Case: Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64 ; (1984) 156 CLR 41
Outcome: cited
The above would seem to be suggesting that the licensing agreement constituted a fiduciary relationship between Tiltform Licensing and Tiltform Australia. When I put this, in my view, extraordinary proposition which would turn fiduciary many exclusive dealerships, agencies, intellectual property licences, etc.: cf Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64 ; (1984) 156 CLR 41; counsel for the applicants resiled from it. However, in supplementary submissions, counsel re-embraced the above though with one additional matter of emphasis which is said to be "critical". This is that Sladojevic and Bell "were promoting the take up of shares in Tiltform Australia and advancing the licence that Tiltform Australia had with Tiltform Licensing is (sic) the reason why the proposed investors should seriously consider the investment." 253 So, it is said, from the moment Bell and Sladojevic put forward the Benson Tiltform Australia proposal on 26 June 2000 without Benson's sanction, they were promoting the take up of capital in Tiltform Australia, and they placed themselves in a position where their interest in the share take up conflicted with their duty, seemingly, to act in the joint interest of themselves and the WA investors. I note in passing that the substance of the proposal - the making of an investment in Tiltform Australia had already been discussed at the 24 June 2000 meeting. 254 In any event, it is said in my view surprisingly that this is a case "where the existence of a fiduciary relationship is indicated by the particular licence agreement alone". They point to the licence being an exclusive Australia wide one; to the fact that the position of Tiltform Australia in the Tiltform Group was fundamental to the success of the Group; and to the terms of cl 11.1.2 of the agreement which imposed, in essence, what is commonly encompassed in clauses imposing duties of fair dealing on parties to long term commercial relationships: I refer, purely for reasons of convenience and because good faith itself is not in issue, to Finn, "The Fiduciary Principle" in Youdan (ed) Equity, Fiduciaries and Trusts , 10 ff, 1989. 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.