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28 Cards in this Set
- Front
- Back
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Paid trust money to unauthorised agent in NZ. Scope of duty: full control of trust. Had to compensate amount in NZ currency.
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Re Dawson
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Scope of duty- to hold money, wait for cert, then release. Did not wait for cert=breach. Evidence was that venture would have failed anyway, even with cert- however what happened afterwards outside scope of trustee’s duty.
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Youyang v Minter Ellison Morris Fletcher
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Solicitor got loan through finance comp in which he had a personal interest- finding of fact was it was the only one that would give the client the loan anyway- the loss was not caused by the breach, and whether there was full and frank disclosure wouldn’t actually make a difference. Court held: strict liability, what client may have done if there was disclosure purely speculative, had to disgorge.
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Maguire v Makaronis
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Duty of Care and Skill: Trustee/fiduciary's negligence in forgetting to tell bank the couple obtained another loan was not the cause of the loss. With duty of care and skill, no srict liability.
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Bristol and West Building Soc v Mothew
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Fid got allowance for work and skill- court said they allowed it because the breach was honest/un-premeditated.
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Boardman v Phipps
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Managing director of gearbox distributor used knowledge to start assembling gearboxes himself. Manufacturer terminated agreement with business and went into business with guy. Business wanted account of profits. Court held guy got to retain part of profit that was product of own skill and resources. However- because law is not lenient on fids, onus was on him to prove what is reasonable remuneration for his work.
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Warman International v Dwyer
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Spiegleman and Heydon: no need for award of punitive damages for breach of fid duty. Corrective justice approach.
Mason (dissenting): punitive damages appropriate, drawing analogy with deliberate torts |
Harris v Digital Pulse
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NOT proprietary remedy. D fid had to disgorge prop they received in breach from third party, not from ben. Prop remedies relate to pre-existing prop rights of ben.
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AG for HK v Reid
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UK real estate agent persuaded 200 people to pay money for blocks of land in Portugal- not enough land. Paid 5 premiums on expensive life insurance policy, 2 being from trust money, then killed himself. Bens got 2/5 of life insurance payout (appreciation of property)- thus did v well, worth a lot more than premiums.
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Foskett v McKeown
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Rule: Where there is a dissipation, presumed to be trustee’s own money first. ‘Presumption of honesty.’
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Re Hallett’s Estate
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Trustee had shares of the ben and of his own, mixed them together and gave gift to friend. Deemed to be all of his own shares and some held on trust.
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Brady v Stapleton
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Where there is profitable expenditure, is deemed to be investment of trust money.
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Re Oatway
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In extremely complicated cases, take first withdrawal from first deposit, etc.
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Clayton’s Case
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Would only use if calculation is near impossible: almost never, if ever.
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ASIC v Enterprise Solutions 2000
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Proprietary claims: Will directed residue to ‘charitable and benevolent objects’- failed for lack of object. Before anyone realised it was invalid, paid out to 139 different charities. Prima facie, entitled to trace property(rightfully on trust for them). Hospital used it to refurbish; spent on existing, rather than new asset, which did not appreciate. Could not give P charge over hospital building. So must see money as having dissipated.
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Re Diplock (proprietary)
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139 recipients received something they were not entitled to as a matter of law- had to pay it back (restitutionary claim). Effect on wrongful recipients’ conscience b/c they have received trust property they were not entitled to -> enough, strict liability, must pay back.
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Re Diplock (personal)
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P should exhaust remedy against trustee first before proceeding against third party.
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Ministry of Health v Simpson
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First Limb: Knowing Receipt of Property
Second Limb: Knowing Assistance in a Breach of Trust/Fiduciary Duty |
Barnes and Addy
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Mortgaged property they were holding on trust to the bank (third party), who received an interest as a mortgagee, rather than a possessory interest. This constituted ‘receipt of property’.
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Doneley v Doneley
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Makes third party constructive trustee- with all same duties as an actual trustee- because the third party has knowledge of breach.
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Selangor United Rubber Estates v Cradock
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Different types of knowledge in 'assistance of breach'.
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Baden’s Case
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Cope accepted explanation that P comp could not afford property, supported by his own knowledge. No knowledge telling of breach (to reasonable person). Must be blame-worthy conduct on the part of the third party. Distinction between: knowing the facts but ignoring them, and not making the relevant enquires.
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Consul Development v DPC Estates
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No point is suing travel agency because was in liquidation and they’d have to get in line. Instead sued managing director. Found liable under second limb- knowingly assisted in breach of trust. Easy to demonstrate person authorising transactions had requisite degree of knowledge.
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Royal Brunei Airlines v Tan
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Discretionary trust w/ broad power of variation- trustees wanted add new class of beneficiaries. Bens challenged because less likely to benefit- however for the benefit of trust estate as a whole, do not need to take prejudice to individual beneficiaries into account.
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Kearns v Hill
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Superannuation fund variation power: could vary the trust as long as it did not prejudice benefit secured by contributers. Court: Where variation power requires asking a Q, must be objective answer to a question- justiciable. In this case, ‘any benefit’ secured by contributions means any benefit the members get from making contributions. Objectively- of course it will prejudice.
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Wilson v Metro Goldwyn Mayer
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If the trustee reasonably incurs a debt in the administration of the trust, the right to indemnity to the trust becomes an asset of the trustee, and in the case that they go bankrupt is part of the bankrupt’s estate and to be used for distribution between all creditors, NOT just to the creditor to which it was incurred (who would otherwise have a right to the trust property).
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Octavo Investments v Knight
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Lord Lindley’s 2 situations:
1) If the liability to meet the expense arises from the mere fact of ownership, the ben is liable to indemnify the trustee. 2) If the liability is not by necessity part of the trust (smaller scope than reasonably incurred), the ben will not be liable, unless they have authorised the expenditure. (Only the case for bens with absolute interest, not bens of a discretionary trust) |
Hardoon v Belilios
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McGarvie J insisted that trustee could only have a right to indemnity from the bens if all were sui juris- could not just exercise right against the ones who were. Controversial.
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JW Broomhead (Vic) v JW Broomhead
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