PC (New Zealand) Land was offered for sale. A potential buyer, the appellant was approached by a merchant bank with a proposal for finance. When he sought finance elsewhere, a company associated with the bank bought the land instead. The appellant complained that the information acquired by the bank on his behalf was confidential to him, and that the bank had acted in breach of its duty of confidence to him. He also claimed a breach of a duty of loyalty.
Held: A duty of loyalty arises when a relationship gives rise to a legitimate expectation, which equity will recognise, that the fiduciary will not utilise his or her position in a way which is adverse to the interests of the principal. The court was unable to see an evidential basis for finding that a relationship of trust and confidence, in this sense of undertaking an obligation of loyalty, arose in this case. The claimant did not accept the proposal, and so no relationship arose. Characterising the duty to respect confidential information as fiduciary does not create particular duties of loyalty which are imposed as a result of the nature of the particular relationship and the circumstances giving rise to it. It is not the label which defines the duty. Though the defendant had acquired confidential information there was insufficient evidence that that information had been misused, or that the claimant had suffered any loss as a result directly of such use. Some of the information for which confidence was claimed was not capable of being confidential.
Lord Steyn, Lord Lloyd of Berwick, Lord Hobhouse of Woodborough, Sir Andrew Leggatt, Mr. Justice Henry
(Appeal No 17 of 1999),  UKPC 51,  1 WLR 594
Bailii, PC, PC
England and Wales
Cited – Mothew (T/a Stapley and Co) v Bristol and West Building Society CA 24-Jul-1996
The solicitor, acting in a land purchase transaction for his lay client and the plaintiff, had unwittingly misled the claimant by telling the claimant that the purchasers were providing the balance of the purchase price themselves without recourse . .
Cited – Attorney-General v Blake CA 16-Dec-1997
A former member of the security services, convicted for spying, had written a book. The AG appealed a refusal to prevent publication. The court upheld denied the appeal on the breach of fiduciary claim. The Attorney General amended his statement of . .
Cited – Saltman Engineering Co v Campbell Engineering Co Ltd CA 1948
The plaintiffs instructed the defendant to make tools for the manufacture of leather punches in accordance with drawings which the plaintiffs provided to the defendant for this purpose. The defendant used the drawings to make tools, and the tools to . .
Cited – Coco v A N Clark (Engineers) Ltd ChD 1968
Requirememts to prove breach of confidence
A claim was made for breach of confidence in respect of technical information whose value was commercial.
Held: Megarry J set out three elements which will normally be required if, apart from contract, a case of breach of confidence is to . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
See Also – Arklow Investments Ltd v Maclean 19-May-2000
(High Court of New Zealand) The court considered the potential personal responsibility of a directors for costs incurred by the company in litigation: ‘Where a person is a major shareholder and dominant director in a company which brings . .
Cited – Lehtimaki and Others v Cooper SC 29-Jul-2020
Charitable Company- Directors’ Status and Duties
A married couple set up a charitable foundation to assist children in developing countries. When the marriage failed an attempt was made to establish a second foundation with funds from the first, as part of W leaving the Trust. Court approval was . .
Lists of cited by and citing cases may be incomplete.
Updated: 27 September 2021; Ref: scu.174631