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Week 5 – Lecture 9– Equity and Trusts– Joshua Abulafia –11712561Fiduciary ObligationsThis lecture will discuss the relationship between the fiduciary and the principals. The principal is the person to whom the fiduciary owes a duty. In Australia there are two fiduciary duties. They are you do not enter into any arrangement which isin conflict with your duties to your principle and you do not profit as the position as the fiduciary from your principle. These are proscriptive because they proscribe behavior. They say you must not do certain things. Something that is prescriptive is something that prescribes certain behavior.A good example of this is under the corporation’s act where a director owes certain duties which could be inclusive of something like the duty of good faith. This is a prescriptive duty to do something duty. This is not a fiduciary obligation this is a statutory obligation. Some people may argue that it is fiduciary but that is not the way we apply the law. In Australia there are only two fiduciary duties which falls within the no conflict and no profit rule. We have not extended it any further than that. That is not to say pursuant to statute or due to a contract that you have entered into with your principle that you might not owe certain other positive duties.For example the duty to keep information confidential; this is a common contractual undertaking in employment relationships. Note although you may owe them a fiduciary duty this is not a fiduciary obligations it is a contractual obligation. There are only two fiduciary duties the no conflict and no profit rule. In our society and not in just commercial relationships but trust relationships as well as commercialrelationships, few personal relationships we often categorize one as the others fiduciary. Certain relationships are presumed to be fiduciary which shifts the onus to the person who is accused of breaching their duties to negate the assertion that they are not a fiduciary. If you are in a solicitor client relationship you re assumed by statute to have a fiduciary relationship. You will be unable to deny this in court. However what becomes interesting is when you attempt to define the scope of that relationship. Lets contemplate the example of a solicitor who represents a car dealer, do you owe a duty to tell your client you are purchasing a car on the weekend. Is this within the scope of the duty? Most likely not, but consider if you are advising them to invest in your car manufacturing plant which you are the director of? You mist likely should as this places you back in the no conflictno profit world of thinking. 1
Corporations Law PodcastJoshua AbulafiaSO the important take away is that their exists a certain recognized category of fiduciary relationships. Within this we understand that certain duties are owed which fall within the category of no profit no conflict. However this can become blurred the more circumstances you include.