Prospective Joint Venturers and Fiduciary Duties: A Comment on the SCNZ decision in Chirnside v Fay

Publisher:
LexisNexis Australia
Publication Type:
Journal Article
Citation:
Journal of Equity, 2007, 2007, 2 (1), pp. 221 - 228
Issue Date:
2007-01
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This comment considers a recent decision of the Supreme Court of New Zealand on the fiduciary duties owed by prospective joint venturers. As one of the first cases concerning equity heard by the new court, it provides an interesting insight into the possible approach of the court to this area of law. The comment first looks to the imposition of liability and examines the different approaches taken by the court, focusing on the problems of imposing liability in early pre-contractual joint venture cases. The comment then considers the impact these problems may have had on remedy, highlighting the remedial flexibility which characterises equity jurisdiction in New Zealand. In September 2006 the Supreme Court of New Zealand handed down its judgment in Chirnside v Fay, a case concerning the nature of the obligations between joint venturers and attendant remedies for breach of fiduciary duty.1 Those interested in equity matters may remember that the 2004 Court of Appeal decision in Chirnside attracted some attention, most notably for the courts somewhat controversial application of a loss of chance analysis to the calculation of quantum.2 The Supreme Court decision, therefore, was eagerly awaited to see whether that court would uphold such an analysis or substitute a more orthodox approach. Chirnside v Fay is one of the first cases determined by the new Supreme Court which falls squarely within the area of equity.3 Chirnside v Fay was, therefore, a chance to gauge that courts likely approach to equity jurisdiction and no better case could be found than one whose subject matter lies at the heart of equity: the fiduciary obligation.
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