The status of trustees Case Study Example | Topics and Well Written Essays - 1500 words

The status of trustees - Case Study Example The status of trustees In case there is a breach of trust on the part of the fiduciary, the beneficiary can move the court and claim damages. Another interesting concept that introduces itself when a case is filed is that of 'equity'. A lawsuit might entail just monetary claims as a part of the verdict. However, equity as a set of legal principles restrains or orders the execution of a certain action. Calling it a course of natural justice would not be an exaggeration. Many case histories citing breach of trust in fiduciary-beneficiary relationship abound the legal corridors. What is important to understand in this context is the way legal implications were enforced. There are examples that hold a fiduciary's position as such that he is liable to be punished, whatever may be intentions. There are some other cases where the fiduciary was exempted. The basis of each case of course was the peculiar circumstances as well as the moral and legal guidelines that influenced it. 'Boardman was solicitor to a trust, which owned 8,000 of 30,000 shares in a private textile company, with whose performance Boardman was dissatisfied. The trust had no wish to buy the remaining shares, and in any case was unable to buy them, although it could have applied to court for power to do so. Since a company’s Facebook page will reflect its business and what it stands for, the management must pay higher attention to creating and maintaining its brand page. To illustrate, the firm may set a cover photo that depicts the essence of its brand and quality of products/services offered. Boardman decided to purchase them himself, undoubtedly benefiting from information he had received as in his fiduciary capacity (in knowing what price to offer), and did not obtain the consent of all beneficiaries. The shares later increased in value (partly perhaps because of Boardman's management in selling off some of the assets of the newly acquired company), so Boardman made a large profit for himself. Additionally, however, because the trust still had a large share in the same company, his activities also resulted in a large profit for the trust. There was no claim of bad faith, nor any obvious conflict of interest, since the trust did not have the power to purchase the shares itself, and in any case, the trust had positively benefited from Boardman's intervention. In negotiating for the majority shareholding Boardman had, in good faith, obtained information in his capacity as solicitor to the trust, which he would not otherwise have obtained. Phipps,a beneficiary under the trust, sued for an account of profits.' 1 As per the specifications of the legal framework, if a fiduciary performs an action, which is injurious to the interests of the beneficiary and profits a rival in the process, the fiduciary ought to reimburse the losses. However, in this particular case, Boardman had bought the shares in a personal capacity and in no way incurred any kind of loss to the beneficiaries. An increase in the value of shares implied profit for the trust. A pro-fiduciary perspective would view this action as a case of constructive trust 2 . However the court stretched it too far taking into consideration the viewpoint of the beneficiary, who put a question mark on Boardman's role s the beneficiary. The