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Case Table: Constructive Trusts

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  • Vak
  • Equity & Trusts
  • Instelling
  • Cardiff University (CF)

Case table produced by a 1st class student. Includes: - Ratio/judgments - Significance of case e.g. policy reasonings of judgment - Link to other cases This case table is for constructive trusts in the Equity and Trusts course. Includes sub-topics of: - Bribes and secret commissions - No ...

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Document informatie

  • 26 juli 2023
  • 7
  • 2022/2023
  • Overig
  • Onbekend

Onderwerpen

  • constructive trusts
  • equity and trusts
  • law
  • bribes and secret commissions

Geschreven voor

  • Cardiff University (CF)
  • Onbekend
  • Equity & Trusts
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Constructive Trusts Junkyard

Case/Source Quote/Summary Significance/ link to other sources
No Profit Rule
Boardman v Phipps Held majority 3:2 – defendants had breached their fiduciary to the trust Boardman illustrates the strictness of the no profit rule.
[1967] since they had made a personal profit by virtue of their position as The strictness of the application of this rule in Boardman is
fiduciaries and were liable to account to the trust for the profit. justified because:
 The breach of the duty – it was significant that the
Lord Hodson and Guest: defendants had misappropriated confidential company was a private company, so that there was
information from the trust, this information suggesting that purchasing no public market for the shares, and consequently
shares in the company would be a good investment. The judges the information that the defendants obtained and
considered that such information could be characterized as the ability to purchase shares in the company came
property, so that the defendants had clearly profited from their to them in a fiduciary capacity
fiduciary position by taking trust property and were liable to  Informed consent – defendants would have
account for the fruits of that property. escaped liability if they had obtained the fully
informed consent of the beneficiaries
Lord Cohen: confidential information lacked the hallmarks of  Interests of efficiency – principal may not be able
property, but considered that the defendants were liable for breach of to monitor easily the fiduciary’s actions on a daily
fiduciary duty, because there was a conflict of interest and duty to basis
the trust.  To provide an incentive to all fiduciaries to resist
the temptation to conduct themselves improperly
Dissenting judgment, Viscount Dilhorne and Lord Upjohn: there was  Where there is no hint of fraud in the conduct of
no sensible possible conflict of interest and duty on the facts, and the D, as in Boardman, it might be more just to
defendants’ actions had enhanced the value of the trust property commend the D for what they had done rather than
to hold them accountable to C
Murad v Al-Saraj D was held liable for breach of the no-profit rule. Virgo comments that the flexibility sought by Arden LJ
[2005] EWCA Civ already applies to breach of fiduciary duty: any fiduciary is
959 Arden LJ acknowledged that the application of the no-profit rule was able to profit from their position as a fiduciary if they
strict. She considered that the time may have come… obtain the fully informed consent of the principal before
‘when the court should revisit the operation of the inflexible rule of doing so (476)
equity in harsh circumstances, as where the trustee has acted in
perfect good faith and without any deception or concealment, and in
the belief that he was acting in the best interests of the beneficiary’
Bribes and Secret Commission
Goode ‘Property Where a fiduciary accepts a bribe or secret commission, deriving from This concept can be illustrated in Cook v Deeks – rather

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