intermeddlers - trustees de son tort

Question 1

what does trustees de son tort mean?

Answer 1

A trustee of his or her wrong

Question 2

what are the 2 types of constructive trustees?

Answer 2

1. Act in accordance with trust initially - more like actual trusts, behaviour of constrictive trustee is more like an expressive trustee
2. Act contrary to trust from outset - so dishonest assistance and knowing receipt would be type 2

Question 3

what is the case for a type 1 constructive trustee?

Answer 3

• Paragon Finance plc v D B Thakerar & Co
  [1999]
• where the cons are trusted like actual trustees - they are de facto trustees so same remedies apply - they have fid duties and there’s no limitation period for suing them for retained property
  • Its like a trustee because its voluntarily assumed

Question 4

what is the case for a type 2 constructive trustee?

Answer 4

• They’re not like trustees at all - its more like fraud than acting like a trustee so remedies different
• Don’t owe fid duty and there’s a limited period to sue them
  These people got caught up in wrong doing and never voluntarily took up liability, it was just imposed on the by equity

Question 5

what is a trustee de son tort?

Answer 5

• It’s a kind of intermeddler with a tort - takes it upon themselves to do acts characteristics of the position of trustee - they are behaving like a proper trustee - manages trustee, dispersants, maybe makes some investments, even though they haven’t been properly appointed
  
  • So type 1 is where they intend to act in accordance with the trust from the beginning - they may go on and breach trustee or fid duty later, but they don’t do it right away
    Very different set of circumstances to dishonest assistance or knowing receipt

Question 6

what is the Mara case?

Answer 6

Mara v Brown [1896]

 Where they assumed the position of a trust in fact, even though not properly appointed, and they intended to act
as trustee;

Question 7

what were the facts of the Mara case?

Answer 7

• Solicitors, held some investment property on trust - it was a family settlement
  
  • Solicitors weren’t trustees but solicitors to trustee, they were helping running of it
  • There were 3 trustees but they all died, leaving the solicitors with the builds
  • What should have happened was new express trustees be appointed to take over, but that didn’t happen
  • The husband of the family instructed solicitors to lend the bills of mortgage - way investing to try and make more money for trustee
  • It was bad investment, mortgagors stop paying and the trust suffered losses
  • Beneficiaries wanted to sue solicitors and get compo for losses - was it dishonest assistance or knowing receipt, probably not
  • But solicitors were liable as they had taken it upon themselves to act as trustee even though they weren’t - so they were made trustees of their own wrong, trustees de son tort
    So this gives us another type of intermeddler, not knowing receipt or dishonest assistance, acted in a different way but still liable

Question 8

what is the Re Barney case?

Answer 8

Re Barney [1892]

 Where a person has obtained such command or control of trust property that they can call for title to be vested
in themselves

Question 9

what did the Dubai Aluminium Co Ltd v Salaam [2002] say?

Answer 9

we would do
better today to describe such persons as de facto
trustees.
 In their relations with the beneficiaries they are treated
in every respect as if they had been duly appointed.
They are true trustees and are fully subject to fiduciary
obligations. Their liability is strict; it does not depend on
dishonesty

Hasn’t caught on either (just like unconscionable receipt)