''York Buildings Co v MacKenzie'' (1795) 3 ER 432 is an
English trusts law
English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the ...
case concerning the duty of a fiduciary to act in the beneficiaries' interests, without entering any conflict of interest.
Facts
The York Buildings Co was
insolvent
In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet inso ...
. Its estates (land in
Widdrington, a lease of
Strontian
Strontian (;
gd, Sròn an t-Sìthein) is the main village in Sunart, an area in western Lochaber, Highland, Scotland, on the A861 road. Prior to 1975 it was part of Argyllshire. It lies on the north shore of Loch Sunart, close to the head of the ...
Mines, and some bonds and annuities) had been sold to pay creditors. Mr MacKenzie had bought some at a public judicial auction in February 1779, and the sale was confirmed by the Court of Session after several months. Mr MacKenzie then spent substantial sums of money improving the buildings. The York Buildings Co then sought a declaration that the sale be set aside, on the ground that Mr MacKenzie had been an agent and solicitor of the court during the previous proceedings.
Counsel for the appellants outlined the conventional position of the function of fiduciary responsibility in his submissions.
[(1795) 8 Bro 42, 63-68]
Judgment
The House of Lords held that an agent or solicitor of creditors of a bankrupt owed trustee-like fiduciary duties. So a purchase by him of part of a bankrupt's estate was liable to be set aside when the circumstances showed any impropriety or negligent conduct.
See also
*''
Keech v Sandford
is a foundational case, deriving from English trusts law, on the fiduciary duty of loyalty. It concerns the law of trusts and has affected much of the thinking on directors' duties in company law. It holds that a trustee owes a strict duty of ...
'' (1726) Sel. Cas. T. King 61; 25 E.R. 223;
*''
Whelpdale v Cookson
''Whelpdale v Cookson'' (1747) 27 ER 856 is an English trusts law case, also relevant for UK company law, on the duty of loyalty owed by a trustee to beneficiaries of the trust.
Facts
A trustee purchased land that was owned by the trust.
Judgm ...
'' (1747) 1 Ves. Sen. 9; 27 E.R. 856;
Notes
{{Reflist, 2
References
*R Flannigan, 'The adulteration of fiduciary doctrine in corporate law' (2006) 122 LQR 449
English trusts case law
United Kingdom insolvency case law
House of Lords cases
1795 in case law
1795 in British law