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Law Notes Trusts and Equity Notes

Fiduciaries Notes

Updated Fiduciaries Notes

Trusts and Equity Notes

Trusts and Equity

Approximately 1016 pages

Equity notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB trusts cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

These were the best Equity and Trusts Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest re...

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What is a fiduciary relationship?

Situation: Arises where a person is not strictly a T, but is in a position which is analogous to a T, so similar duties should be owed – exporting function of fiduciary duties. E.g. Solicitors are similar to Ts.

When are duties owed? Unclear:

+ Finn: “It is not because a person is a “fiduciary” or a “confidant” that a rule applies to him. It is because a particular rule applies to him that he is a fiduciary or confidant for its purposes.”

= Emphasises that to say someone owes fiduciary duties is the same thing as saying there is a fiduciary relationship. The two statements are equivalent, one does not lead to the other.

  • Mothew [1998]; CA

+ Millett: “A fiduciary is someone who has undertaken to act [not just hold property like a T] for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty.” (LJ Millett).

= Agrees with Finn’s statement. Ts undertake to take property from the settlor and hold it for B’s benefit: that is a fiduciary relationship/duties are owed. So trusteeship is a fiduciary relationship. However, fiduciary relationships are not limited to trust-like relationships. Generated whenever someone undertakes to look after another’s interests.

+ Finn: “A person will be a fiduciary in his relationship with another when and in so far as that other is entitled to expect that he will act in that other’s interests or (as in a partnership) in their joint interests, to the exclusion of his own several interest.”

= Highlights the breadth of fiduciary relationships. Ask whether one of the parties is reasonably expected to act solely in the interests of the other party and not in his own interests. That characterises a fiduciary relationship.


Who is a fiduciary?

(i) Settled categories of fiduciary relationship – *Short cut in exam; do not need to work out if the fiduciary expectation is legitimate.

  1. Trustees – Paradigm example of fiduciary relationships as T has undertaken to act on behalf of the Bs, not for his own benefit.

    • This is always the case for express trusts.

    • Constructive and resulting trusts are often fiduciary, but not always:

  • Lonrho plc v. Fayed (No 2) [1992]; Millett J highlighted it is a mistake to think that there are always full fiduciary obligations in all constructive trusts.

    • Resulting trusts – Ts still fiduciaries for settlor even if trust fails due to lack of specificity of objects.

    • Constructive trusts – Less clear. If the trust arises to the knowledge of the constructive T then they know they are holding for another so have duties. But if T does not know then it is unlikely they will owe duties until they are aware of the trust’s existence.

  • Westdeutsche Landesbank [1996]; Lord B-W states Ts are not subject to personal duties until they are aware they are holding for another. Duties are based on an undertaking; a relationship between the parties.


  1. Agents – A undertakes to act on behalf of the principal, not in their own interests, so it legitimate to expect them to have a duty. Arises irrespective of whether property is involved.

  • De Bussche v. Alt (1878);

Facts: C owned a ship and wanted to sell it in the Orient, but C was based in the Isle of Wight. C arranged for D (who was a partner in a merchant shipping firm in Japan) to sell the ship on his behalf for at least $90,000. D knew a Japanese prince. Prince was prepared to pay $160,000. D should have said yes, but D bought the ship himself for $90,000 and then sold it to the prince, making a profit of $70,000.

Decision: D should have been acting as an agent for C. He was expected to act in C’s best interests, not his own. Runs contrary to the fiduciary expectation so he was breach of fiduciary duty. He had to account for the $70,000 to C.


  1. Company directors – Companies are a separate legal entity from the shareholders. The company is capable of owning property, but the directors do not own it themselves. Directors are not Ts of the co’s property. Co. can only act through its directors, so they control the property in a similar was to Ts. So directors have similar duties to Ts. So duties Ts owe were exported to directors.

  • Regal (Hastings) Ltd v. Gulliver [1967]; H of L. Shows directors owe fiduciary duties.

Codification: Companies Act 2006, s.170 & 178 – Since 2009 directors’ duties have been codified in statute. So directors are now no longer subject to common law duties, just the statutory duties. But the cases can be used to interpret the statute. Use cases before 2009 as illustrations of general principle. Cases after 2009 may apply specific statutory provisions. Remedies for breach of statute are the same as the common law ones.


  1. Solicitors – Owe fiduciary duties to their clients as they are expected to act in the best interests of their clients, not in their own interests.

  • Boardman v. Phipps [1967]; HL held solicitors owe fiduciary duties. Solicitor made a profit out of his role as solicitor so was held to be acting in his own personal interests and so breached his fiduciary duty.


  1. Partners – The point of a partnership is to make money for the partnership, not for yourself. Must act in the interests of the group as a whole, so there is a...

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