Protheroe v Protheroe
A trustee who buys the freehold reversion of a lease held on trust holds the freehold on trust for the beneficiaries, subject to being repaid.
Facts
Mr Protheroe held the lease of the matrimonial home on trust for himself and his wife. After they separated, he bought the freehold of the house for himself, for a small sum. His wife claimed that he held the freehold on trust for both of them, as he had done the lease.
Legal principle
The Court of Appeal held that Mr Protheroe held the freehold on trust for himself and his wife. Lord Denning MR said that there is a long established rule of equity that if a trustee, who owns the lease, buys in the freehold, he holds the freehold as part of the trust property, subject to his being repaid what he paid for it. This followed from the principle in Keech v Sandford.
Related cases on fiduciary duties
- Attorney General for Hong Kong v Reid [1994] 1 AC 324
- Boardman v Phipps [1967] 2 AC 46
- Bray v Ford [1896] AC 44
- 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
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