Facts: George Blake was a former member of the MI6 from 1944 to 1961. For his employment contract, he had signed an official declaration to disclose no information about his work. It applied after his employment ceased. In 1951, he became a Soviet agent, thus, being a double agent. He was discovered in 1961 and the British government imprisoned him. He escaped in 1966 and fled to the Soviet Union. He wrote a book about it and his secret services work called ‘No Other Choice’.
Held: Blake was held to have breached his fiduciary duty to the crown
Facts: The Acting Director of Public Prosecutions for Hong Kong had accepted bribes from criminals to drop cases against them. The bribes were used to buy property in New Zealand.
Held: The Privy Council found that as there was a fiduciary relationship the property could be recovered i.e. this meant the land bought by Mr Reid was held on trust, and had to be given over to the Hong Kong governmen
Facts: Boardman was solicitor of family trust, which included a 27% holding in a textile company. Boardman felt that by asset-stripping the company he could increase the value of the shares. However, to do this he needed a majority shareholding in the company. Boardman and another trustee, Fox, therefore acquired the extra shares personally allowing them to control the company. Boardman was able to make the company and the shares in the trust extremely profitable
⇒ One ungrateful beneficiary sued Boardman for his profits
Held: The House of Lords held that Boardman should hold the profits on constructive trust for the beneficiaries of the existing trust → and therefore the money Boardman had made had to be returned to the trust
Facts: The defendant was president of the mineworker’s union and trustee of the miner’s pension fund (which had an investment plan including investments in South Africa and the oil industry). The defendant felt investing the miner’s pension fund in oil companies, which were in direct competition with the coal industry, would not be in the beneficiary's best interest, so he proposed to withdraw this investment
Held: The trustee has a duty to maximise returns on the trust fund and it was not up to the defendant to reject the investment advice on the basis that he had personal/moral objections to the investment; the defendant therefore lost the case and had to take the advice from the miner’s pension fund investment plan
Facts: A couple sought to sell land and were negotiating with Dedham. Dedham applied for planning permission on the land, which was granted, and therefore made the land more valuable. Dedham did not tell the couple this and bought the land at its original value. The couple subsquently sued.
Held: It was held that Dedham had appointed themselves as agents of the couple in applying for planning permission so there was a fiduciary duty (which includes a duty to disclose any conflicts of interest); so Dedham had to account for the profits made on the transaction
Facts: Wine was held in trust. A trustee failed to take steps to collect wine from a debtor. The debtor subsequently drank the wine.
Held: The trustee was held liable for the loss → he should have taken possession of the trust property
Facts: Guinness appointed a committee of directors to handle the company’s affairs during a takeover bid of another company. One of the directors, Ward, was paid a £5.2m sum as a bonus. The articles of association provides that the whole board must consent to such a bonus.
Held: It was held that there was a breach of fiduciary obligation based on the terms set out in the company’s articles of association, which could not be overruled. So the money was held on a constructive trust for the company
Facts: A managing director of a company that offered construction services was advised by a potential client that they were not prepared to do business with the construction company, but was willing to place its business with the director personally. The director feigned ill health as a pretext for resignation and accepted the client’s work.
Held: The court held that he was bound to account to the company for all benefits accruing under the contract
Facts: The Managing Director (Isaac) of company was a shareholder himself and trustee of a family trust, which also had shares in the company. Travis Perkins looked to buy the company and the beneficiaries were keen for this to happen as it would allow them access to a yearly dividend (i.e. an income from the trust). However, Isaac scuppered the deal by voting his own shares against the deal. The beneficiaries sued Isaac saying he is obliged to act in best interest of the beneficiaries so should have voted in their favour
Held: The court disagreed, holding he could deal with his own property for his own benefit → Although there is a conflict of interest, it is a declared conflict of interest which is okay
Held: The trustee was not liable for the theft of a watch by one of his servants, since he had exercised reasonable care and skill in selecting the servant.
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Facts: Family property, that was held on lease, was left on trust for an infant. Sandford was trustee of the trust, but the lease subsequently expired and the landlord refused to renew the lease. So Sandford renewed the lease in his own right as he saw it as a good investment. When the infant (Keech) grew up he sued Sandford
Held: The court held that the property was held on constructive trust for Keech → the court clearly adopts a strict approach to conflict of interests
Facts: An estate agent was acting for the sellers of two adjacent properties. A purchaser agreed to buy one house, and then the other (the claimant's property). The estate agent did not tell the claimant that the same purchaser was buying both houses. The claimant claimed there was a breach of fiduciary duty as that information was material for him negotiating a better deal
Held: The Privy Council found that, by their nature, estate agents were expected to act for more than one principal. The info received by virtue of their acting for the other purchasers was confidential to that fiduciary relationship.
Facts: Trust property was invested in bearer bonds (bearer bonds are bonds that are not registered in anyone’s name and payable to whoever possesses it). The bearer bonds were divided between two trustees. One trustee disappeared with half of the bonds
Held: This was a breach of the duty to take care of trust assets
Facts: Nestle (a man, NOT the company Nestlé) left money under his will for his granddaughter. She was expecting a lot more money to be left for her as he was a rich man. She subsequently found out that the bank did not use the full scope of its investment powers → it had left the money in safe trustee stock when in fact the trust instrument had given them the power to invest in potentially more profitable investment
Held: The trustee (bank) should have familiarised itself with the trust instrument; if they did they would have known scope of its investment power
Facts: Kamp was a director of Odyssey Entertainment Ltd. In bad faith he told the board of Odyssey Entertainment Ltd that the company's financial prospects were poor, which led to their decision for the company to enter voluntary liquidation while still solvent and profitable. This allowed him not only to escape his contractual obligations to the company, but also to cherry-pick proposed deals in which the company had an interest.
Held: Kamp was liable to account for his profits because he had broken duty of good faith by going behind company’s back for personal gain
Facts: A young singer (O’Sullivan) entered into an exclusive management deal with a promoter, who induced him to sign contracts which were disadvantageous (i.e. got stitched up by his manager)
Held: The court held that there was a fiduciary relationship (i.e. there was a relationship of trust and confidence), and the promoter should account for the profits he made.
Facts: A sergeant in the medical corps participated in a smuggling operation, wearing his uniform to help the smugglers get through army check-points.
Held: He was held to be in breach of his fiduciary duty, owed as a soldier in uniform to the Crown, which allowed the Crown to recover the payments made to him.
Facts: Mr Pook had liability for acquiring land for the development of new stores. In breach of his fiduciary duty to Tesco he took bribes and concocted false invoices
Held: There was a breach of his fiduciary duty. The court said Pook, as a senior employee, was effectively under the same duty as a director
Facts: A farmer transferred his property to a trust for the benefit of his wife and children. He appointed his father and other family members, none of whom had any knowledge or experience of trusts, as trustees. He later instructed the trustees to make appointments of the property.
Held: As the trustees had not considered the powers and whether they should be exercised, but had simply followed the instructions of the settlor, the appointments were held to be a nullity.
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