LAWS3114 Lecture 3

Obligations of Loyalty and Confidence

Recommended Reading: Sarah Worthington, Equity (2nd ed), 129-143, 148-157

A. Fiduciary Obligations

1. Identifying Fiduciary Relationships

Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41
*Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165

2. Breach of Fiduciary Obligation

(a) The Conflict Rule
Williams v Barton [1927] 2 Ch 9
*Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373

(b) The Profit from Position Rule
*Regal (Hastings) Limited v Gulliver [1967] 2 AC 135
Boardman v Phipps [1967] 2 AC 46

3. Some Specific Situations

(a) Fiduciaries Renewing Leases
Keech v Sandford (1726) 25 ER 223
Chan v Zacharia (1984) 154 CLR 178

(b) Employees Receiving Bribes or Secret Commissions
Reading v Attorney-General [1951] AC 507
Lister v Stubbs (1890) 45 ChD 1
Attorney-General for Hong Kong v Reid [1994] 1 NZLR 1

(c) Doctor and Patient
*Breen v Williams (1996) 186 CLR 71

(d) Real Estate Agents
Kelly v Cooper [1993] AC 205

4. Informed Consent

Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165, 223 (Kirby J)
Brickenden v London Loan and Savings Co [1934] 3 DLR 465
Maguire v Makaronis (1997) 188 CLR 449
Queensland Mines Limited v Hudson (1978) 18 ALR 1

5. Remedies

(a) Compensation
McKenzie v McDonald [1927] VLR 134
Maguire v Makaronis (1997) 188 CLR 449

(b) Account
*Warman International Limited v Dwyer (1995) 182 CLR 544
Chirnside v Fay [2006] NZSC 68

(a) Exemplary Damages?
Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298

6. Third Party Liability

“Strangers are not to be made constructive trustees…unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees.”
(Barnes v Addy (1874) LR 9 Ch App 244 at 252 per Lord Selbourne LC)

(i) Knowing Receipt of Trust Property
Doneley v Doneley [1998] 1 QdR 602
Say-Dee Pty Ltd v Farah Constructions Pty Ltd (2007) 81 ALJR 1107

(ii) Knowing Assistance in a Breach of Trust or Fiduciary Duty
*Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373
Royal Brunei Airlines Sdn Bhd v Tan [1995] 3 WLR 64

B. The Duty of Confidence

1. Confidential Information

(b) The Nature of the Information
Ansell Rubber Co v Allied Rubber Industries [1967] VR 37
Attorney-General (UK) v Heinemann Publishers Australian Pty Ltd (1987) 8 NSWLR 341

(c) The Circumstances of Communication
Seager v Copydex Ltd [1967] 2 All ER 415

2. The Public Interest Defence

Lion Laboratories v Evans [1984] 2 All ER 417
Francombe v Mirror Newspapers Limited [1984] 2 All ER 408

3. Trustee’s Duty to Provide Information

Re Londonderry’s Settlement [1965] Ch 918
Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405