Re Brogden (1888) 38 Ch D 546

Facts

  • The case concerned a dispute over the management of a trust.
  • Trustees entered into a transaction from which they personally benefited, creating a conflict of interest with the beneficiaries.
  • The beneficiaries challenged this transaction, asserting that the trustees had placed personal interests above those of the trust.
  • The trustees did not disclose their personal interests to the beneficiaries nor seek their consent before the transaction.
  • The court considered whether the trustees’ actions constituted a breach of duty.

Issues

  1. Whether trustees may enter into transactions that benefit them personally, potentially conflicting with their duties to beneficiaries.
  2. Whether a failure to disclose personal interest and obtain beneficiaries' consent constitutes a breach of trustee duties.
  3. Whether the trustees’ actions rendered the transaction voidable at the instance of the beneficiaries.

Decision

  • The court found that the trustees had breached their duty by failing to disclose personal interests and by not obtaining consent from beneficiaries.
  • The transaction was found to be in conflict with the trustees' duties and was declared voidable.
  • The court reinforced that trustees must act fairly and openly, placing beneficiaries’ interests first.

Legal Principles

  • Trustees are bound by the duty of loyalty and must avoid conflicts of interest, including situations of actual or potential conflict.
  • The rule against self-dealing prohibits trustees from entering transactions that benefit themselves without proper procedure.
  • Any transaction involving a conflict of interest is voidable unless approved by the court or fully informed beneficiaries.
  • Trustees must treat all beneficiaries fairly and without bias, ensuring personal interests do not influence their actions.
  • Breach of these duties may result in liability for any losses caused to the trust.

Conclusion

Re Brogden (1888) 38 Ch D 546 affirmed that trustees must avoid conflicts of interest, act solely for beneficiaries' interests, and that self-dealing or unfair conduct may render trust transactions voidable and expose trustees to liability.

The answers, solutions, explanations, and written content provided on this page represent PastPaperHero's interpretation of academic material and potential responses to given questions. These are not guaranteed to be the only correct or definitive answers or explanations. Alternative valid responses, interpretations, or approaches may exist. If you believe any content is incorrect, outdated, or could be improved, please get in touch with us and we will review and make necessary amendments if we deem it appropriate. As per our terms and conditions, PastPaperHero shall not be held liable or responsible for any consequences arising. This includes, but is not limited to, incorrect answers in assignments, exams, or any form of testing administered by educational institutions or examination boards, as well as any misunderstandings or misapplications of concepts explained in our written content. Users are responsible for verifying that the methods, procedures, and explanations presented align with those taught in their respective educational settings and with current academic standards. While we strive to provide high-quality, accurate, and up-to-date content, PastPaperHero does not guarantee the completeness or accuracy of our written explanations, nor any specific outcomes in academic understanding or testing, whether formal or informal.
No resources available.

Job & Test Prep on a Budget

Compare PastPaperHero's subscription offering to the wider market

PastPaperHero
Monthly Plan
$10
Assessment Day
One-time Fee
$20-39
Job Test Prep
One-time Fee
$90-350

Note the above prices are approximate and based on prices listed on the respective websites as of May 2025. Prices may vary based on location, currency exchange rates, and other factors.

Get unlimited access to thousands of practice questions, flashcards, and detailed explanations. Save over 90% compared to one-time courses while maintaining the flexibility to learn at your own pace.

All-in-one Learning Platform

Everything you need to master your assessments and job tests in one place

  • Comprehensive Content

    Access thousands of fully explained questions and cases across multiple subjects

  • Visual Learning

    Understand complex concepts with intuitive diagrams and flowcharts

  • Focused Practice

    Prepare for assessments with targeted practice materials and expert guidance

  • Personalized Learning

    Track your progress and focus on areas where you need improvement

  • Affordable Access

    Get quality educational resources at a fraction of traditional costs

Tell Us What You Think

Help us improve our resources by sharing your experience

Pleased to share that I have successfully passed the SQE1 exam on 1st attempt. With SQE2 exempted, I’m now one step closer to getting enrolled as a Solicitor of England and Wales! Would like to thank my seniors, colleagues, mentors and friends for all the support during this grueling journey. This is one of the most difficult bar exams in the world to undertake, especially alongside a full time job! So happy to help out any aspirant who may be reading this message! I had prepared from the University of Law SQE Manuals and the AI powered MCQ bank from PastPaperHero.

Saptarshi Chatterjee

Saptarshi Chatterjee

Senior Associate at Trilegal