Self-test questions: Fiduciary Duties and Remedies for Breach of Trust

. What does a fiduciary relationship give rise to?

. What is the 'distinguishing obligation of a fiduciary'?

. Which of the following is not a fiduciary relationship?

. Which of the following employees would be in a fiduciary relation with their employer?

. Is a professional trustee permitted to receive remuneration for their work?

. When does the 'self-dealing rule' apply?

. Which of the following are exceptions to the 'self-dealing rule'?

. When does the 'fair-dealing' rule apply?

. Should a fiduciary be bribed, how will the bribe moneys be held beneficially?

. Is a trustee permitted to compete with the trust?

. Should a business opportunity be offered to a trustee in his position of trustee, can they personally exploit the opportunity by retiring?

. Can a trustee use confidential information gained from their position as trustee for personal gain?

. Should a trustee make an unauthorised profit, must they account for the profit made?

. Should a fiduciary breach their fiduciary duties, which form(s) of remedy is available to the principal?

. What is the applicable limitation period to breaches of fiduciary duties not occasioned by fraud?

. Louis works in a supermarket. He is tasked with collecting the notes and coins from the tills at the end of the day, counting them and then taking them to the local bank. Millie also works in the local supermarket, but is only tasked with stacking shelves. Is Louis and/or Millie in a fiduciary relationship with their employer?

. Suleiman is a trustee. Which of the following duties will he owe his beneficiaries?

. Steven works for the British Government in a secretive capacity. He has access to a lot of sensitive information, including several potential business opportunities. Will Steven's fiduciary obligations cease should he resign from his position and seek to exploit the business opportunities?

. Amani is a trustee and decided to pay herself £45,000 a year from the trust fund for her own purposes. The trust deed does not provide for her to be remunerated and there are no other trustees. Is she entitled to her remuneration?

. Malee wants to buy a painting that is owned by the trust that they are a trustee for. They are worried about being caught by the self-dealing rule, however, and there is no express provision in the trust document permitting purchases by the trustees. Which of the following is not an exception to the self-dealing rule that would permit them to purchase the trust property?

. Malee also wishes to purchase a similar painting from one of the beneficiaries. She has made an agreement to purchase the painting, but knows that the true market value is 4 times the agreed purchase price, and has told the beneficiary 'you're getting a great price - they normally go for much less than this'. Will Malee meet the requirements of the fair-dealing rule?

. Olaf is the director of a failing company that has not paid him in 3 months. He is approached by a merchant that if Olaf agrees to get his company to buy his products, he will give him £45,000. How will the £45,000 be held beneficially?

. Liana is the guardian of her 12-year-old nephew after their parents died, and is also responsible for their assets. The family home is a rented property, and the lease is due for renewal in 3 months. Liana has spoken to the landlord and said she would like to renew it in her name 'for the sake of ease'. What will happen should the lease be renewed?

. Russell is the director of a company that produces mattresses. He is annoyed that he has not been made chief executive, and so cannot implement his own ideas. Frustrated, he sets up his own company producing mattress toppers. Will Russell be in breach of his fiduciary duties?

. Gerrard is in his 60s and approaching retirement. He works for an accountancy firm that does commercial auditing. He approaches one company about the firm doing its auditing but is informed they are unable to Gerrard's firm due to a conflict of interest. Seeing the commercial opportunity here, Gerrard starts feigning a back injury and eventually 'retires' on medical grounds. He then propositions the company about doing the auditing work himself. He was also recently spotted in the local supermarket by his former secretary appearing to have no issue with his back. Will Gerrard be in breach of his fiduciary duties?

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