Fiduciary Relationships: Understanding the Duties and Obligations

Running head: QUESTIONS 0
equity and succession
JUNE 20, 2018

QUESTIONS 1
Part 1
Introduction
The fiduciaries have key role around the equity. The equitable authority has
established mechanism to control conduct of people in relation to other persons. Generally
fiduciaries are called persons who are subjected to some specific equitable duties to others as
per the principle of equity rather than private agreement. It is not required by individual to
describe himself as fiduciary because this is issue of legal intervention. It is all about
relationship between persons that court will enforced the fiduciary relationship. Usually, this
is relationship of disproportion, in which one party has powers against the other party in
respect of property or business affairs.
In this essay the fiduciary relationship with help of case law is discussed and critically
examined.
Fiduciary relationships
The fiduciary duty is attached with properties of trust. Fiduciary relationship is called
relationship of confidence that suits perfectly with traditional idea of equity itself. The
relationships have many sides. As per this fact, fiduciaries should have understanding that a
person who involved in specific relationship where there is exception by equity courts of high
level of faith or accountability than on behalf of fiduciary. The fiduciary relationship is owed
by fiduciary to the beneficiary. The trustee should maintain the relation of confidence with
beneficiary. The equity has anticipations as how trustee will exercise powers and discharge
his duties.
Fiduciary relationship includes trustee and beneficiary relationship. In fiduciary
relationship, it is required by the trustees to perform wholly in beneficiary’s interest in

QUESTIONS 2
respect of all matters in the scope of trust. It involves the way by which trustee deals and
handles the property of trust. It also includes the way of managing the direct and indirect
accrued incomes and benefits. The trustees are required to take advice from beneficiaries.
They are required to accept instructions from beneficiaries.
In case Queensland Mines Ltd v Hudson1, Hudson was appointed as managing
director in Queensland Mining Ltd. The company thought to establish iron ore mining
operations in Tasmania. Hudson took essential licences to establish the iron ore mines on the
behalf of Queensland Mines Ltd. Later, the company denied to give funds because there was
financial difficulties in the company. Hudson gave resignation from the post of managing
director of the company and developed mines on his behalf with the knowledge of others
directors of Queensland Mines Ltd. After eleven years, company sued Hudson for breach of
fiduciary duty. The judgement has given in the favour of Hudson. Hudson was not liable
because the establishment of mine was rejected by company itself. The directors had full
knowledge about this.
The fiduciary relationship based on this fact that powers, obligations and duties are to
be performed in other’s interest. The activities in relation to fiduciary obligation are
controlled by others. The fiduciaries are not agent or mediator of beneficiaries of the
fiduciary obligations. Fiduciaries are legal actors. They will be responsible in negligence as
consequences in which they fail to perform their duties. Negligence can be measured by the
standards of the person in the same position. Industrial Development Consultants Ltd v
Cooley 2is good example on corporate opportunities doctrine. Cooley was appointed as
architecture in Industrial Development Consultants Ltd. Cooley gave resignation to the
Industrial Development Consultants Ltd and made contract with gas board. Cooley said that
gas board did not want to enter into contract with company. Industrial Development
1 [1978] 18 ALR 1,
2 [1972] 1 WLR