Fiduciary Duty Cases

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  • Created by: k1016450
  • Created on: 25-04-14 13:21
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  • Fiduciary Relationships
    • Lister v Stubbs 1890
      • Facts: Stubbs made orders for his company in return for large commissions from the other company. An injunction was sought by his employers to restrain him from disposing of these investments before trial.
      • Principle: His employers were not debtors as there was no constructive trust over the investments. They only had a claim for the proceeds of dishonesty.
      • Outcome: The injunction was not awarded.
    • AG Hong Kong v Reid 1994
      • Facts: The DPP unlawfullly received funds from criminals for obstructing their prosecutions.
      • Principle: The relationship was that of a constructive trust and therefore the fiduciary should account for a bribe (though not always a secret benefit).
      • Outcome: The proceeds could be traced and given to the government. This contradicts Lister v Stubbs.
    • Boardman v Phipps 1966
      • Facts: A solicitor asked to advise some trustees acquired information in doing this, that led him to gain control over the company and gain a profit.
      • Principle: The profits would be held on constructive trust for the company trustees as a fiduciary is not supposed to have a conflict between a personal capacity and the fiduciary duties. This does not have to be unconscionable or in bad faith, in which case service should be paid for.
      • Outcome: The solicitor had to account for the profits, but was paid for his service.
    • Satnam Investments v Dunlop Haywood 1999
      • Facts: A property developer appointed to advise on a site which the company held a purchase option over, approached another developer who took the contract when Satnam were having financial difficulties.
      • Principle: The other developer did not hold a fiduciary duty to Satnam. It could have been liable as: a knowing recipient, as a dishonest accessory (mere knowledge is insufficient) or through sui generis in confidence (confidential info wrongly disclosed). Dunlop was in breach of fiduciary duty.
      • Outcome: Dunlop had to pay Satnam for its breach.

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