Equity Revision
Seminar
Breach of Confidence
 Information must be specific
 The information must be able to be defined with sufficient
precision (O’Brien)
 Rationale:
 Injunctions must be certain in scope (O’Brien)
 D’s must know case against him (Ocular)
 Cannot use BOC as means of oppression (O’Brien)
Breach of Confidence
 Necessary Quality of Confidence
 Form: the information may take any form
 Type: must be commerically or personally valuable
 Look to cases for examples: Franklin, Talbot, Douglas,
Saltman, Foster, Giller, Campbell
 The information must be secret
 Information that is public cannot be protected (Saltman)
 Otherwise public knowledge may be secret by way of its
organisation (eg. customer list)
 Limited dissemination may not equate to PN (Foster)
 Rumours lack authenticity and will not amount to PN (AFL v
The Age)
Breach of Confidence
 The information must be imparted in circumstances
that impose an obligation of confidence
 Reasonable person would have known was
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confidential/restrictions on use (Coco)
Imparted in context of confidential relationship (Giller;
Spycatcher)
Improperly or surreptitiously obtained (Franklin)
Obtained by another an passed on to a third party
(Douglas)
Accidentally obtained (Lord Goff in Spycatcher)
Breach of Confidence
 Unauthorized Use
 Can be threatened
 Where some limtiations on use, alternative uses may be
ok (Smith Kline)
 Detriment
 No Requirement of detriment in Vic (Giller)
Breach of Confidence
 Defences
 Public Interest
 Iniquity (as a subset of PI – Kumar)
 Likelihood of a crime or civil misdeed
 Of public significance
 Being communicated to someone who has a real and direct
interest in redressing the matter (AFL v The Age)
 Distinction between public interest and what the public
are interested in
Breach of Fiduciary Duty
 Are the parties in a Fiduciary Relationship
 Accepted categories
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Trustee/Beneficiary (Keech)
Agent/Principal (McKenzie)
Employee/Employer (AG v Reid)
Company director/Company (Regal Hastings)
Solicitor/Client (Farrington)
Partner/Partner (Chan)
Breach of Fiduciary Duty
 Are the parties in a fiduciary relationship?
 Proven in Fact
 Court will consider the fiduciary indicators put forward by
Mason J in Hospital Products:
 Relationship of trust and confidence
 An undertaking
 Power to affect the principal’s interest
 Vulnerability
 Property holding
 Reliance
 Unlikely to be found in commercial relationships conducted at
arms length (CBA v Smith; Kelly)
 No one factor is decisive
Breach of Fiduciary Duty
 Does the conduct fall within the scope of the
fiduciary duty?
 Content of contractual agreements between the parties
(USSC)
 Character of relationship (Birtchnell)
 Course of dealings actually pursued (Birtchnell)
 DEFINE the scope! Is your conduct within it?
Breach of Fiduciary Duty
 Breach of the Profits or Conflicts Rule
 Profits Rule:
 Fiduciary cannot make an illicit or unauthorized profit from the
fiduciary position
 Can extend past money/assets to oppurtunities
 Conflicts Rule:
 “A fiduciary cannot enter into a transaction where a conflict or a
serious possibility (i.e not hypothetical: Lord Upjohn in
Boardman) of conflict exists” (per Deane J in Chan).
 Duty v Interest
 Duty v Duty
Breach of Fiduciary Duty
 Breach
 Conflicts Rule:
 Duty v Duty:
 Concurrent duties – cannot serve two masters at once
 Successive duties:
 KPMG (re lawyers) and Pilmer (re accountants) suggest that
fiduciary obligations do not survive the termination of a
retainer
 Rationale – afforded sufficient protection through BOC
 BUT in Spincode single judge suggested that they may still be
owed. But did not say clearly to what extent.
 Defences
 Full disclosure and consent (Hudson Mines)
Third Party Liability
 Rule in Barnes v Addy
 Knowing Receipt
 Receipt of property
 Must receive for own purpose – not mere handling
 Trust property clear
 May extend to fiduciary property (Farah – in dicta)
 Trade secretes may form fiduciary property
 Can only be obtained in fiduciary capacity
 Knowledge that the property was trust/fiduciary property
 Knowledge of the circumstances indicating fiduciary’s
breach involved a misapplication of trust/fiduciary
property
Third Party Liability
 Knowing Receipt
 Receipt of property
 Knowledge that the property was trust/fiduciary property
 Use the Baden Scale from Consul (per Farah in obiter)
 Actual knowledge
 Willfully shutting eyes to the obvious
 Willfully/recklessly failing to make enquiries an honest/reasonable person
would make
 Knowledge of circumstances that would indicate facts to an
honest/reasonable person
 Knowledge of circumstances that would put an honest/reasonable person on
enquiry (this is will not constitute knowing receipt).
 Knowledge of the circumstances indicating fiduciary’s breach
involved a misapplication of trust/fiduciary property
 Use the Baden Scale from Consul (per Farah in obter) – as above
 NB: UK Position
Third Party Liability
 Knowing Assistance
 Breach of Fiduciary Duty
 Assistance in breach
 Knowledge that the conduct involved a breach of fiduciary duty
 Use the Baden Scale from Consul (per Farah)
 Actual knowledge
 Willfully shutting eyes to the obvious
 Willfully/recklessly failing to make enquiries an honest/reasonable
person would make
 Knowledge of circumstances that would indicate facts to an
honest/reasonable person
 Knowledge of circumstances that would put an honest/reasonable
person on enquiry (this is will not constitute knowing receipt).
 Fiduciary must have had a ‘dishonest and fraudulent design’
 NB: UK Position
Assignments – Legal Property
Assignments
 Assignments of legal property
 Where the legal transfer rules have not been complied with:
 Where consideration – will be effective in equity
 Where gift – must ask “Has the donor done all they alone can
do (Milroy; Corin), and put it beyond their recall (per Deane J
Corin)?
 Assignments of property only recognised in equity
 Donor must manifest an intention to immediately assign
 Windeyer J in Norman says through deed or other writing
 In Everett HCA suggested s 134 PLA does not need to be
complied with, but will be helpful where complied with
Assignments
 Assignments of future property
 Cannot transfer at common law
 At equity, where consideration paid:
 May be able to transfer where the property can be properly
ascertained/identified (Talbot; Hewitt)
 At equity, who no consideration – cannot transfer
 Future Interest?
 If pre-existing right of entitlement that will vest in future may
be capable of assignment (Shepherd)
 Must still then discuss whether transferred
Property Rights and
Remedies
 Constructive Trust
 Equitable Lien
 Property rights:
 Existing property right (eg. B under a trust)
 Misappropriation of opportunity by a fiduciary (Boardman;
VUT)
 Bribes and secret commissions (Reid)
 NB: Lister v Stubbs
Tracing
 Cannot have been dissipated on in the hands of a
BFPFVWN
 Where T took trust property and used it (w/o
mixing)
 If still holding – trace into object
 If used to purchase new asset – trace into new asset
 Where T mixes trust property with their own
property
 If paid into a bank account, assume T withdraws their
own money first (Re Hallet)
 Where used to buy an asset – CT or Lien (Foskett; Scott)
Tracing
 Where T passes trust property to a third party with
notice or a volunteer
 Can trace property into hands of third party
 Where T has passed property to an innocent third
party, who has mixed with property with their own
 If mixed to purchase a new asset, can trace into the new
asset – will receive a lien (Re Diplock)
 If an existing asset has been improved, the right to trace
is lost (Re Diplock)
Personal Remedies in Equity
 Always discretionary – factors to consider:
 Laches/Delay
 Hardship
 Unclean hands
 Interest of third parties
 Impossibility/futility
 Court supervision
 Availability of adequate common law remedy
 Specific Performance
 Injunction
 Need a recognised cause of action (Lenah)
 Interlocutory injunction where (i) serious question to be tried; or (ii)
prima facie entitlement to final relief at trial
 Balance of convenience must favour granting (Atkins)
 Damage would be suffered if not granted
Personal Remedies
 Account of Profits
 Where breach resulted in capital gain – strip profits
 Where profit stream is ongoing, can give AoP for the ‘head start’
period (Warman)
 Where there has been a contribution of time, skill or money an
allowance may be made (VUT; Warman)
 Equitable Compensation
 Breach must have caused the loss (Mantonella)
 Re Dawson applied ‘but for’ test.
 Maguire said ‘but for’ can be applied, but would also need to apply
‘common sense’ approach
 Where profit and loss, can choose which remedy to seek (cannot
have double recovery) Tang Man Sit
Personal Remedies
 Equitable Rescission
 Where a contract is affected by a vitiating factor (ie entered into
in BOFD) court can order equitable rescission.
 This has the effect that any property conveyed under the
contract is held on the trust for P
 Equity does not need complete rescission where practical
justice can be achieved (Maguire)
 Can order ‘pecuniary rescission’ (McKenzie)
 Lord Cairns’ Act Damages
 Court can awards damages in lieu of or in addition to SP or an
injunction
 Therefore, must show SP or Injunction available (Mills)
Exam
 Start memorizing the subject!
 Do practice exams
 Plan your question during reading time
 Use ‘BOFD’ and ‘As above’ to save time
 Always introduce and conclude your questions
 Split up each person/act/cause of action
 Use headings
 Always state the law
 Use cases/judges where possible
 Include policy points where relevant