Fiduciary Relationships
Mason J in Hospital Products (dissent(
Test Undertakes/agrees to act for or on behalf or in the best interests of another in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense The other person is vulnerable to abuse by the fiduciary of his position The fiduciary acts in a representative character
Brennan J in Breen
'it is necessary to identify "the subject matter over which the fiduciary obligations extend"
Profits Rule (Deane J in Chan)
A fiduciary "must account... for any benefit or gain: - which has been obtained or received in circumstances where a conflict or significant possibility of conflict existed...; or - which was obtained or received by use or reason of his position or opportunity or knowledge resulting from it."
Conflicts rule (Chan)
A fiduciary must not place themselves in a position involving a real, sensible possibility of a conflict between the: - Duty to act as a fiduciary and their own interest (Duty-interest conflict); and - Duties they owe as fiduciaries to 2 or more persons (Duty-duty conflict)
UDC
A joint venture's acquisition of benefits not disclosed to another joint venturer
Lord Upjohn in Boardman (QLD mines; Hospital Products)
A real or sensible possibility of conflict
Breen; Chan
A significant possibility of conflict
McKenzie v McDonald
Agent & prinipal
Horizontal
Associative fiduciary relationships Partners, joint ventures and parties with incomplete dealings
Breen
Brennan CJ: while the doctor acquires an ascendancy over the patient and the patient is in a position of placing trust in the doctor, this does not give rise to a fiduciary duty to provide access to medical records Gaudran and McHugh JJ: If W owed a fiduciary duty to B, They could only attach in respect of matters that relate to diagnosis, advice and treatment.
Spincode
Decided on same grounds as Bolkiah decision Obiter comments re obligation of loyalty ersists even when solicitor no longer acts for client if - the client thinks the solicitor still acts for them; or - has custody of client's documents; or - there are enough facts to show client is still vulnerable to the solicitor
Regal
Director & company
Warman
Employee & Employer
Vertical
Entails the subordination of one party to another Trustees, company directors, employees, agents and solicitors
Grimaldi
Establishing a fiduciary relationship is only the first step
Regal; Boardman
Exploitation of knowledge acquired in a fiduciary capacity - Company director - Solicitor and/or trustee
Boardman
Full disclosure means that a fiduciary must disclose to the beneficiary all information in his/her possession in relation to the proposed transaction which was relevant to the beneficiary's consideration of whether or not to consent to it
Chan
Fiduciary relationships survive the dissolution of partnership
Woodhead Breen Hospital products Habib
Not found to exist in: - Family friend/abused child: - Doctor/patient - Supplier/distributor - Government/citizen
Chan
Partner's diversion of opportunities from another partner
Defences
Requires full disclosure of all relevant facts and informed consent: onus on fiduciary Principal may consent to, excuse or ratify a breach of duty, after material facts have been sufficiently disclosed
Reid; Grimaldi
Taking bribes and secret commissions
Habib
Since the power to conduct foreign relations is vested in the Cth by s 61 of Con, the executive is answerable to Parliament only and not the court; No precedent would support an argument for equity to impose a FD on the Cth for foreign relations; and Breach of FD requires a conflict of interest, therefore would need to establish the Cth had a competing duty which conflicts with the alleged. Court found only interest is the one prescribed by s 61, and similar to 1., court does not have the power to review
Nocton
Solicitor & Client
Hospital Products
The contract between the parties contained a "best efforts" clause The relationship between was not a fiduciary one because: - Arrangement was a commercial one entered into by the parties arm's length and on an equal footing; - It was intended that both would profit from the distributorship arrangement, it could not be said that HPI was under an obligation not to profit from its position
Bolkiah
The fiduciary relationship ends with termination of the solicitor - client retainer The duty to preserve confidential information is a continuing duty - covered by BOC claim
UDC
The joint venture was in substance a partnership even though it was not labelled as such in the documentation. The relationship was fiduciary because the willingness of the parties to proceed with the project prior to executing the agreement, demonstrated a high degree of mutual trust and confidence.
Birtchnell
The relation between such a client and the partnership is a matter affecting the joint interests which each member was bound to safeguard and protect, and no member could enter into dealings or engagements which conflicted or might conflict with those interests or which gave him a "bias against a fair discharge of his duty" in that respect
Grimaldi; Birtchnell
The scope of fiduciary obligations varies according to the nature of each relationship and the facts of the case
Howard
The scope of the fiduciary duty generally in relation to conflicts of interest must accommodate itself to the particulars of the underlying relationship which give rise to the duty so that it is consistent with and conforms to the scope and limits of that relationship.
Factual or non-standard categories
To establish a relationship, you must prove on a factual basis that a fiduciary duty exists
Keech
Trustee & beneficary
Keech
Trustee who renewed the lease, being trust property, in his own name rather than as trustee, held the lease on constructive trust for the beneficiary. It was irrelevant that the landlord had encouraged him to take the renewal and that the trustee had acted in good faith in taking the renewal.
Chan
Unauthorized acquisition of an asset is profit as it is not necessarily just money
Obligation
Undivided loyalty and the fiduciary must act exclusively in the interests of the beneficiary
Chan
Where a trustee obtains renewal of a lease himself, the lease being trust property, it is irrebuttably presumed that the trustee has obtained renewal by use of his position as a trustee. Where other fiduciaries, including partners, obtain renewal of a lease for themselves, the lease being the subject-matter of the fiduciary relationship, it is rebuttably presumed that the renewal was obtained by use of the fiduciary position. In the case of fiduciaries other than trustees, the onus rests on the fiduciary to show that he did not obtain renewal of the lease by exploiting his fiduciary position