Boardman v Phipps
1966 · [1967] 2 AC 46
Posted By lanbuk.com
- Facts
- The solicitor to a , and a , used information obtained while acting for the trust to buy shares in a company in which the trust held shares. Both they and the trust made large profits.
- Issue
- Did they have to account for their profit?
- Held
- Yes. By a majority, the House of Lords held they were fiduciaries and had profited from their position. They were given a generous allowance for their work.
- Principle
- A must account for any profit made through his position, even if he acted honestly and the principal also gained.
- Why it matters
- It is a leading, and debated, case on the no-profit rule.
Words and Latin in this note
- Beneficiary
- A person entitled to the benefit of trust property in equity, who can make the trustees carry out the trust. Open the note.
- Fiduciary
- A person, such as a trustee, director or agent, who must act loyally for another. He must not profit from his position or put himself in a conflict of interest. Open the note.
- Trust
- An arrangement in which a trustee holds property at law but must use it for beneficiaries, or for a charitable purpose. The beneficiaries have the equitable interest. Open the note.
For study only. By lanbuk.com. Always check current sources and consult a qualified professional.