| York Buildings Co v MacKenzie | |
|---|---|
| Court | House of Lords |
| Citation(s) | (1795) 8 Bro 42, (1795) 3 ER 432 |
| Keywords | |
| Conflict of interest | |
York Buildings Co v MacKenzie (1795) 3 ER 432 is an English trusts law case concerning the duty of a fiduciary to act in the beneficiaries' interests, without entering any conflict of interest.
The York Buildings Co was insolvent. Its estates (land in Widdrington, a lease of Strontian Mines, and some bonds and annuities) had been sold to pay creditors. Mr MacKenzie had bought some at a public judicial auction in February 1779, and the sale was confirmed by the Court of Session after several months. Mr MacKenzie then spent substantial sums of money improving the buildings. The York Buildings Co then sought a declaration that the sale be set aside, on the ground that Mr MacKenzie had been an agent and solicitor of the court during the previous proceedings.
Counsel for the appellants outlined the conventional position of the function of fiduciary responsibility in his submissions. [1]
He that is entrusted with the interest of others, cannot be allowed to make the business an object of interest to himself; because from the frailty of nature, one who has the power, will be too readily seized with the inclination to use the opportunity for serving his own interest at the expense of those for whom he is entrusted...
The danger of temptation, from the facility and advantages for doing wrong, which a particular situation affords, does, out of the mere necessity of the case, work a disqualification; nothing less than incapacity being able to shut the door against temptation where the danger is imminent, and the security against discovery great, as it must be where the difficulty of prevention or remedy is inherent to the very situation which creates the danger... The wise policy of the law has therefore put the sting of a disability into the temptation as a defensive weapon against the strength of the danger which lies in the situation.
It is of no moment what the particular name or description, whether of character or office, situation or position, is, on which the disability attaches... [for it applies] to all the acts of tutors and guardians, factors, trustees, and all who are akin to a trust by any connection of character or office...
It is needless to enter into refinements or niceties as to the nature of trusts, or the specific name of trustee. There is no magic in the term: He is a trustee (in technical style) who is vested with property in trust for others; but every man has a trust, to whom a business is committed by another, or the charge and care of any concern is confided or delegated by commission.
The House of Lords held that an agent or solicitor of creditors of a bankrupt owed trustee-like fiduciary duties. So a purchase by him of part of a bankrupt's estate was liable to be set aside when the circumstances showed any impropriety or negligent conduct.
 | This section needs expansion. You can help by adding to it. (April 2010) |
A trust is a legal relationship in which the holder of a right gives it to another person or entity who must keep and use it solely for another's benefit. In Anglo-American common law, the party who entrusts the right is known as the "settlor", the party to whom the right is entrusted is known as the "trustee", the party for whose benefit the property is entrusted is known as the "beneficiary", and the entrusted property itself is known as the "corpus" or "trust property". With the strategic and legal use of Trusts, individuals can ensure that their children and grandchildren or chosen beneficiaries are able to benefit completely from the inheritance they want them to receive.
A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for example, a corporate trust company or the trust department of a bank, acts in a fiduciary capacity to another party, who, for example, has entrusted funds to the fiduciary for safekeeping or investment. Likewise, financial advisers, financial planners, and asset managers, including managers of pension plans, endowments, and other tax-exempt assets, are considered fiduciaries under applicable statutes and laws. In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance, and trust in another whose aid, advice, or protection is sought in some matter. In such a relation, good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trusts.
A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.
A constructive trust is an equitable remedy imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference, or due to a breach of fiduciary duty, which is intercausative with unjust enrichment and/or property interference. It is a type of implied trust.
Consumer bankruptcy in Canada is governed by the Bankruptcy and Insolvency Act ("BIA"). The legislation is complemented by regulations, as well as directives from the Office of the Superintendent of Bankruptcy that provide guidelines to trustees in bankruptcy on various aspects of the BIA.
The Bankruptcy and Insolvency Act (the Act) is one of the statutes that regulates the law on bankruptcy and insolvency in Canada. It governs bankruptcies, consumer and commercial proposals, and receiverships in Canada.
Devaynes v Noble (1816) 35 ER 781, best known for the claim contained in Clayton's case, created a rule, or more precisely common law presumption, in relation to the distribution of money from a bank account. The rule is based upon the deceptively simple notion of first-in, first-out to determine the effect of payments from an account, and normally applies in English Law in the absence of evidence of any other intention. Payments are presumed to be appropriated to debts in the order in which the debts are incurred.
English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the Commonwealth and the United States. Trusts developed when claimants in property disputes were dissatisfied with the common law courts and petitioned the King for a just and equitable result. On the King's behalf, the Lord Chancellor developed a parallel justice system in the Court of Chancery, commonly referred as equity. Historically, trusts have mostly been used where people have left money in a will, or created family settlements, charities, or some types of business venture. After the Judicature Act 1873, England's courts of equity and common law were merged, and equitable principles took precedence. Today, trusts play an important role in financial investment, especially in unit trusts and in pension trusts. Although people are generally free to set the terms of trusts in any way they like, there is growing legislation to protect beneficiaries or regulate the trust relationship, including the Trustee Act 1925, Trustee Investments Act 1961, Recognition of Trusts Act 1987, Financial Services and Markets Act 2000, Trustee Act 2000, Pensions Act 1995, Pensions Act 2004 and Charities Act 2011.
Bristol and West Building Society v Mothew [1996] EWCA Civ 533 is a leading English fiduciary law and professional negligence case, concerning a solicitor's duty of care and skill, and the nature of fiduciary duties. The case is globally cited for its definition of a fiduciary and the circumstances in which a fiduciary relationship arises.
Keech v Sandford[1726] EWHC J76 is a foundational case, deriving from English trusts law, on the fiduciary duty of loyalty. It concerns the law of trusts and has affected much of the thinking on directors' duties in company law. It holds that a trustee owes a strict duty of loyalty so that there can never be a possibility of any conflict of interest.
Guth v. Loft Inc, 5 A.2d 503, 23 Del. Ch. 255 is a Delaware corporation law case, important for United States corporate law, on corporate opportunities and the duty of loyalty. It deviated from the year 1726 rule laid down in Keech v Sandford that a fiduciary should leave open no possibility of conflict of interest between his private dealings and the job he is entrusted to do.
The Trusts of Land and Appointment of Trustees Act 1996, usually called "TLATA" or "TOLATA", is an Act of Parliament of the United Kingdom, which altered the law in relation to trusts of land in England, Wales, Scotland and Northern Ireland.
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.
Constructive trusts in English law are a form of trust created by the English law courts primarily where the defendant has dealt with property in an "unconscionable manner"—but also in other circumstances. The property is held in "constructive trust" for the harmed party, obliging the defendant to look after it. The main factors that lead to a constructive trust are unconscionable dealings with property, profits from unlawful acts, and unauthorised profits by a fiduciary. Where the owner of a property deals with it in a way that denies or impedes the rights of some other person over that property, the courts may order that owner to hold it in constructive trust. Where someone profits from unlawful acts, such as murder, fraud, or bribery, these profits may also be held in constructive trust. The most common of these is bribery, which requires that the person be in a fiduciary office. Certain offices, such as those of trustee and company director, are always fiduciary offices. Courts may recognise others where the circumstances demand it. Where someone in a fiduciary office makes profits from their duties without the authorisation of that office's beneficiaries, a constructive trust may be imposed on those profits; there is a defence where the beneficiaries have authorised such profits. The justification here is that a person in such an office must avoid conflicts of interest, and be held to account should he fail to do so.
Bankruptcy in Irish Law is a legal process, supervised by the High Court whereby the assets of a personal debtor are realised and distributed amongst his or her creditors in cases where the debtor is unable or unwilling to pay his debts.
The Attorney General for Hong Kong v Reid (UKPC)[1993] UKPC 2 was a New Zealand-originated trust law case heard and decided by the Judicial Committee of the Privy Council, where it was held that bribe money accepted by a person in a position of trust, can be traced into any property bought and is held on constructive trust for the beneficiary.
Belchier v Parsons (1754) 96 ER 908 is an English trusts law case, which stands as one of the earliest formulations of the prudent person rule.
Oldham v Kyrris[2003] EWCA Civ 1506 is a UK insolvency law case concerning the administration procedure when a company is unable to repay its debts.
Futter v HM Revenue and Customs [2013] UKSC 26 is an English trusts law case, concerning the fiduciary duty to take into account relevant factors, and disregard irrelevant factors. It held that trustees who act on professional advice do not breach this duty, and that even if they do, the failure to have proper regard to relevant matters only ever renders a transaction voidable. For a transaction to be wholly set aside, as in common mistake, a decision by a trustee must be based on a truly "basic" mistake.
Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd[2011] EWCA Civ 347 is an English trusts law case, concerning constructive trusts. Sinclair was partially overruled in July 2014 by the UK Supreme Court in FHR European Ventures LLP v Cedar Capital Partners LLC.
FHR European Ventures LLP v Cedar Capital Partners LLC[2014] UKSC 45 is a landmark decision of the United Kingdom Supreme Court which holds that a bribe or secret commission accepted by an agent is held on trust for his principal. In so ruling, the Court partially overruled Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd in favour of The Attorney General for Hong Kong v Reid (UKPC), a ruling from the Judicial Committee of the Privy Council on appeal from New Zealand.