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Fact based Duty Exists where : X has undertaken an Act for Y, Y expects X to act exclusively for Y or in joint interest
Fact Based Duty also exists in a commercial context
Self dealing rule - Strict Liability
Competition with the trust - Where trust includes a business and trustees sets up his own business in competition then trustee is accountable for any profit and possibly an injunct
Trustees cannot charge for their services unless obtained a court order
Incidental Profits - Where trustee uses their position to get paid by a third party is must be surrendered
Company directors Strict Liability
A proprietary claim is available only where the profit was gained out of the use of the trust property or opportunity belonging to the trust
Trustees have a duty to watch over and correct the conduct of other trustees
Trustees must meet the standard of a reasonable prudent man of business
Trustees are only liable if the breach has caused loss
If profit and loss occur from same breach courts will allow the profit to offset the loss
Trustees had consent of beneficiaries
Beneficiaries must understand what the trustee is doing but need not know it's a breach
Exclusion clause in trust document may relieve trustee of liability for negligent or innocent breaches but void if fraudulent
Indemnity if : Co-trustee received trust property and used it for his own benefit
Indemnity if : Trustee Blindly followed advice from co-trustee who is a solicitor
Proprietary remedies - Trustee is deemed to spend his own money first
Proprietary Remedies - Trustee is deemed to spend Trust money first
Where trust money has been dissipated and then own money paid in this cannot be claimed
Proprietary remedy on two mixed funds - First in First out (Fifo)
If Fifo would result in injustice, is impractical/difficult/expensive or contrary to party intentions -divide account balance/assets in proportion to original contributions
Dishonest - Objective test: 'Not acting as an honest person would in the circumstances'
Recipient Liability - 'Has D's knowledge made it 'unconscionable' for time to retain that property?'
Intermeddling - Acting beyond the scope of his authority as an agent, he will be liable for the loss just as if he had been appointed express trustee
Common Law action for restitution - Is Claimant Legal owner, Had Defendant been unjustly enriched, there must be no mixing prior to receipt by Defendant
If Customer made pre-payments, a trust can be used to protect their money
Customer Pre-payments - Separate bank account need not be labeled, it can be inferred from payments, evidence that company followed advice
Customer Pre-Payments - certainty of subject Matter - Cannot create a trust over an undifferentiated mass of profit
Customer Pre-Payments - Certainty of Object: 'Urgent suppliers' Deemed uncertain must be able to draw up a list
Declaration of trust over money already paid by existing customers in an unlawful preference
Purpose Loan - Primary trust where a lender has lent money for a specific purpose and on failure of this purpose, a secondary trust resulting in favor of the lender
Payment of a purpose loan into a separate bank account is strong evidence of certainty of intention but not essential
Purpose Loan- Lender is not free to use the money as it pleases
Goods Supplied on Credit - A successful clause gives the seller a prioprietery right, over all other creditors
Goods supplied on Credit - Where a company mixes the gods into a manufactured product, there is no longer a fiduciary relationship
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