Boardman was concerned about the accounts of the company, and thought that to protect the trust a majority shareholding is required.

Wilberforce J held that Boardman was liable to pay for his breach of the duty of loyalty by not accounting to the company for that amount of money, but that he could be paid for his services.

Lord Denning MR, Russell LJ and Pearson LJ upheld Wilberforce J's decision and held that Boardman and Phipps had breached his duty of loyalty, which arose as they had become self-appointed agents representing the trust, by putting themselves in a conflict of interest.

On this, Lord Denning MR said (at 1021) Ought Boardman and Tom Phipps to be allowed remuneration for their work and skill in these negotiations?

The plaintiff is ready to concede it, but in case the other beneficiaries are interested in the account, I think we should determine it on principle.

If the agent has been guilty of any dishonesty or bad faith, or surreptitious dealing, he might not be allowed any remuneration or reward.

As the judge said: "it would be inequitable now for the beneficiaries to step in and take the profit without paying for the skill and labour which has produced it."

They owed fiduciary duties (to avoid any possibility of a conflict of interest) because they were negotiating over use of the trust's shares.

Lord Upjohn dissented, and held that Phipps and Boardman should not be liable because a reasonable man would not have thought there was any real sensible possibility of a conflict of interest.