Wednesday, May 22, 2013

Fiduciary duty

The Toronto Party v. Toronto (City), 2013 ONCA 327 discusses how fiduciary duties arise:

[37]       The concept of fiduciary obligation has a venerable lineage rooted in the notion of breach of confidence, an original head of jurisdiction in Chancery: Guérin v. The Queen, [1984] 2 S.C.R. 335, at p. 383. Where by statute, agreement, or perhaps by unilateral undertaking, one party has an obligation to act for the benefit of another and that obligation carries with it a discretionary power, the party thus empowered becomes a fiduciary. Equity intervenes to supervise the relationship by holding the fiduciary to a strict standard of conduct:Guérin, at p. 384.

[38]       The standard categories of agent, trustee, partner, director, and the like do not establish and exhaust the nature of the fiduciary relationships. It is, after all, the nature of the relationship, not the specific category of actor involved that gives rise to the fiduciary duty. The categories of fiduciary are not closed:Guérin, at p. 384.

[39]       Fiduciary duties generally arise only in connection with obligations originating in a private law context. Public law duties, the performance of which commands the exercise of discretion, do not typically give rise to a fiduciary relationship: Guérin, at p. 384.

1 comment:

Robert Champion said...

Most Canadians understand that their lawyer, accountant and doctor have a duty to act in their best interest. Many mistakenly assume their financial adviser has the same duty. Tomorrow the OSC is holding a roundtable to discuss imposing a best interest duty on advisers http://osc.gov.on.ca/en/NewsEvents_nr_20130502_csa-roundtables-best-interest.htm

Robert D. Champion
Vice-President Client Services
Sprung Investment Management Inc.
25 Adelaide Street East, Suite 1914
Toronto ON M5C 3A1
rchampion@sprunginvestment.com