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CHAPTER 5
FIDUCIARY OBLIGATIONS AND

CONFIDENTIAL INFORMATION
COVERED IN THIS CHAPTER

After successfully completing this chapter, you will be able to:
• distinguish fiduciary obligations and confidential information
• understand established and emerging categories of fiduciary obligations
• explain the scope of confidential information
• appreciate appropriate remedies.
CASES TO REMEMBER
Fiduciary obligations
Keech v Sandford (1726) Sel Cas T King 61; 25 ER 223
Chan v Zacharia (1984) 154 CLR 178
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134
United Dominion Corporation v Brian Ltd (1985) 157 CLR 1
LAC Minerals v International Corona Resources Ltd (1969) 61 DLR (4th) 14
Breen v Williams (1996) 138 ALR 259
Pilmer v Duke Group Ltd (in liq.) (2001) 207 CLR 165
Copyright © 2015. Oxford University Press. All rights reserved.
Boardman v Phipps [1967] 2 AC 46

Confidential information
Attorney General (UK) v Heinemann Publishers Australia Pty Ltd (1988) 165 CLR 30
Coco v AN Clark (Engineers) [1969] RPC 41
Smith Kline and French Laboratories (Australia) Ltd v Secretary Dept. of Community
Services and Health (1991) 99 ALR 679
Duchess of Argyll v Duke of Argyll [1967] 1 Ch 302
Victoria Park Racing and Recreation Grounds Co. Ltd v Taylor (1937) 58 CLR 479
STATUTES TO REMEMBER
Fiduciary Obligations
Corporations Act 2001 (Cth) ss 180–4
Partnership Act 1963 (ACT)
Partnership Act 1892 (NSW)
Partnership Act 2007 (NT)
Brien, Christopher. Equity and Trusts Guidebook, Oxford University Press, 2015. ProQuest Ebook Central,
http://ebookcentral.proquest.com/lib/newcastle/detail.action?docID=4389157.
Created from newcastle on 2024-06-12 12:58:31.
CHAPTER 5: FIDUCIARY OBLIGATIONS AND CONFIDENTIAL INFORMATION 63
Partnership Act 1891 (Qld)

Partnership Act 1891 (SA)
Partnership Act 1891 (Tas)
Partnership Act 1958 (Vic)
Partnership Act 1895 (WA)
Privacy
Privacy Act 1988 (Cth)
Information Privacy Act 2014 (ACT)
Privacy and Personal Information Protection Act 1998 (NSW)
Health Records and Information Act 2002 (NSW)
Information Act 2009 (Qld)
Information and Protection Act 2004 (Tas)
Privacy and Data Protection Act 2014 (Vic)
Health Records Act 2001 (Vic)
Human Rights Act 2004 (ACT)
Charter of Human Rights and Responsibilities Act 2006 (Vic)
OVERVIEW
Fiduciary obligations and confidential information are special relationships. They are
separate and discrete doctrines. Figure 5.1 provides an overview. The material in this
chapter has been organised on this basis.
FIDUCIARY OBLIGATIONS
The term ‘fiduciary’ is derived from the Latin word fiducia, meaning ‘confidence’.
If you are found to be in breach of your fiduciary obligations, it is a very serious
matter. It means that you cannot be trusted.
The general principles of unconscionable conduct encompass circumstances
where fiduciary obligations do not exist. See Chapter 4: Undue Influence,
Unconscionable Conduct and Estoppel for further information.
NATURE AND PURPOSE

Fiduciary obligations arise from the ‘position of the parties’.
64 EQUITY AND TRUSTS GUIDEBOOK
FIGURE 5.1 Fiduciary obligations and confidential information
Fiduciary Nature and purpose

obligations Keech v Sandford (1726) Chancery Division
Established categories
– Trustees Breach of duty
(See Chapter 10: Trustees and Beneficiaries) Boardman v Phipps (1967)
– Legal Practitioners House of Lords
Boardman v Phipps (1967) House of Lords
– Partners in a partnership
Chan v Zacharia (1984) High Court of Australia
– Agent and principals Defences Remedies
Hospital Products Ltd v United States Surgical Disclosure (See Chapter 12:
Corporations (1984) High Court of Australia Equitable
– Company directors Remedies)
Regal (Hastings) Ltd v Gulliver (1967)
House of Lords
Emerging categories
– Joint venturers
United Dominion Corporation v Brian Ltd (1985) High Court of Australia
LAC Minerals v International Corona Resources Ltd (1969) Supreme
Court of Canada
– Medical practitioners and patients
Breen v Williams (1996) High Court of Australia
– Professional advisors
Pilmer v Duke Group Ltd (in liq.) (2001) High Court of Australia
– Indigenous Australians and government
Third parties: Barnes v Addy (1874) LR House of Lords
(See Chapter 9: Constructive Trusts)
Unconscionable conduct
(See Chapter 4: Undue Influence, Unconscionable Conduct and Estoppel)
Confidential
Nature and purpose

information
Breach of confidence
i Information with a ‘quality of confidence’
Attorney General (UK) v Heinemann Publishers Australia Pty Ltd (1988)
High Court of Australia
ii The reasonable man standing in the shoes of the recipient of the information
Coco v AN Clark (Engineers) (1969) Chancery Division
iii Unauthorised use causing loss or harm
Smith Kline and French Laboratories (Australia) Ltd v Secretary Dept of
Community Services and Health (1991) Federal Court of Australia
Privacy
Defences Remedies Information Privacy Act 2014 (ACT)
(See Chapter 12: Privacy and Personal Information Protection Act 1998 (NSW)
Public interest Health Records and Information Act 2002 (NSW)
Equitable Remedies)
Unconscionable conduct Privacy and Data Protection Act 2014 (Vic)
(See Chapter 4: Undue Influence, Health Records Act 2001 (Vic)
Unconscionable Conduct and Estoppel)
Charter of Human Rights and Responsiblities Act 2006 (Vic)
A CASE TO REMEMBER
Keech v Sandford (1726) Sel Cas T King 61; 25 ER 223
Facts: A leasehold interest was held under a trust. The leasor refused to renew the lease
on behalf of the trust.
Issue: The trustee sought to renew a lease in their personal capacity and not in favour of
the tenant/beneficiary.
Decision: Lord King LC held that the trustee holds the renewed lease under a constructive
trust in favour of the beneficiary.
All trustees are fiduciaries. Fiduciary obligations involve two principles:
• The fiduciary must avoid any conflict of interest.
• Any property that is acquired by the fiduciary from that position is held under a
constructive trust, in favour of the party to whom fiduciary obligations are owed.
There are three general points to note with respect to all of the cases:
• The law of fiduciaries often has to fit within a particular context; for example, a particular
contract of employment. See Harris v Digital Pulse Pty Ltd [2003] 56 NSWLR 298,
discussed in Chapter 1: The Nature and History of Equity. See also Consul Development
Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373, which is examined in Chapter 9:
Constructive Trusts.
• The concept of fiduciary obligation may involve dishonesty or bad faith, but it is
independent of the fiduciary’s liability. See Boardman v Phipps [1967] 2 AC 46, discussed
below.
• The scope of fiduciary obligations will vary depending on the circumstances. It may be
that what has occurred does not breach fiduciary obligations.
Note: There is no scientific test that can be used to identify when fiduciary obligations
arise. It is a matter of looking at the circumstances and the position of the parties. The
courts have identified established categories. There are also emerging categories.
ESTABLISHED CATEGORIES
There are several established categories of fiduciary relationships. They include
trustees, partners in a partnership, agents and sole distributors, and company
directors.
Trustees
All trustees are fiduciaries.
See Keech v Sandford (1726) Sel Cas T King 61, discussed above. See also
Chapter 10: Trustees and Beneficiaries for more information.
Legal practitioners
A legal practitioner is a fiduciary for their client.
The High Court of Australia in Maguire v Markaronis (1997) 188 CLR 149 held that
a legal firm who had lent money to a client to enable the purchase of a property had
breached their fiduciary obligations. There was a conflict of interest between the firm’s
financial position and the needs of their client. They were also in a position to benefit
from their client in the circumstances. See also Boardman v Phipps [1967] 2 AC 46,
discussed below. The decision is also examined in Chapter 9: Constructive Trusts.
Partners in a partnership
All partners in a partnership are by definition jointly and severally liable for the
business. Each partner is a fiduciary for the other partners.
A CASE TO REMEMBER
Chan v Zacharia (1984) 154 CLR 178
Facts: Dr Chan and Dr Zacharia entered into a partnership agreement to operate a
medical practice. They entered into a three-year lease with an option for renewal of a
further two years. Prior to the conclusion of the first term, the partnership was dissolved.
One of the parties then renewed the lease in their own name.
Issue: The nature of fiduciary obligations in a partnership agreement.
Decision: The High Court of Australia held that fiduciary obligations exist between partners
in a partnership agreement. Given that the lease was originally an asset of the partnership;
the new lease should be held under a constructive trust in favour of all former partners.
State and territory legislation governing partnerships embodies these principles.
Partnership Act 1963 (ACT)
Partnership Act 1892 (NSW)
Partnership Act 2007 (NT)
Partnership Act 1891 (Qld)
Partnership Act 1891 (SA)
Partnership Act 1891 (Tas)
Partnership Act 1958 (Vic)
Partnership Act 1895 (WA)
Partners in a partnership agreement might be deemed to be the equivalent of parties

to a joint venture. See LAC Minerals v International Corona Resources Ltd (1969)
61 DLR (4th) 14 and United Dominion Corporation v Brian Ltd (1985) 157 CLR 1,
discussed below.
Agents and principals

Not all agents are fiduciaries. Depending on the nature of the agency agreement,
fiduciary obligations may arise. A critical feature is whether the agent is to put the
interests of their principal ahead of their own. The same approach applies to the
position of sole distributors.
A CASE TO REMEMBER
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
Facts: The United States Surgical Corporation manufactured surgical staples. The
company entered into an agreement with Blackman, who was to become the exclusive
Australian distributor for their products. While in that capacity, Blackman engineered his
own surgical staples and presented them to the marketplace as being superior to those of
the United States Surgical Corporation.
Issue: Fiduciary obligations between agent and principal.
Decision: The trial judge considered that fiduciary obligations arose in the particular
circumstances and awarded an account of profits. The New South Wales Court of Appeal
arrived at the same conclusion. The court emphasised that there was an implied term in
the agreement between Blackman and the US Surgical Corporation in which Blackman
would only act in the best interests of the corporation. In a subsequent appeal to the
High Court, this approach was overturned. Gibbs CJ, with whom Wilson and Dawson JJ
agreed, did not consider that the implied term amounted to imposing a fiduciary
relationship because it was a commercial agreement with the intent that both parties
would financially benefit. On this basis damages were available for breach of contract.
Mason Jagreed with the majority but also considered that limited fiduciary obligations
existed between the parties on the basis of exclusive marketing arrangements in Australia.
The aspect of a commercial relationship is further considered in the context of joint

venture agreements. See United Dominion Corporation v Brian Ltd (1985) 157
CLR 1, discussed below.
Company directors
The following decision is frequently regarded as being a narrow interpretation
concerning fiduciary obligations and company directors, but it is still good law.
A CASE TO REMEMBER
Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134
Facts: The directors of Regal Hastings Ltd formed a subsidiary called Hastings
Amalgamated Cinemas Ltd. Their intention was for the subsidiary to acquire the lease of
two cinemas. The prospective landlord refused to grant the lease unless the company
had a paid-up capital of £5000. Regal Hastings Ltd contributed part of the funds and
the directors contributed the balance. Two weeks after the lease had been obtained,
both companies were sold and the directors made a profit on the shares that had been
issued to them in the subsidiary. The new management of Regal Hastings Ltd brought
proceedings against the former company directors.
Issue: The existence of fiduciary obligations for company directors.
Decision: The House of Lords were unanimous in holding that the former directors were
liable to Regal Hastings Ltd to account for the profit they made in the subsidiary. Lord
Russell at 144 noted that the directors were fiduciaries and they had breached their
obligations in the absence of fraud because they had acquired a profit from their position.
Lord Macmillan at 153 also noted that they had made a profit because they had ‘utilised
the position and knowledge … in virtue of their office as directors’. The House of Lords
ordered an account of profits.
A company director has fiduciary obligations imposed by statute. Sections 180–4 of

the Corporations Act 2001 (Cth) are relevant.
EMERGING CATEGORIES
New emerging categories of fiduciary obligations are constantly being identified. The
following matters largely focus on financial or business concerns, but it is important
to remember it is ‘the position of the parties’ which is critical. Emerging categories of
relationships include partners to a joint venture (even if no final agreement is formed),
medical practitioners and their patients, professional advisors and their clients, and
Indigenous Australians and the Australian Government.
Joint venturers
A CASE TO REMEMBER
United Dominion Corporation v Brian Ltd (1985) 157 CLR 1
Facts: United Dominion Corporation Ltd, Security Projects Ltd and Brian Ltd entered into
a joint venture agreement to develop a block of land. A substantial profit was made but
United Dominion Corporation Ltd refused to distribute the proceeds to Brian Ltd because
of a ‘collaterisation clause’. The collaterisation clause had been entered into between
United Dominion Ltd and Security Projects Ltd prior to the joint venture agreement
including Brian Ltd being concluded, the consequence being that the land had been
security for all debts owed to Security Projects Ltd by United Dominion Ltd.
Issue: The existence of fiduciary obligations between joint venturers.
Decision: The High Court held that fiduciary obligations existed between the parties.
United Dominion Corporation Ltd should have disclosed to Brian Ltd the nature of the
collaterisation clause. Dawson J at 16 noted that a fiduciary relationship ‘may arise

from circumstances leading to the final agreement as much as from the fact of the
final agreement itself’. In the circumstances the joint venturers had gone beyond early
negotiations and fiduciary obligations arose with respect to knowledge of the project.
United Dominion Corporation Ltd and Security Projects Ltd had information which should
have been disclosed to Brian Ltd.
In Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41,
discussed above, the majority of the High Court focused on the nature of a
commercial relationship as being a basis upon which to indicate fiduciary obligations
did not arise. In United Dominion Corporation v Brian Ltd (1985) 157 CLR 1 the
High Court was more prepared to accept fiduciary obligations arising in such
circumstances.
A CASE TO REMEMBER
LAC Minerals v International Corona Resources Ltd (1969) 61 DLR (4th) 14
Facts: International Corona Resources Ltd owned a block of land. In the course of
negotiations with LAC Minerals about forming a joint venture, the mineral value of the
particular land was disclosed. Later LAC Minerals acquired mining rights to the land.
Issue: Fiduciary obligations existing between joint venturers.
Decision: The majority of the Supreme Court of Canada, comprising Sopinka, Lamer
and McIntyre JJ, held that no fiduciary obligations arose in the circumstances. They
found that the information was bound by an obligation of conscience; in other words,
confidential information had been breached. La Forest J in dissent held that because of
the position of the parties, fiduciary obligations were involved. His Honour also emphasised
vulnerability as being a critical component and that the parties were under an obligation to
act honestly.
This decision by the Supreme Court of Canada is another matter involving joint
venture agreements. Here the court held that the provision of information was only
done so as to assess the prospect of entering into the joint venture agreement.
It is useful to contrast this decision with that of the Australian High Court in United
Dominion Corporation v Brian Ltd (1985) 157 CLR 1, which is discussed above.
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 (24 May 2007)
is another matter involving commercial interests and the existence of fiduciary
obligations. It is discussed in Chapter 9: Constructive Trusts.
Medical practitioners and patients

The relationship between medical practitioner and patient is very close.
A CASE TO REMEMBER
Breen v Williams (1996) 138 ALR 259
Facts: A number of patients were seeking access to their medical records for use in
proceedings being instituted in the United States concerning the manufacturer of silicone
breast implants.
Issue: The doctor–patient relationship.
Decision: The majority of the High Court of Australia, consisting of Brennan CJ, McHugh,
Dawson, Toohey and Gummow JJ, rejected the idea that a doctor owes a fiduciary duty
to give a patient access to their medical records. Brennan CJ considered that fiduciary
obligations are based on agency or a relationship of trust. In the circumstances neither
was involved. Gummow J noted that the relationship between a medical practitioner and
patient is fiduciary, but there was no breach. The court distinguished fiduciary obligations
from other legal relationships, since the former is based on loyalty.
It should be noted that this decision concerned access to medical records. It did
not involve direct financial advice, profit or misconduct by the medical practitioner.
Particular legislation and ethical protocols would apply in such circumstances. These
largely occur at the state level.
Professional advisors
In a commercial context, financial advice and other information is sought and relied
on to make particular decisions. There is potential for such a relationship to embody
fiduciary obligations.
A CASE TO REMEMBER
Pilmer v Duke Group Ltd (in liq.) (2001) 207 CLR 165
Facts: A financial report for use in a proposed corporate takeover was negligently
prepared.
Issue: The existence of fiduciary obligations when preparing financial reports or references.
Decision: The majority of the High Court of Australia, comprising McHugh, Gummow,
Hayne and Callinan JJ, held that no fiduciary obligations arose in the particular
circumstances. They emphasised the role of contract and torts to provide relief. The
majority also noted that the position of the parties has the potential to be fiduciary.
Financial advisors, investment brokers and superannuation consultants may be bound by
legislation in the near future.
There has been ongoing discussion for many years about the close relationship
between financial advisors and their clients/customers. Given the growth of
superannuation funds and the increasing numbers of people who are self-funded
retirees, the matter has only taken on greater significance.
Indigenous Australians and government

The Honourable Justice Toohey in Mabo v Queensland (No. 2) (1992) 175 CLR 1
noted at 199–205 the idea that the Crown has fiduciary obligations to Indigenous
Australians. In that decision Toohey J was alone in holding that such obligations
existed. He noted these obligations did not preclude the Crown from legislating
to extinguish native title rights. The idea of fiduciary obligations existing between
Indigenous Australians and the Crown has received very little judicial attention.
Brennan CJ in Wik Peoples v Queensland (1996) 187 CLR 1 (at 83–4) commented
that the Crown’s power to legislate with respect to Indigenous people does not of
itself give rise to fiduciary obligations. Where such a power exists, it must only be
used for their benefit. Dawson J and McHugh J agreed.
BREACH OF DUTY
Note: In answering questions involving fiduciary obligations there are three essential
parts.
• First, establish that fiduciary obligations arise with respect to the ‘position of the
parties’. It is important to consider both established and emerging categories.

• Second, provide commentary as to the nature and purpose of fiduciary obligations.
In this context the best reference is Keech v Sandford (1726) Sel Cas T King 61;
25 ER 223, which is discussed above. Attention should focus upon the need to
avoid conflicts of interest and the potential of profiting.
• Third, characterise the scope of the obligations by carefully examining the facts in
the question. It may be that what has occurred is outside the fiduciary obligations
and therefore no breach has occurred. The following decision needs to be carefully
analysed because it involves almost all aspects of fiduciaries.
A CASE TO REMEMBER
Boardman v Phipps [1967] 2 AC 46
Facts: There were three executors of CW Phipps’ estate: the testator’s widow, one of
his daughters and an accountant. His widow was elderly and lacked legal capacity due
to dementia. A substantial number of shares in a particular company formed part of the
estate. Under the terms of the will, the executors could not acquire any further shares.
The solicitor who had been appointed to assist in the administration of the estate was
Boardman. Together with another beneficiary, Tom Phipps, Boardman considered that
the particular company was undervalued so they acquired the remaining shares in their
own names. In the process of changing the management of the company, Boardman told
everyone that he was acting on behalf of the estate.
Issue: The respondent, who was one of the beneficiaries, brought the matter before the
court on the basis that Boardman and Tom Phipps through their actions were fiduciaries
and had breached their obligations.
Decision: The majority of the House of Lords, comprising Hodson, Guest and Cohen LJ,
held that both Boardman and Tom Phipps were fiduciaries. During negotiations with
the company, Boardman as solicitor had represented himself as acting on behalf of the
estate. It was in this position that he had acquired information about the true value of the
company.
Tom Phipps was a fiduciary because he had also presented himself as an agent of the trust.
Because a potential conflict of interest could arise involving their own interests and those of
the trust, breach had occurred. Although both Boardman and Tom Phipps had attempted
to disclose to the executors their actions, insufficient information had been provided. The
minority judgment consisted of Viscount Dilhorne and Lord Upjohn. Viscount Dilhorne LJ
held that fiduciary obligations arose and that information about the company was trust
property. His Honour noted that no breach had occurred because the trust could not acquire
any more shares. Lord Upjohn held that Boardman and Tom Phipps were only agents of
the trust and not fiduciaries. He noted that an exception would be if the information was
bound by an obligation of confidence—in other words, if it was confidential information. The
concept of confidential information is considered later in this chapter.
Defences
No breach has occurred if the party to whom such obligations are owed has given
consent or permission to the fiduciary. Note that complete disclosure is required. See
Boardman v Phipps [1967] 2 AC 46 above.
Remedies
The range of remedies that are available for a breach of fiduciary obligation includes:
• the imposition of a constructive trust
• an order for an account of profits
• an injunction
• an order for equitable compensation.
In determining what is appropriate, attention should be directed to the nature of

the loss or harm. Further information is provided in Chapter 12: Equitable Remedies.
THIRD PARTIES: BARNES V ADDY (1874) LR HOUSE OF LORDS

Fiduciary obligations may also extend to third parties. Under the second limb of
Barnes v Addy (1874) LR 9 Ch App 244, this can occur if third parties have
knowledge of a dishonest and fraudulent design on behalf of the fiduciary or trustee.
See Chapter 9: Constructive Trusts for a discussion of this issue. The same approach
applies to confidential information.
CONFIDENTIAL INFORMATION
Confidential information concerns material that is provided in confidence or imparted
for a restricted purpose. The information must be not commonly known, and
therefore a secret.
Information that is subject to an obligation of confidence might be thought of
as being based in contracts or property. The obligation could be expressly stated
or implied as a term in a contract. Frequently, commercially sensitive information
and intellectual property matters are governed by an obligation of confidence. On
this basis it is correct to indicate that such information is proprietary. Yet personal
relationships can also be subject to obligations of confidence and, as such,
would not be based on property issues. Equity has its own jurisdiction that is
independent of contract and property.
NATURE AND PURPOSE

Seager v Copydex (No. 1) [1967] 2 All ER 415 was discussed in Chapter 1: The
Nature and History of Equity, with respect to fusion fallacies. The decision is also
relevant for the nature and purpose of confidential information. The English Court
of Appeal, comprising Lord Denning MR, Salmon LJ and Winn LJ, held that the
obligation arose not from an express or implied term of the contract, but from the
general principles of equity.
BREACH OF CONFIDENCE
Megarry J in Coco v AN Clark (Engineers) [1969] RPC 41 at 47 identified three
elements that need to be satisfied if a breach of confidence is to be established.
First, the quality of confidence needs to be assessed. Time may have elapsed
since the obligation arose or other matters may have intervened so as to significantly
reduce its nature.
A CASE TO REMEMBER
Attorney General (UK) v Heinemann Publishers Australia Pty Ltd (1988)
165 CLR 30
Facts: The government of the United Kingdom brought proceedings in Australia to prevent
Peter Wright from publishing his memoirs. Powell J acknowledged that Peter Wright, as
a member of MI5, had received information in confidence when working as a spy for the
government. His Honour noted that since a considerable amount of time had passed
and large amounts of the information had been placed in the public domain, no action for
breach of confidence could be maintained. The matter was then referred to the New South
Wales Court of Appeal and later the High Court of Australia.
Issue: Quality of confidence.
Decision: Both the New South Wales Court of Appeal and the High Court did not deal
with the quality of confidence. This decision is significant because it emphasises the need
for an examination to be undertaken regarding the scope and purpose of the confidential
obligation. It may be that the obligation has ceased to be effective. Alternatively, the
obligation may not encompass what has occurred.
Second, an objective test must be applied. If a reasonable man ‘standing in the

shoes’ of the recipient of the information considered that an obligation of confidence
arose, the information would be confidential.
While the idea of a reasonable man or objective test in equity may seem unusual,
it has been generally accepted. It is important that all circumstances be considered.
A CASE TO REMEMBER
Coco v AN Clark (Engineers) [1969] RPC 41
Facts: Negotiations had commenced about forming a joint venture for the manufacture
of a moped. The plaintiff provided information about design. The parties did not enter into
business together. After a period of time had elapsed, the defendant adopted the plaintiff’s
design ideas. An injunction was sought.
Issue: An objective test—the reasonable person.
Decision: Megarry J held that the test to be applied whether information has been
communicated with an obligation of confidence is objective. In the circumstances an
injunction was refused.
Third, the purported unauthorised use must result in loss or harm. Unlike the
common law in torts or contract, the level of detriment that needs to be established
is low.
A CASE TO REMEMBER
Smith Kline and French Laboratories (Australia) Ltd v Secretary Dept of
Community Services and Health (1991) 99 ALR 679
Facts: The applicant had provided information to the government department regarding
the chemical applications of certain drugs that they were seeking to import. The
department sought to use that information to assess other applications from different
parties.
Issue: Unauthorised use causing loss or harm from breach of confidence.
Decision: The trial judge refused to grant an injunction. Gummow J noted that the
purpose for a breach of confidence is to vindicate potential loss. The Full Court of the
Federal Court agreed, because the applicant had not informed the respondent as to what
use could be made of the information. No harm would result in such circumstances.
Note: All three elements should be carefully considered regarding a breach of

confidence. If any are not satisfied, breach has not taken place and no remedies are
available.
Information bound by an obligation of confidence can also arise in non-
commercial activities.
A CASE TO REMEMBER
Duchess of Argyll v Duke of Argyll [1967] 1 Ch 302
Facts: During divorce proceedings both the Duke and Duchess sought to publish
disturbing accounts of each other’s personal and financial affairs.

Issue: Nature of marital relationship and an obligation of confidence.
Decision: Ungoed-Thomas J considered confidentiality as the cornerstone of a marriage
relationship. The Duchess sought and was granted an injunction against her husband. The
court held that given the nature of the relationship and the type of material her husband
threatened to release such a remedy was justified. Relief was available not simply because
they were married.
Similarly, equity will intervene when confidential information has been obtained illegally or
improperly to prevent unconscionable conduct. See Australian Broadcasting Corporation v
Lenah Game Meats Pty Ltd (2001) 208 CLR 199 per Kirby J at 271–2 per Kirby J and per
Callinan J at 316.
DEFENCES
When dealing with government information in particular, the public interest may
provide a complete defence to breach of confidence proceedings. This necessarily
involves balancing competing interests for and against disclosure.
REMEDIES
The same types of relief as those for breach of a fiduciary relationship are available for
breach of confidential information—see above and Chapter 12: Equitable Remedies.
PRIVACY
There is no clear link between confidential information and privacy. The Australian
High Court in Victoria Park Racing and Recreation Grounds Co. Ltd v Taylor (1937)
58 CLR 479 noted that there was no cause of action for breach of privacy. The
matter involved a radio station broadcasting the results of a horse race without
purchasing a ticket to enter the racetrack. Latham CJ at 496 noted that no ‘general
right of privacy exists’. Rich J (at p 504–5), who was in dissent (together with Evatt J),
considered technology might ‘force the courts to recognise that protection against
the complete exposure of the doings of the individual may be a right indispensable to
the enjoyment of life’.
In ABC v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 the High Court had
another opportunity to consider privacy. The issue before the court was whether a
media organisation, which had received certain information from another party, could
be prevented from distributing the material. The court declined to provide assistance.
Although the facts were not established, the court considered that equity might
provide assistance if the activity which had been videotaped was considered private.
The court upheld the appeal by the ABC that the matter did not involve some legal or
equitable wrong.
Specific privacy legislation has been enacted throughout most Australian
jurisdictions.
Privacy and Personal Information Protection Act 1998 (NSW)
Privacy and Data Protection Act 2014 (Vic)
There are two exceptions with respect to dedicated privacy legislation; namely,
South Australia and Western Australia.
South Australia has no legislation with respect to privacy but it does have the
Cabinet Administrative Instruction 1/89, also known as the Information Privacy
Principles (IPPs) Instruction, and Premier and Cabinet Circular 12. The Privacy
Committee of South Australia deals with compliance and disputes arising from the
privacy principles.
Western Australia also does not have specific privacy legislation, though some
matters are contained in the Freedom of Information Act 1992 (WA).
Aside from privacy legislation, the Australian Capital Territory and Victoria have
an additional source of protection through their Charter of Rights legislation. This
legislation acknowledges an individual’s right to privacy.
Charter of Human Rights and Responsibilities Act 2006 (Vic)
No other Australian jurisdictions have comparable mechanisms. Although these

schemes may be attractive they also give parliament the ability to override these
safeguards.
Further reading
Australian Law Reform Commission Serious, Invasions of Privacy in the Digital Era ALRC
Final Report 123 (June 2014).
C Brien, J Brien NetLaw, LexisNexis Butterworths, 2004.
G Dal Pont, Equity and Trusts: Commentary and Materials, Lawbook Co., 2011,
pp. 95–242.
G Dal Pont, Equity and Trusts in Australia, Lawbook Co., 2011, pp. 99–216.
M Evans, Equity and Trusts, LexisNexis Butterworths, 2012, pp. 122–212.
J Heydon, M Leeming and P Turner, Meagher, Gummow and Lehane’s Equity: Doctrines
and Remedies, 5th edn, LexisNexis Butterworths, 2015, pp. 139–224.
J Heydon and M Leeming, Equity and Trusts: Cases and Materials, LexisNexis Butterworths,
2011, pp. 267–332 and 543–74.
D Ong, Ong on Equity, Federation Press 2011, pp. 46–174.
P Radan and C Stewart, Principles of Australian Equity and Trusts: Cases and Materials,
LexisNexis Butterworths, 2013, pp. 147–260.
P Radan and C Stewart, Principles of Australian Equity and Trusts, LexisNexis Butterworths,
2013, pp. 143–221.
ASSESSMENT PREPARATION
Test your knowledge
1 Which of the following statements most accurately explains fiduciary obligations?
(a) Fiduciary obligations arise from the ‘position of the parties’.
(b) Fiduciary obligations are important in equity.
(c) Fiduciary obligations involve many complex and confusing principles.
(d) Fiduciary obligations are exaggerated.
2 Another way of explaining fiduciary obligations would be to indicate that where they
arise:
(a) the party who is a fiduciary must avoid any conflict of interest and must not profit
from that position.
(b) the party who is a fiduciary must avoid any conflict of interest and any profit
acquired is held under a constructive trust in favour of the party to whom fiduciary
obligations are owed.
(c) they should be considered a subset of confidential information.
(d) the party who is a fiduciary must not profit from that position.
3 Complete the sentence: Joint venturers are
(a) automatically presumed to have fiduciary obligations.
(b) fiduciaries when a final agreement has been concluded.
(c) fiduciaries depending on the circumstances.
(d) never fiduciaries.
4 Complete the sentence: Confidential information only occurs
(a) in a commercial context.
(b) in the context of intellectual property.
(c) when information is subject to an obligation of confidence.
(d) in limited circumstances.
5 Complete the sentence: Information subject to an obligation of confidence may be

(a) expressly stated.
(b) expressly stated or an implied term.
(c) expressly stated, an implied term or arise because equity would acknowledge that
the information has been received in confidence.
(d) part of a fiduciary relationship.
6 Which is the most accurate statement with regard to protecting privacy?
(a) Privacy legislation operates in all Australian jurisdictions.
(b) Privacy protection is piecemeal and haphazard.
(c) Specific privacy legislation has been enacted in most Australian jurisdictions.
(d) Specific privacy legislation has been enacted in most Australian jurisdictions except
South Australia and Western Australia.
7 Complete the sentence: A charter of rights and responsibilities
(a) has been enacted in all Australian jurisdictions.
(b) has been enacted in New South Wales and Victoria.
(c) has been enacted in the Australian Capital Territory.
(d) has been enacted in the Australian Capital Territory and Victoria.
8 Equity provides little protection for confidential information, unless

(a) the nature of the relationship is established and how the information is
communicated is assessed.
(b) it is encompassed in legislation.
(c) a proprietary interest is established.
(d) it is challenged in the courts.
9 Complete the phrase: ‘Circumstances of inequality do not of themselves call for the
intervention of equity. It is …
(a) only where there is a problem of morality.’
(b) the concept of unfair advantage being taken of serious inequality that is central
to the notion of unconscionable conduct. It must be established that it would
be against the conscience for a court of equity not to acknowledge what has
occurred between the parties.’
(c) the concept of unfair advantage being taken of serious inequality that is central to
the notion of unconscionable conduct.’
(d) only when the court decides to act.’
10 Equity is based on the concept of ‘unconscionability’, that is to say,
(a) the exploitation of the vulnerable and abuse of positions of confidence.
(b) abuse of positions of confidence, insisting on rights in circumstances that are
harsh, the inequitable denial of obligations and the unjust retention of property.
(c) insisting on rights in circumstances that are harsh, the exploitation of the
vulnerable and abuse of positions of confidence.
(d) the inequitable denial of obligations, the exploitation of the vulnerable and abuse
of positions of confidence.
ESSAY/DISCUSSION QUESTIONS
1 ‘Information is property.’
Is this an accurate statement regarding fiduciary obligations and confidential
information? Comment on the extent to which equity will provide assistance when
information has been mishandled.
2 In Roads and Traffic Authority of New South Wales v Dederer (2007) 324 CLR 330 at
[57] Gummow J noted:
The common law technique … looks to precedent and operates analogically

as a means of accommodating certainty and flexibility in the law. Equity,
by contrast, involves the application of doctrines themselves sufficiently
comprehensive to meet novel cases. The question of a plaintiff ‘what is your
equity?’[as posed by Gleeson CJ in ABC v Lenah Game Meats Pty Ltd] thus
has no common law counterpart.
Do you agree? In what circumstances will equity intervene to provide assistance?
PROBLEM QUESTION
Bill is a director of ABC Ltd. The company is involved in the exploration for and
processing of precious metals. It is currently undertaking exploratory drilling at a
particular location.
Ben is a close friend of Bill. Over lunch, Ben indicates that his own company, XYZ Ltd,
has undertaken exploratory drilling in an adjacent block of land in the same area. In the
course of discussion, Ben expresses great excitement at the prospect of them joining
forces to exploit the resources of this parcel of land. Ben indicates that he will provide
the data that his company has collated so that Bill will be in a position to consider
entering the joint project. The next day the information is sent to Bill.
Several months pass and Bill refuses to talk with Ben. Later, Ben discovers that ABC
Ltd has acquired the mining rights to the land and that work has started on the site.
Ben is furious. He has always thought Bill was a loyal friend. His own company is now
on the brink of collapse. Ben regarded information as valuable property. ABC Ltd had
spent considerable money and time in producing the document. Ben now regrets
providing the information to Bill. Ben is adamant that over lunch he clearly indicated
that the information was being provided so that Bill could assess the potential in
contributing to the joint project.
Ben seeks your advice.
For answers to these questions, please refer to: <www.oup.com.au/brien2e>.


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62

FIDUCIARY OBLIGATIONS AND

COVERED IN THIS CHAPTER

Boardman v Phipps [1967] 2 AC 46

Partnership Act 1891 (Qld)

chapter has been organised on this basis.

NATURE AND PURPOSE

FIGURE 5.1 Fiduciary obligations and confidential information

Fiduciary Nature and purpose

Nature and purpose

State and territory legislation governing partnerships embodies these principles.

Partners in a partnership agreement might be deemed to be the equivalent of parties

Agents and principals

The aspect of a commercial relationship is further considered in the context of joint

A company director has fiduciary obligations imposed by statute. Sections 180–4 of

collaterisation clause. Dawson J at 16 noted that a fiduciary relationship ‘may arise

Medical practitioners and patients

Indigenous Australians and government

parties’. It is important to consider both established and emerging categories.

• an order for an account of profits

• an order for equitable compensation.

In determining what is appropriate, attention should be directed to the nature of

THIRD PARTIES: BARNES V ADDY (1874) LR HOUSE OF LORDS

NATURE AND PURPOSE

Second, an objective test must be applied. If a reasonable man ‘standing in the

Note: All three elements should be carefully considered regarding a breach of

disturbing accounts of each other’s personal and financial affairs.

No other Australian jurisdictions have comparable mechanisms. Although these

5 Complete the sentence: Information subject to an obligation of confidence may be

8 Equity provides little protection for confidential information, unless

The common law technique … looks to precedent and operates analogically

Do you agree? In what circumstances will equity intervene to provide assistance?

For answers to these questions, please refer to: <www.oup.com.au/brien2e>.

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