FIDUCIARIES

Question 1

what is a fiduciary

Answer 1

FINN 1973

• ‘expected to act in the interests of another - to act eflessly and with undivided loyalty’
• no conflict rule = BRISTOL aAND WEST BUILDING SOCIETY

Question 2

Bristol and west building society?

Answer 2

F’s primary duty is no conflict

Question 3

How do F duties relate to trust duties?

Answer 3

‘irreducable core’

Armitage v Nurse

Question 4

Why is rule of no profit for Fs so strict?

Answer 4

BRAY v FORD

- not to do with morality but to guard against conflict of interest/corruption

Question 5

Keech v Sanford

Answer 5

• T held lease on trust for baby, lease ran out wanted to renew for trust benefit
• Leasor didnt like idea of baby benefiting, said no
• Trustee took lease = because it had been trust property it was potential conflict of interest

Question 6

Key quote KEECH v SANFORD

Answer 6

‘only person in the world’ who could not take the lease

Question 7

Why is BOARDMAN v PHIPPS controversial

Answer 7

3:2 ratio

Lord Upjohn in strong dissent

Question 8

Justification for strict application of F duties

Answer 8

1) ensures certainty
2) protects B interest and does not grant any property rights to F
3) stops mistakes of F effecting the whole trust

Question 9

Why is Boardman v Phipps critisied LORD UPJOHN

Answer 9

1) such strict standards totally unrealistic
2) strict liability in most cases already disuades people becoming trustees (s29 2000 cant even get paid unless professional)
3) should only impose liability if reasonable, not just any potential conflict of interest

Question 10

LORD UPJOHN

quote in Boardman v Phipps

Answer 10

• If reasonable man precieves a ‘real sensible possibility of conflict’ liability should be found
• any possibility at all = too harsh

Question 11

Has strict position ever been challenged by courts

Answer 11

Yes

SINCLAIR INVESTMENTS 2012 which returned to LISTER v STUBBS 1890 approach

Question 12

Lister v stubbs 1890

Answer 12

• F under duty to account for any money money recieved but not to disgorge profit

Question 13

Why was SINCLAIR INVESTMENTS decision questionable?

Answer 13

• CoA decision, are supposed to follow SC but didnt

- Overruled in FHR EUROPEAN VENTURES 2014

Question 14

AG HONG KONG v REID 1984

Answer 14

• Idea that if F is recieving on going profit from bribe = not allowed
• money spent on houses that increased in value, so Bs were granted a property right in the bribe profits as it would be unjust to allow F to benefit from breach

Question 15

When FHR EUROPEAN VENTURES 2014 overruled SINCLAIR INVESTMENTS 2012, why did it return to perhaps overly strict approach?

Answer 15

• Lord Neuberer could appreciate that it was a 2 sided argument
• Prioritised anti-corruption policy over allowing honest Fs to make profits

Question 16

Could strictness be softened without opening door to corruption?

Answer 16

QUEENSLAND MINES (aus)
- fully disclosing F is protected slighty
BAROMAN v PHIPPS
- quantum meruit award, so good honest deeds are not ignored

Question 17

How does strictness of anti-corruption effect the other 2 fiduciary concerns?
RENUMERATION
INFORMATION

Answer 17

• they too are very strictly interpreted, even though they are much less faliable to corruptin
• unfair

Question 18

why can F not make a profit from their positin

Answer 18

potential conflict of interest

Question 19

how are directors paid? they have fiduciary duty to comany

Answer 19

salary agreed by shareholders (Bs)

Question 20

Re MACADAM

Answer 20

• if director is appointed soley by vote of B’s, salary held on CT for Bs
• cos if not for B’s they wouldnt be there anyway

Question 21

contrast macadam with

RE GEE

Answer 21

• Re GEE if independently appointed then salary is allowed

Question 22

When is information B’s property under FR?

Answer 22

If F was still a fiduciary when they discovered it, even if it has nothing at all to do with B
NO UNAUTHORISED PROFIT

Question 23

IDC v COOLEY

Answer 23

• C learnt of a business opportunity while F to IDC, they only wanted to work with C
• C resigned and went on to make profit
• Impossible for IDC to benefit, but still breach of FD as he learnt of opportunity whilst still a fiduciary