Thanks Rob for these thoughts. I agree that only Lord Kerr really
did the appellate court's job of high level rational analysis rather
than shuffling of authority.
You have accepted on face value Lord Clarke's reasoning that the
local
bon pere du famille standard in Gurensey trust law is
to be measured by whatever
Armitage v Nurse may have decided
(the reasoning of which case itself may well have been per incuriam
at the time of decision because of misreading of the authorities
especially from Scotland that were used to justify the decision).
Lord Kerr forcefully argues that English law (whether clear, murky,
controversial or whatever) does not provide the right metric for
deciding Guernsey law, though obviously it may be consulted. So Lord
Clarke's judgment has to be taken to decide two points - he is right
to impose English doctrine on Guernsey because that is the
determinative body of doctrine; and he is right to ratify the
controversial English doctrine of
Armitage in so doing. Lady
Hale's deference to the local Guernsey law at the appellate level of
their court system opposes this reasoning, and it is not at all odd;
she is saying that the Guernsey courts in deciding their law may
look at English or any other trust law for analogies and ideas, but
that
Armitage v Nurse at thet point of time in question does
not make the cut as overwhelmingly clear and authoritative law an
ddoes not bind or compel Guernsey trust law. The majority argument
that trust law is and only is English law and that a "Norman" legal
system that has trusts cannot differ from the norms of English law
is decidedly odd. I'd be very wary if the Supreme Court applied that
technique to reform Scottish trusts law.
From Rob's take on
Spread Trustee I have to accept - with
heavy heart - that reasonable English lawyers may end up accepting
the case as good authority for the
Armitage v Nurse
doctrine. But there are further reasons to doubt both the authority
and policy sense of the majority judgments endorsing that case. In
my old essay on "Duty of care" in Birks and Pretto's edited volume
on
Breach of Trust I tried to lay out justifications for
directing the doctrinal traffic in the opposite direction to that of
the
Spread Trustee majority - namely that the civilian
bon
pere du famille since the early 18th century is the proper
approach for
English trust law on both precedential and
policy grounds and that it was fecklessly displaced by Millett LJ's
decisions in the late 1980s and 1990s. I take cheer from Rob's
distinguished restatement of English tort theory to resist the
instinct that every corner of our private law should be irradiated
with an undifferentiated mid-20th century tort negligence standard.
We should make it simple but not too simple.
On a minor point of precedent - if the strong tradition in Privy
Council judgments is for a single-speech expressing the majority
view, then what is the status of the Auld and Mance add-ons?
Josh
Having now read the case (thanks Colin) I don't think I can endorse Josh's
view that the case contains nothing more than "speculative dicta" on the
question of whether a trustee may exclude liability for gross negligence.
So, the majority are forceful in their endorsement of the view of Millett
LJ in Armitage v Nurse, rejecting the view of Professor Matthews to the
contrary and the doubts of the Law Commisssion (see Lord Clarke at [57],
Lord Mance [106], Auld [122]). What the position of English law is was
necessary to determine for the outcome of this case because in relation to
the position prior to legislation in 1989 Guernsey law would have been
(and is) determined according to the position found in England (see Lord
Clarke at [45], Lord Mance [109]).
Lord Mance and Auld are agreeing in full with Lord Clarke and are giving
judgements out of deference to the fact that there are dissentients.
Lady Hale's reasons for dissent are summarised at [140]
"English law on the subject was not settled in 1988, I see no reason why
we should disagree with the Guernsey courts' conclusion as to how Guernsey
law would have decided the matter then."
This is odd. The judge's job is to authoritatively determine the question
of law before her. She is sitting to determine Guernsey law.
Auld states (at [127])
"What matters is what a pre-1991 Guernsey Court should have decided as a
matter of Guernsey law on a logical and otherwise legally correct process
of reasoning – an outcome that might also have required examination by the
Board at the time. It is an issue on which the present Board – given the
extensive material and submissions put before it – is as well placed as
the Lieutenant Bailiff and Court of Appeal, then or now, to determine."
I don't think that is quite right either.The law is not just a prediction
about how an earlier court would have decided the case. The only issue is
what the position of Guernsey law is in relation to breaches by a trustee
not covered by the legislation. The Privy Council is the ultimate Guernsey
court, its job is to state the law not predict what it or another court
would have done before 1989/91.
The disappointing aspect of the decision is, for me, the failure to
analyse whether as a matter of principle the trustee should be able to
exclude liability for gross negligence. The majority seem to me to content
themselves with the mechanical citation of authority without any further
analysis. So, I have some sympathy with Lord Kerr in dissent that the duty
of a fiduciary to subordinate his interests to those of his principal is
simply incompatible with his at the same time excluding liability for
gross negligence. However, the majority have endorsed Millett LJ's views
in Armitage v Nurse to the contrary, and I don't think that this can be
readily dismissed as a matter of authority.
--
Robert Stevens
Professor of Commercial Law
University College London