Two Fiduciary Fallacies

Journal of Equity, Vol. 2, No. 1, pp. 1-25, 2007

U of Melbourne Legal Studies Research Paper No. 367

26 Pages Posted: 19 Jan 2009 Last revised: 18 Feb 2009

See all articles by Matthew Harding

Matthew Harding

University of Melbourne - Law School

Date Written: January 18, 2009

Abstract

In this article, I argue that two fallacies may have characterised the way the courts handled the fiduciary dimensions of the recent case that ultimately reached the High Court of Australia as Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22. The first fallacy is in the proposition that there is a distinct and freestanding fiduciary obligation of disclosure. The second fallacy is in the proposition that there is a fiduciary obligation to give a profit-making opportunity to the principal. These two fallacies persist despite clear statements of authority pointing them out and warning against them. If fiduciary law is to achieve rationality, and if parties are to know what may and may not be pleaded when bringing fiduciary claims, it is important that courts expose these fallacies whenever they are relied on in argument, and not endorse them or pass over them in silence, as appears to have happened in Farah.

Keywords: facllacies, fiduciary, obligation, High Court of Australia

JEL Classification: K00, K1, K19

Suggested Citation

Harding, Matthew, Two Fiduciary Fallacies (January 18, 2009). Journal of Equity, Vol. 2, No. 1, pp. 1-25, 2007, U of Melbourne Legal Studies Research Paper No. 367, Available at SSRN: https://ssrn.com/abstract=1329846

Matthew Harding (Contact Author)

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

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