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Equity & Trusts - Breach of Trust Flashcards

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0
Q

Boardman v Phipps

A
  1. Fiduciary relationship exists between solicitor and client
  2. T/F may be rewarded for profits made if shows considerable skill (still liable to account)
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1
Q

s12 TA 2000

A

B may owe fiduciary duty to other Bs if acting as a principal (Boardman v Phipps)

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2
Q

s. 175 Companies Act 2006

A

Directors owe fiduciary duty to company (Regal (Hastings) Ltd v Gulliver)

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3
Q

Bray v Ford

A

T/F must not put himself in a position where his duty and personal interests conflict

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4
Q

Foskett

A

T/F misappropriating funds will hold them on CT

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5
Q

ex p Lacey

A

T/F may not purchase assists from himself/co-trustees (self-dealing) as there is a presumption of undue influence

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6
Q

Holder v Holder

A

T/F may rebut self-dealing presumption if:

  • He takes steps to renounce his position
  • He makes his motives clearly known
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7
Q

Barclays Bank v O’Brien

A

T may not purchase assists from B as there is a presumption of undue influence

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8
Q

Tito v Waddell

A

T/F may rebut presumed undue influence if he can show ‘fair dealing’:

  • Disclosed all material facts to B
  • Not taken advantage of position
  • transaction is fair and honest
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9
Q

Re Gates

A

T/F must not receive remuneration for his actions

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10
Q

Re MacAdam

A

T/F must not receive remuneration for his appointment as company director

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11
Q

s29(1) TA 2000

A

Trust corporation may charge reasonable remuneration

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12
Q

Re Pooley

A

T/F may receive remuneration if authorised under terms of trust instrument

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13
Q

s28(1) TA 2000

A

T/F may receive remuneration if authorised expressly by trust instrument

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14
Q

s31(1)(a) TA 2000

A

T may recover incidental expenses, e.g. travel

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15
Q

Re Duke of Norfolk’s ST

A

T/F may receive remuneration by order of court

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16
Q

Ayliffe v Murray

A

T/F may receive remuneration with all Bs’ consent, provided:

  • Bs are all sui juris
  • Obtained in writing (s29(2) TA 2000)
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17
Q

Regal (Hastings) Ltd v Gulliver

Ketch v Sandford

A

T/F must not earn incidental profits

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18
Q

Queensland Mines v Hudson

A

T/F may exploit opportunity if:

  • Keeps Bs fully informed
  • trust cannot take advantage anyway
  • T/F is not a company director (s175(2) Companies Act 2006)
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19
Q

A-G for Hong Kong v Reid

A

T/F has a duty not to accept bribes, and will hold on CT if he does

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20
Q

s4 TA 2000

A

T has duty to comply with standard investment criteria:

  • Consider suitability
  • Ensure diversity
  • Periodically review for compliance (s4(2) TA 2000)
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21
Q

s5 TA 2000

A

T has duty to seek and consider advice

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22
Q

s5(3) TA 2000

A

T does not have to seek advice where it would be unnecessary/inappropriate

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23
Q

s5(4) TA 2000

A

T must believe advisor is reasonably qualified

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24
Harries v Church Comms of England
1. T under a duty to invest in a manner designed to generate maximum return
25
Cowan v Scargill
T will ignore ethical considerations of Bs unless: - Ethical investment would be equally as strong - Bs are all sui juries and would have done likewise (Harries)
26
s3(1) TA 2000
T has power to invest as if he were absolutely entitled, provided: - No express provisions to the contrary in trust instrument
27
Howe v Earl of Dartmouth
T has duty of impartiality, i.e. must balance life interests against those of remaindermen
28
Styles v Guy
T has duty to monitor and correct actions of fellow Ts
29
s1(1) TA 2000
T must exercise reasonable skill and care in relation to statutory duties, having regard to: - special knowledge he holds himself out as having - special knowledge (as professional T) he could reasonably be expected to have
30
Sleight v Gaunt
Common law SoC is that of "reasonably prudent man of business"
31
Bartlett v Barclays Bank
1. Professional T owes higher DoC 2. Professional T may not rely on provisions of s61 TA 1925 3. T may offset profits against losses of a breach IF same transaction
32
Target Holdings v Redfurns
Causation established through 'but for' test
33
Townley v Sherborne
T will be VL if he has failed to keep property in joint control
34
Boardman v Mossman
T will be VL if he has concealed a breach of another T
35
Booth v Booth
T will be VL if he has stood by whilst another T committed breach
36
ss11 & 12 TA 2000
T may delegate duties of investment and advice to agent
37
s23 TA 2000
T will not be liable for actions of agent exercising his delegable duty
38
s25 TA 1925
T is VL for actions of PoA donee
39
s15 TA 2000
T may only delegate duty in writing
40
s22 TA 2000
T must review actions of agent from time to time
41
Armitage v Nurse
Trust instrument may include clause excluding T's liability
42
s61 TA 1925
T may avoid liability if he can show he acted honestly and reasonably
43
Re Pauling's ST
T may escape liability if he can show he acted with knowledge and consent of all Bs (all must be sui juris); not necessary for Bs to be aware actions constitute a breach
44
Laches
T may escape liability if: - B acquiesced to breach - Acquiescence was for a long period 'delay defeats equity'
45
Re Smith
T may be indemnified if co-trustee acted fraudulently
46
Head v Gould
T may be indemnified if honestly followed advice of solicitor, who is co-trustee, and T relied upon the advice
47
s62 TA 1925
T may be indemnified if acted upon inducement/request of B
48
Re Dawson
Ts are personally liable to return trust to state before breach
49
s2 Civil Liability (Contribution) Act
Ts may be jointly and severally liable for breach if they commit a breach along with another T, but court has power to determine share of contributions
50
Re Diplock
Personal claims against Ts must be exhausted first before proprietary claim may be brought
51
s21(3) LA 1980
Personal claims time-barred after 6 years, but proprietary claims are not time-barred
52
Taylor v Plumer
Tracing I. Common law possible only if original property remains distinctly identifiable
53
Re Diplock
Tracing in equity must satisfy 3 conditions: - fiduciary relationship needed - must be in traceable form - no inequitable result, e.g, BFPFVWN takes free
54
Chase Manhattan Bank
Fiduciary relationship can arise subsequently if D's conscience affected, e.g. mistaken payment gives rise to CT
55
Borden v Scottish Timber
Dissipated funds are not traceable
56
Re Hallet
Where TP mixed with D's own money, D presumed to have spent own money first
57
Re Oatway
Where Re Hallet produces inequity, D deemed to have spent TP first
58
Clayton's Case
Where TP mixed with money from another trust/innocent party, FIFO rule applies
59
Foskett
Where TP used with other monies to fund purchase, C has two choices: - May claim proportionate share of asset (if value increased) - May enforce lien against asset for full value (if value decreased)
60
Barnes v Addy
Personal claims are permissible against 3rd parties subject to 3 conditions: - Existence of fiduciary relationship - Assistance in breach by 3rd party - Dishonesty on part of 3rd party
61
Royal Brunei Airlines
Dishonesty is 'failure to behave as an honest person would in the circumstances'
62
Barlow Clowes
Dishonesty may simply be acting with conscious impropriety, i.e. w/o actual knowledge of breach
63
Recipient liability
3 conditions: - 3rd party received TP as a result of breach - 3rd party received TP for own benefit - 3rd party had actual knowledge of breach
64
Re Montagu's ST
Only actual knowledge suffices for recipient liability

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