swarb.co.uk - law index
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Trusts - From: 1993 To: 1993
This page lists 13 cases, and was prepared on 02 April 2018.
Paragon v Thakerer [1993] 1 All ER 400
1993
Trusts, Torts - Other, Litigation Practice
A claim for fraudulent or intentional breach of trust/fiduciary duty is a different cause of action from a claim for breach of trust/fiduciary duty generally and must be separately and distinctly pleaded.
1 Citers
Baden v Societe Generale pour Favoriser le Developpement du Commerce et de l'Industrie en France SA (Note) [1993] 1 WLR 509
1993
Peter Gibson J
Trusts
The court looked to various forms of knowledge which could be attributed to a party when considering a rectification. Knowledge may be proved affirmatively or inferred from circumstances. The various mental states which may be involved are (i) actual knowledge; (ii) wilfully shutting one's eyes to the obvious; (iii) wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make; (iv) knowledge of circumstances which would indicate the facts to an honest and reasonable man; (v) knowledge of circumstances which would put an honest and reasonable man on inquiry. A person in categories (ii) or (iii) will be taken to have actual knowledge, while a person in categories (iv) or (v) has constructive notice only. Peter Gibson J: "Again, however, I do not think it need be knowledge of the whole design: that would be an impossibly high requirement in most cases. What is crucial is that the alleged constructive trustee should know that a design having the character of being fraudulent and dishonest was being perpetrated. Further he must know that his act assisted in the implementation of such design."
1 Citers
Saville v Goodall; CA 1993 - [1993] 1 FLR 755
In Re Estate of Monica Dale Dec, Proctor v Dale; ChD 11-Feb-1993 - Gazette, 07 April 1993; Times, 16 February 1993; Independent, 14 April 1993; [1993] 4 All ER 129
Baker v Baker [1993] EWCA Civ 17; [1993] 2 FLR 247
19 Feb 1993
CA
Dillon, Beldam, Roch LJJ
Trusts
[ Bailii ]
Baker v Baker and Another; CA 23-Feb-1993 - Gazette, 07 April 1993; Independent, 06 April 1993; Times, 23 February 1993
Leyland Daf Ltd v Automotive Products Plc Times, 06 April 1993
6 Apr 1993
ChD
Trusts
Exerting ordinary commercial pressure to obtain payment is not an abuse.
Jaffray v Marshall Gazette, 21 April 1993
21 Apr 1993
Chd
Trusts
Compensation calculated at 'highest opportunity value'.
Sinclair v Lee and Another Times, 06 May 1993
6 May 1993
Chd
Trusts
Trustees to hold company de-merger shares as capital.
Target Holdings Ltd v Redferns and Another Independent, 03 December 1993; Times, 24 November 1993; [1994] 1 WLR 1089
24 Nov 1993
CA
Peter Gibson LJ
Legal Professions, Trusts, Equity
Solicitors were liable to mortgagees for mortgage monies which had been out by them paid in advance of the completion of the purchase which would allow the mortgagee's loan to be charged. The basic liability of a trustee in breach of trust was not to pay damages, but to restore to the trust fund that which had been lost to it or to pay compensation to the beneficiary for what he had lost. If a trustee wrongly paid away trust monies to a stranger, there was an immediate loss to the trust fund and the trustee came under an immediate duty to restore the monies to the trust fund. The remedies of equity were sufficiently flexible to require the finance company to give credit for monies received on the subsequent realisation of its security, but otherwise the solicitors' liability was to pay the whole of the monies wrongly paid away.
Peter Gibson LJ said: "The remedy afforded to the beneficiary by equity is compensation in the form of restitution of that which has been lost to the trust estate, not damages. "
Ralph Gibson LJ (dissenting) held that it was necessary for the court to examine the nature of the relationship between the parties out of which the solicitors' equitable duty arose. If, having regard to the relationship and its purpose, the obligations of the parties, its purpose and the obligations of the parties within it, it appeared just to regard the breaches as having caused no loss, because the loss would have happened if there had been no breach, the court should so hold.
1 Cites
1 Citers
Attorney General for Hong Kong v Reid and Others Gazette, 26 January 1994; Independent, 24 November 1993; Times, 12 November 1993; [1994] 1 AC 324; [1993] UKPC 2
24 Nov 1993
PC
Lord Templeman
Equity, Trusts, Commonwealth
Bribes were taken by an employee, a crown prosecutor in Hong Kong, in a fraud on his employer. He then invested the proceeds in the purchase of property in New Zealand. The property had increased in value. The employer sought repayment of the bribes received from the properties purchased. Held: The employer had a proprietary interest both in the bribe and in the asset substituted for it. Thus the property belonged in equity to the employer. The first stage in the analysis was the decision that the bribe itself was trust property. The second stage in the analysis was simply the application of the process of tracing the value of the bribe into the asset that had been substituted for it. A fiduciary office holder who accepted a bribe holds both the original sum, and any increase in its value, on a constructive trust for the person to whom he owed that fiduciary duty. Bribery is an evil practice which threatens the foundations of any civilised society. It corrupts not only the recipient but the giver of the bribe. "property acquired by a trustee innocently but in breach of trust and the property from time to time representing the same belong in equity to the cestui que trust and not to the trustee personally":
1 Cites
1 Citers
[ Bailii ]
El Ajou v Dollar Land Holdings Ltd Times, 03 January 1994; [1994] 2 All ER 685; [1993] EWCA Civ 4; [1994] BCC 143; [1994] 1 BCLC 464
2 Dec 1993
CA
Nourse, Rose, Hoffmann LJJ
Company, Equity, Torts - Other, Trusts
The court was asked whether, for the purposes of establishing a company's liability under the knowing receipt head of constructive trust, the knowledge of one of its directors can be treated as having been the knowledge of the company. Held: The company was fixed with the knowledge of its part-time chairman and a non-executive director, because he had acted as its directing mind and will for the particular purpose of arranging its receipt of the tainted funds. It was sufficient that the director had management and control so far as the receipt of the fraud was concerned, having made arrangements for the receipt and disposal of the money, even though he had no general managerial responsibility in the company.
Hoffmann LJ set out the ingredients of knowing receipt: "For this purpose the plaintiff must show, first a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets are traceable to a breach of fiduciary duty."
When asking who was the controlling mind of a company, the relevant test is to find the person who had management and control in relation to the act or omission in point. The formal position or status as a director is relevant but not decisive. A "pragmatic" approach is necessary: "Decided cases show that, in regard to the requisite status and authority, the formal position, as regulated by the company's articles of association, service contracts and so forth, though highly relevant, may not be decisive. Here Millett J adopted a pragmatic approach. In my view he was right to do so, although it has led me, with diffidence, to a conclusion different from his own" and " . . different persons may for different purposes satisfy the requirements of being the company's directing mind and will. " The court considered the ingredients of the tort of 'knowing receipt': "For this purpose the plaintiff must show, first, a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets he received are traceable to a breach of fiduciary duty." (Hoffmann LJ)
Nourse LJ said: "The doctrine attributes to the company the mind and will of the natural person or persons who manage and control its actions. At that point, in the words of Millett J ([1993] 3 ALL ER 717 at 740): "Their minds are its mind; their intention its intention; their knowledge its knowledge." It is important to emphasise that management and control is not something to be considered generally or in the round. It is necessary to identify the natural person or persons having management and control in relation to the act or omission in point. This was well put by Eveleigh J in . . R v Andrews Weatherfoil Ltd . .
Decided cases show that, in regard to the requisite status and authority, the formal position, as regulated by the company's articles of association, service contracts and so forth, though highly relevant, may not be decisive. Here Millett J adopted a pragmatic approach. In my view he was right to do so, although it has led me, with diffidence, to a conclusion different from his own."
1 Cites
1 Citers
[ Bailii ]
Hunter v Moss [1993] EWCA Civ 11; [1994] 1 WLR 452; [1994] 3 All ER 215
21 Dec 1993
CA
Dillon, Mann, Hirst LJJ
Trusts
The defendant challenged the finding that an oral express trust applied to 50 of his 950 shares on the basis there was not certainty of subject matter. The trust related to five per cent of a company's issued share capital. However, all of the shares were identical in one class and the defendant held more than 50 shares. Mr Rimer QC, at first instance, held that the principles applying to a trust of tangible assets (as in Re Wait or London Wine Co) were not the same as applied to a trust of intangibles. He held that the test should be whether, immediately after the declaration of trust, the court could, if asked, make an order for the execution of the trust, which it could only do if the subject-matter of the trust is identified with sufficient certainty. He then held that a declaration as regards a definite number of shares, forming part of a larger holding, was valid, just as a declaration as regards the corresponding proportion of the shares held would have been. He accepted that the trustee's subsequent dealings with the larger holding might leave doubt as to whether the dealings were with his own retained assets or with the trust assets, but said that such uncertainty would not be as to whether a trust had been validly created, but as to whether the obligations to which it gave rise had been properly discharged. Held: The appeal failed. It was not necessary to identify any particular 50 shares. The trust was effective.
[ Bailii ]
