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Published online by Cambridge University Press: 16 January 2009
1 See in general Farrar, J.H., “Business Judgment and Defensive Tactics in Hostile Takeover Bids” (1989) 15 Can. Bus.L.J. 15Google Scholar; Bennett, D.M.J., “The Ascertainment of Purpose when Bona Fides are in Issue—Some Logical Problems” (1989) 12 Syd. L.R. 5Google Scholar.
2 Cf. Day v.Mead [1987] 2 N.Z.L.R. 443 (C.A.);Carl B. Potter Ltd. v.The Mercantile Bank of Canada [1980] 2 S.C.R. 343.
3 The term “equitable wrongs” is used generically to encompass breach of fiduciary duty and equitable breach of confidence, but does not include the retention of an unjust enrichment by a non-fiduciary or a non-confidant. Although breach of fiduciary duty and breach of confidence are probably distinct equitable wrongs, they may be treated as a unitary category for conflicts purposes, as the same considerations inform both concepts—see text at notes 117-122 below. (On the relationship between breach of fiduciary duty and breach of confidence, see Finn, P.D., Fiduciary Obligations (Sidney 1977), pp. 79, 130Google Scholaretseq.; Gurry, F., Breach of Confidence (Oxford 1984), pp. 158–162Google Scholar; Shepherd, J.C., The Law of Fiduciaries (Toronto 1981), pp. 322Google Scholaretseq.; Lac Minerals Ltd. v. International Corona Resources Ltd. [1989] 2 S.C.R. 574, 630-632 (Wilson J.), 656-658 (LaForest J.).)
4 This term is used here to denote the common law jurisdictions, exclusive of the USA.
5 White, R.W., “Equitable Obligations in Private International Law: The Choice of Law” (1986) 11 Syd. L.R.92Google Scholar, discussed in the text at notes 72-77 below. Collins, L. (ed.), Dicey and Morris on the Conflict of Laws, 11th ed., (London 1987), p. 1355Google Scholar, briefly refers to fiduciaries, but only in the context of restitution. Dicey & Morris' Rule 174 (at p. 1134) provides that the internal management of corporations is governed by the law of the place of incorporation. The discussion and authorities cited indicate, however, that the rule is concerned with management issues regulated by the instrument of incorporation. It is therefore not clear whether the authors had in mind the lex causae of corporate officers' equitable duties.
6 See, e.g., L.S. Sealy's seminal articles: “Fiduciary Relationships” [1962] C.L.J. 69, “Some Principles of Fiduciary Obligation” [1963] C.L.J. 119; and the major specialist treatises by Finn, op. cil (note 3 above) and Shepherd, op. cit. (note 3 above).
7 The equity of such jurisdictions has traditionally been similar: United States Surgical Corp. v. Hospital Products International Pry. Ltd. [1982] 2 N.S.W.L.R. 766, 799. But see, e.g., Flannigan, Robert, “Fiduciary Obligation in the Supreme Court” (1990) 54 Sask.L.R.45Google Scholar, for the Canadian Supreme Court's departure from traditional principles; text at notes 1–2 above.
8 Readers are assumed to be familiar with the rules of jursidiction applicable to claims in equity: see in general North, P.M. and Fawcett, J.J. (eds.), Cheshire and North's Private International Law, 11th ed., (London 1987), pp. 185Google Scholarelseq., 257–264; Sykes, E.I. and Pryles, M.C., Australian Private International Law, 3rd ed. (Sydney1991), pp. 21Google Scholaret seq., 61–63. Equitable jurisdiction vests whenever service can be effected on the defendant, even where the claim relates to interests in foreign land. It should be noted, however, that the Civil Jurisdiction and Judgments Act 1982 (UK), giving effect to the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, limits English courts' equitable jurisdiction in cases involving persons or trusts domiciled in, or property situated in, other EEC states. Their broad equitable jurisdiction remains unimpaired in other cases: see Cheshire & North, id., pp. 282 et seq.
9 See in general Muschinski v. Dodds (1984-1985) 160 C.L.R. 583, 615; Baumgartner v. Baumgartner (1987) 76 A.L.R. 75, 83; Elders Pastoral Ltd. v. Bank of New Zealand [1989] 2 N.Z.L.R. 180, 193; Powell v. Thompson [1991] 1 N.Z.L.R. 597, 614-615; contra D.W.M. Waters, “The Constructive Trust in Evolution: Substantive and Remedial” (1991) 10 Est. & Trusts J. 334, 339.
10 See Rawluk v. Rawluk (1990) 65 DX.R. (4th.) 161, 186; Paciocco, D.M., “The Remedial Trust—A Principled Basis for Priorities over Creditors” (1989) 68 Can. Bar Rev. 315, 318–321Google Scholar; Waters, op. cit. (note 9 above), pp. 375 etseq.
11 Cf. Chase Manhattan Bank N.A. v. Israel-British Bank (London) Ltd. [1981] 1 Ch. 105, 122 (unjust enrichment arising out of mistaken payment; alleged conflict of characterisation of the right to trace).
12 Chase Manhattan (note 11 above) at 124, per Goulding J.
13 See in genera] Cheshire & North, op. cit. (note 8 above), pp. 76-78; Dicey & Morris, op. cit. (note 5 above), p. 174. Also note that Dicey & Morris argue (at pp. 1354-1356) that constructive trusts imposed to remedy unjust enrichment should not necessarily be classified as remedial institutions for conflicts purposes.
Waters, op. cit. (note 9 above), p. 375 raises the possible further argument that a claimant may fall between the cracks if the constructive trust is characterised as a substantive institution in country A and as a remedial device in country B: if an action is brought in A but is governed by B's legal system, the lex causae will not allow for a substantive cause of action and the lex fori's procedural law will not provide a remedy. However, this argument is not convincing, as his scenario arises only if the lex causae approach to characterisation is adopted, which is not the case in Commonwealth conflict of laws: see note 23 below.
14 (1981) 117D.L.R. (3d) 257, 278, per DicksonJ., delivering the majority judgment.
15 [1982] 2 N.S.W.L.R. 766 (hereafter USSQ. For a fuller account of the decision, see text at notes 60-63 below. The decision was confirmed on appeal to the New South Wales Court of Appeal in United States Surgical Corp. v. Hospital Products Ltd. [1983] 2 N.S.W.L.R. 157 (hereafter USSC (C.A.)); and overturned on appeal to the High Court of Australia on a different point in Hospital Products Ltd. v. United States Surgical Corp. (1984) 156 C.L.R. 41 (hereafter USSC (H.C.)).
16 See the analysis of Deane J. in Muschinski (note 9 above) at 614; Baumgartner (note 9 above) at 83; Rossiter, C.J. and Stone, M., “The Chancellor's New Shoe” (1988) 11 U.N.S.W.L.J. 11Google Scholar; Elders Pastoral (note 9 above) at 186,193; Powell (note 9 above) at 615.
17 Cf. text at note 10 above.
18 See Austin, R.P., “The Melting-Down of the Remedial Trust” (1988) 11 U.N.S.W.L.J. 66, 71Google Scholar; Pettkus (note 14 above) at 273, 275-276; Rawluk (note 10 above) at 183-184. Cf. the approach in US law, which classifies constructive trusts imposed for breaches of fiduciary duties as remedial, but nevertheless allows them to be governed by the substantive law of the place where the relationship was centred under the choice of law rules for restitution (unjust enrichment being the rationale for the imposition of constructive trusts in that jurisdiction). See text at notes 93-97 below.
19 See Re Osborn (1989) 91 A.L.R. 135. Contra Waters, op. cit. (note 9 above), p. 341, who does not refer to this judgment.
20 Paciocco, op cit. (note 10 above), p. 316; Waters, op. cit. (note 9 above), pp. 351-369.
21 Cf. Rawluk (note 10 above) at 185, per McLachlin J.: “When the court declares a constructive trust, at that point the beneficiary obtains an interest in the property subject to the trust.”
22 This is so, even where courts impose constructive trusts with retrospective effect (as e.g. Australian courts usually do: see Muschinski (note 9 above) at 615): plaintiffs cannot proceed in property where they do not yet have proprietary claims and the creation of their property rights is dependent on the courts' discretion.
23 Cf. Cheshire & North, op. cit. (note 8 above), p.- 45; Sykes & Pryles, op. cil. (note 8 above), pp. 213-215. Contra: Dicey & Morris, op. cit. (note 5 above), p. 47.
24 As ascertained under art. 7 of the Hague Convention on the Law applicable to Trusts and their Recognition: cf. note 48 below. The Recognition of Trusts Act 1987 (UK), s. 1(2) provides that the Convention applies to both express and constructive trusts. It is submitted that, in determining the proper law of the constructive trust, regard should be had to the jurisdiction where, or under whose law the fiduciary relationship arose, in addition to the connecting factors specified as significant in art. 7 (namely the situs of the disputed assets, and the defendant's place of residence or domicile).
25 There is no common law authority on the conflicts rules relating to beneficial title under a constructive trust. Dicey & Morris, op. cit. (note 5 above), p. 1079 suggest that constructive trusts are best regarded as within the subject of restitution, and thus governed by the choice of law rules applicable to that category. This classification depends on unjust enrichment forming the rationale for imposing constructive trusts—which does not accord with the majority view in the Commonwealth (cf. text at note 16 above; Austin, op. cit. (note 18 above), p. 71) and will not accord with Canadian law if constructive trusts imposed for breach of fiduciary duty or confidence are surviving institutional trusts.
26 See text at note 18 above.
27 See text at note 16 above.
28 See, e.g., Fleming, J.G., The Law of Torts, 7th ed. (Sydney 1987), pp. 168–170Google Scholar on concurrent tortious and contractual liability.
29 Cf. USSC (H.C.) (note 15 above) at 97, per Mason J.: “That contractual and fiduciary relationships may co-exist between the same parties has never been doubted. Indeed, the existence of a basic contractual relationship has in many situations provided a foundation for the erection of a fiduciary relationship”. See also C.E.F. Rickett, “Trust or Tort? Tort and Trust?” [1990] N.Z. Recent L.R. 259, 262.
30 Except that the terms of any contract will circumscribe the scope of the other duties owed— cf. USSC (H.C.) (note 15 above) at 97.
31 See Coupland v. Arabian Gulf Oil Co. [1983] 1 W.L.R. 1136.
32 See note 15 above.
33 Att.-Genl. (UK) v. Heinemann Publishers Australia Ply. Ltd. (1987) 75 A.L.R. 353 (N.S.W.C.A.); (1988) 78 A.L.R. 449 (H.C); Att.-Genl. for the UK v. Wellington Newspapers Ltd. [1988] 1 N.Z.L.R. 129 (H.C); [1988] 1 N.Z.L.R. 166 (C.A.). For a fuller account of these cases, see text at notes 78–87 below.
34 At the time of writing this article, only British Columbia, Newfoundland and New Brunswick appear to have given legislative effect to the Hague Convention on the Law applicable to Trusts and their Recognition: see note 47 below.
35 Dicey & Morris, op. cit. (note 5 above), p. 1075. This approach is supported by Waters, D.W.M., Law of Trusts in Canada, 2nd ed. (Toronto 1984), p. 1125Google Scholar and coincides with that adopted in the Restatement of the Law Second: Conflict of Laws 2d (1971), § 271 Comment (a) (hereafter referred to as the American Restatement).
36 Sykes & Prylcs, op. cil. (note 8 above), p. 716, are of the view that trustees' powers and duties pertain to substantive matters. Moreover, in Chellaram v. Chellaram [1985J Ch. 409, 432, ScottJ. pointed out that trustees' rights and duties may as easily be classified as pertaining to the effect of a settlement, as to its administration.
37 The chosen or objective proper law certainly applies to trusts inter vivos of movables (Cheshire & North, op. cit. (note 8 above), pp. 885-888; Dicey & Morris, op. cit. (note 5 above), p. 1072 et seq.\ A. Wallace. “Choice of Law for Trusts in Australia and the United Kingdom” (1987) 36 I.C.L.Q. 454, 459, 470) and arguably also to trusts inter vivos of immovables (see Cheshire & North, p. 888; Dicey & Morris, pp. 1076-1078; Wallace, pp. 471-472) and testamentary trusts (see Cheshire & North, pp. 883-884; Dicey & Morris, pp. 1072 etseq.;sed contra Wallace, pp. 472-473).
38 Cheshire & North, op. cit. (note 8 above), p. 890; In re Nanton Estate (1948] 2 W.W.R. 113. There is some authority to the contrary: see In re Hewitt's Settlement. Hewitt v. Hewitt |1915] 1 Ch. 228, which indicates that inter vivos trusts, at least, are administered in accordance with the law governing the validly of the settlement. Croucher, P.E.N.. “Trusts of Moveables in Private International Law” (1940) 4 M.L.R. 111, 118–119Google Scholar argues that Hewitt does not. on a proper analysis, support this proposition; but Sykes & Pryles. op. cit. (note 8 above), p. 717 note 37 rightly doubt the correctness of this narrow interpretation.
39 See note 36 above, at 432.
40 See Dicey & Morris, op. cit. (note 5 above), pp. 1072, 1075. So too Wallace, op. cit. (note 37 above), pp. 481^182.
41 [1934] 1 D.L.R. 748 (C.A. B.C.), per Macdonald C.J.B.C, who delivered one of the majority judgments.
42 (1892) 10 N.Z.L.R. 609, 618 (C.A.)
43 Webb, P.R.H., “Trusts, Conflicts and New Zealand” [1975] N.Z.L.J. 128, 132Google Scholar note (w) argues that the court must have mistakenly assumed that Scotland was the place of administration—on the facts, New Zealand was the place of administration—because this case would otherwise not conform to Dicey & Morris' rule. There is nothing in the judgment, however, which suggests an incorrect analysis of the connecting factor.
44 Cf. Wood, P.M., “Variation of Trusts in New South Wales” (1990) 13 U.N.S.W.L.J. 359, 363Google Scholar; Sykes & Pryles, op. cit. (note 8 above), pp. 716-717; Cheshire & North, op. cit. (note 8 above), p. 891; Wallace, op. cit. (note 37 above), p. 476; Jewish National Fund Inc. v. Royal Trust Co.(1965) 53 D.L.R. (2d) 577, 584 (S.C.).
45 It is as yet unclear how to identify the place of administration where the settlor has not specified the law governing the administration (as he o r she is allowed to do—cf. the American Restatement (note 35 above) para. 272, comment (e)). Th e place of administration is variously identified in the literature as being where the trustees reside or carry on business; where the trust assets ar e situated; o r where the seat of administration is (cf. respectively Cheshire & North, op. cil. (note 8 above), p. 891; Latham, V., “The Creation and Administration of a Trust in the Conflict of Laws” (1953) 6 Current Legal Problems 176, 185Google Scholar; Meagher, R.P. and Gummow, W.M.C. (eds.), Jacob's Law of Trusts in Australia, 4th ed. (Sydney 1977). pp. 588–589)Google Scholar.
46 See Dicey & Morris, op. cit. (note 5 above), p. 1074; Hewitt (note 38 above) at 233-234. Th e proper law of a trust can only be changed by a power reserved in the trust instrument to that effect, an agreement by the beneficiaries to change it, o r a court sanctioning such a change under an empowering Act: Dicey & Morris, ibid.
47 See the Recognition of Trusts Act 1987 (UK); the Trusts (Hague Convention) Act 1991 (Cth.); the Conflict of Laws Rules for Trusts Act 1990 (British Columbia); the International Trusts Act 1989 (Newfoundland); and the Conflict of Laws Rules for Trusts Act 1990 (New Brunswick).
48 Art. 6 provides that the trust “shall be governed by the law chosen by the settlor. The choice must be expressed or be implied in the terms of the instrument creating or the writing evidencing the trust, interpreted, if necessary, in the light of the circumstances of the case.” Art. 7 provides that, where no law has been chosen, the trust “shall be governed by the law with which it is most closely connected” which is ascertained with particular reference to:
“(a) the place of administration of the trust designated by the settlor;
(b) the situs of the assets of the trust;
(c) the place of residence or business of the trustee;
(d) the objects of the trust and the places where they are to be fulfilled.”
49 Art. 10 further provides that the law governing the validity of the trust shall determine whether the legal system indicated by art. 8 or 9 may be replaced by another legal system.
50 See text at notes 35-40 above.
51 Overbcck, A.E. von, “Hague Conference on Private International Law: Explanatory Report” (1986) 25 Int. Legal Mat. 593, 605Google Scholar.
52 Contra Von Ovcrbeck ibid., who submits that the law governing the validity of the trust should govern the characterisation. This view conflicts with the general Commonwealth approach that the forum's categories are used at the categorisation stage (cf. note 23 above).
53 Administrators appointed by a foreign court cannot be sued in their representative capacity, as the forum will not recognise their status, but can be sued locally—inter alia for breach of fiduciary duty—in their personal capacity: see Cheshire & North, op. cit. (note 8 above), p. 831.
54 See note 35 above.
55 Rule 131.
56 See the discussion of Rule 162 at p. 1112.
57 Op. cit. (note 8 above), p. 799. They raise the possibility that maladministration by administrators of deceased estates may be governed instead by the conflict rules on tort, as devastavit was in essence a tort action. However, it is submitted that the current equitable character rather than the historical tortious character of devastavit proceedings should inform the modern choice of law rule.
58 Ewing v. Orr Ewing (1883) 9 App. Cas. 34, 48, per Lord Watson, which is also sometimes cited in this context, is not strictly in point as it concerned a question of jurisdiction rather than the governing law.
59 [1952) Ch. 26, 30.
60 [1905] V.L.R. 278, 283-284, 285. The conflicts issue was unfortunately not considered on appeal, as the full court regarded Scots and Victorian law as similar in all material respects: see [1905] V.L.R. 286. 292.
61 Halsbury's Laws of England. 4th ed., vol. 8. para. 643: “Equitable remedies are in the discretion of the court, and an English court will act upon its own principles in deciding whether to grant relief.” Also cf. Schmitthoff, C.M. (ed.) Palmer's Company Law, 24th ed. (London 1987). vol. 1, para. 43-06, p. 665Google Scholar. But see text at notes 75-76 and note 77 below, where this rule is challenged.
62 Unreported, 28 April 1978. N.S.W. S.C. (Eq.), 1546/1978.
63 Swiss law required E to furnish full security to the Prince's bank for the guaranteed sum: ibid., 36.
64 A plaintiff may obtain any of the forum's, remedies, provided they harmonise with his or her rights as fixed by foreign law: see Cheshire & North, op. cil. (note 8 above), p. 90. (Indeed, it is submitted that the more radical remedy of imposing a constructive trust would have been permissible in the circumstances, if one accepts the traditional view that such a trust merely imposes a personal obligation on the constructive trustee, and does not have any direct proprietary effect.)
65 At p. 41, citing Re Courtney, ex pane Pollard (1840) 4 Deac. 27; Mont. & Ch. 239; Ex pane Holthausen, In re Scheibler (1874) 9 Ch. App. 722; In re The Anchor Line (Henderson Bros.) Lid. [1937| 1 Ch. 483, 488; British South Africa Co. v. De Beers Consolidated [1910] 2 Ch. 502.
66 See note 15 above.
67 At pp. 796-797. The court here referred to Lord Cranstown v. Johnston (1796) 3 Ves. Jun. 170; Scheibler (note 65 above); Ex pane Pollard (note 65 above) and Wimborne (note 62 above).
68 But see text at notes 75-76 and note 77 below.
69 At p. 798, citing Lord Arglasse v. Muschamp (1682) 1 Vern. 76; Angus v. Angus (1737) Westt. Hard. 23; Cranstown (note 67 above); Beckford v. Kemble (1822) 1 Sim. & St. 7.
70 At p. 798.
71 See note 15 above. While Gibbs C.J. did examine foreign authorities in deciding that HPI and USSC were not in a fiduciary relationship as regards the duties not to profit or to allow a conflict of interests (USSC (H.C.) (note 15 above) at 74), the context indicates that he referred to them by way of substantive comparative, rather than conflicts, analysis.
72 Op. cit. (note 5 above).
73 Chancery jurisdiction originally depended on one of the following being in England: (a) the defendant's domicile or residence; (b) the subject matter of the suit; or (c) the place where the cause of action arose.
74 Chase Manhattan (note 11 above).
75 See The Anchor Line (note 65 above); Duder v. Amsterdamsch Trustees Kantoor [1902] 2 Ch. 132; Richard West & Partners v. Dick [1969] 2 Ch. 424 (Ch.), 435 (C.A.); and Ward v. Coffin(1972) 27 D.L.R. (3d.) 58.
76 See British South Africa Co. (note 65 above); In re Smith, Lawrence v. Kitson [1916] 2 Ch. 206.
77 White's thesis that the precedents offer doubtful support for a general lex fori rule may be taken even further: one may question even the authority of the specific rule from which this general rule is commonly deduced, namely the proposition that the court will always act on its own principles in determining personal equities arising under a contract or from fraud. Most of the early judgments cited as precedents in fact concerned the scope of Chancery jurisdiction in respect of foreign land, rather than choice of law issues; having established that they enjoyed jurisdiction, the relevant courts simply applied their own law without further analysis (see Arglasse (note 69 above); Toller v. Carteret (1705) 2 Vern. 494; Angus (note 69 above); Fosterv. Vassall (1747) 3 Atk. 587, 589; Penn v. Lord Baltimore (1750) 1 Ves. Sen. 444; Cranstown(note 67 above); Jackson v. Petrie (1804) 10 Ves. Jun. 165; White v. Hall (1806) 12 Ves. Jun. 321; Lord Portalington v. Soulby (1834) 3 My. & K. 104; Norris v. Chambres (1861) 3 De G.F. & J. 583, reversing Norris v. Chambers (1861) 29 Beav. 246 on this point; Ewing (note 58 above)).
Only one early judgment formulated a choice of law rule, namely Ex parte Pollard (note 65 above). There, the owners of land in Scotland had purported to grant a lien on it, but had done so in a form that was insufficient to create any rights in rem at Scots law. In upholding the creditor's claim for enforcing the lien against the owners' assignees in bankruptcy, Lord Cottenham L.C. stated that “the courts of this country, in the exercise of their jurisdiction over contracts made here, or in administering equities between parties residing here, act upon their own rules, and are not influenced by any consideration of what the effect of such contracts might be in the country where the lands are situate, or of the manner in which the courts of such countries might deal with such equities” (at p. 418). The important point is that, although Lord Cottenham probably intended to state as a legal rule the established practice that English courts applied English rules of equity whenever they exercised equitable jurisdiction (as shown by his citing earlier jurisdictional precedents in support of this dictum, and by his references to “contracts made here” and “parties residing here,” which mirror the connecting factors on which equitable jurisdiction over foreign land depended at the time—see note 73 above), his dictum was accorded a different, restrictive interpretation by the English Court of Appeal in British South Africa Co. (note 65 above; overturned on appeal to the House of Lords on another point).
There, the court had to determine whether a perpetual mining lease granted under a credit agreement was valid, upon an application of the lex situs, or an unenforceable clog on the equity of redemption, on an application of English law. The court cited Ex parte Pollard, but the majority did not simply accept on the basis of that precedent that English law governed as the lex fori. Instead, they applied English law to resolve the dispute only after carefully identifying this as the proper law of the contract. This indicates that the majority focused on the phrase “contracts made here” in Lord Cottenham's dictum, reading it as a reference to contracts whose proper law was English law. They reinterpreted the jurisdictional connecting factors as choice of law connecting factors, to interpet his dictum as authority for their new rule that the proper law of a contract governed the equities arising under it. (Cf. pp. 512, 513-515 (Cozens-Hardy M.R.), and 515, 517-518 (Farwell L.J.); note the stress on English contracts in their judgments.) This case therefore in effect overturned Lord Cottenham's lex fori rule, restricting the application of the forum's law to those instances where it is linked to the case by the connecting factors previously required to vest equitable jurisdiction.
Some post-Briiish South Africa Co. cases do seemingly support a lex fori rule for determining personal equities arising under contracts or from fraud. But in most of the contract cases, the forum's law was, on closer analysis, also the proper law of the contract (e.g. The Anchor Line(note 65 above); Richard West (note 75 above)); and in most of the fraud cases the defendant resided or was domiciled in the forum's territory (e.g. Razelos v. Razelos (No. 1) [1969] 3 All E.R. 929, 936, although the court's assumption that the defendant resided in England may be questioned on the facts), so that these cases can readily be confined and distinguished (cf. alsoI.C.F. Spry, The Principles of Equitable Remedies, 4th ed. (Sydney 1990), p. 40). To the extent that they are not so distinguishable (e.g. Ward (note 75 above) at 71; Cook Industries v. Galliher [1979] 1 Ch. 439), or to the extent that they were intended to state a lex fori rule, the relevant English judgments were delivered per incuriam, as they conflict with the earlier binding statement of the law in British South Africa Co. On this view, the only valid modern precedent supporting a lex fori rule to determine personal equities (and that without any thorough analysis) is the New Brunswick decision of Ward.
78 See note 33 above. These judgments are also of interest because they contain important statements regarding the ambit of the rule against judicial enforcement of a foreign state's public laws; on which, see Howard, M., “Spycatcher Downunder: Attorney-General for the United Kingdom v. Heinemann Publishers Australia" (1989) 19 U.W.A.L.R. 158Google Scholar.
79 At 400-407, 414-415, 446.
80 Cf. note 81 and aecompnaying text below.
81 See Alt.-Gen. v. Jonathan Cape Ltd. [1976] Q.B . 752, whose authority as a precedent was not questioned. Some doubt was, however, expressed as to the authority of the only Australian decided case in point, Commonwealth v. John Fairfax & Sons Ltd. (1980) 147 C.L.R. 39, which also required public detriment. In the event, the court here accepted public detriment as a requisite element where the plaintiff is a government agency, thereby settling this issue for New South Wales.
82 At 455-456.
83 At 366, 374-375.
84 At 461-462.
85 Att.-Genl. for the UK v. Wellington Newspapers Ltd. (note 33 above).
86 At 138.
87 At 172, per Cooke P., with whose decision on this point the other judges concurred.
88 It is doubtful whether the rule in British South Africa Co. (note 65 above), under which personal equities in respect of foreign land arising under a contract or from fraud are governed by domestic law if the proper law of the contract is domestic law or the defendant is resident or domiciled in the forum territory (see note 77 above), should be extended by analogy to equitable wrongs. It is rather difficult to derive a general choice of law rule from this, to govern cases where the relevant connecting factors do not link the case with the forum territory. Furthermore, those connecting factors are derived by historical accident from archaic jurisdictional rules: their selection has not been informed by policy considerations or rational choice of law analysis. While the proper law of the contract under which a fiduciary relationship arose might have some claim in logic o r policy to govern th e equitable obligation (cf. text at notes 122-123 below), it is difficult to see why the law of the defendant's place of residence per se should be equally relevant.
It is similarly submitted that the Canadian courts should not extend Ward v. Coffin (above note 75), according to which the lex fori governs personal equities in foreign land arising under contract: not only is that rule based on doubtful authority (cf. note 77 above), but the lex fori is moreover an inappropriate governing law for equitable wrongs (see text at note 112 below).
89 See text at notes 75-76, and note 77 above.
90 He held that even if the governing law was the law of New South Wales, “the court would not impose a higher obligation on [W] than he would be subject to in England” (at 456).
91 Since the category of equitable wrongs is unfamiliar to the Civil Law systems. Civilian conflicts law can offer no guidance on this matter.
92 See Austin, op. cit. (note 18 above), p. 70.
93 A LEXI S search failed to reveal any U S authority relating specifically to choice of law in breach of confidence.
94 The explanatory comments offer the following guidelines in this regard: The place where the relationship between the parties was centred will usually be the determinative contact where the restitution claim stems from a prior relationship between them. Practical convenience dictates that the same law should govern all of the parties' rights stemming from this relationship. Thus, where the enrichment occurred in the course of performing a contract between the parties, or in a relationship of trust or tort, the proper law of the contract, trust or tort respectively would govern restitution claims. The place where the benefit was received will usually be the conclusive contact where no prior relationship existed between the parties, unless it is fortuitous or cannot be identified, in which case the governing law will usually be the law of the place where the act resulting in enrichment was performed. The parties' domicile, place of business, and so on, assume importance only if they are all grouped in a single state; otherwise, these contacts play a subsidiary role. The situs of property assumes independent importance in the case of land, but is less significant in the case of movables.
95 439 F. Supp. 738, 743 (D.C. Pa., 1977).
96 On the grounds that Arkansas was the place where the plaintiff corporation was incorporated and had its principal place of business, and where the defendant entered into his employment relationship with the plaintiff, and was also the base from which the defendant worked. The court considered these factors relevant in the light of Restatement provisions § 188 (contract), 291 (agency) and 309 (company officers' liability); its reference to these provisions accords with the Restatements explanatory comments to § 221.
97 Fratcher, W.F. (ed.), Scott on Trusts, 4th ed. (Boston 1989), vol. VA, pp. 623–626Google Scholar.
98 As required for restitutionary liability: see Goff, Lord of Chieveley and Jones, G., The Law of Restitution, 3rd ed. (London 1986), pp. 16etseqGoogle Scholar.
99 See Birks, P., An Introduction to the Law of Restitution, rev. ed. (Oxford 1989), pp. 338–343Google Scholar; Regal (Hastings) Ltd. v. Gulliver 11967] 2 A.C. 134; [1942] 1 All E.R. 378.
100 The facts of a recent New Zealand case, Richmond Ltd. v. DHL International (NZ) Ltd. (Unreported, 23 August 1991, High Court Auckland Registry, C.L. 71/90) may serve as a practical example of the inadequacies of the § 221 regime. R, a New Zealand exporter, contracted for the sale of mechandise to an Italian buyer. On payment of the purchase price to a nominated Italian bank the buyer would receive the sale documents, which would entitle it to receipt of the merchandise from the carrier. R arranged with DHL, a New Zealand courier, to deliver a sealed package containing the sale documents to an Italian bank identified on the package as the sole consignee. An employee or agent of DHL opened the package, discovered that the buyer was the ultimate recipient of the documents, and delivered them directly to the latter. The buyer received the goods and went into liquidation. R failed to obtain payment or recover the goods. The court held that R should be compensated for its resultant loss on the grounds that (a) a fiduciary relationship arose between DHL and R when the former obtained the confidential information in the documents; and (b) DHL breached its fiduciary duty of confidence by using this information in a manner prejudicial to R's interests. As DHL had not been enriched in any way, the US § 221 regime would have been unable to resolve the conflicts issue raised by these facts. (Italian law, the law of the place where the alleged duty of confidence may have arisen, and was breached, does not know equitable obligations: an aspect which the court did not consider.)
101 See text at note 94 above.
102 Op. cit. (note 5 above), p. 1350.
103 731 F. 2d 112, 120-121 (2ndCir., 1984).
104 See e.g. Gautreau, J.R.M., “Demystifying the Fiduciary Mystique” (1989) 68 Can. Bar Rev. 1Google Scholar. The trend towards substantive fusion of tort and breach of fiduciary duty is particularly strong in New Zealand, where the Court of Appeal has, e.g., apportioned equitable damages for breach of fiduciary duty on principles of contributory negligence (see Day v. Mead (note 2 above), criticised by Gummow, J. in T.G. Youdan (ed.) Equity, Fiduciaries and Trusts (Toronto 1989), pp. 57, 82–87)Google Scholar; and awarded punitive damages for equitable wrongs (see Aquaculture Corp. v. New Zealand Green Mussel Co. Ltd. [1990] 3 N.Z.L.R. 299, and cf. also Rickett, op. cit. (note 29 above)). For the traditional view, according to which tort and breach of trust are inherently different kinds of wrong, see Fridman, G.H.L. , Torts (London 1990), p. 8; W.V.H.Google ScholarRogers, (ed.), Winfield and Jolowicz on Tort, 13th ed. (London 1989), p. 11Google Scholar.
105 [1971] A.C. 356, per Lord Hodson and Lord Wilberforce. Despite the technical difficulties with extracting a majority opinion from the report, Lord Hodson's and Lord Wilbcrforce's speeches are in practice accepted as stating the correct approach. For a genera] discussion of this judgment and choice of law in tort, see Cheshire & North, op. cil. (note 8 above), pp. 513 et seq.; Dicey & Morris, op. cil. (note 5 above), pp. 1359 et seq., read with the 4th cumulative supplement (London 1991), pp. 302 el seq. and authorities cited there.
106 See McKain v. R.W. Miller & Co. (South Australia) Pty. Ltd. (1991) 104 A.L.R. 257, 276. for the exact formulation of this rule: “A plaintiff may sue in the forum to enforce a liability in respect of a wrong occurring outside the territory of the forum if—1. the claim arises out of circumstances of such a character that, if they had occurred within the territory of the forum, a cause of action would have arisen entitling the plaintiff to enforce against the defendant a civil liability of the kind which the plaintiff claims to enforce; and 2. by the law of the place in which the wrong occurred, the circumstances of the occurrence gave rise to a civil liability of the kind which the plaintiff claims to enforce.”
107 The flexible exception was adopted by the High Court in an obiter dictum in Koop v. Bebb (1951) 84 C.L.R. 629, but subsequent developments have rendered its application doubtful—see Sykes & Pryles, op. cit. (note 8 above), p. 566. The High Court left this issue open in its recent decision in McKain (note 106 above) at 275-276.
108 Prefontaine Estate v. Frizzle (1990) 65 D.L.R. (4th) 275 (Ont. C.A.), distinguishing McLeanv. Pettigrew (1945] 2 D.L.R. 65 (Can. S.C.).
109 McLean (note 108 above), following Machado v. Fontes [1897] 2 Q.B. 231.
110 Since the New Zealand courts generally consider themselves bound by Privy Council decisions on appeal from any common law jurisdiction (see Breuer v. Wright [1982] 2 N.Z.L.R. 77. 83 (C.A.)), they will probably adopt the Privy Council decisions providing that a claim in tort will succeed if it is actionable under the lex fori's tort law and not justifiable under the lex loci delicti (Canadian Pacific Railway Co. v. Parent (1917) A.C. 195; Walpole v. Canadian Northern Railway Co. [1923] A.C. 113 (both on appeal from Canada), affirming the rules in The Halley(1868) L.R. 2 P.C. 193 and Phillips v. Eyre (1870) 6 L.R. OB. 1); but it cannot be predicted whether they will interpret “not justifiable” (the interpretation of which was left open by the Privy Council in Canadian Pacific Railway Co.) as “civilly actionable” in the Boys sense, or follow the Canadian Supreme Court interpretation of “not justifiable” as “not innocent.”
111 Law Com. No. 193. For a critical discussion, see Carter, P.B., “Choice of Law in Tort and Delict” (1991) 107 L.Q.R. 405, 416–417Google Scholar.
112 For conflicts purposes, courts abandon their domestic conceptions of public policy and refuse to apply foreign rules only if they lead to a result which offends a fundamental principle of justice: cf. Dicey & Morris, op. cit. (note 5 above), p. 92; Cheshire & North, op. cit. (note 8 above), pp. 131-133.
113 It would not be fundamentally unconscionable to refuse relief absent proof of fault; the more so since some common law jurisdictions (like Canada: see Flannigan, “Fiduciary Obligation in the Supreme Court” (note 7 above)) are now departing from the traditional strict liability in equitable obligations on the ground that this liability is not always consonant with justice. Further, there can be no fundamental objection to refusing relief if the plaintiff cannot establish actual damage (e.g., where a fiduciary provided necessary services at the business rate, without prior disclosure of his or her interest).
114 Boys (note 105 above) at 391, per Lord Wilberforce.
115 See Cheshire & North, op. cit. (note 8 above), p. 537.
116 Cf. Cheshire & North, op. cit. (note 8 above), pp. 536-537, who support the retention of the lex fori where the proper law is that of a third country; and Dicey & Morris, op. cit. (note 5 above), p. 1375, who support an ouster of both the lex fori and the lex loci delicti in such a case. The former view seems more in accord with precedent. In Boys (note 105 above) at 391, Lord Wilberforce stated that the consideration for purposes of a segregable issue was whether the relevant foreign rule ought, as a matter of principle, to be applied. That case admittedly concerned a situation where the lex fori was also the proper law, and where the inappropriate rule was the foreign lex loci delicti rule. However, I cannot see why the lex fori should be applicable where the relevant foreign law is the lex loci delicti, but not where it is the proper law: the policy reasons supporting an application of the lex fori must remain the same. So too Cheshire & North, op. cit. (note 8 above), p. 537.
117 On the use of the proper law in respect of contracts and restitution, see Dicey & Morris, op. cit. (note 5 above), pp. 1161 el seq., 1350 et seq.\ on the flexible proper law exception now acknowledged in respect of torts, see text at notes 105, 114, 116 above.
118 See Frame v. Smith (1987) 42 D.L.R. (4th.) 81, 99-100, per Wilson J. (adding as a further consideration that the person whose affairs were subject to control had to be in a vulnerable position. This element is now in doubt, following Lac Minerals (note 3 above)). See also Flannigan, R., “The Fiduciary Obligation” (1989) 9 O.J.L.S. 285, 305–306Google Scholar, commenting on USSC (H.C.) (note 15 above).
119 This concept is here used in its broad sense, including inter alia a corporate opportunity. Cf. Shepherd, op. cit. (note 3 above), pp. 110 et seq., 324–325,326–331 for this wide interpretation of the concept “property."
120 “Access to property” is used in the broad sense of being enabled to deal with property already owned by the beneficiary, or to influence the latter's future acquisition of property.
121 So too Flannigan, “The Fiduciary Obligation” (note 118 above), pp. 307-310 and “Fiduciary Obligation in the Supreme Court” (note 7 above), p. 48, who speaks of “access to assets for a defined or limited purpose” but uses this phrase in a context which indicates that he attaches a wide meaning to both “access” and “assets”.
The above analysis is not meant to suggest that “fiduciary relationship” is a unitary concept, or that a fiduciary relationship granting access to property for a specified purpose will necessarily attract the entire range of fiduciary duties: cf. Sealy, “Fiduciary Relationships” (note 6 above)p. 73; Finn, op. cit. (note 3 above), p. 1.
122 So too Flannigan, “The Fiduciary Obligation” (note 118 above), p. 310.
123 This would be the proper law of the agreement, which in turn would usually be the law of the place of incorporation. This accords with the US approach: cf. Kozyris, P.J., “Corporate Wars and Choice of Law” [1985] Duke L.J. 1Google Scholar.
124 The proper law/law of access approach will effect practical results that correspond with those achieved under the United States § 221 regime (at least, where the equitable relationship is imposed on a legal relationship), and the approach adopted in Aaron Ferer (note 103 above), should US law regard the existence and scope of an equitable duty as a segregable tort issue governed by the law of the relationship as the proper law. (US courts can more readily segregate fundamental issues like wrongfulness from the control of the lex loci delicti, as US conflicts law does not have the equivalent of Lord Wilberforce's restrictions on referral to the proper law (see text at note 114 above). Note, too, the following statement in the seminal case of Babcock v. Jackson 191 N.E. 2d 279, 285 (1963): “[T]here is no reason why all issues arising out of a tort claim must be resolved by reference to the law of the same jurisdiction. Where the issue involves standards of conduct, it is more than likely that it is the law of the place of the tort which will be controlling, but the disposition of other issues must turn, as does the issue of the standard of conduct itself, on the law of the jurisdiction which has the strongest interest in the resolution of the particular issue presented.") There would admittedly still be difficulties with claims brought in non-common law jurisdictions. The concept of equitable obligations will be an unfamiliar one; claims will, therefore, probably be classified as relating to breach of contract or delict. The latter, especially, will result in internationally inconsistent outcomes, as Civilian conflicts regimes usually refer claims in delict to the lex loci delicti. An international convention, along the lines of the Hague Convention on the Law applicable to Trusts and their Recognition, may be required to assist non-common law countries in identifying claims in equitable obligation and applying an appropriate choice of law regime.
