Fiduciaries Flashcards
Who are fiduciaries? Bristol & West Building Soc v Mothew
Fiduciary is someone who:
1) undertakes to act on the behalf of another
2) in a relationship of trust and confidence
(basically anyone that is meant to act in the best interest of P
Aberdeen Town Council v Aberdeen University
Trustee/Beneficiary = fiduciary relationship
Boston Deep Sea Fishing v Ansell
Agent/Prinicpal = fiduciary relationship
Regal Hasting v Gulliver
Director/Company = fiduciary relationship
Aas v Benham
Partners = fiduciary relationship
Hilton v Barker Booth
Solicitor/Client = fiduciary relationship
Reading v AG
AD-HOC Fiduciary relationship (sergeant and the crown, he took bribes to escort smugglers through police checks)
No real test available - if C trusts D with property to be dealt with for C’s benefit
Partners in a JV = adhoc fiduciary relationship
Murad v Al-Saraj
AG v Blake
Lord Woolf - relationship of trust and confidence = F duty
Grimaldi v Chameleon Mining NL
Undertaken to perform function at exclusion of his/her own interests
JP Morgan v Springwell
Just because 1 party in commercial relationship trusts the other does not mean it is a fiduciary duty
Scope of F duty
only as far as F is meant to act
Basis of the F Duty: Bristol & West Building Soc v Mothew
Millet LJ - F has to be "loyal" to P by: 1) Good faith 2) No profit 3) No conflict 4) No self-benefit (all linked to core duty of loyalty - NB. this is not exhaustive)
If F works for 2 Ps, and P chose F for this reason = consent, and that on its own is not conflict
Keech v Sandford
NO CONFLICT RULE = ENFORCED STRICTLY
- even if it is a potential conflict (not actual)
here T couldn’t have done it for B, landlord already said no
Boardman v Phipps
NO CONFLICT RULE = enforced strictly
- even if it is a potential (not actual) conflict
- even if F = good faith
- even if actions left P better than if F did nothing
Here, F had to disgorge all profits made (only small allowance made for the work B&T did)
No profit rule
Lord Neuberger said no profit rule is part of the wider no conflict rule (FHR European Ventures)
Tito v Waddell (no.2)
2 rules:
1) SELF-DEALING - where T deals with trust property (e.g. sells to himself)
- CONFLICT
- transaction ALWAYS voidable even if fair value paid
2) FAIR-DEALING - where T purchase beneficial interest off any of the beneficiaries
- less danger of conflict
- B can set aside transaction IF it is unfair
- T has to show:
- T did not take advantage of his position
- T made full disclosure to B
- Fair and honest transaction
Re Duke of Norfolk ST
F can be remunerated (but if paid, higher potential for conflict of interest)
- even if there is a contract, courts have INHERENT JURISDICTION TO AUTHORISE REMUNERATION
- what F did must be v. valuable (e.g. Boardman v Phipps)
How might F be remunerated?
- courts may authorise it
- or by consent (if B had full disclosure)
- by Charging Clause in trust instrument
- Trustee Act 2000 s.28-32 (professional trustees can charge even if no charging clause)
Rescission
if F procures P to enter into a contract with 3P (because F was bribed to do that)
If F acts for P and 3P but 3P knows and P doesn’t
Under self-dealing and fair-dealing rules
Norton v Lord Ashburton
EQUITABLE COMPENSATION (compensate losses)
- need causation and remoteness
- courts slow to take this on because they don’t like duty model (prefer disability model)
CAUSATION in EQUITABLE COMPENSATION
BUT FOR test - Swindle v Harrison
was contribution - Brikenden v London Lonon
Remoteness test in EQUITABLE COMPENSATION
Direct Consequence test (Canson Enterprises v Boughton)
Contributory fault in Equitable Compensation?
depends if good faith (probably consider contributory fault) or bad faith (don’t consider contributory fault - National Building Society v Balmer Radmore)
