Excellence in Equity:
New developments in conflict of
interest
Diana Ayling
Patricia Finlayson
Unitec Business School
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What is a fiduciary?
• A fiduciary is a person who
undertakes to act in the
interest of another person.
• Examples:
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Trustee – beneficiary
Solicitor – client
Employee – employer
Director – company
Partners
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What are the obligations of a fiduciary?
• Duty to avoid conflicts of
interest.
• Duty to act in good faith in the
interests of the other party.
• Duty to use powers for a
proper purpose.
• Duty to act with reasonable
care, diligence and skill.
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Who are the new fiduciaries?
• Government departments and
employees
– S. v Attorney General, 2003
• Directors – shadow, de facto
and promoters
– Thexton v Thexton, 2001
• Trustees – discretionary
beneficiaries (mere power)
– Kingston v Foreman, 2004
• Trustees – newly vested
beneficiaries
– Johns v Johns, 2004
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Limits to fiduciaries responsibilities
• Mediators are not fiduciaries
– Haines v Carter & Anor,
(2006)
• Trustees of iwi trusts
– Fenwick v The Trustees of
Nga Kaihautu O Te Arawa
Executive Council and Others,
(2006)
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Criminal Liability of Trustees
• S 229 Crimes Act 1961
– R v Simcock, (2004)
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New developments in conflict of interest
• Two common situations
– Failure to recognise
– Wilful ignorance
• Bristol and West Building
Society v Mothew, (1996)
• Maguire v Makaronis, (1997)
• Pilmer v Duke Group Ltd (in
liq), (2001)
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Remedies
• Damages
• Account for profits
• Rescission
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Implications for law teachers
• Full coverage of fiduciaries
obligations
for:
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Company directors
Government officers
Financial intermediaries
trustees
• Curriculum review
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Conclusion
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