadan v phips- innconetly no.. So had maide gain as result what gibso in cap reciev info gain made busiens sopp..?????????
Fiduciary Nature of Trusteeship- what about boardman$
Mic not working look at case se
But could .. Remuneration will work and inovle work done via solitiocr trustee that case BOARMAN VERY IMPROTNAT CASE- RLEVANT TO EXAM AND TUTORIALS-
Fiduciary Nature of Trusteeship- what about remuneration?
that remuneration
Remunartion used to be accpetion but nowadays norm. and isntnt future eof trusteeship. Being trustee repsonsbility.
Fiduciary Nature of Trusteeship- what about 200 years ago?
Not like 200 yrs ago ladies managing prop for mate who died its now become profesisnal isnittuin which requires proper remuneration fo thos involved in amangement in propert.y under these stiect rules have to selfless manage prop for benefit of others. Very ltitle [personalgian e.eg boadman Phipps and fhr case.
Fiduciary Nature of Trusteeship- what happened in craddock v piper?
Craddock v Piper (1850)
A solicitor trustee may charge costs if he acted for a co-trustee as well himself in relation to trust business in court, provided that his activities have not increased the expenses.
Fiduciary Nature of Trusteeship- craddock in other wrods?
Craddock – r,a.w , so rem persisits trustee always been allowed. Costs have to be reasonable of course. Ct has to inherent jursidc to alow that
BOOK- what case to define fid duties?
Bristol and West Building Society v Mothew Millet LJ described the fidiciary relationship in the following terms
BOOK- how did the case describe the term
A fid is someone who has undertaken to act for or or on behalf of another in a particular matter in circumstance which give rise to a relationship of trust and confidence. The distinguishing obligation of a fid is the obligation of loyalty
📖- what do fid have?
Number of duties designed to prevent any conflict arising btw the interests of the trustee and those of the beneficiaries- these duties strictly enforced by courts
📖- what about this
Although this can sometimes be said to lead to the unfair treatment of innocent fid, the exacting nature of these duties discouraged them from undertaking any action which might be said to conflict with their paramount duty of loyalty to beneficiaries
📖- what about unauthorized profits?
Fidiciares cannot retain any unauthorized profits generated by their connection to the trust
📖 trust in relation to this?
Bray v ford
📖 what about the profits
Any profits will be held on constructive trust for the benefirces
📖 case for this
Keech v Sanford
📖What after case?
It will not make a difference if the fiduciary generates a profit for both himself and the trust
📖 case for the next case?
Boardman v Phipps
📖If fid makes a profit from his or her company’s dealings with the beneficiary what will happen?
His or her share of the profit will be subject to a constructive trust for the beneficiary - Williams v Barton
📖What about bribes?
A fid who receives a bribe from a 3rd party is clearly in breach of his or her fid duty not to make an unauthorized profit
📖However with bribes
The extent of the remedy available to the beneficiary against a fid who takes a bribe has been questioned
📖 In the case of which?
Lister v co v Stubbs - the court of appeal held that the c could not establish proprietary interest in bribes recieved by their fid as those monies had never belonged to the company
📖 however to libs?
Attorney general for Hong Kong v Reid - privy council held that the c was able to establish a proprietary interest in the bribe monies received by Reid on the basis of the equitable maxim
📖 equitable maxim ?
Equity sees as done that which ought to be done
What did this meant ?
This meant d held prop purchase with bribe money which had increase in value on constructive trust for the c
📖 what about both approaches
Both can be seen controversial
Lister - reduces the extent to which fid can be held accountable by the beneficiaries and seems to run contrary to the principle that fid should not be balled to profit from their position
Attorney- clearly seeks to send a strong message that any explotation of a fid relation will not be tolerated, but did so through the creative use of an equitable maxim which trampled upon 100 yrs of established legal principle
When was this debate re opened?
Sinclair investments uk Ltd v Versailles trade finance Ltd in administration - when the court of appeal declined to follow att general - and reasserted that beneficiary will only have a personal claim against a fid in respect of prop which neither belonged to the benefi nor was acquired by taking advantage of an opportunity that rightfully belonged to the beneficiary
📖 however few years late?
Later in fhr European ventures llp v attorney- in a careful and thordough review of the authorized
📖what did lord neuburger argue?
argues that the importance of ensuring fid loyalty is the key to understanding the rules in this area and not the question of whether the bribe money belonged to the principle
📖 as such what?
As such accepting a bribe should be considered to fall within the general principle that an agent who acquires a benefit through their fid psosition to be treated as having acquired it in behalf of their principal
📖 what does this approach provide?
Provides the principal with both propertiAry and personal remedies from which to chose and means that the value of bribes and any subsequent additional profit can now be potentially recovered
📖 where’s this strict approach taken by the courts?
By courts in relation to the duties of fid is illustrated by the following decision
📖 which decision
O donnell v shanahan
Trustees Must not be Purchasers- whats the 1st thing
(A) Purchase of Trust Property
Trustees Must not be Purchasers-
Trustees must not place themselves in a position where their role and personal interests conflict.
Trustees Must not be Purchasers-
trustees who sell trust property have an overriding duty to obtain the best price
Trustees Must not be Purchasers-
case buttle v saunders- an injunction was awarded preventing trustee from accepting an offer to purchase property for reasons of morality when a higher offer had been recieved