¹ Finn, P., “Controlling the Exercise of Power” (1996) 7 Public Law Review 86 at pp. 87–88Google Scholar. See also J.C. Shepherd, The Law of Fiduciaries (Toronto 1981).

² Sherlock Holmes in “A Scandal in Bohemia” (Sir Arthur Conan Doyle, The Strand Magazine, 1891).

³ See, e.g., Wilson v. Turner (1883) 22 Ch.D. 521 and Turner v. Turner [1984] Ch. 100, esp. at p. 111, per Mervyn Davies J.

⁴ There is much old learning about requirements of manner and form. It is of limited general relevance: see C.J.W. Farwell and F.K. Archer (eds.), Farwell on Powers, 3^rd edn (London 1916), at pp.147–156, 380–383.

⁵ As regards trustees, see Underhill & Hayton, Law of Trusts and Trustees, 17^th ed. (London 2007), §§[47.1]–[47.3] and the cases cited there. As regards directors, see Companies Act 2006, s. 171(a), codifying earlier case law in accordance with s. 170(3) and (4).

⁶ Lord Nicholls, “My Kingdom for a Horse: The Meaning of Words” (2005) 121 L.Q.R. 577 at pp. 579–580. “In the law, context is everything”: R (Daly) v. Home Secretary [2001] UKHL 26, [2001] 2 A.C. 532 at [28], per Lord Steyn.

⁷ Equitable Life Assurance Society v. Hyman [2000] UKHL 39, [2002] 1 A.C. 408 at pp. 458–459, per Lord Steyn, who distinguishes between “interpretation” (ascertaining the meaning of express words) and “implication” (reading in limitations to express words based on the circumstances of the case).

⁸ See, e.g., Kane v. Radley-Kane [1999] Ch. 274.

⁹ For a recent example, see, e.g., Bluebottle UK Ltd v. Deputy Commissioner of Taxation [2007] HCA 54, (2007) 232 C.L.R. 598 at [31], per curiam. See also Investors Compensation Scheme v. West Bromwich Building Society [1998] 1 W.L.R. 896, particularly at pp. 912–913 (and principle (4)), per Lord Hoffmann and, generally, Lord Nicholls, op. cit. note 6 at pp. 578–579.

¹⁰ Bristol & West BS v. Mothew [1998] Ch. 1 at p. 18.

¹¹ See, further, L. Ho “Good Faith and Fiduciary Duty”, presented at the Obligations IV Conference, National University of Singapore, July 2008; Teele Langford, “ENT Pty Ltd v Sunraysia Television Ltd: A Positive Fiduciary Duty of Disclosure” (2008) 26 Company and Securities Law Journal 470.

¹² Item Software (UK) Ltd. v. Fassihi [2004] EWCA Civ 1244, [2005] 2 BCLC 91, rejected in Australia by P & V Industries Pty Ltd v. Porto [2006] VSC 131, (2006) 14 V.R. 1 and criticised by M. Harding, “Two Fiduciary Fallacies” (2007) 2 Journal of Equity 1.

¹³ As regards trustees, see, e.g., Armitage v. Nurse [1998] Ch. 241. As regards company directors, see, e.g., Regentcrest plc (in liquidation) v. Cohen [2001] 2 BCLC 80 (ChD).

¹⁴ Consider, e.g., Gisborne v. Gisborne (1877) 2 App. Cas. 300 at p. 305, per Lord Cairns.

¹⁵ See, e.g., Re Oddy (1911) 104 L.T. 128 at p. 131, per Joyce J. (trustees) and In re Coalport China Co. Ltd. [1895] 2 Ch. 404 at p. 409, per Lindley L.J. (directors).

¹⁶ See Civil Procedure Rules, Practice Direction 16, para. 8(2), as supplemented by strict professional guidance to barristers in the Bar Council's Code of Conduct at §704(c). See also Medforth v. Blake [2000] Ch. 86 at p. 103, per Scott V.-C.

¹⁷ See, e.g., In re Smith [1896] 1 Ch 71 at p. 76, per Kekewich J. (in relation to powers of investment); Bristol & West Building Society v. Mothew [1998] Ch 1 at p. 18 and Armitage v. Nurse [1998] Ch. 241 at pp. 253–254, per Millett L.J. (general principle).

¹⁸ Re Smith & Fawcett Ltd [1942] Ch 304 at p. 306; Medforth v. Blake [2000] Ch. 86 at p. 103, per Scott V.-C.; Regentcrest plc (in liquidation) v. Cohen [2001] 2 BCLC 80 (ChD) at [120], per Jonathan Parker J. See also Extrasure Travel Insurances Ltd. v. Scattergood [2002] EWHC 3093 (Ch), [2003] 1 BCLC 598 at [87]–[90], per Jonathan Crow Q.C.

¹⁹ See the cases cited in note 17 above.

²⁰ Armitage v. Nurse [1998] Ch. 241 at pp. 251, 253–254, per Millett L.J.

²¹ Dundee General Hospitals Board of Management v. Walker [1952] 1 All E.R. 896 at p. 905, per Lord Reid, a Scottish case cited with approval as regards English law in Scott v. National Trust [1998] 2 All E.R. 705 at pp. 717–718, per Robert Walker J.

²² Hopkins v. TL Dallas Group Ltd. [2004] EWHC 1379 (Ch), [2005] 1 BCLC 543 at [87]–[91], per Lightman J.

²³ See, e.g., G.W. Thomas, Powers (London 1998), Chapter 9.

²⁴ See, generally, Gore Browne on Companies, reissue (London 2008), at §§15[9]–15[9A]; P. Davies, Gower & Davies Principles of Modern Company Law, 8^th ed. (London 2008) at pp. 500–501; R.C. Nolan, “The Proper Purpose Doctrine and Company Directors”, in B. Rider (ed.) The Realm of Company Law (London 1998), ch. 1, and R.P. Austin, Company Directors: Principles of Law & Corporate Governance (Sydney 2005), at §§7.18–7.30. The term “fraud on a power” has been used in older company law cases, however: see, e.g., Spackman v. Evans (1868) L.R. 3 H.L. 171 at p. 187, per Lord Cranworth.

²⁵ [1915] A.C. 372 at p. 378.

²⁶ Re Manisty's Settlement [1974] Ch. 17 at p. 26, per Templeman J.

²⁷ See Kain v. Hutton [2007] NZCA 199, [2007] 3 N.Z.L.R. 349 at [36], per Glazebrook J., citing Thomas, above note 23, at §9–20. In fact, this three-fold classification is much older: see Farwell on Powers (above note 4), at p. 460.

²⁸ Farwell on Powers (above note 4). Note also Henty v. Wrey (1882) 21 Ch.D. 332 at p. 354, per Lindley L.J.

²⁹ See, e.g., Robinson v. Briggs (1853) 1 Sm. & G. 188, 65 E.R. 81.

³⁰ For examples of the doctrine in company law, see the texts cited in note 24 above.

³¹ The Bell Group Ltd (in liquidation) v. Westpac Banking Corporation (No. 9) [2008] WASC 239 at [4456], per Owen J.

³² Regentcrest plc (in liquidation) v. Cohen [2001] 2 BCLC 80 (ChD) at [123], per Jonathan Parker J. See also Extrasure Travel Insurances Ltd. v. Scattergood [2002] EWHC 3093 (Ch), [2003] 1 BCLC 598 at [92]–[93], per Jonathan Crow Q.C.

³³ Hogg v. Cramphorn Ltd. [1967] Ch. 254; Bamford v. Bamford [1970] Ch. 212, though note the possibility of greater judicial latitude evidenced (albeit obiter) in Criterion Properties plc v. Stratford UK Properties LLC [2004] UKHL 28, [2004] 1 W.L.R. 1846.

³⁴ Wong v. Burt [2004] NZCA 174, [2005] 1 N.Z.L.R. 91; Kain v. Hutton [2008] NZSC 61, [2008] 3 N.Z.L.R. 589 at [18], per Elias C.J., Blanchard, McGrath and Anderson J.J.

³⁵ See Kain v. Hutton [2007] NZCA 199, [2007] 3 N.Z.L.R. 349 at [113], per Glazebrook J., and on appeal, [2008] NZSC 61, [2008] 3 N.Z.L.R. 589 at [20], per Elias C.J., Blanchard, McGrath and Anderson J.J., citing Re Burton's Settlement [1955] Ch. 82.

³⁶ Farwell on Powers (above note 4), pp. 484–485. Purpose is to be distinguished from motive: motive is essentially about antecedent reasons for action; purposes are essentially about prospective aims. See, e.g., Topham v. Duke of Portland (1863) 1 De G.J. & S. 517 at pp. 570–571, 46 E.R. 205 at pp. 226–227, per Turner L.J., and Topham v. Duke of Portland (1869) L.R. 5 Ch. App. 40 at p. 57, per Lord Hatherley L.C. In this regard, Extrasure Travel Insurances Ltd. v. Scattergood [2002] EWHC 3093 (Ch), [2003] 1 BCLC 598 at [92]–[93], per Jonathan Crow Q.C., is unhelpful as the words “purpose” and “motive” are used interchangeably.

³⁷ [1915] A.C. 372 at pp. 379–380. This statement, in particular its final and crucial phrase, appears to have been overlooked by Tipping J. the New Zealand Supreme Court, where the learned Judge criticised Lord Parker's earlier statement (at p. 378) that “it is enough that the appointor's purpose and intention is to secure a benefit … [for] some other person not an object of the power”: Kain v. Hutton [2008] NZSC 61, [2008] 3 N.Z.L.R. 589 at [48]–[49]. See also Lord Hinchinbroke v. Seymour (1789) 1 Bro.C.C. 395, 28 E.R. 1200; Portland v. Topham (1864) 11 H.L. Cas. 32; Henty v. Wray (1882) 21 Ch.D. 332, Re Dick [1953] Ch. 343 and Wong v. Burt [2004] NZCA 174, [2005] 1 N.Z.L.R. 91.

³⁸ [1974] A.C. 821 at p. 834, emphasis added. See also Fearon v. Desbrisay (1851) 14 Beav. 635 at p. 642, 51 E.R. 428 at p. 431, per Romilly M.R., Henty v. Wrey (1882) 21 Ch.D. 332 at p. 355, per Lindley L.J. and Macmillan Inc v. Bishopsgate Trust (No3) [1995] 1 W.L.R. 978 at p. 984, per Millett J.

³⁹ See, e.g., Wong v. Burt [2004] NZCA 174, [2005] W.T.L.R. 29.

⁴⁰ Equitable Life Assurance Society v. Hyman [2000] UKHL 39, [2002] 1 A.C. 408 at pp. 457–460, per Lord Steyn, and at pp. 460–462, per Lord Cooke of Thorndon. The other members of the House agreed with both speeches.

⁴¹ Rolled Steel Products (Holdings) Ltd. v. British Steel Corporation [1986] Ch. 246 at p. 295, per Slade L.J. See also Re Introductions Ltd. [1970] 1 Ch. 199 at p. 211, per Harman J., though the abolition of a company's need to have objects, effected by Companies Act 2006, s. 31, will obviously alter this position.

⁴² Re Beatty's W.T. [1990] 1 W.L.R. 1503 at p. 1506, per Hoffmann J. See also McPhail v. Doulton [1971] A.C. 424 at p. 449, per Lord Wilberforce; Re Manisty's Settlement [1974] Ch. 17 at p. 26, per Templeman J.; Re Hay's S.T. [1982] 1 W.L.R. 202 at p. 209, per Megarry V.-C., and Hayim v. Citibank [1987] A.C. 730 at p. 746, per Lord Templeman. For the distinction between the “real” settlor and the “nominal” settlor, see, inter alia, Hartigan Nominees Pty Ltd v. Rydge (1992) 29 N.S.W.L.R. 405 and Breakspear v. Ackland [2008] EWHC 220 (Ch), [2009] Ch. 32.

⁴³ See W.J. Mowbray et al (eds.), Lewin on Trusts, 18^th ed. (London 2008), §[6-03]. Note Vandervell v. I.R.C. [1967] 2 A.C. 291 at p. 312, per Lord Upjohn and In re Z Trust [1997] C.I.L.R. 248 at p. 257, per Smellie J.

⁴⁴ Merely following the settlor's directions, however, could result in a finding that the purported trust is a sham: see Rahman v. Chase Bank (C.I.) Trust Co Ltd [1991] J.L.R. 103 and, more generally, M. Conaglen, “Sham Trusts” [2008] C.L.J. 176.

⁴⁵ See, e.g., Citibank NA v. MBIA Assurance SA [2006] EWHC 3215 (Ch), esp. at [47]–[49], per Mann J., affirmed by the Court of Appeal, [2007] EWCA Civ 11 at [82], per Arden L.J. and at [95]–[97], per Dyson L.J., the Master of the Rolls agreeing with both judgments at [100].

⁴⁶ See further J. Hilliard, “The Flexibility of Fiduciary Doctrine in Trust Law: How Far does it Stretch in Practice?” (lecture to the Chancery Bar Association, 14^th July 2008). The limitation also seems implicit in the Citibank case, note 45 above.

⁴⁷ See Re Rabiotti's 1989 Settlement [2000] W.T.L.R. 953 at pp. 967–968, per Deputy Bailiff Birt (Jersey Royal Court, Samedi Division); Breakspear v. Ackland [2008] EWHC 220 (Ch), [2009] Ch. 32 at [5]–[14], and esp. at [8], per Briggs J., though “[i]t may be that there are some matters in the memorandum [of wishes] which … it would not be proper for the trustees to take into account in the exercise of any, or of a particular, discretionary power”: Hartigan Nominees Pty Ltd v. Rydge (1992) 29 N.S.W.L.R. 405 at p. 427, per Mahoney J.A.

⁴⁸ A power to amend trusts is common in pension trusts: see R. Self, Tottel's Pension Fund Trustee Handbook, 9^th ed. (Haywards Heath 2005), at §6.3, and, by way of example, Imperial Group Pension Trust Ltd v. Imperial Tobacco plc [1991] 1 W.L.R. 589.

⁴⁹ See, generally, A.J. Oakley, Parker and Mellows: The Modern Law of Trusts, 9^th ed. (London 2008), at §§[18-024]–[18-044] and Lord Millett et al, Forms and Precedents, 5^th ed. (London 2001), vol. 40(1), at §§[139] (settled advances); and [4359] and [4405] (powers for trustees to appoint trust funds to distinct settlements).

⁵⁰ Scott v. National Trust [1998] 2 All E.R. 705 at p. 718g. The charity involved in this case, the National Trust for Places of Historic Interest or Natural Beauty, is actually a corporation rather than a trust stricto sensu: see the National Trust Act 1907, s. 3. That should not affect this point, however.

⁵¹ See Underhill & Hayton (above note 5), §§61.12–61.17. Rather ironically, the continuing place of Wednesbury unreasonableness in administrative law is moot: see, generally, H.W.R. Wade and C.F. Forsyth, Administrative Law, 9^th ed. (Oxford 2004), pp. 371–372.

⁵² [1942] Ch. 304 at p. 306, per Lord Greene M.R. See also ANZ Executors & Trustee Co Ltd v. Qintex Australia Ltd [1991] 2 Qd.R. 360 and Advance Bank of Australia Ltd v. FAI Insurances Australia Ltd (1987) 9 N.S.W.L.R. 464.

⁵³ [1974] A.C. 821.

⁵⁴ [1992] B.C.L.C. 22.

⁵⁵ [2000] UKHL 39, [2002] 1 A.C. 408.

⁵⁶ See the Companies (Tables A–F) Regulations 1985 (SI 1985/805) as amended, and the Model Articles of Association promulgated for the purposes of the Companies Act 2006 in the Companies (Model Articles) Regulations 2008 (SI 2008/3229).

⁵⁷ Companies Act 2006, ss. 21–27, replacing earlier legislation.

⁵⁸ Companies Act 2006, s. 544 and Part 21, re-enacting earlier legislation.

⁵⁹ See, e.g., Howard Smith v. Ampol Petroleum [1974] A.C. 821.

⁶⁰ See, generally, Nolan, “The Proper Purpose Doctrine and Company Directors”, (above note 24).

⁶¹ See note 51 above and the text thereto. Note also Fridman, S., “An Analysis of the Proper Purpose Rule” (1998) 10 Bond Law Review 164Google Scholar, and P. Watts, “Judicial Review of Directors' Decisions – Another Bad Idea” [2007] Company and Securities Law Bulletin 75.

⁶² Mills v. Mills [1938] HCA 4, (1938) 60 C.L.R. 150 at pp. 185–186, per Dixon J.

⁶³ Ibid., approved in Howard Smith Ltd. v. Ampol Petroleum Ltd. [1974] A.C. 821 at pp. 835–836, per Lord Wilberforce.

⁶⁴ See, e.g., Wright v. Morgan [1926] A.C. 788 (fiduciary's own interest adverse to that of his principal); Re Thompson's Settlement [1986] Ch. 99 at pp. 114–115, per Vinelott J. (fiduciary's interest as representative of others adverse to that of his principal).

⁶⁵ See, e.g., Re Thompson's Settlement [1986] Ch. 99.

⁶⁶ See, e.g., Burland v. Earle [1902] A.C. 83; Re Cape Breton Co. Ltd. (1885) 29 Ch.D. 795; Hely-Hutchinson v. Brayhead Ltd. [1968] 1 Q.B. 549. The somewhat problematic successor to the self-dealing rule in company law is Companies Act 2006, s. 177.

⁶⁷ Companies Act 2006, s. 16, re-enacting earlier legislation.

⁶⁸ In this regard, see A.J. Oakley, Constructive Trusts, 3rd. ed. (London 1996), at pp. 146 et seq., noting the texts cited there, and Part G(ii) below.

⁶⁹ See Ingram v. IRC [1997] 4 All E.R. 395 at p. 425, per Millett L.J.

⁷⁰ As regards the fair dealing rule, see Tito v. Waddell (No. 2) [1977] Ch. 106 at p. 241, per Megarry V.-C. There is a convincing argument that the fair dealing rule and the self-dealing rule are not separate rules but applications of the same principle to differing patterns of facts: M. Conaglen, “A Re-Appraisal of the Fiduciary Self-Dealing and Fair Dealing Rules” [2006] C.L.J. 366. That debate does not affect the point, however: only the self-dealing rule, or the pattern of facts where a fiduciary acts on behalf of his principal, is relevant for present purposes.

⁷¹ For a comprehensive treatment of the issues raised in this paragraph, see Conaglen, “The Nature and Function of Fiduciary Loyalty” (2005) 121 L.Q.R. 452 and Fiduciary Loyalty (Oxford 2010, forthcoming).

⁷² As regards the general principle of pleading inconsistent cases, see, e.g., Oliver Ashworth (Holdings) Ltd. v. Ballard (Kent) Ltd. [2000] Ch. 12 at p. 31, per Robert Walker L.J.; A v. A [2007] EWHC 99 (Fam) at [16], per Munby J. In the context of transactions that can be argued to be either void in equity or voidable, see Baker v. Potter [2004] EWHC 1422 (Ch) at [109], per David Richards J., distinguishing Re Ciro Citterio Menswear plc [2002] EWHC 662 (Ch), [2002] 1 B.C.L.C. 672. See also Part G(iii) below.

⁷³ This much is obvious even from a cursory glance at the footnotes in P. Finn, Fiduciary Obligations (Sydney 1977), M. Conaglen, “The Nature and Function of Fiduciary Loyalty” (above note 71), “A Re-Appraisal of the Fiduciary Self-Dealing and Fair Dealing Rules” (above note 70), and Fiduciary Loyalty (above note 71).

⁷⁴ For examples of such drafting, see (in the context of trusts) Forms & Precedents (above note 49), volume 40(1), at §[3583], and (in the context of company law) Table A (1985, op. cit. note 56) regs. 85–86, 94–98; and note Companies Act 2006, s. 175(5).

⁷⁵ [2005] EWHC 1312 (Ch), [2005] 1 W.L.R. 3811 at [38].

⁷⁶ Hunter v. Senate Support Services Ltd. [2004] EWHC 1085 (Ch), [2005] 1 B.C.L.C. 175. Application of the principle in company law is hard to justify in the light of Harlowe's Nominees Pty. Ltd. v. Woodside (Lakes Entrance) Oil Company NL [1968] HCA 37, (1968) 121 C.L.R.483 at p. 493, per Barwick C.J., McTiernan and Kitto J.J., and Howard Smith Ltd. v. Ampol Petroleum Ltd. [1974] A.C. 821 at p. 832, per Lord Wilberforce.

⁷⁷ See Dame Mary Arden et al, Buckley on the Companies Acts, 15^th ed. (London 2008), §§[810]–[815], [866]. A court might be tempted to characterise the principle (at least in company law) as resting on an implied term of a company's constitution governing the exercise of power by directors, so as to fall within Companies Act 2006, s. 171(a), or as an aspect of the proper purposes doctrine, within s. 171(b). Alternatively, it might remain uncodified: s. 170(3) means that the codification of directors' duties is not necessarily exhaustive.

⁷⁸ Sieff v. Fox [2005] EWHC 1312 (Ch), [2005] 1 W.L.R. 3811 at [119]. The Hastings-Bass principle does not apply to a mistaken failure to decide to act: Breadner v. Granville-Grossman [2001] Ch. 523.

⁷⁹ Lord Neuberger, “Aspects of the Law of Mistake”, lecture to the Chancery Bar Association, London, 19^th January, 2009.

⁸⁰ See Part E, below.

⁸¹ R.I. Barrett, “The Principle in Re Hastings-Bass”, lecture to Superannuation 2006, Melbourne, 23^rd February, 2006.

⁸² Lord Walker of Gestingthorpe, “The Limits of the Principle in Re Hastings-Bass” (2002) 13 King's College Law Journal 173; J. Hilliard, “Re Hastings-Bass: Too Good to be True?” (2002) 16(4) Trust Law International 202; D. Goodman and C. Groves, “Need Trustees' Mistakes Stand?” [2002] Private Client Business 102; B. Green, “The Law Relating to Trustees' Mistakes – Where Are We Now?” (2003) 17(3) Trust Law International 114; J. Hilliard, “Limiting Re Hastings-Bass” [2004] The Conveyancer 208; D.A. Hayton, “Pension Trusts and Traditional Trusts: Drastically Different Species of Trusts” [2005] The Conveyancer 229; Barrett, above note 81; H.W. Tang, “Rationalising Re Hastings-Bass: A Duty to Act on Proper Bases” (2007) 21(2) Trust Law International 62 and in H. Tijo (ed.) The Regulation of Wealth Management (Singapore 2008), 305.

⁸³ See Abacus Trust (Isle of Man) Ltd. v. Barr [2003] EWHC 114 (Ch), [2003] Ch. 409 at [32], per Lightman J.

⁸⁴ See Barrett, above note 81.

⁸⁵ See the Australian authorities cited in note 76 above.

⁸⁶ Underhill & Hayton, Law of Trusts and Trustees (above note 5), §61.22, emphasis added.

⁸⁷ As regards the basic rule, see, inter alia, Ex parte James (1803) 8 Ves. 337 at p. 345, 32 E.R. 385 at p. 388, per Lord Eldon C.; Wright v. Morgan [1926] 1 A.C. 788 and Tito v. Waddell (No. 2) [1977] Ch. 106 at p. 241, per Megarry V.-C. As regards exceptional circumstances, see Holder v. Holder [1968] Ch. 353; Hillsdown plc v. Pensions Ombudsman [1997] 1 All E.R. 862 at pp. 895–896, per Knox J. and Public Trustee v. Cooper [2001] WTLR 901 at p. 993, per Hart J.

⁸⁸ Sieff v. Fox [2005] EWHC 1312 (Ch), [2005] 1 W.L.R. 3811 at [119], per Lloyd L.J., considered in Smithson v. Hamilton [2007] EWHC (Ch) 2900, [2008] 1 W.L.R. 1453 at [53], per Park J.

⁸⁹ See note 72 above and its accompanying text.

⁹⁰ Re Whiteley (1886) 33 Ch.D. 347, 355 per Lindley L.J., affirmed sub nom. Learoyd v. Whiteley (1887) 12 App. Cas. 727; emphasis added. See also Cowan v. Scargill [1985] Ch. 270, and Nestle v. National Westminster Bank plc [1994] 1 All E.R. 118, 140 (C.A.) per Leggatt L.J.

⁹¹ Daniels v. Anderson (1995) 37 N.S.W.L.R. 438 (NSWCA); Re Barings plc (No. 5) [1999] 1 BCLC 433; Equitable Life v. Bowley [2003] EWHC 2263 (Comm), [2004] 1 BCLC 180.

⁹² See Daniels v. Anderson (1995) 37 N.S.W.L.R. 438 (NSWCA), Lagunas Nitrate Co. Ltd. v. Lagunas Syndicate [1899] 2 Ch. 392 at pp. 435, 437, per Lindley L.J., and, more generally, W. Heath, “The Director's ‘Fiduciary’ Duty of Care and Skill: A Misnomer” (2007) 25 Company and Securities Law Journal 370.

⁹³ In this regard, note Henderson v. Merrett Syndicates Ltd. [1995] 2 A.C. 145 at p. 205, per Lord Browne-Wilkinson.

⁹⁴ Companies Act 2006, s. 174.

⁹⁵ See, e.g., Learoyd v. Whiteley (1887) 12 App. Cas. 727 and Daniels v. Anderson (1995) 37 N.S.W.L.R. 438 (NSWCA).

⁹⁶ Permanent Building Society (in liquidation) v. Wheeler (1994) 14 A.C.S.R. 109 at pp. 157–158, per Ipp J.; Colin Gwyer & Associates Ltd. v. London Wharf (Limehouse) Ltd. [2002] EWHC 2748 (Ch), [2003] 2 BCLC 153 at [83], per Leslie Kosmin Q.C.; Extrasure Travel Insurances Ltd. v. Scattergood [2002] EWHC 3093 (Ch), [2003] 1 BCLC 598 at [87]–[90], per Jonathan Crow Q.C.

⁹⁷ E.B. Sugden, A Practical Treatise of Powers, 8^th ed. (London 1861), at p. 863; Bailey, “Trusts and Titles” [1942] Cambridge Law Journal 36 at pp. 38–39.

⁹⁸ An analogous criticism has been made of the principle in Re Hastings-Bass, which has been used to allow trustees to unpick transactions that had disadvantageous tax consequences where a similarly mistaken individual would not be able to do so: Underhill & Hayton, Law of Trusts and Trustees (above note 5), §61.24.

⁹⁹ Bell v. Lever Brothers Ltd. [1932] A.C. 161.

¹⁰⁰ Note Austin, (above note 24), at §§7.20–7.21.

¹⁰¹ P. Finn, “The Fiduciary Principle”, in D. Waters (ed.), Equity, Fiduciaries and Trusts (Toronto 1989); P. Finn, “Fiduciary Law and the Modern Commercial World”, chapter 1 in E. McKendrick (ed.), Commercial Aspects of Trusts and Fiduciary Relationships (Oxford 1992); M. Conaglen, “The Nature and Function of Fiduciary Loyalty” (2005) 121 L.Q.R. 452 at pp. 454–460 and Fiduciary Loyalty (above note 71).

¹⁰² Ibid.

¹⁰³ Aleyn v. Belchier (1758) 1 Eden 132 at p. 138, 28 E.R. 634 at p. 637, per Lord Northington. A few examples of powers that must be exercised in good faith suffice to make the point: Allen v. Gold Reefs of West Africa [1900] 1 Ch. 656 (shareholders' power to alter a company's articles of association); Yorkshire Bank v. Hall [1999] 1 W.L.R. 1713 (mortgagee's power of sale); Paragon Finance v. Nash [2001] EWCA Civ 1466, [2002] 1 W.L.R. 685 (mortgagee's power to set interest rates under the mortgage); Redwood Master Fund Ltd. v. TD Bank Europe Ltd. [2002] EWHC 2703 (Ch), [2006] 1 BCLC 149 (lenders' power to alter the terms of a loan syndication).

¹⁰⁴ Armitage v. Nurse [1998] Ch. 241; Bristol & West BS v. Mothew [1998] Ch. 1; Item Software (UK) Ltd. v. Fassihi [2004] EWCA Civ 1244, [2005] 2 BCLC 91.

¹⁰⁵ See (again) Aleyn v. Belchier (1758) 1 Eden 132 at p. 138, 28 E.R. 634 at p. 637, per Lord Northington; Price v. Bouch (1986) 53 P. & C.R. 257 (power to administer a scheme of development); National Grid Co. plc v. Laws [1997] OPLR 207 (powers of an employer company under a pension trust); Yorkshire Bank plc v. Hall [1999] 1 W.L.R. 1713; (mortgagee's power of sale); Paragon Finance v. Nash [2001] EWCA Civ 1466, [2002] 1 W.L.R. 685 (mortgagee's power to set interest rates under the mortgage). See, generally, Underhill & Hayton (above note 5), §1.76.

¹⁰⁶ Consider Hunter v. Senate Support Services Ltd. [2004] EWHC 1085 (Ch), [2005] 1 B.C.L.C. 175 at [165]–[173], per John Randall Q.C., addressing the similarity of the principle to the Wednesbury principles of public law.

¹⁰⁷ See Part D(ii) above.

¹⁰⁸ Smithson v. Hamilton [2007] EWHC 2900 (Ch), [2008] 1 W.L.R. 1453 at [97], per Sir Andrew Park.

¹⁰⁹ J.S. Getzler, “Equitable Compensation and the Regulation of Fiduciary Relationships”, in P. Birks and F. Rose (eds.), Restitution and Equity (London 2000), 235, “Duty of Care” in P. Birks and A. Pretto (eds.), Breach of Trust (Oxford 2002), 41, “Am I My Beneficiary's Keeper? Fusion and Loss-Based Fiduciary Remedies” in S. Degeling and J. Edelman (eds.), Equity in Commercial Law: Volume 1 (Sydney 2005), 239; J.D. Heydon, “Are the Duties of Company Directors to Exercise Care and Skill Fiduciary?”, ibid., 185. Note also Youyang v. Minter Ellison Morris Fletcher [2003] HCA 15, (2003) 212 C.L.R. 484 at [39], per curiam.

¹¹⁰ Permanent Building Society (in liquidation) v. Wheeler (1994) 14 A.C.S.R. 109 at p. 157, per Ipp J. The leading statement in English law to this effect was made by Millett L.J. in Bristol & West BS v. Mothew [1998] Ch. 1 at p. 18: see Johnson v. EBS Pensioner Trustees Ltd. [2002] EWCA Civ 164, [2002] Lloyd's Rep PN 309 at [37], per Mummery L.J.

¹¹¹ W. Heath, “The Director's ‘Fiduciary’ Duty of Care and Skill: A Misnomer” (2007) 25 Company and Securities Law Journal 370.

¹¹² Note Permanent Building Society (in liquidation) v. Wheeler (1994) 14 A.C.S.R. 109 at p. 158, per Ipp J.

¹¹³ Note Henderson v. Merrett Syndicates Ltd. [1995] 2 A.C. 145 at p. 205, per Lord Browne-Wilkinson.

¹¹⁴ Armitage v. Nurse [1998] Ch. 241.

¹¹⁵ Cf. Birks, P., “The Content of Fiduciary Obligation” (2000) 34 Israel Law Review 3CrossRefGoogle Scholar.

¹¹⁶ See above note 101.

¹¹⁷ See, e.g., Hosegood v. Pedler (1896) 66 L.J. Q.B. 18 at pp. 20–21; Vacuum Oil Co. Pty. Ltd. v. Wiltshire (1945) 72 C.L.R. 319 at pp. 324–325 and 335. See also Donaldson v. Smith [2006] EWHC 1290 (Ch) at [54].

¹¹⁸ See, e.g., Turner v. Harvey (1821) Jac. 169 at p. 178, 37 E.R. 814 at pp. 817–818 per Lord Eldon C., and Dunn v. Flood (1885) 28 Ch.D. 586 at pp. 594–595 per Fry L.J.

¹¹⁹ See, generally, R.C. Nolan, “Understanding the Limits of Equitable Property” (2006) 1 Journal of Equity 18, drawing on C. Harpum, “Overreaching, Trustees' Powers and the Reform of the 1925 Legislation” [1990] C.L.J. 277.

¹²⁰ [1911] 1 Ch. 18. See in particular the judgment of Farwell L.J. at pp. 30–31.

¹²¹ See, e.g., Hely-Hutchinson v. Brayhead Ltd. [1968] 1 Q.B. 549 at p. 583, per Lord Denning M.R.

¹²² See, e.g., Re Lands Allotment Co. [1894] 1 Ch. 616 at p. 631 and p. 638, per Lindley and Kay L.J.J.

¹²³ Freeman & Lockyer v. Buckhurst Park Properties (Mangal) Ltd. [1964] 2 Q.B. 480; Hely-Hutchinson v. Brayhead Ltd. [1968] 1 Q.B. 549.

¹²⁴ See, generally, P. Watts, “Deeds and the Principles of Authority in Agency Law” (2002) 2 Oxford University Commonwealth Law Journal 93 at pp. 96–98.

¹²⁵ Bryant, Powis & Bryant, Ltd. v. Quebec Bank [1893] A.C. 170 at p. 180, per Lord Macnaghten; Hambro v. Burnand [1904] 2 K.B. 10 at p. 25, per Romer L.J.; Reckitt v. Barnett, Pembroke & Slater Ltd. [1928] 2 K.B. 244 at pp. 257–260, per Scrutton L.J. (who refers to “clear notice of fraud” at p. 260), and at p. 262–265, per Sankey L.J. (reversed by the House of Lords, [1929] A.C. 176, holding that the scope of the agent's authority did not include the actions in question).

¹²⁶ Heinl v. Jyske Bank [1999] Lloyd's Rep. Bank. 511 (C.A.). In Australia, note The Bell Group Ltd. (in liquidation) v. Westpac Banking Corporation [2008] WASC 239 at [4462], per Owen J., who does not make the necessary distinction between cases involving contracts and cases involving allotments (as to which, see the text to note 134 below), citing authority concerning allotments (Whitehouse v. Carlton Hotel Pty Ltd. [1987] HCA 11, (1987) 162 C.L.R. 285 at [10], per Mason, Dean and Dawson J.J.) for a general proposition it does not support.

¹²⁷ Bryant, Powis & Bryant, Ltd. v. Quebec Bank [1893] A.C. 170 at p. 180, per Lord Macnaghten; Hambro v. Burnand [1904] 2 K.B. 10 at pp. 19–22, per Collins M.R., and at pp. 23–25, per Romer L.J.; Reckitt v. Barnett, Pembroke & Slater Ltd. [1928] 2 K.B. 244 at pp. 257–260, per Scrutton L.J.

¹²⁸ Hely-Hutchinson v. Brayhead Ltd. [1968] 1 Q.B. 549 at p. 583, per Lord Denning M.R. See also Hopkins v. TL Dallas Group Ltd. [2004] EWHC 1379 (Ch), [2005] 1 BCLC 543 at [88]–[89], per Lightman J.

¹²⁹ See above note 127.

¹³⁰ Hopkins v. TL Dallas Group Ltd. [2004] EWHC 1379 (Ch), [2005] 1 BCLC 543; Criterion Properties plc v. Stratford UK Properties LLC [2004] UKHL 28, [2004] 1 W.L.R. 1846. Indeed, the current edition of Bowstead & Reynolds on Agency (London 2006) seeks to use the doctrine of offensible authority to explain all these cases where the company (principal) is bound notwithstanding the director's (agent's) breach of fiduciary duty: §3-009.

¹³¹ See, e.g., Russell v. Wakefield Waterworks Co. (1875) L.R. 20 Eq. 474; Selangor United Rubber Estates Ltd. v. Cradock (No. 3) [1968] 1 W.L.R. 1555; Belmont Finance Corporation v. Williams Furniture [1979] Ch. 250, (No. 2) [1980] 1 All E.R. 393; Rolled Steel Products (Holdings) Ltd. v. British Steel Corporation [1986] Ch. 246; Clark v. Cutland [2003] EWCA Civ 810, [2003] 2 BCLC 393.

¹³² See, e.g., J.J. Harrison (Properties) Ltd. v. Harrison [2001] EWCA Civ 1467, [2002] 1 BCLC 162.

¹³³ See, e.g., Rolled Steel Products (Holdings) Ltd. v. British Steel Corporation [1986] Ch. 246; Eagle Trust plc v. SBC Securities Ltd. [1993] 1 W.L.R. 484, Eagle Trust plc v. SBC Securities Ltd. (No. 2) [1996] 1 B.C.L.C. 121.

¹³⁴ Hogg v. Cramphorn Ltd. [1967] Ch. 254; Bamford v. Bamford [1970] Ch. 212. The voidable allotment may be ratified by ordinary resolution of the company in English law (ibid.), though semble not under Australian law according to Residues Treatment & Trading Co Ltd v. Southern Resources Ltd (No. 4) (1988) 51 S.A.S.R. 196.

¹³⁵ As regards the power itself, see Companies Act 2006, s. 617(2)(a), re-enacting earlier legislation, given effect through a company's constitution (see, e.g., the model articles of association in the Companies (Model Articles) Regulations 2008 (SI 2008/3229), Schedule 1, Art. 22 (private company articles) and Schedule 3, Art. 43 (public company articles)). As regards vesting the power in the company's directors, see its constitution (e.g., model articles, Art. 2 (private company articles and public company articles)).

¹³⁶ Companies Act 2006, s. 541, re-enacting earlier legislation.

¹³⁷ See Companies Act 2006, s. 112, re-enacting earlier legislation.

¹³⁸ Colin Gwyer & Associates Ltd. v. London Wharf (Limehouse) Ltd. [2002] EWHC 2748 (Ch), [2003] 2 BCLC 153 at [91]–[93], per Leslie Kosmin Q.C.

¹³⁹ Companies Act 2006, ss. 658–659, repeating earlier legislation.

¹⁴⁰ See Harlowe's Nominees Pty. Ltd. v. Woodside (Lakes Entrance) Oil Company NL [1968] HCA 37, (1968) 121 C.L.R. 483 at p. 500, per Barwick C.J., McTiernan and Kitto J.J.

¹⁴¹ [1911] 1 Ch. 18 at pp. 30–31.

¹⁴² The possibility of a legal power of appointment over land was abolished in England and Wales by Law of Property Act 1925, s. 1(7). As to the effect of such legal powers, see Coke on Littleton, 271b note VII.

¹⁴³ See, e.g., Dover v. Buck (1865) 5 Giff. 57 at p. 63, 66 E.R. 921 at p. 924, per Stuart V.-C. and Guinness plc v. Saunders [1990] 2 A.C. 663 at pp. 697–698, per Lord Goff. Suggestions to the contrary in D. O'Sullivan et al, The Law of Rescission (Oxford 2008), at [1.65]–[1.69] are wrong. For a fuller refutation, see M. Conaglen, Fiduciary Loyalty (above note 71), Chapter 4, Part III.A.

¹⁴⁴ See, e.g., Campbell v. Walker (1800) 5 Ves. 678 at p. 682, 31 E.R. 801 at p. 803, per Arden M.R.; Dover v. Buck (1865) 5 Giff. 57 at p. 63, 66 E.R. 921 at p. 924, per Stuart V.-C. Occasionally, no transaction ever occurs at law, because there was only one party involved, and he cannot transact with himself. However, this situation is rare, given the effect of Law of Property Act 1925, s. 72. Also, a power of sale cannot be exercised by a sole trustee in favour of himself because there is no genuine arm's length sale, within the terms of the power. In either such a case, the self-dealing rule cannot apply: there is no transaction to which it can respond. See the dissenting judgment of Millett L.J. in Ingram v. IRC, [1997] 4 All E.R. 395 at pp. 424–425, subsequently vindicated by the House of Lords, [2000] 1 A.C. 293.

¹⁴⁵ Guinness plc v. Saunders [1990] 2 A.C. 663 at pp. 697–698, per Lord Goff.

¹⁴⁶ See Part D(ii) above.

¹⁴⁷ [2003] EWHC 114 (Ch), [2003] Ch. 409. This decision was followed in Gallaher Ltd. v. Gallaher Pensions Ltd. [2005] EWHC 42 (Ch).

¹⁴⁸ [2004] EWHC 1085 (Ch), [2005] 1 B.C.L.C. 175.

¹⁴⁹ See the discussion in Underhill & Hayton, Law of Trusts and Trustees (above note 5), §61.18. Also note Sinclair v. Moss [2006] VSC 130 (Supreme Court of Victoria) at [79]–[84], per Byrne J.

¹⁵⁰ See, e.g., Hunter v. Senate Support Services Ltd. [2004] EWHC 1085 (Ch); [2005] 1 BCLC 175 at [179], per John Randall Q.C.

¹⁵¹ Cf. Abacus Trust (Isle of Man) Ltd. v. Barr [2003] EWHC 114 (Ch), [2003] Ch. 409 at [30], per Lightman J.

¹⁵² See, e.g., Boardman v. Phipps [1967] 2 A.C. 67 and Maguire v. Makaronis [1997] HCA 23, (1997) 188 C.L.R. 449.

¹⁵³ Law of Property Act 1925, s. 72(4).

¹⁵⁴ See note 72 above and its accompanying text.