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FID06

Fiduciary Relationships

NZ $50.00
incl GST
Dr Gerard Curry Peter Whiteside
Dr Gerard Curry
Russell McVeagh
Auckland
Peter Whiteside
Wynn Williams and Co
Christchurch

Published: 25 October, 2006
Pages: 74

Introduction

Every second of every day that we lawyers devote to the practice of law, fiduciary duties and a duty of care bind us to the principled conduct of our profession.

This seminar deals with one source of those duties - fiduciary law. Lawyers, as fiduciaries to their clients, and partners as fiduciaries to each other, must know what their fiduciary obligations are. They have been emphasised by s 4 of the Lawyers and Conveyancers Act 2006 which describes fiduciary duties as a “fundamental obligation”. It requires lawyers “to act in accordance with all fiduciary duties and duties of care owed by lawyers to their clients”. Consequently all practising lawyers require a sound knowledge of fiduciary law so we can not only satisfy our own professional duties but also competently advise clients whether they are susceptible to liability for breach of a fiduciary obligation or conversely, whether they have a claim against another for fiduciary breach.

On 6 September this year the Supreme Court addressed fiduciary law for the first time in Chirnside v Fay [2006] NZSC 68. The principal points on appeal were whether parties to a joint venture owe each other fiduciary duties; what remedy is appropriate for breach of such duties; and whether, in arriving at a remedy, a fiduciary who has appropriated the joint venture for himself should be given an allowance for the effort he has made in bringing the joint venture to profit. During the course of the judgment, the bench made important general observations on fiduciary law.

The purpose of fiduciary law is to uphold the integrity of relationships where the role of one party is to serve the interests of the other. It seeks to ensure fiduciaries are motivated only by a duty of loyalty which is not compromised by the possibility of personal gain. J C Shepherd was aware of the difficulty that the social purpose of fiduciary law causes in practice when he characterised fiduciary law as “undoubtedly the most human area of law of the legal system, and as such the most undefinable”.

In a litigious society, fiduciaries are more often being called to account. Fiduciary law offers a wide and generous range of remedies against those who breach their fiduciary obligations and takes a more relaxed approach to causation than the common law. Naturally, there are limits. Tipping J in Bowkett v Action Finance Ltd [1992] 1 NZLR 449 (at 455) recognised limits:

It seems to have become fashionable in the last few years for people to allege fiduciary duties and their breach in all sorts of circumstances. There will no doubt be many cases where a plea of breach of fiduciary duty is apt. It must however by recognised that the concept is not a universal panacea.

Overuse of the fiduciary principle may be due to lack of understanding. Henry J alluded to this in Fortex Group Ltd (in rec & liq) v MacIntosh [1998] 3 NZLR 171 (CA) at 180:

The term “fiduciary duty” seems frequently to be used in litigation without any due regard to what is really meant by it in legal terms.

This seminar seeks to enhance the understanding of the difficult and often amorphous concepts at the heart of fiduciary law. In later sections, its focus is on the fiduciary obligations of practicing lawyers, those in partnerships, and those in joint ventures. We will not provide a complete history of the development of the centuries old subject, nor waste time regurgitating the full array of eloquent pronouncements that have been made. Our focus is rather on bringing out the core principles of fiduciary law and showing how these apply in practice. The focus is practical, rather than academic.

 

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Damages and Account of Profits

Publication Date: 14-Oct-2008

Author(s): Tim Mullins, Associate Professor Peter Devonshire

NZ $40.00
incl GST

Multiple Registration
 
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