Fiduciary Duties - Breach of Fiduciary Duty - The No-Profit Rule

5 important questions on Fiduciary Duties - Breach of Fiduciary Duty - The No-Profit Rule

Exception for Professional Trustees

It does not follow that the fiduciary is prevented from obtaining any benefit at all whilst he acted as a fiduciary. Many fiduciaries are professionals who are legitimately paid for their work, including professional trustees.

Thompson's Trustee in Bankruptcy v Heaton [1974]

If a fiduciary holds a leasehold interest for the principal and then acquires the freehold reversion in a personal capacity, the fiduciary must hold the reversion for the principal.

Sugden v Crossland (1856)

A trustee receives a payment in consideration of his retiring and appointing the payer as a new trustee, the former trustee will be liable to account for the payment.
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Regal (Hastings) Ltd v Gulliver [1967]

The fiduciary must not exploit an opportunity to make a profit where the opportunity came to the defendant in his capacity as a fiduciary.

Reading v Attorney-General [1951]

Facts: The defendant was a sergeant in the British Army serving in Egypt. He was bribed to sit on lorries whilst wearing military uniform, so that the alcohol could be illegally transported without being stopped by the police. The defendant was convicted of a crime. Most of the bribes that he had received were seized by the Crown and he sought to recover them.

Held: His action failed because he had been acting in breach of his fiduciary duty and so he would have been liable to account for the bribes to the Crown.

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