mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Commercial Union Assurance Company of Australia Limited v Ferrcom Pty Limited (1991) 22 NSWLR 389
Outcome: referred to
ASIC called Mr Chatfield to give evidence but it chose not to lead any evidence from him on the relevance of the information. I can therefore infer that Mr Chatfield's evidence would not have assisted: see Commercial Union Assurance Company of Australia Limited v Ferrcom Pty Limited (1991) 22 NSWLR 389 at 418-419 per Handley JA. 385 The other person identified in the particulars, Mr Little, was not called by ASIC to give evidence. The plain inference is that his evidence would not have assisted. 386 The third conflict is said to have arisen because it was likely that the fact that Citigroup had acquired "such a substantial body of shares" would come to the notice of private side employees providing corporate advisory services, namely Mr Dempsey and his team, or to those providing investment banking services, namely Mr Bartels and his team, or their superiors, Mr Roberts and Mr Sinclair, or the Compliance department and in-house lawyers: see Further Amended Statement of Claim [75].
Case: Commissioner for Corporate Affairs v Bracht [1989] VR 821
Outcome: followed
It is also important to bear in mind that, as is noted in Ford's Principles of Corporations Law at [8.020], the origin of the extended definition of "officer" is to be found in Parliament codifying, at least in part, the principles stated by Ormiston J in Commissioner for Corporate Affairs v Bracht [1989] VR 821. 489 In Bracht , Ormiston J considered the proper construction of s 227 of the Companies (Victoria) Code which prohibited a person who was bankrupt from taking part in the management of a corporation. His Honour considered at 830 that the concept of "management" comprehended: "activities which involve policy and decision-making, related to the business affairs of a corporation, affecting the corporation as a whole or a substantial part of that corporation, to the extent that the consequences of the formation of those policies or the making of those decisions may have some significant bearing on the financial standing of the corporation or the conduct of its affairs". 490 The language of subparagraphs (b)(i) and (b)(ii) of the definition of "officer" corresponds, in large measure, with Ormiston J's description of the concept of management. What emerges from this is that an officer is involved in policy making and decisions that affect the whole or a substantial part of the business of the corporation. 491 Moreover, this is reflected in the distinction drawn in the Corporations Act between officers and employees and it is supported by authorities that have considered the statutory definition. 496 It is true, of course, that the meaning of "officer" must be considered in its particular statutory context: see for example Bracht at 827-828 per Ormiston J. Duties of honesty, care and diligence are imposed on officers by ss 180 184 of the Corporations Act . But it seems to me that, if anything, this reinforces the view I have expressed as to the requirement that an officer occupy a management role. 497 In my view, Mr Manchee did not fall within either subparagraph (b)(i) or (b)(ii) of the definition of "officer". ASIC has not established that he had any involvement in policy making or decisions that affected the whole or a substantial part of the business of Citigroup. Mr Manchee was one of five proprietary traders employed by Citigroup. There was no evidence that anyone reported to him or that he had any responsibilities apart from proprietary trading. 498 The proprietary trading desk is one of four trading desks in the Equity Derivatives Division which is itself a subdivision of Equities, one of six divisions in the CIB. The CIB is one of Citigroup's three businesses. Mr Manchee's trading was subject to daily limits and to the direction of his risk manager, Mr Darwell.
Case: Commissioner for Corporate Affairs v Green [1978] VR 505
Outcome: followed
The amendment was explained in [319] [320] of the Explanatory Memorandum to the Corporations Legislation Amendment Bill 1991 (Cth) as follows: "[319] Doubt was also expressed as to whether the term 'information' would be interpreted as encompassing supposition, intentions and other matter not sufficiently certain to require its release to the public, notwithstanding the broad interpretation given to the term in Commissioner for Corporate Affairs v Green [1978] VR 505 at 511. Proposed amendment [320] Proposed section 1002A(1) provides definitions of 'information' and 'securities', in relation to a body corporate, to apply for the purposes of the insider trading provisions. The definition of information is an inclusive one, with information being taken to include supposition and other matters insufficiently definite to warrant being made known to the public and matters relating to the intentions, or likely intentions, of a person." 534 It is also apparent that the new definition was to include in the concept of information, factual knowledge obtained by means of a hint or veiled suggestion from which the receiver of it can impute other knowledge: see Commissioner for Corporate Affairs v Green [1978] VR 505 at 511.
Case: Commonwealth Bank of Australia v Smith (1993) 42 FCR 390
Outcome: referred to
A person may be in a fiduciary relationship as to some aspects of the relationship but not others: see New Zealand Netherlands Society 'Oranje' Incorporated v Kuys [1973] 2 All ER 1222 at 1225-6 per Lord Wilberforce; see also Noranda Australia v Lachlan Resources at 15-17 per Bryson J. Thus, a bank which gives its customers financial advice in the course of a transaction that includes an advance of money to the client may be in a fiduciary relationship with the client in its role as adviser. The bank may be expected to act in its own interests in ensuring the security for the loan but it will undertake fiduciary obligations to the client if it creates an expectation that it will advise in the customer's interests on the wisdom of the investment: see Commonwealth Bank of Australia v Smith (1993) 42 FCR 390 at 391 per Davies, Sheppard and Gummow JJ. 293 A person occupying a fiduciary position will be absolved from liability for what would otherwise be a breach of duty by obtaining a fully informed consent: see CBA v Smith at 393 per Davies, Sheppard and Gummow JJ.
Case: D &amp; J Constructions Pty Limited v Head &amp; ors trading as Clayton Utz (1987) 9 NSWLR 118
Outcome: cited
Nevertheless, warnings have been sounded in other authorities about the risk of leakage through Chinese walls. Thus, for example, Bryson J said in D &amp; J Constructions Pty Limited v Head &amp; ors trading as Clayton Utz (1987) 9 NSWLR 118 at 123: " ...it is not realistic to place reliance on such arrangements in relation to people with opportunities for daily contact over long periods, as wordless communication can take place inadvertently and without explicit expression, by attitudes, facial expression or even by avoiding people one is accustomed to see, even by people who sincerely intend to conform to control." 453 Nevertheless, having seen Mr Monaci in the witness box, it seems to me that the warning sounded by Bryson J in D &amp; J Constructions is apt. That is to say, it is not always realistic to place reliance on arrangements comprising Chinese walls: see [320] above. 454 Adequate arrangements require more than a raft of written policies and procedures. They require a thorough understanding of the procedures by all employees and a willingness and ability to apply them to a host of possible conflicts. 455 Mr Monaci's entire statement was the result of reflection by him in hindsight which he did not take into account in the particular circumstances that arose on 19 August 2006. The 83 page statement was prepared for him in draft by his solicitors and adopted by him.
Case: Darlington Futures Limited v Delco Australia Pty Limited [1986] HCA 82 ; (1986) 161 CLR 500
Outcome: referred to
The effect of the Australian and English authorities referred to above is that where a fiduciary relationship is said to be founded upon a contract, the ordinary rules of construction of contracts apply. Thus, whether a party is subject to fiduciary obligations, and the scope of any fiduciary duties, is to be determined by construing the contract as a whole in the light of the surrounding circumstances known to the parties and the purpose and object of the transaction: see Pacific Carriers Limited v BNP Paribas [2004] HCA 35 ; (2004) 218 CLR 451 at [22] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165 at [40] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; Lion Nathan Australia Pty Limited v Coopers Brewery Limited [2006] FCAFC 144 ; (2006) 156 FCR 1 at [46] per Weinberg J. The same approach applies to exclusion clauses: see Darlington Futures Limited v Delco Australia Pty Limited [1986] HCA 82 ; (1986) 161 CLR 500 at 510 per Mason, Wilson, Brennan, Deane and Dawson JJ; Andar Transport Pty Limited v Brambles Limited [2004] HCA 28 ; (2004) 217 CLR 424 at [122] per Callinan J.
Case: Dresna Pty Limited v Linknarf Management Services Pty Limited (In Liq) [2006] FCAFC 193
Outcome: referred to
There is force in Citigroup's submission that Australian law does not recognise a fiduciary duty to make full disclosure. The strong weight of judicial authority is that fiduciary duties are proscriptive rather than prescriptive; accordingly, a fiduciary does not have a positive duty to disclose information: see Breen v Williams at 113 per Gaudron and McHugh JJ, 137-138 per Gummow J; Pilmer at [74] per McHugh, Gummow, Hayne and Callinan JJ; Aequitas at [283] [287] per Austin J; Dresna Pty Limited v Linknarf Management Services Pty Limited (In Liq) [2006] FCAFC 193 at [132] per Gyles J; P &amp; V Industries Pty Limited v Porto (No 2) [2007] VSC 64 at [29] per Hollingworth J.
Case: Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22
Outcome: referred to
The sufficiency of disclosure may depend on the sophistication and intelligence of the person to whom disclosure is required to be made: see Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22 at [107] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ. 297 The authorities which deal with time charging by solicitors reveal a special instance where a solicitor has a conflict between his or her own interest in earning fees, and the duty to the client. A central question in these proceedings is whether the principles stated in the authorities on solicitors apply where the alleged fiduciary relationship is not one of the established categories. 355 Citigroup did not obtain Toll's express consent to trade on its own account in the context of its advisory role in the Patrick takeover, but in my view informed consent is to be implied from Toll's knowledge of Citigroup's structure and method of operations. Toll's experience and "core competency" in mergers and acquisitions must also be taken into account in determining this question: see Farah at [107] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ. 356 Although Mr Chatfield would have preferred Citigroup not to trade on its own behalf, he knew that Citigroup was a large financial conglomerate which did not act exclusively for Toll. He also knew that Citigroup had a proprietary trading desk which could operate for the benefit of Citigroup so long as knowledge of Toll's confidential information did not leak to the proprietary traders. 357 It is true that Mr Chatfield did not turn his mind to the question of whether Citigroup would suspend its proprietary trading during the period of the mandate, but the effect of his evidence was that he accepted that Citigroup could trade for third parties or for itself, so long as it did not use Toll's confidential information.
Case: Gibson Motorsport Merchandise Pty Limited v Forbes [2006] FCAFC 44 ; (2006) 149 FCR 569
Outcome: referred to
The distinguishing or over-riding duty of a fiduciary is the obligation of undivided loyalty: see Gibson Motorsport Merchandise Pty Limited v Forbes [2006] FCAFC 44 ; (2006) 149 FCR 569 at [11] per Finn J; Beach Petroleum at [201] per Spigelman CJ, Sheller JA and Stein JA; Bristol and West Building Society v Mothew [1998] Ch 1 at 18 per Millett LJ. 291 This duty embodies "the twin themes" of preventing undisclosed conflict of duty and interest (or of duty and duty), and of prohibiting misuse of the fiduciary position: see Chan v Zacharia at 198-199 per Deane J; Gibson Motorsport at [12] per Finn J.
Case: Global Sportsman Pty Limited v Mirror Newspapers (1984) 2 FCR 82
Outcome: referred to
Citigroup's advice was given to Toll which was a person who was, or was "likely to become, an interested party" in Patrick: see Reg 7.1.29(3)(c)(i). In my view, in this context "likely" means a real and not remote chance: see for example Global Sportsman Pty Limited v Mirror Newspapers (1984) 2 FCR 82 at 87 per Bowen CJ, Lockhart and Fitzgerald JJ; Boughey v The Queen [1986] HCA 29 ; (1986) 161 CLR 10 at 21 per Mason, Wilson and Deane JJ. It seems to me that Toll's past record of success in takeover bids, its core competence in the field, and the planning and effort which went into this bid made it likely, even as at 8 August 2005, that Toll would become an interested party within the meaning stated in the authorities.
Case: Hadid v Lenfest Communications Inc [1999] FCA 1798
Outcome: referred to
In Hadid v Lenfest Communications Inc [1999] FCA 1798 at [817] , Lehane J observed that advisers may, and often do, have fiduciary obligations.
Case: Hannes v Director of Public Prosecutions (Cth) (No 2) [2006] NSWCCA 373 ; 60 ACSR 1
Outcome: followed
It seems to me that the case must fail unless I find that Mr Manchee made the supposition in precisely those terms. This is because the authorities establish the central importance of the identified information to the statutory scheme: see R v Hannes [2000] NSWCCA 503 ; (2000) 158 FLR 359 at [26] [27] per Spigelman CJ. Reference has also been made to the level of precision required in formulating the charge: see Hannes v Commonwealth Director of Public Prosecutions (No 2) [2006] NSWCCA 373 ; 60 ACSR 1 at [377] , [415] per Barr and Hall JJ.
Case: Henderson v Merrett Syndicates Limited [1994] UKHL 5 ; [1995] 2 AC 145
Outcome: referred to
That view is supported by both Australian and English authority: see Chan v Zacharia [1984] HCA 36 ; (1984) 154 CLR 178 at 196 per Deane J; News Limited at 539 per Lockhart, von Doussa and Sackville JJ; Noranda Australia Limited v Lachlan Resources NL (1988) 14 NSWLR 1 at 17 per Bryson J; Woolworths Limited v Kelly (1991) 22 NSWLR 189 at 225 per Mahoney JA; Kelly v Cooper [1993] AC 205 at 213-214 per Lord Browne-Wilkinson. See also Henderson v Merrett Syndicates Limited [1994] UKHL 5 ; [1995] 2 AC 145 at 206 per Lord Browne-Wilkinson.
Case: Hooker Investments Pty Limited v Baring Bros Halkertson &amp; Partners Securities Limited (1986) 10 ACLR 462
Outcome: cited
This approach to construction has been adopted in relation to s 128 of the Securities Industry Act 1980 (NSW), the successor to s 75A of the Securities Industry Act and precursor to s 1002A of the Corporations Act 1989 : see Hooker Investments Pty Limited v Baring Bros Halkertson &amp; Partners Securities Limited (1986) 10 ACLR 462 at 467-468 per Young J; R v Rivkin [2004] NSWCCA 7 ; (2004) 184 FLR 365 at [126] [127] per Mason P, Wood CJ at CL and Sully J. As Young J said in Hooker Investments v Baring Bros, at 468, information goes further than knowledge and: "may include a rumour that something has happened with respect to a company which a person neither believes nor disbelieves". 537 In my view it follows from what was said by McInerney J in CCA v Green , by Young J in Hooker Investments v Baring Bros and by Barr and Hall JJ in Hannes v DPP that information can be non-specific and that what is drawn from it by way of inference is also included within the statutory definition of information. Moreover, the information, whether in the form of a hint or a rumour, must be communicated orally or by conduct, for example by observation of the words or conduct of others. 538 It also seems to follow from this that an inference may be a supposition or a matter of supposition, and therefore falls within the definition of information in s 1042A. The supposition would therefore be that which the person drew from the hint or other non-specific information received from another. 539 It was submitted on behalf of Citigroup that the legislative history shows that the inclusive definition of "information" in s 1042A of the Corporations Act was not intended to extend the ordinary meaning of the word "information" to encompass uncommunicated thought processes.
Case: Kelly v Cooper [1993] AC 205
Outcome: distinguished
That view is supported by both Australian and English authority: see Chan v Zacharia [1984] HCA 36 ; (1984) 154 CLR 178 at 196 per Deane J; News Limited at 539 per Lockhart, von Doussa and Sackville JJ; Noranda Australia Limited v Lachlan Resources NL (1988) 14 NSWLR 1 at 17 per Bryson J; Woolworths Limited v Kelly (1991) 22 NSWLR 189 at 225 per Mahoney JA; Kelly v Cooper [1993] AC 205 at 213-214 per Lord Browne-Wilkinson. See also Henderson v Merrett Syndicates Limited [1994] UKHL 5 ; [1995] 2 AC 145 at 206 per Lord Browne-Wilkinson. 315 The scope of any duty, and the extent to which the existence of Chinese walls may protect against an allegation of breach would be determined not only by the express terms of the contract but also by any implied terms: see Kelly v Cooper at 213-215 per Lord Browne-Wilkinson. 359 I do not consider that the circumstances of the present case are identical with those of Kelly v Cooper where the Privy Council held that there was to be implied in a contract with a real estate agent, a term that the agent was free to act for other principals selling similar properties. Such a term was implied because the practice is notorious and it would otherwise be impossible for the estate agents to perform their ordinary business functions: see Kelly v Cooper at 214 per Lord Browne-Wilkinson. 360 In my opinion, there is nothing in the relationship of investment banker/financial advisor and client which requires a conclusion that it is an inherent part of the business of investment banking for the banker to engage in trading in its client's target's shares. 361 But, in my opinion, in the particular circumstances of this case, for the reasons given above, Toll had sufficient knowledge of the real possibility of proprietary trading by Citigroup to amount to informed consent. 362 Citigroup relied upon the concession made by Mr Chatfield in cross-examination that if on 19 August 2005 Citigroup had told him it had engaged in proprietary trading "it wouldn't have made any difference" to the decisions which Toll made: see [232] above. 363 ASIC sought to meet this by submitting that a fiduciary who has not obtained informed consent does not escape the consequences of that failure by showing that the information which was not disclosed would not, as a matter of fact, and with hindsight, have affected the client's decision.
Case: Lac Minerals Limited v International Corona Resources Limited (1989) 61 DLR (4 th ) 14
Outcome: referred to
Lockhart, von Doussa and Sackville JJ considered that these remarks contain an important question "if not the question": see News Limited at 541. La Forest J also agreed with Professor Finn's remarks in Lac Minerals Limited v International Corona Resources Limited (1989) 61 DLR (4th) 14 at 26.
Case: Lion Nathan Australia Pty Limited v Coopers Brewery Limited [2006] FCAFC 144 ; (2006) 156 FCR 1
Outcome: referred to
The effect of the Australian and English authorities referred to above is that where a fiduciary relationship is said to be founded upon a contract, the ordinary rules of construction of contracts apply. Thus, whether a party is subject to fiduciary obligations, and the scope of any fiduciary duties, is to be determined by construing the contract as a whole in the light of the surrounding circumstances known to the parties and the purpose and object of the transaction: see Pacific Carriers Limited v BNP Paribas [2004] HCA 35 ; (2004) 218 CLR 451 at [22] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165 at [40] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ; Lion Nathan Australia Pty Limited v Coopers Brewery Limited [2006] FCAFC 144 ; (2006) 156 FCR 1 at [46] per Weinberg J. The same approach applies to exclusion clauses: see Darlington Futures Limited v Delco Australia Pty Limited [1986] HCA 82 ; (1986) 161 CLR 500 at 510 per Mason, Wilson, Brennan, Deane and Dawson JJ; Andar Transport Pty Limited v Brambles Limited [2004] HCA 28 ; (2004) 217 CLR 424 at [122] per Callinan J.
Case: Maguire v Makaronis [1997] HCA 23 ; (1997) 188 CLR 449
Outcome: referred to
There is no precise formula for determining whether fully informed consent has been given; it will be a question of fact in all the circumstances of each case: see Maguire v Makaronis [1997] HCA 23 ; (1997) 188 CLR 449 at 466 per Brennan CJ, Gaudron, McHugh and Gummow JJ; see also CBA v Smith at 393 per Davies, Sheppard and Gummow JJ.
Case: McNamara Business &amp; Property Law v Kasmeridis [2007] SASC 90
Outcome: referred to
A solicitor who wishes to enter into a time charging costs agreement with the client must make full disclosure to the client of all the implications of such an agreement: see Foreman at 435-437 per Mahoney JA; Re Morris Fletcher v Cross' Bill of Costs [1997] 2 Qd R 228 at 243 per Fryberg J; McNamara Business &amp; Property Law v Kasmeridis [2007] SASC 90 at [28] [31] per Doyle CJ. 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. 303 First, the authorities dealing with solicitors' costs agreements have, as their foundation, the Court's inherent jurisdiction over solicitors and the fiduciary nature of the solicitor and client relationship as an established fiduciary category: see McNamara at [29] per Doyle CJ. 304 Indeed, in Foreman at 435, Mahoney JA specifically pointed out that a solicitor is in a fiduciary position vis-&agrave;-vis the client and/or in a position of influence. Hence the need for the solicitor to give the client advice that would enable a proper understanding of the operation and effect of a time based costs agreement: see McNamara at [28] per Doyle CJ.