Fiduciary Duties - Principled And Justifications And Enabling Principles

Question 1

What is Millett 1998 def of fid duty?

Answer 1

 Undertakes to act in the interests of another, i.e. P’s interests ahead of F’s
 Vulnerability

Question 2

Galambos 2009 (Canada) case?

Answer 2

 looking Voluntary assumption of responsibility - a voluntary duty of responsibility
 Not necessarily a power imbalance (where fid has lots of power over principle)

Question 3

What happened in the Re Goldcorp 1995 case?

Answer 3

 High expectations not enough

• Precious mental exchange, supposed to take deposit and then buy the precious metal for them, would segregate the golf then put a trust on it
• But segregation of gold didn’t work and there wasn’t enough gold to go around all the trusts so the trust failed
• But was there a fiduciary duty?
• The company went insolvent and if there had been a trust investors would have priority over creditors for the money, but because there was no trust creditors moved in and got the remaining gold and all depositors money
• Tried to argue the company as a fid duty as they were vulnerable to the corps bad behaviour, but privy council thought wasn’t anything beyond a normal commercial transaction, might have had higher expectation but that’s not enough
• Need to have a special; greater degree of vulnerability

Question 4

What happened in the Hospital Products Ltd v United States Surgical Corporation (1984) case?

Answer 4

 In a commercial transaction … where the parties are dealing at arm’s length … I am reluctant to import a fiduciary obligation’.

• Dealer of revolutionary surgical stitching gear - wanted to set up in competition which argued was a breach of fiduciary duty by setting up competition
• They cloned US surgical products, but also went to fairs and got lots of samples, rebatched them and sold them off as their own
• Wanted to build market shares while manufacturing work was going on, was this bad behaviour? Yes - was it breach of contract? Yes, they didn’t promote US surgical they undermined it
• But what US surgical wanted was to take all the profits they had made from undermining the obligation
• Duty means you have to make your best efforts - interpreted it wasn’t a fiduciary relationship as if US surgical wanted a greater deal of trust and loyalty they should have made this clear in the dealership agreement
• Here would fid would have owed fid duty but there wasn’t enough vulnerability/ reliance placed on them to make it fiduciary

Question 5

What did re coomber case 1911 say?

Answer 5

Beware of] the danger of trusting to verbal formula.

- Trying to say there are many types of fiduciary relationships - don’t simply look for the duty and if its been breached - assuming fiduciaries owe a fid duty to everything is dangerous

Question 6

What did the henderson v Merrett Syndicates 1995 case say?

Answer 6

 The phrase ‘fiduciary duties’ is a dangerous one, giving
rise to a mistaken assumption that all fiduciaries owe
the same duties in all circumstances. That is not the
case.

Question 7

Cases for partnerships allowing profit from activities outside the scope of the partnership from 1800’s and more modern one?

Answer 7

Dean v Macdowell (1878)

• Rule generalised now, not just couple of partnership cases
• Got to look at the whole transaction and wider activities

New Zealand Netherlands Society ‘Oranje’ Inc v Kuys (1973) (Lord Wilberforce)
- Application of these general rules