The Gazette 1964/67

before Wilberforce J., in the Chancery Division, who held that the only thing which had made the purchase of shares possible was that the information in regard to the Company's affairs had clearly been obtained because the Defendents were acting for the trust. The two main issues for decision in the case were (i) were the defendants in a position of agency towards the trust or the trustees, so as to be account– able to the trust for any profit which they made? (ii) did they obtain a valid consent to the retention of this profit? The first query was one partly of fact and partly of law. The learned Judge pointed out that, in his view, the true interpretation of the initial stage was that the agency of the defendants was continued, its nature being to use and exploit the trust holding and its voting power to obtain inform– ation and to strengthen the management of the company, if possible, by securing representation on the board of the trust holding, as well as the intention that the defendants should acquire additional shares with a view to obtaining control. This was no departure from the agency. That still continued to exist though the defendants were now acting in a mixed capacity partly as agents for the trustees and partly on their own account. The defendants were, throughout, in the position of agents for the trustees for the purpose of using the trust shareholding to extract knowledge of the affairs of the company and ultimately to improve the company's profit earning capacity. His lordship made an order for declaration of constructive trusteeship as regards portion of the transaction, for an account of the profits as claimed, assuming the deduction of expenditure and on inquiry as to what was properly allowed for the work and skill of the defendants. (Phipps v. Board- man [ 1964] 2 All ER. 187). Libel.—Qualified Privileges THE rule that where two or more persons are sued in respect of a joint libel, proof that one of the defendants was actuated by malice will defeat any plea of privilege on the part of the others was set at nought by Denning, M. R., Harman and Davies L. J. J. The plaintiff brought an action against members of a committee of an unincorporated club and its assistant secretary, alleging libel in a letter written on a privileged occasion. The defendants denied that the letter was defamatory and pleaded privilege. The plaintiff by her reply alleged express malice. The action was first tried in 1963 but the jury disagreed. On the re-trial in 1964 the jury found that the letter was defamatory and awarded the plaintiff £750 damages, but found specifically that three of the committee members and the assistant Secretary were not actuated by malice. The trial 30

for the wife's costs. At the hearing the Court was told that there had been a reconciliation and the suits were dismissed by consent. Counsel for the wife then informed the Court that the wife did not intend to apply for costs against the husband. At an adjourned hearing to determine whether, the absence of the wife's application, her solicitor or, in the absence of her solicitor's application, the Law Society, could apply for her legal aid costs: Held, that whereas at common law the solicitor's right to costs depended on whether or not the wife had forfeited her agency of necessity by committing adultery, and that issue could not be determined on adjudication on costs, the Divorce Court had a discretion and could award costs in relief of a wife who had been guilty of adultery; that before the advent of legal aid, it was a practice of the Divorce Court to protect the wife's solicitor in respect of costs reasonably incurred in matrimonial proceedings, usually by ordering the husband to provide security, and if the wife failed, or her suit did not proceed, the court would usually but not invariably limit the order for the wife's costs to the amount paid into court as security; and that the Legal Aid and Advice Act, 1949, had left the practice and discretion of the court untouched. Accordingly, since the wife had not applied for her costs, her solicitor could make the application and an order would be made against the husband for the wife's costs not exceeding the sum paid into court as security. (Carter v. Carter and Cowan [1964] 2 All ER. 968) Accountability of Solicitor Trustee THE extent of which knowledge acquired by a solicitor trustee, in the course of dealing with and for a trust estate, could be used to result in private profit should be given careful consideration. The facts of the case were, a testator left a minority, and quite substantial, holding in a private company. When an approach was made to the executors to sell, the trust solicitor together with a member of the testator's family made investigations and were given proxies to attend a meeting of the company. Saying that he represented the trust share-holding the solicitor obtained a great deal of information about the company's assets, which would otherwise have been denied to him. Resulting from this, he and the member of the family with whom he had acted, bought a considerable number of the shares in the company and, by selling off some of the company's assets, managed to make a capital distribution to the shareholders in access of the price paid. Whereupon another member of the family and a beneficiary under the Will brought an action for a declaration that the shares were held in trust and for an account of the profits. The action came