Fiduciary Relationships in a Commercial Context

Abstract

This paper considers the circumstances in which fiduciary obligations arise, how they relate to any contractual obligations that exist between the putative fiduciary and the person to whom the duty is owed, what is the significance of the relationship concerning which the putative fiduciary duty exists being a commercial one, what fiduciary obligations require the fiduciary to do, and what remedies are available for breach of the obligation. Those topics are considered with particular application to the duties of someone providing advice on matters of finance and investment. The application of those general principles in Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) [2007] FCA 963; (2007) 160 FCR 35 is discussed. The paper also discusses the interrelationship between the general law obligations of a financial adviser, and 2012 Australian legislation imposing obligations on financial advisers (Corporations Amendment (Future of Financial Advice) Act 2012, and the Corporations Amendment (Further Future of Financial Advice Measures) Act 2012).

Keywords: Equity, fiduciary obligations, equitable remedies, duties of financial advisers

JEL Classification: K10, K30