fiduciary duties Flashcards
when does a fiduciary arise in a trusteeship
this arises from the custody or control of someone else’s wealth and property
and the power and discretion afforded to that office in managing that wealth and property
Keech v Sandford outcome
- Judge held that trustee was liable for breach of fiduciary duty
- He put his own interests ahead of his beneficiaries, even there was only the slightest theoretical possibility of a conflict of interest
-a trustee must not take an unauthorised profit from a trust- there were risks of fraud in allowing trustees to take the benefit of renewed leases which they had previously held on trust.
what is remedy an account of
an account of profits
what rule does Keech v Sanford concern
the no profit rule
EX p Lacey outcome (2)
- there was a conflict of interest: trustee got lowest possible price after buying property for himself
- property got rescinded- went back to where it came from
Emma Silver Mining Co v Grant outcome (2)
- accused of fraud as he took a secret commission out- put his interests ahead of the company’s
- breach of no-profit FD
Regal (Hastings) Ltd v Gulliver outcome
- Fs contributed own money in company, making big profits and taking a share of the profits- not allowed
- they made a profit by reason of their fiduciary office- this isn’t allowed
(had to give up profit- count of profit)
Boardman v Phipps outcome
- T’s solicitor put his own money into the trust to improve the outcome
- he got a liberal allowance to say thanks but was not allowed a shoe of the profits- remuneration of salary
FHR European Ventures LLP v Cedar Capital Partners LLC outcome
-took a secret commission
what is a breach of FD
A breach of obligations related to loyalty- entering into a conflict of interest, making a secret profit or acting in bad faith.
Meinhard v Salmon (Cardozo J)
-A trustee is held to strict standards, he cannot put his own interests ahead of the Bs etc- he has to prioritise the people he works for
Canson Enterprises Ltd v Boughton & Co
what do they say about a fiduciary relationship, which is different to negligence or contract
one party pledges herself to act in the best interest of the other. The fiduciary relationship has trust, not self-interest, at its core[.]
what are the 2 functions of remedies
- deterrent
- prophylactic
what does prophylactic mean
prevents the harm because the remedies reverse the outcome- they reverse the outcome
what are the 2 types of remedies
-Account of profits (or disgorgement)
-Rescission (undoing transaction
An example of remedial consistency)
