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