DID THE PRIMARY JUDGE ERR IN CONSIDERING THE STRENGTH OF THE EQUITABLE CLAIM?
65 We have dealt with the general proposition that, on the authorities as they now stand, it is appropriate, on an application to extend time, to take into account as a relevant factor the strength or weakness of the appellant's case as it appears from material before the Court. In addition, however, to matters going generally to the relative strength of the appellant's case, his Honour gave particular consideration to the appellant's case based on breach of fiduciary duty; and his conclusion was that he was not persuaded that that case had real prospects of success.
66 We have already referred to the lack of detail, in the pleading, as to the material facts said to give rise to the relationship and to define the scope of the duties arising from it. Even disregarding that, however, in our view his Honour's conclusion was justified.
67 A relationship such as that alleged, of guardian and ward, may give rise to duties typically characterised as fiduciary - not to allow duty and interest to conflict and not to make an unauthorised profit within the scope of the relationship (although one might need to know more about the relationship than presently appears in order to ascertain the ambit of any such duties arising in this case). Similarly, it is likely to be a relationship giving rise to a presumption of undue influence affecting transactions, particularly but not exclusively voluntary transactions, entered into by the ward and conferring benefits on the guardian. Equally, of course, breach of a fiduciary duty, and breaches of other equitable obligations, are not remediable only by injunction or by a proprietary or restitutionary remedy: a plaintiff who has suffered loss resulting from breach of such a duty is entitled to compensation for that loss. There is no room for doubt about any of those propositions, and it is unnecessary to cite authority for them. Nevertheless, the judge was right in regarding the appellant's claim as, under Australian law, novel. That is so because of two of its aspects: the nature of the alleged breach and the kinds of loss or injury which the appellant claims to have suffered and for which he seeks equitable compensation.
68 In Anglo-Australian law, the interests which the equitable doctrines invoked by the appellant, and related doctrines, have hitherto protected are economic interests. If property is transferred or a transaction entered into as a result of undue influence, then the transaction may be set aside or, no doubt, the appellant may be compensated for loss resulting from the transaction; similarly if a transaction is induced by unconscionable conduct; so, in cases usually classified as involving fiduciary obligations not to allow interest to conflict with duty, the interests protected have been economic. If a fiduciary, within the scope of the fiduciary obligation, makes an unauthorised profit or takes for himself or herself an unauthorised commercial advantage, then the person to whom the duty is owed has a remedy. With one exception, that is the context of, and the assumption underlying, all the recent discussions of fiduciary duty in the High Court: see, for example, Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371; Chan v Zacharia (1984) 154 CLR 178. The exception is Breen v Williams (1996) 186 CLR 71 where the appellant, seeking to rely on fiduciary duty to protect an interest of a rather different sort, namely the right of a patient to access medical records in the possession of a doctor, was held to fail. Much academic writing proceeds on the assumption that the interests protected by these equitable doctrines are economic: see Cooter and Freedman, The Fiduciary Relationship: Its Economic Character and Legal Consequences, NYUL Rev, 66 (1991) 1045, DeMott, Fiduciary Obligation and Intellectual Siege: Contemporary Challenges to the Duty to be Loyal, Osgoode Hall LJ, 30 (1992) 470 (both cited by Gummow J in Breen at 125); and P D Finn, The Fiduciary Principle in Youdan, (ed) Equity, Fiduciaries and Trusts 1989 1-56.
69 Of course, conduct such as that alleged against the respondent in this case can readily be described in terms of abuse of a position of trust or confidence, or even in terms of the undertaking of a role which may in some respects be representative and, within the scope of that role, allowing personal interest (in the form of self gratification) to displace a duty to protect the appellant's interests. But it should not be concluded, simply because the allegations can be described in those terms, that the appellant should succeed in an action for breach of fiduciary duty if the allegations are made good. What the apparent applicability of the descriptions illustrates is not only the incompleteness but also the imperfection of all the individual formulae which have at various times have been suggested as encapsulating fiduciary relationship or duty. The principles can be understood only in the context of the way in which the courts have applied them. In that context the success of the appellant's fiduciary claims, in this case, would indeed be a novelty.
70 To say of a claim that it is a novelty is not necessarily to condemn it or to require the conclusion that it cannot succeed. It is sufficient to demonstrate this point merely to refer to the gradual extension, during this century, of the kinds of loss for which damages are recoverable in tort - particularly in negligence. But an advance must be justifiable in principle. Here, the conduct complained of is in within the purview of the law of tort, which has worked out and elaborated principles according to which various kinds of loss and damage, resulting from intentional or negligent wrongful conduct, is to be compensated. That is not a field on which there is any obvious need for equity to enter and there is no obvious advantage to be gained from equity's entry upon it. And such an extension would, in our view, involve a leap not easily to be justified in terms of conventional legal reasoning.
71 On the appeal, the appellant relied heavily on M(K) v M(H) (1992) 96 DLR (4th) 289, a decision of the Supreme Court of Canada. That case had to do with claims, both in tort and on the footing of fiduciary obligation, arising from alleged incest by the appellant's father. The Supreme Court held that the relationship of parent and child was fiduciary, giving rise to a fiduciary duty to protect the child's well‑being and health; and that incest was a breach of that duty. The judgment of the Court was delivered by La Forest J, with whom the other members of the Court agreed. His Lordship held that the relationship of parent and child fell clearly within the established formulations of circumstances giving rise to fiduciary relationships. There was no principle requiring the duties arising from such a relationship to be restricted to the protection of economic interests: in certain contexts, equity had recognised a parental duty to protect the economic interests of a child; but case law did not limit the range of obligations that might attach to the relationship; and (at 327):
"Indeed, the essence of the parental obligation in the present case is simply to refrain from inflicting personal injury upon one's child."
72 With great respect, there can be no doubt that that is a fundamental aspect of a parent's obligation; and it is one which should be, and is, appropriately protected by law. It does not follow, however, that "fiduciary" is the right label for it, still less that equitable intervention is necessary, appropriate or justified by any principled development of equity's doctrines. (Compare Patrick Parkinson, Fiduciary Law and Access to Medical Records (1995) 17 Syd LR 433 at 443; Professor Parkinson's more general thesis was referred to with approval by Gaudron and McHugh JJ in Breen at 113). It is, perhaps, significant that the question arose, in M(K) v M(H), only in a context where - and, apparently, was raised only because - a limitation statute barred proceedings at law, but not in equity. That was the context, also, of the New South Wales case to which we shall now turn. We know of no other context in which such an extension of equitable principle has been suggested.
73 The New South Wales case is the decision of the Court of Appeal in Williams. The plaintiff, who was of Aboriginal decent, claimed that her treatment, during her childhood, by the Aborigines Welfare Board involved breaches of the Board's fiduciary duty as to her custody, maintenance and education. The Court held (by a majority) that the NSW Act did not apply directly to the equitable claim and should not be applied, in the circumstances, by analogy. Kirby P referred to M(K) v M(H) and said, at 510:
"I see no reason to conclude that the principles expressed by the Supreme Court of Canada would not be applicable in this jurisdiction. Nor is the vehicle of the equitable principles propounded (a claim by an alleged victim of incest) determinative or restrictive of the content of the principles, … The trial of Ms Williams' claim against the respondent, based upon her allegation of breach of fiduciary duty for which they are liable, is not disposed of by a refusal of the extension of time sought in respect of the tort claims by the application of s 60G(2) of the Limitation Act 1969."
74 Priestley JA, who agreed with Kirby P in the result, took a considerably more cautious approach, at 516:
"To enable a properly satisfactory and fully explored answer to be given to [several of the questions] Mrs Williams wishes to raise, it seems to me desirable that Mrs Williams have the opportunity of putting all relevant evidence before the Court at a trial, rather than that the matters of significance which the case raises should be dealt with on the incomplete state of the evidence at present before the Court.
These considerations have influenced my general agreement with the approach of Kirby P. That approach involves conclusions, favourable to Ms Williams, about the arguability of a number of issues. I have reached some of these conclusions only with hesitation and I recognise they may be vulnerable to a strict approach. However, this case seems to me pre‑eminently to be of the kind where a broad approach should be taken to questions of arguability of legal propositions which may be novel but which require careful consideration in the light of changing social circumstances."
75 That case, however, preceded Breen. Breen involved, factually, a quite different question: whether a doctor owed his patient a fiduciary duty to disclose a patient's medical records to her. The Court held that, though a doctor might commonly owe fiduciary duties to a patient, those duties did not include the one for which the appellant contended. In the course of their judgments, the members of the Court made clear their disagreement with several aspects of recent Canadian approaches to the development of the law relating to fiduciaries: see per Brennan CJ at 83, per Dawson and Toohey JJ at 94, 95, per Gaudron and McHugh JJ at 110‑113 and per Gummow J at 132 ff. And it is notable that, in giving
examples of circumstances in which a medical practitioner might be held in breach of a fiduciary duty owed to a patient, their Honours chose examples from the main stream. Thus, at 93, 94, Dawson and Toohey JJ said:
"… it is the law of negligence and contract which governs the duty of a doctor towards a patient. This leaves no need, or even room, for the imposition of fiduciary obligations. Of course, fiduciary duties may be superimposed upon contractual obligations and it is conceivable that a doctor may place himself in a position with potential for a conflict of interest - if, for example, the doctor has a financial interest in a hospital or a pathology laboratory - so as to give rise to fiduciary obligations … . But that is not this case."
76 Likewise, Gummow J at 136:
"The issue here is not that which would arise, for example, where a medical practitioner had advised the patient to undergo treatment at a particular private hospital in which the practitioner had an undisclosed financial interest, or where the medical practitioner prescribed one of a number of equally suitable pharmaceutical drugs for the undisclosed reason that this assisted the practitioner to obtain undisclosed side‑benefits from the manufacturer."
77 There are also, in Breen, significant observations about the interrelationship between common law obligations and the fiduciary principle. For example, Gaudron and McHugh JJ said, at 110:
"In our view, there is no basis upon which this Court can hold that Dr Williams owed Ms Breen a fiduciary duty to give her access to the medical records. She seeks to impose fiduciary obligations on a class of relationship which has not traditionally been recognised as fiduciary in nature and which would significantly alter the already existing complex of legal doctrines governing the doctor‑patient relationship, particularly in the areas of contract and tort. As Sopinka J remarked in Norberg v Wynrib [[1992] 2 SCR 226 at 312; (1992) 92 DLR (4th) 449 at 481]: "Fiduciary duties should not be super imposed on these common law duties simply to improve the nature or extent of the remedy."
78 See also the observations of Gummow J, and the academic writing to which his Honour refers, at 125.
79 All those considerations lead us firmly to the conclusion that a fiduciary claim, such as that made by the plaintiff in this case, is most unlikely to be upheld by Australian courts. Equity, through the principles it has developed about fiduciary duty, protects particular interests which differ from those protected by the law of contract and tort, and protects those interests from a standpoint which is peculiar to those principles. The truth of that is not at all undermined by the undoubted fact that fiduciary duties may arise within a relationship governed by contract or that liability in equity may co‑exist with liability in tort. To say, truly, that categories are not closed does not justify so radical a departure from underlying principle. Those propositions, in our view, lie at the heart of the High Court authorities to which we have referred, particularly, perhaps, Breen. It follows that Gallop J was justified in concluding that he was not persuaded that the appellant's claim based on breaches of fiduciary duty owed by the respondent to the appellant had real prospects of success.