Fiduciaries

Question 1

Are fiduciary duties negative, positive, or both?

Answer 1

They are negative duties.

Question 2

Are all duties owed by fiduciaries fiduciary duties?

Answer 2

No.

Question 3

What are 7 examples of necessarily fiduciary relationships?

Answer 3

1) Trustee and beneficiary; 2) gurdian and ward; 3) agent and principle; 4) partner and co-partner; 5) solicitor and client; 6) director and company; 7) government employee and crown.

Question 4

For a fiduciary what is the elements of a proper exercise of discretion?

Answer 4

1) Must exercise discretion only for proper purposes; and 2) to remove temptation for improper exercise.

Question 5

What is the general rule regarding fiduciaries? Which case illustrates this?

Answer 5

A fiduciary must not profit from their position or have conflicting interests or duties unless the principle has given informed consent or if authorised by statute or the court (Bray v Ford).

Question 6

If the fiduciary only profits for the benefit without consent is that a breach? Which case illustrates this?

Answer 6

It is a breach because the intention of a non-authorised profiting by fiduciary is irrelevant (Keech v Sandford).

Question 7

What is the standard of liability for breach of a fiduciary duty? Which case illustrates this?

Answer 7

Strict liability (Regal (Hastings) Ltd v Gulliver).

Question 8

What remedied are available for the breach of a fiduciary duty?

Answer 8

1) Account of profits; 2) constructive trust; 3) rescission of transaction; 4) equitable compensation.

Question 9

What are relationships of ‘trust and confidence’? Which case illustrates this?

Answer 9

Relationships that are not presumed to be fiduciary until evidence is provided (McWilliam v Norton Finance (UK) Ltd).

Question 10

For discretionary fiduciaries what does ‘exercising discretion for proper purposes’ mean?

Answer 10

It means exercising discretion for the best interest for the purpose given in the trust.

Question 11

What are other duties owed by fiduciaries?

Answer 11

1) obey instructions; 2) take care; 3) exercise discretion properly; and 4) use confidential information properly.

Question 12

Does an honest misrepresentation need to cause damage for the misrepresenting party to be liable?

Answer 12

Yes.

Question 13

What breaches a fiduciary duty? Mention cases where relevant.

Answer 13

1) unauthorized profits (Boardman v Phipps); 2) fair dealing; and 3) self dealing.

Question 14

What is fair dealing?

Answer 14

When fiduciary deals with beneficiary.

Question 15

When fair dealing happens what can the beneficiary do?

Answer 15

Rescind the transaction.

Question 16

For the purposes of fair dealing, what are the defenses available to the fiduciary to stop rescission?

Answer 16

If the fiduciary can show 1) full disclosure to beneficiary; 2) beneficiary did not rely solely on fiduciary’s advice; and 3) price of dealing was fair.

Question 17

What is self-dealing?

Answer 17

When fiduciary is involved in making decisions on both sides of the transaction.

Question 18

What are the elements for breach of confidence?

Answer 18

1) The receiving of confidential information; 2) a duty to use it in a certain limited way; and 3) misuse of that info in the breach of duty.

Question 19

What is confidential information?

Answer 19

Information that is not public knowledge.

Question 20

If some components are not confidential is it still possible for the information to be considered confidential? Which case illustrates this?

Answer 20

Yes (Douglas v Hello!).

Question 21

What happens when confidential information is disclosed to the public? How is it different than when it is disclosed under a breach?

Answer 21

It ceases to be confidential even if disclosure is through breach.

Question 22

How is the duty of confidence created?

Answer 22

Often by contract, could happen by undertaking.

Question 23

When one appreciates confidentiality but does not undertake it or is contracted to keep the confidence can liability arise? Which case illustrates this?

Answer 23

Yes liability can arise (Coogan v News Group Newspaper Ltd).

Question 24

If notice of confidentiality arises later after information has been given can liability arise? Which case illustrates this?

Answer 24

Yes it can arise (Franklin v Giddins).

Question 25

What are the elements of breach of confidence? Which case illustrates this?

Answer 25

1) Unauthorised use; 2) of confidential information; and 3) to the detriment of the party communicating it (Coco v AN Clark (Engineers) Ltd).

Question 26

For the purposes of breach of confidence, what is considered a detriment in the case of a trade secret?

Answer 26

Financial loss.

Question 27

For the purposes of breach of confidence, what is considered a detriment in the case of a personal secret?

Answer 27

Embarrassment.

Question 28

When may there not be liability in breach of confidence?

Answer 28

If the disclosure is about a crime or dangers to public health and safety but this is proportionate (putting a camera in someone’s house for smoking a joint is a no for example).

Question 29

What are the remedies for breach of confidence?

Answer 29

1) Injunction to restrain misuse; 2) payment of money; and 3) deliver goods containing information.