A fascinating decision of the Privy Council, unfortunately with nary a
Scottish judge in sight (although David Johnston QC is of the Scottish
Bar). Much reference to English Law Commission work but none to the
Scottish Law Commission Discussion Paper No 123 (2003) on breach of
trust that I can see. Paras 3.12-3.50 of this support the view of our
law taken by the minority in the Privy Council and proposes
legislation to that effect to remove any doubt there may be on the
matter after Armitage v Nurse. We'll be reporting soon on trusts, and
will doubtless have things to say about this case.

Hector

--
Hector L MacQueen
Professor of Private Law
Edinburgh Law School
University of Edinburgh
Edinburgh EH8 9YL
UK

Currently working at the Scottish Law Commission tel: (UK-0)131-662-5222


Quoting Joshua Getzler <joshua.getzler@law.ox.ac.uk> on Thu, 30 Jun
2011 17:47:57 +0100:

> 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
>
>
>



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