Breaches of fiduciary duty - Incidental profits - Using information and opportunities
3 important questions on Breaches of fiduciary duty - Incidental profits - Using information and opportunities
Explain the facts and judgment in Boardman v Phipps and why the agents were accountable for profits made out of the information they received?
Boardman was the solicitor of the trust and was worried about the condition of the company. He attended a shareholders' meeting on behalf of the trustees and gained valuable information which led him to acquire all the shares personally. Both the trust and Boardman benefitted. It was held that all the profits made had to be accounted for as the profit came from the information they had received as trustees.
Do the courts have the discretion to remunerate the defendant's share and profit? did they receive anything for their time and effort in improving the value of the shares in the company? What is the main authority?
The courts have inherent jurisdiction to award generous remuneration if the defendant has been honest and devoted time and skill to improve the company which brought benefit to the trust. However, the court's jurisdiction to award remuneration should be exercised sparingly (Guinness v Saunders).
Explain the dissenting judgment of Lord Upjohn in Boardman v Phipps and whether you agree?
Argued that the defendants were not guilty as there had to be a real sensible possibility of conflict of interest such as depriving the trust of purchasing shares. In this case, the defendants bought the shares because the trust could not.
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