Case: United Dominions Corporation Limited v Brian Pty Limited [1985] HCA 49 ; (1985) 157 CLR 1
Outcome: referred to
ASIC also points to events pre-dating the execution of the mandate letter as part of its case. However, a difficulty arises because of its disavowal of any fiduciary relationship pre-dating the actual execution of the mandate letter: cf United Dominions Corporation Limited v Brian Pty Limited [1985] HCA 49 ; (1985) 157 CLR 1 at 11-12 per Mason, Brennan and Deane JJ. 25 A central part of ASIC's case is that Citigroup was required, as a financial services licensee, to have in place adequate arrangements for the management of conflicts of interest: see s 912A(1)(aa) of the Corporations Act . According to ASIC, conducting proprietary trading without having obtained Toll's informed consent to the proprietary trading, amounts to a breach of this subsection. 26 ASIC does not concede that, as a matter of statutory construction, s 912A(1)(aa) applies only where a licensee and its client are in a fiduciary relationship. However, Mr Walker SC, for ASIC, did concede that for the purposes of the present case, ASIC's contention that Citigroup contravened s 912A(1)(aa) depends upon the success of ASIC's submission that the parties were in a fiduciary relationship. 27 Even if Citigroup did owe fiduciary duties to Toll, the question of whether s 912A(1)(aa) was engaged depends upon a number of questions of statutory construction. The principal questions are whether Citigroup was providing "financial services" within the meaning of s 766A(1) and "financial product advice' within the meaning of s 766B(1) of the Corporations Act , as well as whether any such services were exempt services within Reg 7.1.29(3) of the Corporations Regulations 2001 (Cth). 28 ASIC seeks to argue the conflicts claim on three further bases. These are, first, a contravention of s 1041H of the Corporations Act , second, breach of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) and third, breach of s 12CA of the ASIC Act . However, each of them depends upon acceptance of ASIC's contention that Citigroup owed fiduciary duties to Toll. 287 The subject matter over which any fiduciary obligations will extend must be determined by the character of the venture or undertaking: see Birtchnell v The Equity Trustees, Executors and Agency Company Limited [1929] HCA 24 ; (1929) 42 CLR 384 at 408 per Dixon J; United Dominions v Brian at 13 per Mason, Brennan and Deane JJ; News Limited at 539 per Lockhart, von Doussa and Sackville JJ. This is to be ascertained from the terms of the agreement and the course of dealing between the parties: see News Limited at 539 per Lockhart, von Doussa and Sackville JJ; Australian Breeders Co-operative Society Limited v Jones (1997) 150 ALR 488 at 514 per Wilcox and Lindgren JJ; Beach Petroleum NL v Kennedy [1999] NSWCA 408 ; (1999) 48 NSWLR 1 at [194] per Spigelman CJ, Sheller JA and Stein JA. 299 This principle applies whether or not the costs agreement is made before the solicitor is instructed: see Symonds v Raphael [1998] FamCA 165 ; (1998) 148 FLR 171 at 186-187 per Baker and Burton JJ; see also McNamara at [38] per Doyle CJ. The reason given in those authorities for the proposition that the solicitor must make full disclosure even before the contract of retainer is that the fiduciary relationship may arise before the solicitor is actually retained: see United Dominions v Brian at 11-12 per Mason, Brennan and Deane JJ. 305 This points to a limitation of the principle to those who fall within an established category of fiduciary relationship or, at very least, to those who carry fiduciary obligations before the execution of the contract, as in United Dominions v Brian. 306 The second reason why the principle is not applicable in the present proceedings is that ASIC's case was that the fiduciary relationship between Citigroup and Toll arose from the mandate letter. ASIC specifically eschewed any suggestion that the fiduciary relationship arose prior to the execution of the mandate letter on 8 August 2005. 307 It follows that there is no place in these proceedings for the application of the principle that a person who is already subject to fiduciary obligations must obtain the client's fully informed consent to the exclusion or modification of those obligations.