Dougan's Trustee v. Dougan [1902] UKHL 383 (14 February 1902)

The trustee failed to disclose a material valuation and did not pay an adequate price for the beneficiary's interest, breaching his fiduciary duty; the transaction must be set aside.

Citation: [1902] UKHL 383
Parties: Pursuer and Respondent: Dougan's Trustee; Defender, Reclaimer, and Appellant: John Dougan
Jurisdiction: United Kingdom
Judgment Date: 14 February 1902
Procedural Posture: Civil Appeal / Appeal to House of Lords From Second Division
Outcome: Appeal dismissed with costs; interlocutors affirmed.
Legal Topics: Trustee's Fiduciary Duty, Purchase by Trustee of Beneficiary's Interest, Non Disclosure of Material Information, Reduction of Assignation, Inadequate Consideration

Trusts and Equity Bankruptcy Trustee's Fiduciary Duty Purchase by Trustee of Beneficiary's Interest Non Disclosure of Material Information Reduction of Assignation Inadequate Consideration

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Parties

Dougan's Trustee

Pursuer and Respondent

John Dougan

Defender, Reclaimer, and Appellant

Procedural Posture

Civil Appeal / Appeal to House of Lords From Second Division

Legal Issues

1 Whether a trustee can purchase a beneficiary's interest in the trust estate without full disclosure of material information and at an inadequate price
2 Whether the transaction should be set aside for breach of fiduciary duty

Ratio Decidendi

The trustee failed to disclose a material valuation and did not pay an adequate price for the beneficiary's interest, breaching his fiduciary duty; the transaction must be set aside.

Court Disposition

Appeal dismissed with costs; interlocutors affirmed.

Orders

Reduction of the assignation upon payment of £450 to the appellant.
Appellant to pay costs.