Anns v Merton [1978]

Local authority inspected and negligently approved
defective foundations.
Cracks appeared in building.
House of Lords held building owner could recover damages.
Lord Wilberforce justified the decision on basis cause
of action arose when building became an imminent danger to health and safety of
occupier, who could then recover cost of averting that danger.
[This seems a sensible rule – this rule, or a modified
form of it, became the law in Canada, Australia and NZ]
Lord Wilberforce:
1. Must ask whether sufficient relationship of
‘proximity or neighbourhood’ between plaintiff and defendant such that in
defendant’s reasonable contemplation carelessness on his part might cause
damage to plaintiff.
If so, prima facie duty of care arose.
2. Must then ask whether there were any considerations
which ought to negative / reduce / limit that duty.

Allied Maples v Simmons & Simmons [1995]

Loss of chance will
be recoverable where plaintiff’s loss depends not on pure chance but on
what action would have been taken by
a third party.
Defendants negligent in advising plaintiffs on
liabilities in purchase of certain shops.
Not necessary for plaintiffs to show that if they had
been properly advised they would have succeeded in getting protection against
these liabilities.
Merely substantial chance of getting that protection,
with damages being discounted to account for that chance.

Swindle v Harrison [1997]

Court of Appeal held that in order to recover
compensation for breach of fiduciary duty, plaintiff had to show loss she
suffered had been caused by defendant’s breach of duty.
Also, unless breach was equivalent of fraud, plaintiff
not entitled to be placed financially
in same position they were before breach occurred but only in position the

Target Holdings v Redferns [1995]

In a mortgage transaction, Redferns solicitors, acting
for both parties, released the mortgage advance before they had receipt
executed conveyances etc, thus constituting breach of trust.
Property subsequently found to be worth less than
estimated, and party which had advanced the funds demanded their return
(subject to credit for sale of mortgaged property)
Redferns argued breach was technical and loss would
have occurred in any event.
House of Lords found for Redferns.
Lord Browne-Wilkinson noted there are two fundamental
common law principles regarding award of damages:
1. Defendant’s wrongful act must cause damage complained
2. Plaintiff is to be put in same position he would
have been had he not sustained the wrong.
These ‘principles are applicable as much in equity as
at common law’

Bristol and West Building Society v Mothew [1996]

Millet LJ in Court of Appeal:
No reason in principle why the common law rules of
causation, remoteness of damage and measure of damages, should not be applied
in a case of equitable compensation for breach of duty and skill.
But should not be confused with cases of equitable
compensation for breach of fiduciary duty,
where it may be awarded in lieu of rescission or specific restitution.
[So Millet was saying that not every breach of duty by
a fiduciary is a breach of fiduciary duty]

Re Macadam [1946]

Trust had shares in company – trustees appointed
themselves directors.
Could trustees retain the director’s fees as their
Cohen J in Divisional court held they were
Cited Lord Herschell’s principle in Bray v Ford.
If trustees were to receive the remuneration, their
obvious interest is to chose themselves for the job.
But duty of trustees is to give estate benefit of
their unfettered advice in choosing persons to act as directors.
Hence had put themselves in position where their
interest and duty conflicted.
Yet goes on to say ‘If I can be satisfied (and this is
the point I have not considered) that they were the best persons to be
directors, I do not think it would be right … to expect them to do the extra
work for nothing’

Boardman v Phipps [1967]

Two defendants were Boardman, the family trust
solicitor, and Phipps, one of the beneficiaries.
Family trust held shares in ailing company.
B & P tried to get elected to Board – failed.
Tried to split up company – failed.
B & P then, with their own money, purchased enough
shares in company to enable them, with support of other beneficiaries, to take
Then paid out large dividends and maintained high
share price.
Good for beneficiaries, but B & P also made
profits on the shares they had purchased.
One of other beneficiaries sued B & P to account
for these profits, said to be acquired in conflict of interest with the trust.
House of Lords found B & P liable to account
(although as they had acted bona fide throughout, entitled to liberal payment
for their work).
B’s liability straightforward – he obtained knowledge
through position as fiduciary and any profits made from using that information were
profits arising from fiduciary office, which must be accounted for unless
But P found liable on basis he should be treated
equally with B whatever the outcome, though P, as beneficiary, obviously did
not stand in same fiduciary capacity.
Lord Upjohn dissented on basis that there was no
conflict of duty and interest.

Guinness v Saunders [1990]

Director agreed to provide his services in connection
with proposed takeover of another company.
His terms: he would be paid a fee dependent on amount
of takeover bid if successful.
Bid successful and director paid £5m.
His company claimed repayment of sum.
House of Lords upheld the claim.
Director’s interest in obtaining a fee calculated in
this way clearly conflicted with his duty as a director, which was to give
impartial advice concerning the takeover.

Tito v Waddell (No2) [1977]

Ocean Island case.
Concerned lease by resident commissioner of colony to
the British Phosphate Commissioners.
Was this a lease by a fiduciary to itself?
Megarry V-C did not accept that the BP Commissioners
could in any way be sufficiently identified with the resident commissioner to
bring the self-dealing rule into play.
Nor did he see how the BP Commissioners could be said
to be in any way the alter ego of the government of the colony or the Crown.