EQUITY LAWS12061

October 7, 2021

 

EQUITY LAWS12061

 

EQUITY LAWS12061

Name of Student

Name of Professor

Zoom session watched 23 December

Word Count: 1962

 

PART A

  • INTRODUCTION

Three key issues arise from the fact pattern. The first one is whether Pixie and George misappropriated Scott’s private information and acted in breach of confidence and if so, what causes of action are available to Scott. Secondly, what is the jurisdictional basis for Scott’s action against Pixie and George? Thirdly is the question as to the defences available to Pixie and George against Scott’s action. Lastly, whether Scott’s action is likely to succeed and what remedies the Court is likely to grant in the circumstances. 

  • ANALYSIS

The law of equity, under the doctrine of breach of confidence, operates to protect from unauthorized disclosure or misappropriation certain types of information considered as private and confidential. In the leading English case of Saltman Engineering Co v Campbell Engineering Co. Ltd (1948) [1963] 3 All E.R. 413, Lord Greene grappled with the meaning of confidential information and held that for information to be confidential, it must not be within public knowledge and must be a result of  result of a person’s efforts. The Court held (in part) that:

[w]hat makes it confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same process” [Emphasis supplied]

In the subsequent of Coco v A N Clark (Engineers) Ltd, the Court established three elements that must be satisfied for a breach of confidence claim to stand. First, a claimant must demonstrate that the information is confidential and not of a public nature. Secondly, the circumstances under which the claimant communicated the information must be such that an obligation of confidence arose. Lastly, there must be an unauthorized communication of the confidential information, to the detriment of the owner of the information. This position was affirmed in Optus Networks Pty Ltd v Telstra Corporation Ltd, wherein the Court held that the information must be identified with specificity, in confidence, in circumstances importing confidence, and there must be threatened or actual disclosure without the owner’s permission.

The test applicable in determining whether a duty of confidence exists is a subjective one: whether any reasonable person would have realized that the subject information was given to them in confidence. This approach was taken in the leading case of Carflow Products UK Ltd v Linwood Securities wherein the Court was emphatic that what matters most is what the parties themselves thought of the information at the time of disclosure.

Turning to the facts of this case, there is no doubt that the information given to Pixie by Scottt regarding the “Scott-Bag V2” was confidential as it was not publicly known and Scott had invested time, creativity and other resources in coming up with the design. Further, in view of the circumstances in which the information was disclosed, it emerges that a duty of confidence was placed upon Pixie because she knew that the information was proprietary and confidential information of Scott. Be that as it may, Scott only disclosed the information to Pixie because of their domestic relationship and Scott did not disclose the same to other people. Accordingly, by proceeding to disclose the confidential information to George, Pixie breached the duty of confidence owed to Scott. 

George, on the other hand, knew or ought to have known that the information disclosed to Pixie was confidential and that he had no permission to use it for his own benefit as Pixie had not given him permission to do so. Instead, George prompted Pixie to divulge the confidential information, which he knew was a private trade secret, and took the information to create his new handbag design. The case of Saltman Engineering Co Ltd (supra) is quite instructive in this regard because in that case, the Court found that liability of confidential exists separately from the relationship of the parties. Therefore, while George and Scott have no relationship, contractual or otherwise, Scott’s claim could still succeed as against both Pixie and George. 

With regard to the ‘sext’ shared by Pixie after the break up with Scott, it is clear that the information was communicated for private use and was not intended to be shared to the public in the manner Pixie did. Right to Privacy legislation protects private information being unwillingly disclosed Pixie breached Scott’s private information by publishing his ‘sext’.

The jurisdictional basis for entertaining Scott’s claim is the law of equity, which protects information from unlawful and unauthorized disclosure or use. It was so affirmed in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd.

As to the defences Pixie and George could raise, it is possible for the two to argue that there was no duty of confidence imposed upon them as Scott had not stated that the information was confidential. Further, the two could argue that the information was already in the public domain and George did not use Scott’s information when coming up with the handbag. Lastly, Pixie could assert that the ‘sext’ was shared on the basis of her freedom of expression. 

  • CONCLUSION AND REMEDIES

Based on the foregoing, George and Pixie are unlikely to rebut Scott’s claim and as such, Scott’s claim is likely to succeed. In the circumstances of the case, the Court may grant a number of remedies. First, the Court may issue an injunction restraining George from selling the new handbag design or proceeding to officially launch it, as doing so so would amount to unjust enrichment. A similar order could be issued to Pixie, to stop her from disclosing the confidential information to other persons and to restrain her from posting Scott’s private information. 

In addition, the Court could award damages to compensate Scott for the breach. Thirdly, the Court could also order the destruction of the infringing handbags in George’s possession. Lastly, the Court has the power to direct that George accounts for the profits made as a result of the infringement.

 

PART B

  • INTRODUCTION

The facts of the film, Storm Boy (1976), raise two pertinent issues to wit, whether Mike is in a fiduciary relationship with Mr Percival, the pelican; and whether Fingerbone Bill is in a fiduciary relationship with Mike. 

  • ANALYSIS

Fiduciary relationships are characterized mainly by trust, good faith and confidence. The idea is that the person upon whom fiduciary duties have been bestowed must act in utmost good faith and have ‘undivided loyalty’. It was so held in the landmark case of Beach Petroleum NL v Kennedy.

Generally, no fiduciary relationship as between parents and their children although such relationships are intuitively fiduciary in nature. However, as the leading Canadian case of M (K) v M (H) illustrates, a fiduciary relationship will be deemed to exist based on the trust the child placed on the parent. The Court, ruling in favour of the appellant/child in that case, found that there existed a fiduciary relationship between the appellant and her father and that sexual assault of the appellant by her father amounted to a grievous breach of the obligations arising from that relationship. A similar approach was taken in the case of Department of Health and Community Services v JWB where the High Court considered a parent to be a fiduciary and held that a parent’s consent to the treatment of a child could only be done in the child’s best interests. The fiduciary duties of a parent exist even when the parent-child relationship is a foster one and as such, Courts have established that a child need not have a biological with the parent. 

Friendships, unlike parent-child relationships, rarely lead to fiduciary relationships unless the conduct and intention of the parties suggest that a fiduciary relationship should be deemed to exist.

In this case, there is no gainsaying the fact that Mike was the guardian and principal caretaker to Mr Percival. As such, Mike had an obligations to act in the best interests of Mr Percival as established in Department of Health and Community Services v JWB (supra). This is evident from the level of control assumed and exercised by Mr Percival over Mike as well as Mike’s vulnerability as a child. Accordingly, a fiduciary relationship should be deemed to exist between the two.

As for the relationship between Fingerbone Bill and Mike, it is clear that the relationship between the two is one of mere friendship and no more than that. The two hold no responsibility to each other despite being friends.  It is also clear that Fingerbone is not responsible for Mike’s ordinary needs as a child including financial needs. In the case of State of South Australia v Lampard-Trevorrow, the Court found no fiduciary relationship exist as the state was not the guardian of the child. The facts leading to the case were that the Plaintiff, an indigenous Australian living in a remote rural community in South Australia with his family, had been admitted to hospital suffering gastroenteritis. Shortly after recovery, the Government placed the Plaintiff in foster family under whose care he remained for a decade as he was not aware of his natural family. The Plaintiff in his claim alleged that the Government had breached its duties to the Plaintiff. The Court dismissed the claim holding that no such fiduciary duties existed. Australian Courts have denied that a guardian has a fiduciary obligation to take care of the wards physical safety as the interests protected are not economic or proprietorial. Therefore, although Fingerbone took the responsibility of protecting Mike, no fiduciary relationship arose between him and Mike. 

  • CONCLUSION

In view of the analysis of the facts and the authorities cited above, it is clear that while a fiduciary relationship exists between Mike and Mr Percival, no fiduciary relationship exists as between Fingerbone Bill and Mike. 

 

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