Case: Gibson Motorsport Merchandise Pty Ltd v Forbes [2006] FCAFC 44 ; (2006) 149 FCR 569
Outcome: applied
This is not a case which requires any significant elaboration of the basic principles of law governing fiduciary relationships: see generally Meagher, Gummow &amp; Lehane, Equity: Doctrines &amp; Remedies , Ch 5 (4 th ed 2002); and, on proposed joint ventures having fiduciary characteristics, see Gibson Motorsport Merchandise Pty Ltd v Forbes [2006] FCAFC 44 ; (2006) 149 FCR 569 at 571-576. 261 It is sufficient to note for present purposes that (i) the distinguishing characteristic of a fiduciary relationship is that "its essence, or purpose, is to serve exclusively the interests of a person or group of persons" (which, as in the case of a partnership or fiduciary joint venture, can include the fiduciary): see generally Meagher, Gummow &amp; Lehane, at 5-005 ff; (ii) a relationship may be fiduciary in part and non-fiduciary in part: Hospital Products Ltd v United States Surgical Corporation , at 97-98 ff; (iii) insofar as the fiduciary relationship is claimed to be founded on mutual trust and confidence, the circumstances must nonetheless be such that the parties to the relationship can reasonably expect loyalty from the other, i.e. the subordination of self interest to joint interest: Gibson Motorsport Merchandise Pty Ltd at [11]-[13]; (iv) a person who provides information, suggestion or advice to another upon which that other may reasonably be expected to rely is not for that reason alone necessarily in a fiduciary relationship with that other, though that person will be a fiduciary if the factual matrix is such that that other is in the circumstances reasonably entitled to expect that the information provider, etc is acting in the matter in that other's interest: cf Pilmer v Duke Group Ltd (in liq) [2001] HCA 31 ; (2001) 207 CLR 165; Commonwealth Bank of Australia v Smith (1991) 42 FCR 390; (v) the loyalty obligation imposed on a fiduciary is that he or she cannot (a) in any matter within the scope of the fiduciary relationship (see Bertchnell v Equity Trustees Executor &amp; Agency Co Ltd [1929] HCA 24 ; (1929) 42 CLR 384 at 408) have a personal interest or an inconsistent engagement with a third party; or (b) use his or her position to own, or to a third party, possible advantage, unless this is freely and informedly consented to by the person(s) to whom loyalty is owed, or is authorised by law: Chan v Zacharia [1984] HCA 36 ; (1984) 154 CLR 178 at 199; Breen v Williams [1995] HCA 63 ; (1996) 186 CLR 71 at 113; (vii) outside of commercial agency, partnership and trust relationships, care needs to be taken in concluding that commercial parties are in a fiduciary relationship for some or all purposes - not because a commercial relationship cannot be fiduciary, but because such a relationship, commonly, possesses characteristics (e.g. known adversarial interests, the reasonable expectation of self-reliance, etc.) which negative a fiduciary finding: Gibson Motorsport Merchandise Pty Ltd , at [2]-[18]; News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 539-541. 263 It was also obvious to all concerned that to the extent that that exploitation was successful, Tiltform Licensing (and those with interests in it) stood in turn to benefit in virtue of the provisions of the licence agreement. In this sense the two companies shared, i.e. had common but several interests, in the prospering of their business relationship. But there was nothing fiduciary at all about that relationship. The licence agreement required considerable cooperation between the parties as well as ongoing trust and confidence in each other. But it was not for that reason fiduciary: cf Gibson Motorsport Merchandise Pty Ltd at [12]-[16]. Such is the commonplace in relational contracts, i.e. contracts which create an ongoing business relationship. Nonetheless there was nothing in the terms of the contract remotely suggesting that the parties were binding themselves in any way to promote "mutual interests". The agreement was designed to serve the several interests of each, and in this it gave Tiltform Licensing considerable powers over Tiltform Australia to protect its own interests. 264 The licence agreements of themselves created no fiduciary relationship as between Tiltform Licensing and Tiltform Australia. This, though, is not the relationship which, by virtue of the agreement "alone", is said to have been fiduciary. It is at this point that the difficulty with the applicants' submission becomes transparent. 265 It was clearly the case that, in their dealings with the WA investors, Bell and Sladojevic acted in the main on behalf of Tiltform Licensing in relation to a prospective investment in its licensee, Tiltform Australia. It was or should have been obvious to the investors that such was the case and that Tiltform Licensing had manifest interests in the making of the proposed investment. It was not necessary for the investors to have read the licence agreements for them to have reason to know that such was the case, although Parker's evidence is that he read it after returning to Perth from the 2 June meeting and he was aware that Tiltform Licensing's approval was necessary for any change in shareholding. The circumstances were redolent of Tiltform Licensing's own interest both in its relationship with Tiltform Australia and in any investment made in Tiltform Australia. To the extent that Bell and Sladojevic acted and were seen to act for Tiltform Licensing no possible foundation existed for characterising Bell and/or Sladojevic's relationship with the WA investors as fiduciary. As would have been apparent to anyone in the position of the WA investors, Bell and Sladojevic were seeking to protect and advance Tiltform Licensing's interests and, as is commonly the case in commercial dealings, they sought positively to encourage the investment in Tiltform Australia, both by enhancing its attractiveness (by, for example, introducing Dawkins to Benson) and by encouraging (through representations) its being made. The latter action was taken for the immediate benefit of Tiltform Australia, though self-interest was writ large in it.