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Monash Law Students’ Society
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STUDENT TUTORIAL
PROGRAM 2015
Equity
SKETCH NOTES
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Breach of Confidence
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!The four elements are derived from Megarry’s statement in Coco v AN Clark.
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1. The information must be sufficiently specific
- Not extremely wide (Ocular Sciences)
- Must be able to be specifically identified (O’Brien v Komesaroff)
- Can be non-commercial info, eg
- Genetic structure in wood (Franklin v Giddins)
- Info concerning the personal affairs and private life (Giller VSC decision per Gillard)
- Religious or social info (Foster & Ors v Mountford)
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2. Information must be necessary quality of confidence
2a. Information must be sufficiently secret
- Not sufficiently secret if public knowledge or common knowledge (AFL v The Age)
- Generally, publishing something in widely circulated print media = public knowledge
(AFL)
- Info of a public profession is public (O’Brien)
- Religion by initiation meant info about the religion is secret (Foster v Mountford)
- Info generated on private property is not necessarily private/secret (ABC v Lenah)
- Merely expanding the circle of secrecy does not break the secret (AFL, Jane Doe)
2b. Secrecy of the info must be sufficiently valuable to be worth protecting
- Cf banal, completely standard info, nothing special or unique (ABC, Douglas per Lord
Walker)
- Where banal info is combined in a way that is a feat of human ingenuity, this is sufficiently
valuable (Talbot per Harris, Megarry in Coco)
- Interests that equity will respond to:
- Human ingenuity / profiting from fruits of ingenuity (Talbot)
- Dignity, freedom from humiliation, personal autonomy, control of personality (Giller,
Jane Doe, also of community Foster v Mountford)
- Commerciality of endeavor (Franklin v Giddens)
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3. The circumstances of acquisition of the info impose a duty of confidence
- Two ways this is satisfied (Gummow in Smith Kline, approving Swinfen in Lord
Ashburton):
- ‘Confidential information improperly or surreptitiously obtained’
- ‘Information imparted in confidence’ – reasonable man realized on reasonable grounds
that info was being given in confidence (Megarry J in Coco) (eg security arrangements
Douglas cf Lenah)
- Special burden: business circumstances – info of commercial value given in business
circumstances, ‘heavy burden’ to prove it wasn’t acquired in circumstances imparting
obligation of confidentiality (Megarry J in Coco)
- Where it is clearly one of these (eg theft (Franklin v Giddens)), say that and move on.
- Where it is borderline:
- Where info is blurted out in public or communicated in circumstances which negative
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duty of confidence, there is no duty of confidence owed (Megarry J in Coco)
- Where info is ‘wafted’ and someone finds it, and it is clearly confidential, this imposes
duty of confidence (Lord Goff in A-G v Guardian, approved by Gleeson in Lenah)
- Eg secret diary or confidential document, and obviously so, blown out a window
- Chain of transmission
- Along Ds – look and see the circumstances in which each D acquired the info
- Ps cannot transmit the duty of confidentiality owed to them (Douglas per Lord Walker)
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4. Breach of duty
- Unauthorised use – so look to the scope of the authority/permission to use the info
- Relevant factors:
- Compulsory or voluntary disclosure:
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Fiduciary Relationships and Breach of Fiduciary Duty
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Do you have a fiduciary relationship?
- Mason J definition from Hospital Products – fiduciary’s exercise of power or discretion can
affect dependent’s legal or practical interests
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Assumed categories
- Trustee/beneficiary – fiduciary has control over the prop and owns it
- Director/company – dependent owns the property, director has physical ability to deal with
the prop
- Agents/principals
- Employees/employers – Nettle J says employment as an accepted category isn’t useful
because each employment situation is unique
- Partners to partners – mutuality of assets and mutuality of endeavor, each partner is
vulnerable to the exercise of the power of the other partners, all property is owned by the
partnership
- Can often analogise a joint venture to a partnership
- Solicitors/clients – Client actually acts, solicitor just provides advice, but recognises the
strong influence solicitor’s advice has over client, high vulnerability of the client, in reality
can’t step behind the advice
- NOT Doctors/patients:
- Health is not an interest equity responds to, we have negligence and contract for that
- Interests equity will respond to:
- Commercialisation of patient’s body (Gummow in Breen v Williams)
- Commercialisation of medical records (Gaudron, McHugh in Breen v Williams)
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- Getting tests and treatment at a fair price (Dawson, Toohey in Breen v Williams)
- Receiving proper medical advice that is honest and reasonable (Dawson, Toohey in
Breen v Williams)
- Judges take divergent views (Gummow vs everyone else in Breen) on whether the
underlying dr/patient relationship is fiduciary, but the practical effect of both views is the
same – there needs to be additional circumstances that trigger equity’s intervention
- NOT Aus government to citizens re: foreign/public powers:
- Jurisdiction – no court has jurisdiction over Cth gvt’s exercise of foreign powers
- Cth’s did not have an interest in conflict with it’s duty to Habib
- The Cth, when exercising public powers, can’t bring itself into the private lives
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Personal Remedies in Equity
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Specific Performance
- Elements:
- 1. Inadequacy of CL damages / the legal remedy of damages
- 2. Breach (in equity)
- = Breach of contract or estoppel or if a land contract, part performance + oral
agreement
- 3. Does it require continued supervision or is it once and for all?
- Courts will not award specific performance where continued supervision is required
(Dixon J in JC Williamson).
- ie in specie specific performance is unavailable – specific performance can only be
used when it is to both settle/define the parties’ rights AND enforce them (not just
settle/define)
- 4. Must not be to enforce a services contract – must not amount to slavery (Dixon J in JC
Williamson)
- Common examples:
- Sale of land – damages usually inadequate because land usually unique
- Building contracts – damages usually adequate, also generally requires supervision of the
court
- Repairing covenants in leases – look at specific clause, damages might be adequate,
constant supervision might be required, might not be sufficiently specific
- Sale of goods – damages usually adequate
- Contracts to pay or lend money – damages usually adequate, unless it is virtually
impossible to calculate damages or where loan is part of a wider arrangement and has
flow-on consequences
- Personal service – usually akin to slavery
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Injunction
- Elements:
- 1. Inadequacy of CL damages
- 2. Cause of action / serious question to be tried / ‘just’ = in accordance with legal rights
and duties (s37(1) Supreme Court Act)
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- No cause of action = no injunction (eg ABC v Lenah), it is ‘axiomatic’ to have a cause
of action (Gaudron in Lenah)
- Unconscionability alone (ie no other cause of action) not sufficient (Gleeson Gaudron
Hayne Lenah)
- 3. Balance of convenience
- For interlocutory injunctions
- Basically, could we compensate if we got this wrong? What is practically more
convenient right now? (eg Aitkins v Cooper – custody of the dog)
- Breaks a legal tie
- Egs:
- Delivery up – mandatory injunction – eg Franklin v Giddins
- Foster v Mountford – aboriginal book case
- An injunction that amounts to indirect specific performance is NOT allowed (Lumley v
Wagner, Atlas Steel)
- Look for situations where P wants an injunction to enforce a negative covenant
- Lumley – obligation to not perform at another theatre – could perform overseas = NOT
indirect specific performance
- Cf Atlas Steel – obligation to not distribute through anyone else – couldn’t physically
move, only alternative was to cease trading altogether (but not commercially realistic) =
indirect spef perf = injunction not granted
Lord Cairns’ Act Damages (s38 Supreme Court Act)
- Elements:
- 1. Jurisdiction
- If specific performance/injunction is available at start of proceedings, there is
jurisdiction for LCA damages regardless of subsequent events that render
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Equitable Proprietary Remedies
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Constructive Trust (CT)
- Disgorgement remedy, specific remedy (it has a subject matter)
- Eg Chan v Zacharia
- When it looks like wrongdoer is going to go insolvent, beneficiary gets to assert privileges
of ownership over the trust asset
- Where the asset has increased in value since the breach, ownership will give P access to the
value of the asset + windfall gain
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Equitable Lien
- Security interest
- Need to specify a) what the debt is and how it arises and b) the proprietary interest that
gives rise to the right to a security interest
- Relevant in insolvency situations – if it looks like wrongdoer is going to go bankrupt and/or
other creditors are around, lien gives P priority access to relief
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What is awarded when?
- 1. Misappropriation of fiduciary asset = CT
- 2. Misappropriation of fiduciary opportunity = CT (VUT, Warman)
- 3. Bribes
- Where fiduciary acquires an asset but if hadn’t engaged in wrongful conduct, would never
have left the hands of the third party
- ! We only really care where prop has increased in value. If it has gone down, go for
compensation.
- Grimaldi (Aus case on point) – CT is not automatically available, court needs to exercise
its discretion.
- Where there are 3P creditors, probably not available (protect creditors + don’t give
wrongdoing fiduciary access to future profits)
- Where there are no 3P creditors, then CT is available.
- If discretionary factors point away from CT being available, Giumelli (discussed in
Grimaldi) suggests EL is still available as a second-best option (but we don’t know if
Lister is more correct, that where no CT, you get nothing)
- Lister & Sinclair – because property was never on pathway to P, no CT available over
assets obtained through a bribe
- A-G HK – CT is available in bribe scenarios – probably sympathetic facts, policy
reasons strongly in favour of finding a CT
- Sinclair said to look to account of profits or extend equitable compensation doctrine –
NO – the whole point is that P never had/doesn’t get title to the bribe property!
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Tracing
- Following = following equitable title as it passes from hand to hand
- Tracing = tracing equitable title into assets substituted for the property in which P has title
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- When property is mixed with P’s property:
- 1. Brady v Stapleton principle – if items in the bundle are wasted, it is said that D’s items
are wasted first. If items are improved, P’s items are improved first.
- 2. Which situation do you have?
- A. Mixing two things to improve an existing tangible asset
- ! Equitable title is extinguished, all tracing and following end
- P should seek a monetary remedy (eg for equitable comp for dissipated asset or
AoP)
- P can get an equitable lien over the improved asset for the value of the monetary
remedy (Scott v Scott, Foskett)
- B. Mixing two things to create/acquire a new tangible asset
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Assignment of Property Rights
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- Step 1: Is it a present property right or a future property right?
- X can only assign a property right they actually have, a future property right that doesn’t
current exist cannot be assigned (for no value)
- A present right that is temporally extended (eg royalty payments under a licence) can be
assigned (voluntarily) (Williams)
- Conflicting case law:
- Shepherd suggests it is a matter of wording, if you can describe the part of the
property right you wish to assign, you can assign i.
- Norman says you can only assign objectively legally recognised parts of the
property. EG next year’s undeclared dividends are not ‘part’ of a share.
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- Step 2: Is value given?
- If future + value – title goes to promise as soon as promisor receives it (Tailby)
- Otherwise, no transfer - cannot transfer something you do not yet have for no value
(Williams, Norman, Shepherd)
- If present + no value, it is a voluntary assignment. Continue.
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- Step 3: Is it legal property or equitable property?
- A. Assignment of legal property
- ! Has assignment been completed according to relevant transfer rules?
- Goods
- Delivery + intention to pass title
- Delivery = legally able to get custody (Thomas v Times Book)
- Where legal requirements for delivery not made out (eg cheque not
endorsed), no delivery (Jones v Lock)
- Constructive delivery is sufficient, past delivery is sufficient (Re Stoneham)
- Land
- 1. Execute a transfer document per statutory requirements
- 2. Produce duplicate certificate of title
- 3. File with Registrar and Registrar amends the register
- Shares
- 1. Produce share certificate
- 2. Give to Co Sec and Co Sec registers the change in share ownership
- Other legal choses in action s134 Property Law Act
- Assignment of a legal right to be paid (eg debt, bank account, life insurance
policy)
- 1. PLA only permits absolute assignment
- 2. Must be in writing (doesn’t matter what form)
- 3. Must be signed by assignor (! In exam speculate if signed)
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- 4. Express notice must be given to third party (ie creditor) by SOMEONE
- Note: Assignment of a chose in action just transfers the chose in action
itself, not the status of someone who created it (Equuscorp) – so if the right
to be paid was illusory, the chose in action doesn’t actually exist and
assignee has nothing
- ! If not, has donor done all that they alone can do (Corin v Patton)?
- Griffiths in Anning, Windeyer in Norman, extension of Re Rose.
- If assignor has done everything necessary within their control to effect
transfer, but legal title hasn’t moved, equitable title will move.