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\fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\insrsid10250110 \chftnsepc \par }}\sectd \linex0\endnhere\sectlinegrid360\sectdefaultcl\sftnbj {\header \pard\plain \s17\ql \li0\ri0\widctlpar\brdrb\brdrs\brdrw15\brsp20 \tqc\tx3553\tqr\tx7293\tqr\tx8789\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid1650032 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs16\insrsid8421204 \tab Decima Joyce Lawlor & Gregory Robert Lawlor v NBF Asset Management Bank (HC)}{\fs16\insrsid8421204\charrsid933470 \tab }{\field{\*\fldinst { \cs18\fs16\insrsid8421204\charrsid12604364 PAGE }}{\fldrslt {\cs18\fs16\lang1024\langfe1024\noproof\insrsid10250110 5}}}{\cs18\fs16\insrsid8421204\charrsid933470 \par }\pard \s17\ql \li0\ri0\widctlpar\tqc\tx4320\tqr\tx8640\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0 {\insrsid8421204 \par }}{\*\pnseclvl1\pnucrm\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl2\pnucltr\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang {\pntxta )}} {\*\pnseclvl5\pndec\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \qc \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkstart Decima_Lawlor_v_NBF_Asset_Management}DECIMA JOYCE LAWLOR & GREGORY ROBERT LAWLOR v NBF ASSET MANAGEMENT BANK \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkend Decima_Lawlor_v_NBF_Asset_Management} \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 High Court Civil Jurisdiction \par }\trowd \irow0\irowband0\lastrow \ts19\trgaph108\trleft-108\trftsWidth1\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tblrsid10250110\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol \clvertalt \clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2268\clshdrawnil \cellx2160\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6588\clshdrawnil \cellx8748\pard \ql \li0\ri0\nowidctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin0\pararsid349411 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 8, 17 August 2001 \cell }\pard \ql \li4320\ri0\nowidctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin4320\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 HBC 333/96S\cell }\pard \ql \li0\ri0\widctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin0 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \trowd \irow0\irowband0\lastrow \ts19\trgaph108\trleft-108\trftsWidth1\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tblrsid10250110\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2268\clshdrawnil \cellx2160\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6588\clshdrawnil \cellx8748\row }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 \par }\pard\plain \s16\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 \fs24\lang3081\langfe3081\cgrid\langnp3081\langfenp3081 {\i\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 Tort \endash fiduciary duty \endash whether there was any joint involvement of Mrs. Lawlor and the Defendant in the affairs of the Stinson Pearce Group of Companies which give may rise to a fiduciary expectation which the Court in equity should uphold - High Court Rules O.3 r.3; Companies Act ss108, 208 \par }{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 \par Mrs. Lawlor (now deceased) advanced $320,000.00 of her money by way of an unsecured loan to Pacific Mercantile Company Limited, a member of the Stinson Pearce Group of Companies (SPG). Noting SPG was in financial difficulties, Pricewaterhouse proposed a Scheme of Reconstruction under s208 of the Companies Act. Mr s Lawlor gave her consent, which was sanctioned by the Court, and which allowed the Bank to be registered proprietors over real property mortgages over certain of the Soqulu land over which the Bank held a first debenture.}{ \lang2057\langfe3081\langnp2057\insrsid10250110 }{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 The Plaintiff}{\lang2057\langfe3081\langnp2057\insrsid10250110 '}{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 s counsel conceded that the present agreed facts did not disclose a fiduciary relationship between Mrs. Lawlor and the Bank but urged the Court to find an ad hoc fiduciary relationship because of the various facts and matters. The Court found that there was nothing to sugg est that Mrs. Lawlor and the Bank were at any stage involved in a joint enterprise having the characteristics of a partnership, or that the Bank ever undertook or agreed to act on behalf of or in the interest of Mrs. Lawlor which required Mrs. Lawlor to pla ce reliance on the Bank or to give rise to the Bank owing an obligation to Mrs. Lawlor. As the Bank did not acquire its powers as a mortgagee until 5 years after Mrs. Lawlor gave her consent to the acquisition of those powers under a moratorium, that cons e nt had by then expired. The Court found that the only arrangement between Mrs. Lawlor and the Bank was one by which she received $60,000 under a moratorium agreement. There was nothing in the schemes of reconstruction of the companies capable of affecting the Bank}{\lang2057\langfe3081\langnp2057\insrsid10250110 '}{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 s statutory powers of sale as a mortgagee of the Soqulu lands. The Court cast doubt on the wisdom of a Plaintiff , acting on advice to advance unsecured funds to a company in financial difficulties, and to cast a duty on the Bank when she did not recover her full advances.}{\b\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 \par \par Held \endash }{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 There was doubt about any real legal relationship between the Bank and Mrs. Lawlor, let alone a fiduciary relationship, and t he attempt to discover a fiduciary relationship between the Bank and Mrs. Lawlor in order to overcome the inherent weakness of her position as unsecured lender is misguided. \par \par Preliminary issue answered in the negative appears to dispose of Action. \par \par [Note: the Plaintiff abandoned an appeal to the Court of Appeal. The Defendant filed an application for costs which was refused on 2 June 2006.] \par \par }{\b\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 Cases referred to in Decision}{\b\lang2057\langfe3081\langnp2057\insrsid9704559 \par }{\b\lang2057\langfe3081\langnp2057\insrsid10250110\charrsid10250110 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 Glandon Pty Ltd v Strata Consolidated Pty Ltd}{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 (1993) 11 ACSR 543 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 Hospital Products Ltd v United States Surgical Corporation}{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 (1984) 156 CLR 41 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 Lloyds Bank v Bundy}{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 [1975] 1 QB 327 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 Pilmer v Duke Group Limited}{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 (In liq) 75 A.L.J.R. 1067 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 Tufton v Sperni}{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 [1952] 2 TLF 516 \par }{\b\i\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 United Dominion Corporation Ltd v Brian Pty Ltd}{\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 (1985) 157 CLR 1 \par }{\b\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 \par }{\i\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 Martin Daubney SC with Grahame E. Leung and Shayne Sorby for the Plaintiffs\line Martin Oakes QC with William W. Clarke for the Defendant \par }{\b\lang2057\langfe3081\langnp2057\insrsid9704559\charrsid10250110 \par }\trowd \irow0\irowband0\lastrow \ts19\trgaph108\trleft-108\trftsWidth1\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tblrsid10250110\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol \clvertalt \clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2088\clshdrawnil \cellx1980\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6768\clshdrawnil \cellx8748\pard\plain \ql \li0\ri0\nowidctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin0\pararsid2818681 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 17 August, 2001 \cell }\pard \ql \li1692\ri0\nowidctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin1692\pararsid10250110 {\b\caps\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 DECISION}{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \cell }\pard \ql \li0\ri0\widctlpar\intbl\aspalpha\aspnum\faauto\adjustright\rin0\lin0 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \trowd \irow0\irowband0\lastrow \ts19\trgaph108\trleft-108\trftsWidth1\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tblrsid10250110\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol \clvertalt \clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2088\clshdrawnil \cellx1980\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6768\clshdrawnil \cellx8748\row }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Scott, J}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 By consent the Court under the provisions of {\*\bkmkstart O3_3_3_HCR_Decima_Lawlor_v_NBF_AMB}RHC O3 r 3 {\*\bkmkend O3_3_3_HCR_Decima_Lawlor_v_NBF_AMB} is asked to consider the two following preliminary questions:}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Upon the facts set out in the Agreed Statement of Facts on Question of Fiduciary Obligation and the documents contained in the Tender Bundle to which the Court has been referred:}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 1. \tab Did the Defendant owe a fiduciary duty Mrs. E.H.M. Lawlor? \par 2. \tab If the answer to question 1 is }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 yes}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 what was the nature and scope of that duty?}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 The Agreed Statement of Facts is as follows. The book references are to the books of Defendant}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s documents tendered by consent.}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Abbreviations}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 NBF National Bank of Fiji \par SPG Stinson Pearce Group of Companies \par PMC Pacific Mercantile Company Limited \par BNZ Bank of New Zealand \par TEL Taveuni Estates Limited \par FNPF Fiji National Provident Fund \par SPH Stinson Pearce Holdings. \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 \par 1. \tab On 11 January, 1980, TEL (then called Soqulu Plantation Limited) granted a debenture to NBF. A full copy of this document was tendered and marked }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 A}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 .}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 2. \tab The Plaintiffs are the trustees of the estate of the late Mrs. Lawlor, who died in 1986.}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 3. \tab As at 1984, Burns Philp had, on behalf of Mrs. Lawlor advanced $320,000.00 of her money by way of an unsecured loan to PMC, a member of the SPG. A diagram depicting the corporate structure of the SPC was tendered and marked }{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 B}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 .} {\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 4. \tab For some time prior to mid-1984, the SPG had been in serious financial difficulties.}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 5. \tab In April 1984, BNZ prepared and circulated an }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Information Memorandum}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 to all lenders to the SPG. (Book 6/10, p 1206)}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 6. \tab On about 13 July, 1984, a statutory demand under the Companies Act was served on PMC on behalf of Mrs. Lawlor seeking payment of the moneys owing to her by 31 July 1984. This is noted in a memo of Mr. Plowman of NBF dated 13 July, 1984 (Book 4/10, p 782).}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 7. \tab On 20 July 1984, NBF and BNZ, as proposed provid ers of additional funds to the SPG, wrote to all lenders to SPG, including Mrs. Lawlor, seeking consent to a moratorium on proceeding against the SPG on the terms set out in the letter (}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 the moratorium letter}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 ). Annexure }{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 A}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 to the moratorium letter acknowledged that the debt owed to Mrs. Lawlor was $333,333.00. Mrs. Lawlor was the only personal unsecured depositor. (Book 4/10, p. 767)}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 8. \tab Paragraph 11 of the moratorium letter states:}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 It is agreed that Mrs. E.H.M. Lawlor, as the only personal unsecured depositor, is to receive monthly capital repayments of FJD5000, commencing 23/8/84 from the Stinson Pearce Group during the twelve months of the moratorium. At the end of the twelve mont h period the position of the Stinson Pearce Group will be reviewed and a fresh assessment made as to the quantum of any future payments. In the event of repayments not being made as stated, and not withstanding the conditions contained in Clause 1 herein i t is understood Mrs. Lawlor will be free to take whatever steps against Pacific Mercantile Co. Ltd she considers appropriate. Further, should the moratorium be terminated within the twelve month period, this repayment arrangement is not to be taken as conf erring on Mrs. Lawlor any priority or rights in respect to any amount owing to her on termination of the moratorium.}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 9. \tab On 24 July, 1984, NBF and BNZ wrote again to Mrs. Lawlor, seeking her agreement to the moratorium letter. (Book 4/10, p 744)}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 10. \tab Mrs. L awlor consented to the moratorium proposal on these terms. Mrs. Lawlor was advised and represented by Tikaram & Associates in relation to the moratorium, and that firm monitored the payments to her under the terms of the moratorium. Mrs. Lawlor was also a dvised and represented by Tikaram & Associates in relation to the schemes of arrangement referred to below.}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 11. \tab On 2 August 1984, BNZ wrote to NBF advising that all lenders had agreed to the terms of the moratorium letter, and enclosing the moratorium lett er for execution by NBF. (Book 4/19, p 743)}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 12. \tab Mrs. Lawlor was paid a total of $60,000.00 (i.e. twelve payments of $5,000.00) by PMC in accordance with the moratorium letter.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 13. \tab On 20 November 1984, a meeting of the lenders to the SPG, convened by Price Waterhouse, was held at which interalia, a }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 " }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 corporate plan}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 for the SPG was tabled and discussed. (Book 4/10, pp 723-734) The plan included a suggestion that the debt to Mrs. Lawlor be paid in full, but this was objected to by Westpac in a letter dated 1 0 January 1985. (Book 3/10, p 700) NBF was represented at the meeting by its Chief Manager, and Mrs. Lawlor was represented by Mr. Adrian Anderson, accountant. (Book 4/10, pp 714-719)}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 14. \tab On 10 May, 1995, on the application of PMC, Kermode J ordered PMC t o convene a meeting of creditors to consider and, if thought fit, approve a proposed Scheme of Reconstruction under {\*\bkmkstart s208_Companies_Act_Decima_Lawlor_v_NBF}s208{\*\bkmkend s208_Companies_Act_Decima_Lawlor_v_NBF} of the Companies Act . Order 2(b) made special provision for service of the proposed scheme on Mrs. Lawlor}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s representatives, which was done. A similar application was made with respect to a proposed Scheme of Reconstruction for SPH. For documents relating to the PMC Scheme of Arrangement, refer Book 9/10. For docu ments relating to the SPH Scheme of Arrangement, refer Book 7/10.}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 15. \tab To obtain NBF}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s support for the proposed Scheme, TEL and BNZ agreed that TEL would grant NBF registered real property mortgages over certain of the Soqulu land over which NBF held a fir st debenture, and NBF agreed to allow BNZ to take registered real property mortgages over certain other land over which NBF held a first debenture. The terms of that agreement were set out in a Deed between NBF and BNZ dated 4 June 1985. (Book 3/10, pp 53 6-538)}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 16. \tab On 18 June, 1985 NBF wrote to Mrs. Lawlor seeking her consent as a moratorium lender to NBF and BNZ taking these securities. (Book 3/10, p 526) Consent on behalf of Mrs. Lawlor was signed on 28 June 1985. (Book 3/10, p. 499)}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 17. \tab On 20 June 1985, pursuant to petitions filed on 13 June, 1985, the Court sanctioned the Schemes of Arrangement. (Book 9/10, p 2146; Book 7/10, p 1494).}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 18. \tab On 23 July 1985, the moratorium expired.}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 19. \tab On 26 July, 1985, NBF took an assignment of the first registered mortgages held over the Soqulu Land in consideration of the payment to FNPF of $1,394,093.61.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 20. \tab On 23 July, 1990, NBF was granted the registered real property mortgage contemplated by the deed dated 4 June, 1985 over the Soqulu Land by TEL.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 21. \tab Apart from the $60,000.00 referred to in paragraph 12, Mrs. Lawlor}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s estate has been paid:}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 a. \tab $7,287.13 from the PMC Scheme Fund on 28 March, 1994 \par b. \tab $50,000 in June 1998, consequent upon claim made on the liquidator of Burns Philp Trustee Co. Ltd, being the proceeds of a government bond lodged by Burns Philp in relation to Mrs. Lawlor}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s deposit.}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Both Senior Counsel also filed written submissions together with copies of the authorities cited. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 I am much obliged to both Senior Counsel for the cooperative, practical and sensible way in which the issues and submissions were placed before me.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Certain relationships between persons are presumed by the Courts to be fiduciary. According to }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Snell}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s Equity }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 30th Edition paragraph 6-05:}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 A fiduciary relationship arises where one person has undertaken to act for another in a particular manner in circumstances giving rise to a relationship of trust and confidence. The distinguishing feature of such a relationship is the fiduciary}{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s duty of l oyalty. Thus he must act in good faith, he must not profit from his position and he must not place himself in a position where his duty and his interest may conflict.}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Examples of presumed fiduciary relationships include trustee and beneficiary, agent and principal, solicitor and client, director and company and partners. Not all fiduciary relationships however fall into these presumed categories and as pointed out in }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkstart Tufton_v_Sperni_Decima_Lawlor_v_NBF_AMB}Tufton v Sperni}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkend Tufton_v_Sperni_Decima_Lawlor_v_NBF_AMB}[1952] 2 TLF 516 and }{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkstart Lloyds_v_Bundy_Decima_Lawlor_v_NBF_AMB}Lloyds Bank v Bundy}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkend Lloyds_v_Bundy_Decima_Lawlor_v_NBF_AMB}[1975] 1 QB 327 what may be termed ad hoc fiduciary duties may arise from the special nature of a particular relationship. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Mr. Daubne y conceded that the present agreed facts do not disclose a relationship between Mrs. Lawlor and the Bank giving rise to a presumption that it was fiduciary but he submitted that this Court should find that it was an ad hoc fiduciary relationship because o f the various facts and matters upon which he relied.\line }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Mr. Daubney stressed that Mrs. Lawlor was the only personal unsecured lender to the SPG and that her unique position was recognised not only by the Bank in 1984 when the moratorium was agreed but also i n 1985 by the Court when the reconstruction schemes were approved. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Mr. Daubney also relied on the June 1985 request by the Bank to Mrs. Lawlor seeking her agreement to the Bank taking mortgages over certain lands in Soqulu over which it already held a first debenture. Mr. Daubney suggested that the Bank, in seeking Mrs. Lawlors consent recognised }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Mrs. Lawlors interest at the time that it was bettering its own security position}{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 . He argued that since one of the effects of the PMC scheme of reconstruction was to transfer all PMC liabilities (including the Lawlor debt) to SPH and that SPH was owed a s ubstantial sum by related companies engaged in the development and sale of the Soqulu land there were }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 objective grounds}{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 for an expectation by Mrs. Lawlor that the amount owed to her by PMC would be repaid from the proceeds of those sales. By managing to achieve the position of first registered mortgagee of those lands the Bank acquired the ability }{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 effectively to control dealings in and development of the Soqulu land}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 . In those circumstances it was suggested that it would be inequitable and unconscionable to permit the Bank when dealing with those lands to disregard Mrs. Lawlor}{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s interests or to act in a manner contrary to them. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 In }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkstart Pilmer_v_Duke_Group_Decima_Lawlor_v_NBF}Pilmer v Duke Group Limited}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkend Pilmer_v_Duke_Group_Decima_Lawlor_v_NBF}(In liq) 75 ALJR 10 67 Kirby J at paragraph 134 et seq. Very usefully set out a number of propositions concerning the existence or otherwise of fiduciary obligations. He explained that:}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 where a suggestion is made that fiduciary obligations arise in a new relationship or out of particular facts it is essential that Judges perform their functions by analogy from settled principles. They are not entitled to distort those principles. Nor may they superimpose an equitable classification on facts simply because to do so would affo rd better or larger remedies to a Plaintiff who appears to have suffered some wrong}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 .}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Specifically it is not sufficient to impose fiduciary obligations on an alleged wrong-doer simply to point to the vulnerability of the person claiming to have been wronged. Many people who are in an arms length relationship with each other (}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 if they have any real relationship at all}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 ) experience a serious disproportion of power in their dealings ..... to call forth fiduciary obligations much more than vulnerability is required.}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 (emphasis added) \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 In support of his submission that the relevant facts of this case point to the existence of a fiduciary relationship Mr. Daubney referred to }{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkstart United_v_Brian_Decima_Lawlor_v_NBF_AMB}United Dominion Corporation {\*\bkmkend United_v_Brian_Decima_Lawlor_v_NBF_AMB}Ltd v Brian Pty Ltd}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 (1985) 157 CLR 1, 10 as authority for the proposition that a joint venture involving a relationship of mutual confidence and trust gives rise to fiduciary duties. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 He also referred to }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkstart Glandon_v_Strata_Decima_Lawlor_v_NBF_AMB}Glandon Pty Ltd v Strata Consolidated Pty Ltd}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkend Glandon_v_Strata_Decima_Lawlor_v_NBF_AMB} (1993) 11 ACSR 543, 557 in support of the proposition advanced by Professor P.D. Finn in }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Equity Fiduciaries and Trusts}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 that:}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 the critical matter in the end is the role that the alleged fiduciary has or should be taken to have in the relationship. It must so implicate that party in the other}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s affairs or so align him with the protection or advancement of that other}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s interests that foundation exists for }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 the fiduciary expe ctation}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 . Such a role may generate an actual expectation that the other}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s interests are being served}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 . \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 As I understood him, Mr. Daubney invited me to view the joint involvement of Mrs. Lawlor and the Bank in the affairs of the SPG as a joint venture givin g rise to a fiduciary expectation which the Court in equity should uphold. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Mr. Oakes did not dispute that Mrs. Lawlor and the Bank both had a relationship with PMC but he pointed out that during different phases of their involvement in the attempt to resc ue the SPG their relationship both with the SPG and with each other altered. It began with them both occupying the position of creditors of PMC; they then had a contractual relationship with each other from August 1994 to July 1995 during the term of the moratorium agreement. That was followed by a statutory relationship sui generis arising from the reconstruction schemes sanctioned by the Court under Section 108 of the Companies Act . When the moratorium expired they reverted to a position of several creditors of the company. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Mr. Oakes rejected the suggestion that any of these relationships were fiduciary for the simple reason that in none of them was it the function and purpose of the Bank to act in Mrs. Lawlor}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s interests. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 This test of the existence of a fiduciary relationship is extracted from Professor Finn}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s paper in which he advances }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 a rather simple technique}{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 to determine whether a particular relationship attracts fiduciary incidents. When the purpose of the relationship is to serve the parties join t interests (as in a partnership) it will be fiduciary. Where the purpose of the relationship is to serve the interests of one only (for example a beneficiary) it will also be fiduciary. But where the relationship exist to further the parties }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 several}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 interests no fiduciary duties arise. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 It will have been noticed that Professor Finn}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s approach is consistent with but not the same as that of }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Snell}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 and it is a feature and difficulty of identifying fiduciary duties that:}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 the law has not formulated any precise or comprehensive definition of the criteria adopted for imposing such obligations.}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 but: \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 as a matter of practicality ... it is reasonable for Courts to have regard to features commonly found in cases where fiduciary obligations have been upheld.}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 (}{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Pilmer}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 \endash supra p. 1095). \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 In }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkstart Hospital_v_United_Decima_Lawlor_v_NBF}Hospital Products Ltd v United States Surgical Corporation}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 {\*\bkmkend Hospital_v_United_Decima_Lawlor_v_NBF}(1984) 156 CLR 41, 96, 103 Mason J described the }{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 critical}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 feature of fiduciary relationships as being:}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 that the fiduciary }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 undertakes or agrees to act for or on behalf }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 or in the interest of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 and: \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 the fiduciary}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s duty may be more accurately expressed by saying that he is under an }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 obligation}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 not to promote his personal interest by making or pursuing a gain in circumstances in which there is a conflict or a real or substantial possibility of a conflict between his personal interests and those of the persons whom he is bound to protect.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 (emphasis added) \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Later, in the same case, Dawson J observed at page 147 that:}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110\charrsid10250110 \par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 a fiduciary relationship exists when one party is in a }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 position of reliance upon the other because of the nature of their relationship }{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 and not because of a wrong assessment of charac ter or reliability. That is to say the relationship must be of a kind which of its nature requires one party to place reliance upon the other; it is not sufficient that he in fact does so in the particular circumstances.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 and: \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Moreover a fiduciary relatio nship does not arise where one of the parties to a contract has failed to protect himself adequately by accepting terms which are insufficient to safeguard his interests. Where a relationship is such that by appropriate contractual provision or other lega l means the parties could adequately have protected themselves but have failed to do so there is no basis without more for the imposition of fiduciary obligations in order to overcome the short comings in the }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 arrangement }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 between them.}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 (emphasis added) \par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid10250110 {\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Fro m the agreed facts of this case I can find nothing to suggest that Mrs. Lawlor and the Bank were at any stage involved in a joint enterprise having the characteristics of a partnership such as that considered in }{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 United Dominion Corporations Ltd}{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 (supra). I can find nothing to suggest that the Bank ever undertook or agreed to act on behalf of or in the interest of Mrs. Lawlor. I can find nothing in the nature of the relationship between them to require Mrs. Lawlor to place reliance on the Bank and neither ca n I find anything giving rise by the Bank to an obligation to Mrs. Lawlor.\line }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 The only arrangement between Mrs. Lawlor and the Bank which I can discover was the arrangement by which she received $60,000 under the moratorium agreement. There is nothing in the schemes of reconstruction of the companies capable of affecting the Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s statutory powers of sale as a mortgagee of the Soqulu lands. As pointed out by Mr. Oakes the Bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 s right to upgrade its security was contained in the debenture which was taken about 4 years before Mrs. Lawlors loan. In fact the Bank did not acquire its powers as a mortgagee until 5 years after Mrs. Lawlor gave her consent to the acquisition of those powers, consent required under the moratorium agreement which of course had by then expired. By that time I doubt whether there was any real legal relationship between the Bank and Mrs. Lawlor at all, let alone a fiduciary relationship. In my view they just happened both to be owed money by the company. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Throughout this saga Mrs. Lawlor a cted on advice. Whether that advice was as good as it might have been is not for me to say. Making a substantial unsecured loan to a company in severe financial difficulties does not however strike me as being especially wise. But the attempt here to discover a fiduciary relationship between the Bank and Mrs. Lawlor in order to overcome the inherent weakness of her position seems to me to be misguided. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 I would answer the first question }{\fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 no}{ \fs24\lang2057\langfe1033\langnp2057\insrsid10250110 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 . \par \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Negative answer to preliminary questions for determination disposes of Action. \par \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9704559\charrsid10250110 Marie Chan}{\fs24\lang2057\langfe1033\langnp2057\insrsid1972231\charrsid10250110 \par }}