399, 400 (PC). His liability to account depends on the facts. no-conflict rule: the acceptance of traditional equitable values Boardman v Phipps [1966] UKHL 2 is a landmark English trusts law case concerning the duty of loyalty and the duty to avoid conflicts of interest. On this Wikipedia the language links are at the top of the page across from the article title. endobj Part II describes the rationales for adopting each of the approaches to awarding allowances to dishonest fiduciaries. Do not use an Oxford Academic personal account. He (and a beneficiary) purchased shares in a company in which the trust already had a substantial holding. Many of these journals are the leading academic publications in their fields and together they form one of the most valuable and comprehensive bodies of research available today. Lord Hodson and Lord Guest: Since S and B had used information made available to them by virtue of their relationship to the trust (as solicitor and beneficiary respectively), and since the information was trust property, they had made a profit out of trust property, rendering them liable. &Thb;ynxP\ -|tLo9sRx[8-a5& 'vd `f@). 1 0 obj Lord Cohen said the information is not truly property and it does not necessarily follow that, because an agent acquired information and opportunity while acting in a fiduciary capacity, he is accountable. HL (majority 3-2) held that S and B would hold their acquired shares as constructive trustees for the beneficiaries. Here you will find options to view and activate subscriptions, manage institutional settings and access options, access usage statistics, and more. way. Boardman and Tom Phipps had breached their duties to avoid a conflict of interest. They owed fiduciary duties (to avoid any possibility of a conflict of interest) because they were negotiating over use of the trust's shares. Tom Boardman was a solicitor for a family trust. Boardman v Phipps [1967] 2 AC 46 - Oxbridge Notes However they were generously remunerated for their services to the trust. overrule Boardman v Phipps.3 It should be noted that the majority in Boardman v Phipps were all-too-aware that they were imposing a constructive trust on a person who had acted in good faith. WI[y*UBNJ5U,`5B1F :IK6dtdj::yj The trustees were informed of these intentions. Priority of trustees indemnity inter se: pari passu or first in time priority? Oxbridge Notes is operated by Kinsella Digital Services UG. This article explores how the dissenting judgment of Lord Upjohn in Boardman v Phipps has been preferred by the lower courts and why the courts have adopted such a position. Annetts v McCann (1990) 170 CLR 596. This is because there is no possibility the trustee would seek Boardman's advice to purchase the shares and at any rate Boardman could have declined to act if given such request. No positive wrongdoing is proved or alleged against the appellants but they cannot escape from the consequences of their acts involving liability to the respondent unless they can prove consent.: p. 112A, I have no hesitation in coming to the conclusion that the appellants hold the Lester & Harris shares as constructive trustees and are bound to account to the respondentIn the present case the knowledge and information obtained by Boardman was obtained in the course of the fiduciary position in which he had placed himself. 31334. Is it a conflict? my lords. Boardman appealed against a finding that he was a constructive trustee for, or agent did not necessarily render him accountable for profit from its use, yet in, the present case, as both the information which satisfied B and P, purchase of the shares would be a good investment and the opportunity to bid, came as a result of B acting on behalf of the trustees B and P, trustees of five eighteenths of the shares in the company for the respondent and, were liable to account to him for the profit thereon accordingly, Human Rights Law Directions (Howard Davis), Tort Law Directions (Vera Bermingham; Carol Brennan), Marketing Metrics (Phillip E. Pfeifer; David J. Reibstein; Paul W. Farris; Neil T. Bendle), Public law (Mark Elliot and Robert Thomas), Commercial Law (Eric Baskind; Greg Osborne; Lee Roach), Introductory Econometrics for Finance (Chris Brooks), Criminal Law (Robert Wilson; Peter Wolstenholme Young), Principles of Anatomy and Physiology (Gerard J. Tortora; Bryan H. Derrickson), Electric Machinery Fundamentals (Chapman Stephen J. His lordship, with respect . You do not currently have access to this article. strict liability of fiduciaries has been the subject of criticism on the grounds that it is unfair to penalise honest trustees in the same way as guilty trustees and that the strict rule may discourage people from accepting the post. The full text is available here: http://www.bailii.org/uk/cases/UKHL/1966/2.html, -- Download Boardman v Phipps [1967] 2 AC 46 as PDF --, Transvaal Lands Co v New Belgium (Transvaal) Lands & Development CO [1914] 2 Ch 488, http://www.bailii.org/uk/cases/UKHL/1966/2.html, Download Boardman v Phipps [1967] 2 AC 46 as PDF. When on the institution site, please use the credentials provided by your institution. Penn v Lord Baltimore (1750) Paul Mitchell . Ought Boardman and Tom Phipps to be allowed remuneration for their work and skill in these negotiations? WI[y*UBNJ5U,`5B1F :IK6dtdj::yj (Keech v Sandford 1726) - landlord would not grant new lease to beneficiary so trustee took in his own name. Boardman v Phipps. Current issues of the journal are available at http://www.journals.cambridge.org/clj. ", The phrase "possibly may conflict" requires consideration. Grey v Grey (1677) Jamie Glister; 4. ), Rang & Dale's Pharmacology (Humphrey P. Rang; James M. Ritter; Rod J. PDF What Shall We Do With the Dishonest Fiduciary? the Unpredictability of The Cambridge Law Journal publishes articles on all aspects of law. The company made a distribution of capital without reducing the values of the shares. 1 0 obj An important feature of the journal is the Case and Comment section, in which members of the Cambridge Law Faculty and other distinguished contributors analyse recent judicial decisions, new legislation and current law reform proposals. Boardman v Phipps [1966] UKHL 2 (03 November 1966) F5aE}*?fxl1oA+;{ S>"~qOf~AcW|g[ VFaxb'o Tns34}#rPDB The proposition of law involved in this case is that no person standing in a fiduciary position, when a demand is made upon him by the person to whom he stands in the fiduciary relationship to account for profits acquired by him by reason of his fiduciary position and by reason of the opportunity and the knowledge, or either, resulting from it, is entitled to defeat the claim upon any ground save that he made profits with the knowledge and assent of the other person.: The appellants obtained knowledge by reason of their fiduciary position and they cannot escape liability by saying that they were acting for themselves and not as agents of the trustees. His daughter, Mrs Newman, was one of the trustees. Boardman had concerns about the state of Lexter & Harris' accounts and thought that, in order to protect the trust, a majority shareholding was required. 'Rules of equity have to be applied to such a great diversity of circumstances that they can be stated only in the most general terms and applied with particular attention to the exact circumstances of each case. Phipps v Boardman: HL 3 Nov 1966 A trustee has a duty to exploit any available opportunity for the trust. Request Permissions, Editorial Committee of the Cambridge Law Journal. UK: Trustees And Conflicts Of Interest - Mondaq Cambridge University Press is committed by its charter to disseminate knowledge as widely as possible across the globe. Lord Upjohn also agreed with Lord Cohen that information is not property at all, although equity will restrain its transmission if it has been acquired by a breach of confidence. Boardman V Phipps - Judgment - House of Lords House of Lords The majority of the House of Lords (Lords Cohen, Guest and Hodson) held that there was a possibility of a conflict of interest, because the solicitor and beneficiary might have come to Boardman for advice as to the purchases of the shares. Issues Did Boardman and Tom Phipps breach their duty to avoid a conflict of interest, despite the fact that the company made a profit and . PDF Boardman v Phipps [1967] 2 AC 46 - 02-17-2019 The trust benefited by this distribution 47,000, while Boardman and Phipps made 75,000. It publishes over 2,500 books a year for distribution in more than 200 countries. The majority of the House of Lords (Lords Cohen, Guest and Hodson) held that there was a possibility of a conflict of interest, because the solicitor and beneficiary might have come to Boardman for advice as to the purchases of the shares. For terms and use, please refer to our Terms and Conditions He also obtained detailed trading accounts of the English and Australian arms of the business. The Appellant Phipps was Chairman of this company and Mr. Boardman was one of its directors. His liability to account depends on the facts. However, to do this he needed a majority shareholding in the company. Fiduciary duties - essay Flashcards | Quizlet Boardman v Phipps (1967) was an example of the application of strict liability. But then John Phipps, another beneficiary, sued for their profits, alleging a conflict of interest. Administrative Law. The strict liability of fiduciaries has been the subject of criticism on the grounds that This is a Premium document. Lord Upjohn dissented, and held that Phipps and Boardman should not be liable because a reasonable man would not have thought there was any real sensible possibility of a conflict of interest. Read more about this topic: Boardman V Phipps, Judgment, A severe though not unfriendly critic of our institutions said that the cure for admiring the House of Lords was to go and look at it.Walter Bagehot (18261877), The welcome house of him my dearest guest.Where ever, ever stay, and go not thence,Till natures sad decree shall call thee hence;Flesh of thy flesh, bone of thy bone,I here, thou there, yet both but one.Anne Bradstreet (c. 16121672), You see how this House of Commons has begun to verify all the ill prophecies that were made of itlow, vulgar, meddling with everything, assuming universal competency, and flattering every base passionand sneering at everything noble refined and truly national. will. Law Case Summaries Q6 - You now need to carry out research about the different universities/colleges you are interested in applying to by finding the answers to the areas you have outlined in your responses to questions 3 and 5 above. <> In my view it means that the reasonable man looking at the relevant facts and circumstances of the particular case would think that there was a real sensible possibility of conflict; not that you could imagine some situation arising which might, in some conceivable possibility in events not contemplated as real sensible possibilities by any reasonable person, result in a conflict.". In the present case, as the purchase of the shares was entirely out of the question, Regal Hastings was said to be inapplicable. If the defendant has done valuable work in making the profit, then the court in its discretion may allow him a recompense. Name of Case. They bought a majority stake. The direct tyranny will come on by and by, after it shall have gratified the multitude with the spoil and ruin of the old institutions of the land.Samuel Taylor Coleridge (17721834), From scenes like these old Scotias grandeur springs,That makes her loved at home, revered abroad;Princes and lords are but the breath of kings,An honest mans the noblest work of God!Robert Burns (17591796), "It is perhaps stated most highly against trustees or directors in the celebrated speech of Lord Cranworth L.C. Boardman was a solicitor to trustees of a will trust. Throughout this phase Proprietary relief in Boardman v Phipps 6 [1967] 2 AC 46 (HL) 73. The institutional subscription may not cover the content that you are trying to access. Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. Therefore S and B invested themselves and the company did very well, improving the value of the shares held by themselves individually and by the trust. Pettitt v Pettitt (1970) and Gissing v Gissing (1971) John Mee; 22. The House of Lords maintained the strict rule that historically equity has imposed on a fiduciary. xksgD2u$N+xH)%"dU &c~m_WMnny|t80^olIv"+E] mv}f"gv UY Fe_go_eu6[xGLBdUS-?b\4?s=}GO0upAQ![*`E"~ Proprietary relief in Boardman v Phipps - Northern Ireland Legal Quarterly Breach of fiduciary duty Flashcards | Quizlet The trust assets include a 27% holding in a textile company called Lexter & Harris. 4 0 obj Boardman and Tom Phipps, a beneficiary of the trust, attended a general meeting of the company. Material Facts Boardman was the solicitor for a family trust. This article explores how the dissenting judgment of Lord Upjohn in Boardman v Phipps has been preferred by the lower courts and why the courts have adopted such a position. P0Y|',Em#tvx(7&B%@m*k criticism, see L.S. Part II describes the rationales for adopting each of the approaches to awarding allowances to dishonest fiduciaries. The no-conflict rule: the acceptance of traditional - ResearchGate Equity Short: Boardman v Phipps [1966] UKHL 2 - YouTube For faster navigation, this Iframe is preloading the Wikiwand page for Boardman v Phipps . He said unequivocally that knowledge learnt by a trustee in the course of his duties is not property of the trust and may be used for his own benefit unless it is confidential information which is given to him (i) in circumstances which, regardless of his position as a trustee, would make it a breach of confidence to communicate it to anyone or (ii) in a fiduciary capacity. See below. The beneficiary principle in the 21st century, Subscription prices and ordering for this journal, Purchasing options for books and journals across Oxford Academic, Receive exclusive offers and updates from Oxford Academic. This has fuelled a more general debate as to whether the no-conflict rule should be harsh or more flexible. endobj With the knowledge of the trustees, Boardman and Phipps decided to purchase the shares themselves. 4 0 obj trust. *Lecturer in Law at University of East London, Email: Search for other works by this author on: The Author (2008). PDF FIDUCIARY RELATIONSHIP Issue: Definition - StudentVIP This article explores . If you cannot sign in, please contact your librarian. His Lordship distinguished Regal (Hastings) v Gulliver by restricting Regal Hastings to circumstances concerned with property of which the principals were contemplating a purchase. Some societies use Oxford Academic personal accounts to provide access to their members. Unit 11. principal shareholder group, Boardman obtained information about the factories of Lester & Harris in Coventry and Nuneaton and its property in Australia. They suggested to Mr Fox, a trustee, that it would be desirable to acquire a majority shareholding, but Fox disagreed. The other two members of the majority, Lord Hodson and Lord Guest, opined that information can constitute property in appropriate circumstances and in the current case, the confidential information acquired can be properly regarded as property of the trust. Boardman v Phipps - Wikipedia Constructive trusts, unjust enrichment, tracing 2010 Cases, Written by Oxford & Cambridge prize-winning graduates, Includes copious academic commentary in summary form, Concise structure relating cases and statutes into an easy-to-remember whole. The Cambridge Law Journal The majority agreed unanimously that liability to account for the profits made by virtue of a fiduciary relationship is strict and does not depend on fraud or absence of bona fides, and so Phipps and Boardman would have to account for their profits.
