mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: New Zealand Netherlands Society 'Oranje' Incorporated v Kuys [1973] 2 All ER 1222
Outcome: cited
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. 295 In order to be exonerated, a fiduciary must give full and frank disclosure of all material facts: see Kuys at 1227 per Lord Wilberforce. Consent need not be given expressly; it may be implied in all the circumstances: see Woolworths v Kelly at 212 per Samuels JA, at 234 per Mahoney JA; see also Our Lady's Mount Pty Limited (as trustee) v Magnificat Meal Movement International Inc (1999) 33 ACSR 163 at [128] per Muir J.
Case: Noranda Australia Limited v Lachlan Resources NL (1988) 14 NSWLR 1
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. 285 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.
Case: Our Lady's Mount Pty Limited (as trustee) v Magnificat Meal Movement International Inc (1999) 33 ACSR 163
Outcome: referred to
In order to be exonerated, a fiduciary must give full and frank disclosure of all material facts: see Kuys at 1227 per Lord Wilberforce. Consent need not be given expressly; it may be implied in all the circumstances: see Woolworths v Kelly at 212 per Samuels JA, at 234 per Mahoney JA; see also Our Lady's Mount Pty Limited (as trustee) v Magnificat Meal Movement International Inc (1999) 33 ACSR 163 at [128] per Muir J.
Case: P &amp; V Industries Pty Limited v Porto (No 2) [2007] VSC 64
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: Pacific Carriers Limited v BNP Paribas [2004] HCA 35 ; (2004) 218 CLR 451
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: Phelan v Middle States Oil Corporation (1955) 220 F (2d) 593
Outcome: referred to
Moreover, there is force in Citigroup's submission that the alleged conflict of interest is too remote. There must be "a conflict or a real or substantial possibility of a conflict": see Hospital Products at 103 per Mason J. In fact , Mason J went even further at 104, quoting the statement of Judge Learned Hand in Phelan v Middle States Oil Corporation (1955) 220 F (2d) 593 at 602-603 that the conflict rule does not apply: "... not only when the putative interest, though in itself strong enough to be an inducement, was too remote, but also when, though not too remote, it was too feeble an inducement to be a determining motive".
Case: Photocure ASA v Queen's University at Kingston (2002) 56 IPR 86
Outcome: referred to
Cases dealing with claims brought by former clients of solicitors and accountants to restrain the firm from acting against it show a willingness by the courts to accept the concept of Chinese walls as a means of quarantining information within the firm: see Bolkiah at 237-238 per Lord Millett; Photocure ASA v Queen's University at Kingston (2002) 56 IPR 86 at [61] per Goldberg J.
Case: Pilmer v Duke Group Limited (In Liq) [2001] HCA 31 ; (2001) 207 CLR 165
Outcome: cited
In Australia, the duty of loyalty is proscriptive rather than prescriptive in nature: see Breen v Williams at 113 per Gaudron and McHugh JJ, 137-138 per Gummow J; Pilmer v Duke Group Limited (In Liq) [2001] HCA 31 ; (2001) 207 CLR 165 at [74] per McHugh, Gummow, Hayne and Callinan JJ. 375 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. 376 It may follow that Brennan J's observations in Daly are to be confined in the manner discussed by Austin J in Aequitas at [287]. ASIC asserted that Daly was referred to by the High Court in Pilmer without disapproval at [70]; but I do not consider that their Honours' remarks amounted to a clear acceptance of the reasoning of Brennan J. However I do not need to consider this question because in my view the claim fails at a factual level. 391 Support for the view that the interests identified in the present case were too remote is also to be found in the remarks of the majority in Pilmer at [83] per McHugh, Gummow, Hayne and Callinan JJ. Their Honours said that it is not sufficient to say generally "that there was a hope or expectation of future dealings". Most professional advisers would hope, as their Honours said, that the proper performance of the task would lead the client to retain them again.
Case: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1988) 194 CLR 355
Outcome: followed
The phrase "carries on or may carry on the business" must be construed in context so that it is consistent with the language and purpose of all of the provisions of the statute: see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1988) 194 CLR 355 at [69] per McHugh, Gummow, Kirby and Hayne JJ. I also accept that the phrase is to be construed in light of the modern corporate practice of carrying on business as a corporate group. 433 But the difficulty which arises is, how can it be said that Virgin, as a 62.4% owned subsidiary of Patrick, carried on the business of that entity. ASIC submitted that to say so would be to find that Virgin, a listed company conducting the business of an airline, was carrying on the business of its major shareholder, Patrick, a listed company carrying on the business of a stevedore. 434 Subparagraph (c)(ii)(A) must be read with s 20 of the Corporations Act which provides as follows: "A reference in this Act to a person carrying on a business, or a business of a particular kind, is a reference to the person carrying on a business, or a business of that kind, whether alone or together with any other person or persons." 438 I have therefore come to the view that, applying the approach to construction stated in Project Blue Sky , Virgin can be said to have been carrying on the business of Patrick, notwithstanding that it was not carrying on the whole of that business. I reject ASIC's submission that the "business" that Patrick had in relation to Virgin is properly characterised as "the business of owning 62.4% of Virgin Blue". 439 It also follows from this that Virgin shares are not "other financial products" and therefore that the advice did not fall within Reg 7.1.29(3)(c)(iii) of the Corporations Regulations . 440 On this finding, the exemption contained in Reg 7.1.29(3)(c) would have been engaged so that Citigroup would not have been providing financial services to Toll for the purpose of s 912A(1)(aa) of the Corporations Act .
Case: R v Firns [2001] NSWCCA 191 ; (2001) 51 NSWLR 548
Outcome: cited
The question of whether a matter is "readily observable" is one of fact. Observability does not depend on proof that persons actually perceived the information; the test is objective and hypothetical: see R v Firns [2001] NSWCCA 191 ; (2001) 51 NSWLR 548 at [88] per Mason P. 547 Where the information is a "matter of supposition", the question of whether it is generally available depends on whether the supposition is capable of being made or drawn by other investors based on readily observable matter or information that has been made known in the manner stated in s 1042C(1)(b)(i) of the Corporations Act : see s 1042C(1)(c). 548 ASIC called Mr Sisson to give expert evidence. However, his first report dated 31 October 2006 did not deal with the question of whether the "information" relied on by ASIC was generally available. Mr Sisson did address the question briefly in a later report dated 16 March 2007, in reply to the evidence of Citigroup's expert, Mr Richard Mews. 551 However, in my view, the test applied by Mr Sisson as to whether the information was generally available was not in accordance with that which has been recognised by the authorities. There are two reasons for this. First, the test of whether material is readily observable is not whether the particular matter was widely observed but whether it could have been: see R v Firns at [88], [91] per Mason P; see also Hannes v DPP at [626] per Barr and Hall JJ. 552 The second reason is that s 1042C(1)(c) of the Corporations Act does not appear to involve a consideration of whether the market has had a reasonable time to absorb the information: see the analysis of the extrinsic material in [55] [56] of the judgment of Mason P in R v Firns . His Honour was of the view that Parliament's intention was not to "penalise individual initiative and diligence." 553 Thus, it seems to me that Mr Sisson's evidence on this question must be rejected. The effect of what he did was to ask whether it was generally available by considering the question of whether it was generally known. 554 Nevertheless, it does not follow that I must find that the information was generally available. Citigroup submitted that I should make this finding upon the basis of the evidence of its expert, Mr Mews. But I am not satisfied that Mr Mews' evidence establishes the proposition for which Citigroup contends.
Case: R v Hannes [2000] NSWCCA 503 ; (2000) 158 FLR 359
Outcome: cited
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. 558 The position seems to me to be analogous to that which was referred to by Spigelman CJ in R v Hannes at [254] [257]. Here the supposition that Citigroup was acting for Toll in relation to the Patrick takeover was one essential part of the "information" on which the claim was based. As Spigelman CJ said at [257], if it was generally available, one would expect to find it in the contemporaneous reports. Yet no such evidence was available, even in the form of speculation or rumour. 559 Mr Mews and Mr Sisson agreed that when one is considering whether information in the form of a deduction is generally available, the analogy of a jigsaw puzzle is apt. But as Mr Sisson said, if all pieces other than those from a small area are removed, as Mr Mews appears to have done, it is relatively easy to fit the remaining pieces together to reach the desired conclusion. 560 Counsel for Citigroup pointed to the evidence of Mr Harvey to support a finding that the information was generally available. Mr Harvey was called by ASIC to give evidence on its behalf.
Case: R v Rivkin [2004] NSWCCA 7 ; (2004) 184 FLR 365
Outcome: referred to
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".
Case: Re Dwyer v Lippiatt; Dwyer v Backpackers R US.Com Pty Limited (2004) 50 ACSR 333
Outcome: cited
So too in Re Dwyer v Lippiatt; Dwyer v Backpackers R US.Com Pty Limited (2004) 50 ACSR 333, White J found that a person who was not a director and who described himself as a consultant, was an "officer" within subparagraph (b)(i) of the definition because he was intimately involved in all the important decisions affecting the corporation. Her Honour said at [68] there could be no doubt about the person's importance to the "drive and direction" of the company and that it was likely he also fell within the other limbs of the definition.
Case: Re HIH Insurance Limited (in prov liq) ; ASIC v Adler [2002] NSWSC 171 ; (2002) 41 ACSR 72
Outcome: cited
In Re HIH Insurance Limited (in prov liq) ; ASIC v Adler [2002] NSWSC 171 ; (2002) 41 ACSR 72 per Santow J, a question arose as to whether Mr Adler, who was a director of the parent company but not of the subsidiary, was an "officer" of the subsidiary company. Santow J held that he was an officer of the subsidiary under subparagraphs (b)(i) and (b)(ii) of the definition. 493 The reason Santow J found that Mr Adler was an officer was that as a director of the holding company and a member of its investment committee, he participated in decision making as to how the funds of the HIH group were invested. His Honour said it was for this reason that Mr Adler was a person whose decisions clearly affected the whole or a substantial part of the business of the subsidiary as well as someone with the capacity to affect significantly the subsidiary's financial standing: see at [73] [75].
Case: Re Morris Fletcher v Cross' Bill of Costs [1997] 2 Qd R 228
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.
Case: Securities and Exchange Commission v Chenery Corporation 318 US 80 (1942)
Outcome: cited
It is true, as Frankfurter J said in Securities and Exchange Commission v Chenery Corporation 318 US 80 (1942) at 85, that "to say a man is a fiduciary only begins the analysis": see the citation in Beach Petroleum at [185] per Spigelman CJ, Sheller JA and Stein JA. But it is otherwise where the parties acknowledge that they are not in a fiduciary relationship. In my view, those words mean what they say and should be enforced accordingly, unless the mandate letter was vitiated as a matter of law.
Case: Stevens v Brodribb Sawmilling Company Pty Limited [1986] HCA 1 ; (1986) 160 CLR 16
Outcome: referred to
It is difficult to see that the words of the mandate letter have anything other than their plain meaning. Citigroup was retained solely as an adviser to Toll, as an independent contractor and not as a fiduciary. The engagement of Citigroup as an "independent contractor and not in any other capacity" suggested that the parties had in mind the distinction between independent contractors and employees or agents; see for example Stevens v Brodribb Sawmilling Company Pty Limited [1986] HCA 1 ; (1986) 160 CLR 16 per Mason, Wilson, Brennan, Deane and Dawson JJ. Thus, these words also point against the assumption of any fiduciary capacity.
Case: Symonds v Raphael [1998] FamCA 165 ; (1998) 148 FLR 171
Outcome: referred to
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.
Case: Target Holdings Limited v Redferns [1996] 1 AC 421
Outcome: referred to
Their Honours said in Beach Petroleum at [444] that Brickenden is not authority for the general proposition that in no case involving breach of fiduciary duty may a court consider what would have happened if the duty had been performed. This is because Brickenden is now to be understood in light of the decision of the House of Lords in Target Holdings Limited v Redferns [1996] 1 AC 421. Their Lordships there said at 439 that causation is to be determined using commonsense and hindsight: see Beach Petroleum at [432] per Spigelman CJ, Sheller JA and Stein JA. I respectfully agree with the views of the Court of Appeal.
Case: Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165
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: Walden Properties Limited v Beaver Properties Pty Limited [1973] 2 NSWLR 815
Outcome: referred to
A different formulation of the test is to be found in the judgment of Hutley JA in Walden Properties Limited v Beaver Properties Pty Limited [1973] 2 NSWLR 815 at 846-7. However, his Honour's remarks are explained by the learned authors of Equity Doctrines and Remedies (4 th ed, Butterworths LexisNexis, 2002) at [5 120].
Case: Woolworths Limited v Kelly (1991) 22 NSWLR 189
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. 295 In order to be exonerated, a fiduciary must give full and frank disclosure of all material facts: see Kuys at 1227 per Lord Wilberforce. Consent need not be given expressly; it may be implied in all the circumstances: see Woolworths v Kelly at 212 per Samuels JA, at 234 per Mahoney JA; see also Our Lady's Mount Pty Limited (as trustee) v Magnificat Meal Movement International Inc (1999) 33 ACSR 163 at [128] per Muir J. 323 In Chan v Zacharia , Deane J said in plain terms at 196 that the parties to a partnership agreement could provide "that any fiduciary relationship between the partners was excluded." The observations of Mahoney JA in Woolworths v Kelly at [225] were to the same effect. His Honour said that fiduciary duties could be "varied or released" by contract. Also, in News Limited , a Full Court of this Court (Lockhart, von Doussa and Sackville JJ) said at 539 that whether there are any fiduciary obligations at all may depend on the terms of the contract.