Bray v Ford
A fiduciary is not entitled to make a profit from his position unless expressly authorised, because there is a danger that his interest will conflict with his duty.
Facts
Mr Ford was a solicitor and a governor of the Yorkshire College, a charity. He was paid for acting as the college's solicitor. Mr Bray, another governor, accused him of improperly receiving payments, and Mr Ford sued Mr Bray for libel. The judge directed the jury that the payments would be improper only if they were not proper and reasonable. The question was whether this direction was correct.
Legal principle
The House of Lords held that the direction was wrong. Lord Herschell said that it is an inflexible rule of a court of equity that a person in a fiduciary position is not, unless otherwise expressly provided, entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict. The rule is based on the consideration that human nature being what it is, there is danger of the person holding a fiduciary position being swayed by interest rather than duty. Whether the payments were reasonable was irrelevant, so a new trial was ordered.
Related cases on fiduciary duties
- Attorney General for Hong Kong v Reid [1994] 1 AC 324
- Boardman v Phipps [1967] 2 AC 46
- Bristol and West Building Society v Mothew [1998] Ch 1
- Re Duke of Norfolk's Settlement Trusts [1982] Ch 61
- FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45, [2015] AC 250
- Guinness plc v Saunders [1990] 2 AC 663
- Holder v Holder [1968] Ch 353
- Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443
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