Fiduciary Duties Flashcards
Case law
English v Denham Vale Properties
Status based list produced by Law Commission is not exhaustive, and equity can create a fiduciary relationship wherever it is needed
Tito v Waddell (purchase of trust property)
A trustee cannot purchase trust property in his personal capacity as he would be wearing two hats - self dealing
Wright v Morgan
A trustee cannot purchase trust property in his personal capacity as he would be wearing two hats, EVEN IF independent valuations are sought
Holder v Holder
Dubious decision that watered down the rule that trustees cannot purchase trust property. In this case was at auction (so fair price) and had purported to renounce his role as executor (although had not). Case has since been disapproved although not entirely overturned.
Morse v Royal
Trustee purchasing a beneficiary’s interest is fair dealing not self dealing. In that case, beneficiary pressed a trustee to purchase, he did so, then the beneficiary regretted his decision when the property subsequently went up in price. He tried to have the decision overturned but was unsuccessful as there was no deceit by the trustee.
Tito v Waddell (purchase of beneficiary’s interest)
Confirmed Morse v Royal that as a right, trustee can purchase the interest of the beneficiary but he has to be clear that full disclosure has been made, there was independent advice and a fair price was paid.
Re Thompson’s Settlement
The self dealing rule is simply an application of the wider principle that a fiduciary cannot put himself into a position of conflict - so despite there being no case law, also good law that a trustee cannot sell his personal property into the trust as it would be self dealing
Re Macadam
A trustee cannot become a director off the back of the trust and take director’s fees, he must account for the fees back into the trust
Re Dover Coalfield
If a trustee was a director before he became a trustee, he does not need to account for director’s fees
Re Gee
If a trustee becomes a director but did not need the votes of the trust to become this director and did it entirely separately, he is entitled to keep his director’s fees.
Boardman v Phipps
Case of solicitor acting on information gained as trustee. Made both the trust and himself considerable monies. Was a breach, but also a rare example of court using inherent jurisdiction to pay the trustee anyway
Keech v Sandford
If a lease is renewed in personal name of trustee, it is held on constructive trust for beneficiary
Re Biss
There is no duty owed BY beneficiary to trustee (relationship flows one way only)
Protheroe v Protheroe
Historic debate on whether or not trustee could purchase freehold reversion of lease but this case confirmed it is forbidden
Re Thompson
Trustee cannot compete with trust (tried to set up rival yachtbroker business, beneficiaries were granted an injunction)
