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Law Second Year > Property Law - Compensatory Liability of Trustees for Breach of Duty > Flashcards

Property Law - Compensatory Liability of Trustees for Breach of Duty Flashcards

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1
Q

At what stage in AIB did court calculate liability by loss caused by breach?

A

CoA

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2
Q

What case shows the disapplication of basic rules on substitutive performance?

A

Target Holdings v Redferns

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3
Q

Declaration setting out Ts duties and powers is binding

A

Cowan v Scargill

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4
Q

what case made it clear a substitutive performance claim is not dependent on T committing a breach?

A

Eaves v Hickson

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5
Q

What are the three types of accounting order a court can make?

A

Order for account in common form, order for account on wilful default and order for account of profits

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6
Q

What judge in what case said Ts can even be exempted from liability from gross negligence and recklessness unless P change it

A

Millett LJ in Armitage v Nurse

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7
Q

What did Staughton J say it was not wrong to pay attention to in Nestle v Nattiest?

A

Relationship and circumstances of life tenant and remainder man to ascertain appropriate actions

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8
Q

What was the ‘cause of action’ test?

A

Required a previous action to rely on before it could be invoked before court

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9
Q

Santander UK v RA Legal Solicitors judgment

A

If Ts negligence caused loss, T cannot be excused if it would have been carried out despite them being reasonable

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10
Q

What case suggests no more stringent test for fiduciaries than contract breakers?

A

Martin v Goldfarb

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11
Q

What case shows prohibitory injunctions can be a remedy for breach of duty?

A

Fox v Fox

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12
Q

Name at least three cases on exemption clauses for compensatory liability

A

Re Wynn; Re Coxen; Adams v Adams; Armitage v Nurse; Seton v Dawson

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13
Q

Hong Kong elderly brother and sister

A

Hayim v Citibank

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14
Q

What two cases on negligent failure to review and diversify trust instruments should be contrasted?

A

Re Mulligan; Nestle v Natwest

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15
Q

What was the ratio in Re Brogden previously thought to be due to?

A

‘Cause of action test’ pre-1964

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16
Q

Re Brogden

A

No punitive award

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17
Q

Youyang Pty Ltd v Minter Ellison judgment

A

Distinguished Target by reference to Millett - pay WHOLE amount, even what would have been lost had T complied with obligation

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18
Q

What three cases show relevant considerations if breach occurs due to T taking erroneous legal advice?

A

Re Allsop; Cherny v Neuman; Wills v Cooke

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19
Q

AIB Group (UK) v Mark Redler judgment of Supreme Court

A

Lord Toulson gave special significance to ‘commercial trust’

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20
Q

Brudenell-Bruce v Moure general

A

Disrepair of property

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21
Q

Martin v Goldfarb

A

No reason to treat fiduciaries more stringently than contract-breakers - no higher damage merely because claim is for breach of duty

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22
Q

armitage v Nurse on exemption clauses

A

Ts can be exempted from liability for BoT as long as S knew and approved, including gross negligence unless P change it (Millett LJ)

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23
Q

What case did Brudenell-Bruce v Moure follow?

A

Barlett v Barclays Bank

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24
Q

In what jurisdiction was Youyang v Minter Ellison?

A

Hight Court of Australia

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25
Q

In what year and what document did Law Com suggest distinction between lay and professional Ts?

A

Law Com 2003 Consultation Paper

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26
Q

Exemption clauses can be binding on matters of fact as long as conceptually certain

A

Re Coxen

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27
Q

How do Mitchell and Millett believe AIB should have been argued?

A

Like CoA - apply Target

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28
Q

Clause excluding responsibility/duty until death ‘understandable and explicable’

A

Hayim v Citibank

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29
Q

Snell’s Equity

A

Bs carries burden of proving surcharges and T burden of proving discharge

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30
Q

If court finds T has personal liability to B and trust is absolute, what form of order is made?

A

No need to reconstitute fund - T can transfer assets or pay straight to B

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31
Q

T held liable for unauthorised distribution prompted by forged DoC - not dependent on T committing a breach

A

Eaves v Hickson

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32
Q

In what case and what judge said strong microscope needed to distinguish reparation claim from common law damage claim?

A

Bartlett v Barclays Bank per LJ Bingham

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33
Q

What case explains calculating award for reparation claims?

A

Sanders v Parry

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34
Q

If court finds T has personal liability to B and trust is still on foot, what form of order is made?

A

Reconstitute fund

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35
Q

What is surcharging?

A

Act authorised, but negligent, so it remains on the accounts but T pays Bs compensation

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36
Q

Re Mulligan general

A

Ts did not diversify equities, in order to favour life tenant

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37
Q

When can a B push for substitutive performance and how is it remedied?

A

Unauthorised distribution, remedied by falsifying the documents

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38
Q

Adams v Adams

A

Cannot oust jurisdiction of court by preventing Bs from applying to court in trust document

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39
Q

Hagan v Waterhouse

A

Proprietary tracing claim against 3rd w/o exhausting T remedies allowed

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40
Q

What two cases/academic sources suggest more stringent test for fiduciaries than contract breakers?

A

Conson Enterprises v Boughton; H&M

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41
Q

Law Com 2003 Consultation Paper

A

Lay Ts can rely on exemption clauses, not professional Ts when conduct is so unreasonable, irresponsible and incompetence that it would be unfair to B

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42
Q

H&M on stringent test for fiduciaries compared to contract breakers

A

Can be appropriate to treat different Ts differently, e.g. more equality in family trust between T and B than commercial

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43
Q

Wills v Cooke

A

If advice was for Ts personal protection, B can only sue T, but if on behalf of trust Bs, then B can sue for themselves by joining Ts as codefendant if they refuse to sue

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44
Q

Millett on Re Patten, adopting

A

Should be called ‘right to decide whether to complain or not’

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45
Q

Jones v Lewis

A

allowing unauthorised disbursement when insisting on performance would be inequitable - if a ‘T is robbed’

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46
Q

What judge in Nestle v Natwest said a Misunderstanding of trust terms and failure to conduct review insufficient to lead to reparation

A

Staughton J

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47
Q

Norberg v Wynrib

A

Allowed exemplary damages in Canada

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48
Q

What judge and in what case highlighted how substitutive performance is a restitutionary, personal obligation

A

Street J in Re Dawson

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49
Q

What is an order for account on wilful default?

A

Account of what Ts have received and what would have got without their breach

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50
Q

If court finds T has personal liability to B and there are new trustees, what form of order is made?

A

Old Ts need to transfer assets/pay money to new Ts

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51
Q

Eaves v Hickson

A

T held liable for unauthorised distribution prompted by forged DoC - not dependent on T committing a breach

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52
Q

What case gives a ‘but-for’ causation test for reparation claims?

A

Target Holdings v Redferns

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53
Q

How did Lord Browne-Wilkinson characterise the trust in Target Holdings?

A

A bare trust inside a commercial trust

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54
Q

Cowan v Scargill on remedies for breach

A

Declaration setting out Ts duties and powers is binding

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55
Q

what is an order for account on wilful default for?

A

Reparation claims

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56
Q

What is the issue with the judgment in Target Holdings?

A

Relies on causation, but claim is not founded on breach of duty - it is based on continuing obligations

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57
Q

If Ts negligence caused loss, T cannot be excused if it would have been carried out despite them being reasonable

A

Santander UK v RA Legal Solicitors

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58
Q

When is T discharged from duty to provide entire property to B?

A

When exercise of the power of appointment is authorised

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59
Q

No ousting of jurisdiction of courts on pure matters of law

A

Re Wynn

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60
Q

Bartlett v Barclays Bank general

A

Controlling share - 99.8%, property speculation

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61
Q

Bs don’t need to prove act/omission caused loss as not a breach claim

A

Cocker v Quayle

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62
Q

Scots law doesn’t allow ousting of gross negligence liability

A

Seton v Dawson

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63
Q

What are Canadian reparation claims subject to, and according to what case?

A

Novus actus - Hodgkinson v Simms

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64
Q

Armitage v Nurse on ousting duties

A

Not all can be ousted - ‘irreducible core of obligations’

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65
Q

Cherny v Neuman

A

Need to consider if adviser was given full and accurate info when Ts breach was due to erroneous legal advice

66
Q

What case shows difference between Ts seeking legal advice for personal protection and on behalf of trust Bs?

A

Wills v Cooke

67
Q

What case says the special relationship of T means more stringent test than for contract breakers?

A

Conson Enterprises v Boughton

68
Q

When did Law Com suggest a professional T could not rely on an exemption clause?

A

when conduct is so unreasonable, irresponsible and incompetent that it would be unfair to B

69
Q

Target Holdings v Redferns judgment

A

HoL decided that C has to show that if D had acted with authorisation, it would have made a difference

70
Q

Millett on AIB

A

Could have been reached through orthodox principles - discharge of duty by producing authorised substitute

71
Q

What report of Law Com rejected Seton v Dawson - Scots law on gross negligence liability

A

Report 2006

72
Q

what case shows a reparation claim is dependent on assertion that T has committed a wrong?

A

Partington v Reynolds

73
Q

Who questions traditional/commercial trust distinction drawn by Lord B-W in Target Holdings?

A

Millett extra-judicially

74
Q

Fox v Fox

A

Prohibitory injunctions are a remedy

75
Q

What case showed HoL characterising a bare trust inside a commercial trust as falling outside basic rules on substitutive performance claims?

A

Target Holdings v Redferns

76
Q

AIB Group (UK) v Mark Redler general

A

Re-financing, first charge £300,000

77
Q

What section of what Act allows courts to excuse breaches in trust management and unauthorised distributions?

A

Section 61 Trustee Act 1925

78
Q

Why can Millett’s opinion on AIB not be accepted, and according to who?

A

Hayton and Mitchell - both CoA and SC rejected orthodox principles used by trial judge

79
Q

Beever

A

Punitive damages should never be awarded as looks to policy goals of deterrence

80
Q

What is an account surcharged on the basis of?

A

‘Wilful default’

81
Q

Street J in Re Dawson

A

substitutive performance is a restitutionary, personal obligation

82
Q

Target Holdings v Redferns on reparation claims

A

‘But-for’ causation test

83
Q

No ‘cure’, unlike Target Holdings

A

Youyang Pty Ltd v Minter Ellison

84
Q

Youyang Pty Ltd v Minter Ellison general

A

No ‘cure’, unlike Target Holdings

85
Q

What did Street J in Re Dawson say a substitutive performance claim is not limited by?

A

Remoteness

86
Q

Libertarian Investments Ltd v Hall general

A

Two-step process to accountability of Ts

87
Q

Seton v Dawson

A

Scots law doesn’t allow ousting of gross negligence liability

88
Q

what is an order for account in common form for?

A

Substitutive performance claims, but maybe also reparation

89
Q

What case says No reason to treat fiduciaries more stringently than contract-breakers

A

Martin v Goldfarb

90
Q

AIB Group (UK) v Mark Redler judgment of CoA

A

Agree on trial judge’s result, but not analysis - all unauthorised, but liability calculated by loss caused by breach

91
Q

allowing unauthorised disbursement when insisting on performance would be inequitable - if a ‘T is robbed’

A

Jones v Lewis

92
Q

If Ts cause same damage to B by respective breaches, what happens?

A

Both jointly and severally liable

93
Q

Who said a breach of trust is not an ‘equitable counterpart of breach of contract at common law’ and where?

A

Lord Millett extra-judicially

94
Q

What case makes it clear a calculation for reparation includes loss of chance?

A

Sanders v Parry

95
Q

Who highlighted incoherence of causal link requirement in Target Holdings?

A

Millett, extra-judicially

96
Q

What case does Re Patten tie in with and how?

A

Saunders - both let Bs act inconsistently with Ts wishes

97
Q

Bs can adopt Ts actions and treat them as authorised

A

Re Patten

98
Q

What is falsifying the documents?

A

Cancelling out entries of unauthorised distributions

99
Q

Nestle v Natwest per Staughton J

A

Misunderstanding of trust terms and failure to conduct review insufficient to lead to reparation

100
Q

Law Commission 2006 Report

A

rejected scots law prohibition on ousting gross negligence liability from exemption clauses

101
Q

Hayim v Citibank general

A

Hong Kong elderly brother and sister

102
Q

Bartlett v Barclays Bank on substitutive performance

A

No deduction for tax that would have been payable but for Ts unauthorised distribution

103
Q

Cannot oust jurisdiction of court by preventing Bs from applying to court in trust document

A

Adams v Adams

104
Q

Ts who cause same damage to B by respective breaches are both jointly and severally liable

A

Charitable Corp v Sutton

105
Q

Re Coxen

A

Exemption clauses can be binding on matters of fact as long as conceptually certain

106
Q

Cocker v Quayle

A

Bs don’t need to prove act/omission caused loss as not a breach claim

107
Q

What did Law Com 2006 Report suggest on exemption clauses?

A

Paid T needs to make S aware of meaning and effect of clause, but no further

108
Q

what is an order for account in common form?

A

Submit accounts on property, costs, distribution and what is left

109
Q

Penner on AIB

A

Judges didn’t consider falsification, and commercial/traditional trust distinction is wrong - doesn’t matter to right to falsify if trust continues/has failed/been completed

110
Q

What judge in Libertarian Investments Ltd v Hall gave a two-step process to accountability of Ts?

A

Lord Millett

111
Q

what was the two-step process given in Libertarian Investments Ltd v Hall?

A

Account is RIGHT of B, and is first step to identifying and quantifying trust fund deficit, not remedy in itself

112
Q

What judge and in what case highlighted how accountability of Ts to B is not a remedy in itself?

A

Lord Millett in Libertarian Investments Ltd v Hall

113
Q

Hodgkinson v Simms

A

Canadian claims are subject to nous actus

114
Q

What is an order for account of profits for?

A

Claim to hand over gains

115
Q

What two things are needed for a reparation claim?

A

Remoteness cap and causal link

116
Q

At what stage in AIB did the court apply orthodox substitutive performance rules?

A

Trial judge

117
Q

Millett extra-judicially on Target Holdings

A

Problem was cured. Highlighted incoherence of causal link requirement. Questioned distinction between ‘traditional’ trusts and commercial ones

118
Q

Nestle v Natwest general

A

Tracker fund

119
Q

Section 61 Trustee Act 1925

A

Courts can excuse breaches in trust management and unauthorised distributions - three stage test of fairness, honesty and reasonableness, with burden on T

120
Q

Re Allsop

A

need to consider standing of legal advice and value of property affected when breach occurred due to T taking erroneous legal advice

121
Q

What two cases show a duty can be ousted completely in a trust?

A

Hayim v Citibank; Armitage v Nurse

122
Q

Ts can be exempted from liability for BoT as long as S knew and approved, including gross negligence unless P change it

A

Armitage v Nurse

123
Q

Who highlighted how judges in AIB didn’t consider falsification, and found commercial/traditional trust distinction wrong?

A

Penner

124
Q

What case allows proprietary tracing claim against 3rd without needing to exhaust T remedies?

A

Hagan v Waterhouse

125
Q

Give two cases which show unauthorised disbursements are allowed in some cases, exonerating T

A

Re Patten; Jones v Lewis

126
Q

What case shows Bs carry burden of proving surcharges and T burden of proving discharge

A

Snell’s Equity

127
Q

No deduction for tax that would have been payable but for Ts unauthorised distribution

A

Bartlett v Barclays Bank

128
Q

Why is it explained no punitive damages for breach of duty?

A

Closer to breach of contract, where exemplary damages are not given: Johnson v UNISYS

129
Q

Law Commission 2006 Report on 2003 Consultation Paper

A

Rejected due to costs and tendency to defensive trusteeship

130
Q

What happens if T appoints to an unauthorised object?

A

T cannot rely on discharge of duty and must make reparation in some way - either sue object, substitutively perform or reparation

131
Q

Need to consider if adviser was given full and accurate info when Ts breach was due to erroneous legal advice

A

Cherny v Neuman

132
Q

Partington v Reynolds

A

Depending on assertion that T has committed a wrong

133
Q

Name two cases on a negligent failure to review and diversify trust instruments

A

nestle v Natwest; Re Mulligan

134
Q

How is an unauthorised distribution remedies?

A

Falsifying the documents

135
Q

Conson Enterprises v Boughton

A

special relationship of T means balance should favour person wronged by breach, unlike contract breakers

136
Q

Hayim v Citibank judgment

A

Clause excluding responsibility/duty until death ‘understandable and explicable’

137
Q

What is an order for account of profits?

A

T has to account for specific gains

138
Q

What case confirmed no need to prove act/omission for substitutive performance claim?

A

Cocker v Quayle

139
Q

Re Mulligan judgment

A

Court ordered T to pay difference between current value and would-be value if had performed duty

140
Q

Re Wynn

A

No ousting of jurisdiction of courts on pure matters of law

141
Q

AIB Group (UK) v Mark Redler judgment of trial judge

A

BoT, so payment only to extent action was unauthorised, e.g. only £300,000

142
Q

What jurisdiction allows exemplary damages for compensation, and according to what case?

A

Canada, Norberg v Wynrib

143
Q

Re Patten

A

Bs can adopt Ts actions and treat them as authorised

144
Q

Why did Law Com 2006 Report reject prohibition on ousting gross negligence liability from exemption clauses?

A

No clear distinction in English law between gross and ordinary negligence

145
Q

What is substitutively performing Ts duty?

A

Paying current market value of trust property to substitute obligation

146
Q

If an individual has no beneficial interest, what is their status for compensation for breach of duty?

A

No locus standi to bring a claim

147
Q

Who said Punitive damages should never be awarded as looks to policy goals of deterrence?

A

Beever

148
Q

Charitable Corp v Sutton

A

Ts who cause same damage to B by respective breaches are both jointly and severally liable

149
Q

Target Holdings v Redferns general

A

Fraud - docs later but money early

150
Q

Johnson v UNISYS

A

Exemplary damages not given for breach of contract

151
Q

Sanders v Parry

A

Calculate award for reparation by loss suffered by Bs, including loss of chance

152
Q

Bartlett v Barclays Bank per LJ Bingham

A

Strong microscope to distinguish reparation claim from common law damage claim

153
Q

How is a reparation claim similar to BoC?

A

Asking if a reasonable T could have done it

154
Q

Court ordered T to pay difference between current value and would-be value if had performed duty

A

Re Mulligan

155
Q

How does a substitutive performance claim show a striking contrast with BoC claim?

A

Can take account of increases in market value

156
Q

Who can sue for compensation for breach of duty?

A

B, T against co-T/former Ts and T of a sub-trust against main trust T

157
Q

Who said it can be appropriate to treat different Ts differently?

A

H&M

158
Q

Brudenell-Bruce v Moure judgment

A

T not liable for reinstatement of disrepair of property when greater than enhancement of property value

159
Q

When is a reparation claim brought, and how is it remedied?

A

Loss claimed by B, translated into accounting item by ‘surcharging’

160
Q

need to consider standing of legal advice and value of property affected when breach occurred due to T taking erroneous legal advice

A

Re Allsop

161
Q

HoL decided that C has to show that if D had acted with authorisation, it would have made a difference for substitutive performance claim

A

Target Holdings v Redferns

Law Second Year (62 decks)

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