Fact-Based Fiduciary Accountability in Canada

Advocates' Quarterly, Vol. 36, Pg. 431, 2010

26 Pages Posted: 12 Mar 2010 Last revised: 3 May 2010

Date Written: March 10, 2010

Abstract

The Supreme Court endeavored in Galambos v. Perez to reduce the confusion that exists in Canada over the test for fact-based fiduciary accountability. The unanimous decision produced a mixed, possibly conventional, outcome. The court did discard a number of unsatisfactory recent accretions to the jurisprudence. Difficulties remain, however, with its newest reformulation of the definitive criteria. The court declared that fact-based fiduciary accountability arises where two elements are present: (1) an undertaking to act in the best interest of another and (2) discretionary power to affect the legal and practical interests of that other. As I will explain, when understood in terms of limited access, the requirement of an undertaking is conventional science. The requirement of discretionary power, however, is radical. I will examine the materials the court relied on to conclude that this second element is required. I will also show that classifying discretionary power as a necessary condition potentially has two effects. It may significantly narrow the range of application of conventional fiduciary accountability and it may sanction judicial assessment of the merits of a good faith exercise of discretion. Neither effect is desirable. That said, there possibly is an entirely different interpretation of the decision. The court may have articulated a limited access test of fiduciary accountability. Rather than implicitly denying the conventional function of controlling opportunism, it implicitly may have embraced that function.

Keywords: fiduciary, loyalty, fact-based, ad hoc, limited access, opportunism, undertaking, discretionary power, reasonable expectation

Suggested Citation

Flannigan, Robert, Fact-Based Fiduciary Accountability in Canada (March 10, 2010). Advocates' Quarterly, Vol. 36, Pg. 431, 2010, Available at SSRN: https://ssrn.com/abstract=1568434 or http://dx.doi.org/10.2139/ssrn.1568434

Robert Flannigan (Contact Author)

University of Saskatchewan ( email )

15 Campus Drive
Saskatoon, Saskatchewan S7N 5A6
Canada
306-966-5876 (Phone)
306-966-5900 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
563
Abstract Views
2,071
rank
59,257
PlumX Metrics