Fiduciary Duty + Duty of Care Flashcards
how does Bristol and West Building Society v Mothew [1998] describe what Fiduciary Duty means?
fiduciary must act in good faith:
- He Must NOT make a Profit out of his trust;
- He Must NOT place himself in a position where his Duty + his Interest may conflict;
- He May NOT act for his Own Benefit/for Benefit of a 3rd person WITHOUT Informed CONSENT of his Principal
what is the rule on T acquiring Property in Keech v Sandford
Reinforces that T Cannot Acquire Property in Breach of Fiduciary Duty
Lord King LC: may seem harsh, but it’s a very proper rule, should be strictly pursued
what’s the rule on inside knowledge in Wrexham Association FC Ltd v Crucialmove Ltd [2006], and Boardman v Phipps [1967]
T Cannot Acquire Property in Breach of Fiduciary Duty
strict rule
what’s is Shouting the Rule + Whispering the Equity from Boardman v Phipps [1966]
though deciding that the F Breached Strict Rule, HoL held he should be paid for work he had done to the great profit of the Trust, + ‘that payment should be on a liberal scale’
i.e. –> shouted that he Cannot keep his Profits (Unauthorised Profits), BUT whispered that he could be paid for his work = Court using 2 voices
also seen in O’Sullivan v Management Agency and Music Ltd [1985]
what do Regal Hastings v Gulliver [1942], and Bristol and West Building Society v Mothew [1998] say about conflicting Duty + Interest?
- Fiduciaries MUST NOT place themselves in a position where their Duty + Interest may Conflict
- General Rule of Equity = no one who’s a FD can enter engagements where they can/have a personal interest conflicting with interests of those they’re bound to protect
*BUT person you owe Duty to is allowed to put you in Positional Conflict
- BUT you just CANNOT Breach it
Bristol and West Building Society v Mothew [1998] = - IF you find yourself in a position of conflict, you should probably just resign from both positions to avoid this
what does Tito v Waddell (No. 2) [1977] say about the Self-Dealing + Fair-Dealing Rules?
- Self-Dealing Rule = IF a Trustee purchases Trust property from himself = ANY Beneficiary may have the sale set aside, however fair the transaction (voidABLE)
- Fair-Dealing Rule = IF a T buys his Beneficiary’s Beneficial Interest, the B May have the sale set aside UNLESS T can establish the Propriety of the transaction
o T MUST show they did Not take Advantage of their position
o B MUST have been fully informed + received full value
how does Speight v Gaunt [1883] clarify Duty of Care?
- T must have same care as an ordinary prudent business man
o BUT had to clarify, as business people take risks:
o Thus = Prudent Family Provider
o Do what you do with the money, with not only with yourself to think about
what does Armitage v Nurse [1998] say about Exemption Clauses + Duty of Care?
If Trust Instrument gives Trustee powers + says Duty of Care does Not apply to them = this is Allowed
what does Nestle v National Westminster Bank plc [1996] say about Modern Portfolio Theory + Proof of Loss?
- Bank poorly invested Ms Nestle’s money
o Now had £50k, when could have had £1.5M if they did what sensible T’s would have done
CoA Held = Bank was negligent, BUT Cannot prove Bank caused Loss
MPF = do what/invest in what most people would, so you’re doing as good as the market is, so no one can say you caused loss
- Trustee Act 2000 Part 2 = enshrines this in law
what do Cowan v Scargill [1985], and Harries v Church Commissioners [1992] say about Investment Policy + Ethics?
C v S = Pensioners just want their money, can’t bring your own Trustee politics into this
H v CC = Can’t do this, if you removed all unethical investments, you’d remove 1/3 of the top companies in the country + can’t encourage this
