what is a fiduciary
FINN 1973
- ‘expected to act in the interests of another - to act eflessly and with undivided loyalty’
- no conflict rule = BRISTOL aAND WEST BUILDING SOCIETY
Bristol and west building society?
F’s primary duty is no conflict
How do F duties relate to trust duties?
‘irreducable core’
Armitage v Nurse
Why is rule of no profit for Fs so strict?
BRAY v FORD
- not to do with morality but to guard against conflict of interest/corruption
Keech v Sanford
- T held lease on trust for baby, lease ran out wanted to renew for trust benefit
- Leasor didnt like idea of baby benefiting, said no
- Trustee took lease = because it had been trust property it was potential conflict of interest
Key quote KEECH v SANFORD
‘only person in the world’ who could not take the lease
Why is BOARDMAN v PHIPPS controversial
3:2 ratio
Lord Upjohn in strong dissent
Justification for strict application of F duties
1) ensures certainty
2) protects B interest and does not grant any property rights to F
3) stops mistakes of F effecting the whole trust
Why is Boardman v Phipps critisied LORD UPJOHN
1) such strict standards totally unrealistic
2) strict liability in most cases already disuades people becoming trustees (s29 2000 cant even get paid unless professional)
3) should only impose liability if reasonable, not just any potential conflict of interest
LORD UPJOHN
quote in Boardman v Phipps
- If reasonable man precieves a ‘real sensible possibility of conflict’ liability should be found
- any possibility at all = too harsh
Has strict position ever been challenged by courts
Yes
SINCLAIR INVESTMENTS 2012 which returned to LISTER v STUBBS 1890 approach
Lister v stubbs 1890
- F under duty to account for any money money recieved but not to disgorge profit
Why was SINCLAIR INVESTMENTS decision questionable?
- CoA decision, are supposed to follow SC but didnt
- Overruled in FHR EUROPEAN VENTURES 2014
AG HONG KONG v REID 1984
- Idea that if F is recieving on going profit from bribe = not allowed
- money spent on houses that increased in value, so Bs were granted a property right in the bribe profits as it would be unjust to allow F to benefit from breach
When FHR EUROPEAN VENTURES 2014 overruled SINCLAIR INVESTMENTS 2012, why did it return to perhaps overly strict approach?
- Lord Neuberer could appreciate that it was a 2 sided argument
- Prioritised anti-corruption policy over allowing honest Fs to make profits
Could strictness be softened without opening door to corruption?
QUEENSLAND MINES (aus)
- fully disclosing F is protected slighty
BAROMAN v PHIPPS
- quantum meruit award, so good honest deeds are not ignored
How does strictness of anti-corruption effect the other 2 fiduciary concerns?
RENUMERATION
INFORMATION
- they too are very strictly interpreted, even though they are much less faliable to corruptin
- unfair
why can F not make a profit from their positin
potential conflict of interest
how are directors paid? they have fiduciary duty to comany
salary agreed by shareholders (Bs)
Re MACADAM
- if director is appointed soley by vote of B’s, salary held on CT for Bs
- cos if not for B’s they wouldnt be there anyway
contrast macadam with
RE GEE
- Re GEE if independently appointed then salary is allowed
When is information B’s property under FR?
If F was still a fiduciary when they discovered it, even if it has nothing at all to do with B
NO UNAUTHORISED PROFIT
IDC v COOLEY
- C learnt of a business opportunity while F to IDC, they only wanted to work with C
- C resigned and went on to make profit
- Impossible for IDC to benefit, but still breach of FD as he learnt of opportunity whilst still a fiduciary
