Equity Exam Notes. Proprietary Remedies - To do with property EQUITY:
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1 Equity Exam Notes Fiduciary obligations where one party to a transaction or an engagement has to maybe subordinate their interests to those of another. Have to not seek out any personal advantage. - Have to not put themselves in a position where there might be a conflict between what is good for them and what is good for the other person. They are meant to act with complete loyalty in the ideal case. - It s about the law identifying certain relationships in society, which will not work unless one party subordinates their interest to the other and acts with complete loyalty. - If you are a solicitor, you owe fiduciary obligations to your client. You are advising them what is the best thing for them to do. - If you make an unauthorized profit from your position as a fiduciary you need to give the profit to the person to whom you owe the duty - The remedy is about damages loss recovery - Anyone who assists in the breach, or knows of the breach (third parties, eg. Banks) may also be liable Personal Remedies - Money - Or if you want equity to do something for you stop someone from doing something or make someone do something Proprietary Remedies - To do with property EQUITY: What is it? - The separate body of law, developed in the Court of Chancery, which supplements, corrects and controls the common law Butterworth s Encyclopedic Australian Legal Dictionary - Adaptability + Flexibility words to associate with equity - Equity softens common law in certain aspects by paying more attention to justice and fairness - But equity will shut its door in the face of upset and poorly treated people just not as easily as the common law will Common Law: A body of judge made law. The idea that the common law is rigid and inflexible Court of Chancery:
2 - How did it develop? - What did it do? - Two major shifts: o Gradual systematization from 16 th century o Procedural (not doctrinal_ unification of equity and common law jurisdictions: Judicature Acts 1873, UK; 1883, Vic; 1972, NSW (see Supreme Court Act (Vic) s 29(1)) To say that the same courts could administer both equity and the common law Equity v Common Law (Or Ellesmere vs Coke) - King James said: The courts of equity take precedence - This does not mean the equity is more important than the common law because if there was no equity the law would be okay (just a bit harsh) - But if there was no common law everything would fall apart - Equity needs the common law to provide a stable back bone of the legal system How does equity differ from the common law? - Equity recognizes different levels of ownership (legal and beneficial/equitable) - Equity recognizes some forms of property which the common law does not Interest in partnership form of property that exists only in equity Rights under constructive and express trusts form of property which exists only in equity - Equity recognizes different types of obligations to CL (generally proscriptive as opposed to prescriptive) In a normal property transfer relationship only need to do what you are promised to do. Equity will recognized a higher level of obligation unfettered loyalty have to forgo your own interests and act in the interests of another. (Does not mean positive obligations) Equity v The Common Law: - What can equity do which the common law cannot? Equity may enforce rights where common law does not (eg. Enforcing beneficial interests or assignments where formalities are lacking.) Equity may deny rights common law would enforce (eg. Equity may not enforce a contract affected by undue influence) Remedies (remedial flexibility) Range of remedies Discretion versus remedy as of right (discretionary vs mandatory element of remedies)
3 Modern Equity in Australia: Equity has two zones of jurisdictions: Exclusive jurisdiction Rights and obligations only recognized in equity (eg. Trusts, fiduciary obligations, partnerships) Concurrent (or auxiliary) jurisdiction Equity supplements common law rights and obligations (eg. A has a common law action for trespass, but needs an equitable remedy of injunction to stop trespass continuing. An example of equity aiding common law rights) Here equity acts as a supplement to common law - Remedies are crucial Equitable Maxims: (Themes underlying what is going on in cases) - Equity looks on as done that which ought to be done - Equity follows the law Doesn t seek out to contradict the law. Does not try to overturn the way that the law functions. - He or she who comes to equity must come with clean hands If you want to make a claim in equity you cannot be a fraudster yourself - He or she who seeks equity must do equity - Equity does not allow a statute to be an instrument of fraud - Equality is equity - Equity acts in personam - Equity will not assist a volunteer - Equity looks to intent not form - Equity will not suffer a wrong to be without a remedy - Where the equities are equal, the first in time prevails - Where the equities are equal, the law prevails - Equity aids the diligent and not the tardy The idea of limitations statutes doctrine of delay. Fusion of equity and common law? - A concern that after the Judicature acts which combined the administration of the courts of equity and the courts of the common law, that there would also be a thing called doctrinal fusion. That the remedies and causes of action between equity and the common law would start to mingle and merge, and would lose their distinct character - Fusion fallacy that the combination of the administration of equity and common law would have any affect on the doctrine - Anti-fusion argument - Fear of foreignness - Reminder Judicature Acts brought procedural, not doctrinal duty Those who assert that law and equity are fused should explain what they mean, how it happened and what follows from it Lehane J
4 Equitable doctrines should now take their proper place as part of a unified system of judge-made law - Mason P Kirby, Keane, Gummow: - Kirby: The doctrines and remedies of equity are part of what is now a great world-wide legal tradition [which in Australia] must now be harmonious with other parts of the law, including statute and common law. Suggesting that equity may be able to be more responsive to circumstances rather than the rigid common law? - Keane: To elide differences in pursuit of a common standard of fair and reasonable behavior is to fail to recognize that the rules of equity and the common law reflect radically different views of legitimacy of human selfishness and of occasions for its control. - Gummow: It is from a thriving equity jurisdiction based in a thorough understanding of its principles, their necessity, and the circumstances of the individual case, that the judge-made law continues to draw much of its sustenance. Says that equity can t play its role if its too transformative - Kirby, Keane, Gummow, agree that reference to history is important, but they disagree on what you can draw from history - Recourse to principle - Trying to own the history - Gummow more fixed, traditional and orthodox approach. Says we should be faithful applicants of the law TOPIC: BREACH OF CONFIDENCE Breach of confidence: - What is it? Breach of confidence is a doctrine developed by equity in its exclusive jurisdiction that recognises and protects certain rights of confidentiality; it pertains to the unauthorised use of confidential information. Other regimes for protecting such rights exist, such as contract, employment and intellectual property law, but this section is concerned with purely equitable claims rights which equity enforces independently of the common law. Breach of confidence actions are becoming increasingly important as a means of protecting the value of information in an age of electronic communication and complex networks Almost any variety of technical or commercial information in any form can be protected. A range of personal or private information is also apt to be protected. You can get a personal remedy for unauthorized use of your information (eg. Injunction restrain them from disclosing your information, compensation, counter profit if the breacher gained
5 more from the breach than you lost, you can strip away the profits from them) - What role does it play in society? Commerce Innovation o Patents (intellectual property protection) society benefits as your idea is ultimately disclosed, you benefit as no one except you is able to use it for a set amount of time o However Breach of confidence can protect better if you need people s help eg. Recipe for Coca Cola people know about it, it is shared among a select few (all entered into a confidentiality agreement) o Can also restrain former employees from taking trade secrets and sharing them with their next employer Privacy Government secrecy and national security o Can protect Government information through the action of breach of confidence o Courts are more inclined in the case of Government secrecy and national security to be stricter on the application of defenses Elements of the Action *Coco v AN Clark (Engineers) Ltd [1969] RPC 41, (OL). People come together to work on an idea They don t document anything Before anything serious happens they have a falling out One takes the idea, and proceeds to do it themselves Elements of the Action of Breach of Confidence: (USE THIS FORMAT IN EXAM) Equity imposes an obligation of confidence where: 1) The information is specific; The information claimed to be confidential must be defined with sufficient precision. O Brien v Komesaroff (1982) 150 CLR 310 (OL), [32]-[46]. 2) The information has the necessary quality of confidence Any formula, pattern, design or compilation of information of any kind can be the substance of confidential information. There is no restriction on the mode or medium through which confidential information may be conveyed. A quality of confidence in information which can be protected may appear from a photograph, the design of a product, a list of customers or the genetic structure of a tree. The mere fact that information is not common knowledge, or is a record of events that occurred on private property, does not entail that it has the necessary quality of confidence; conversely, in certain
6 circumstances information may retain the quality of confidence even following publication: 3) Circumstances import the duty; and 4) Unauthorized use (possibly to the detriment of the party who disclosed information in the first place) The information is specific O Brien v Komesaroff (1982) 150 CLR 310 (OL), [32]-[46]. FACTS: 2 solicitors come together with the help of some accountancy expertise they produce a unit trust deed which implements a tax avoidance minimization scheme Solicitors in partnership (involve obligations of confidence to one another) Difficulty with trying to work out what information here was in confidence the idea before the scheme? The documents themselves that implemented the scheme? The unit trust deed? The court has to come to a view about what the thing is/what the information is Question: Was the information over which the obligation was claimed specific enough? One needs to know not only what was the information conveyed but also what part of the information was not common knowledge Mason J the problem is caused by the generality of the description of the information which he seeks to protect Mason J What is the relationship between this element and the next? Ocular Sciences Ltd v Aspect Vision Care Ltd [1997] RPC 289, (OL) Involves plans for contact lenses (various designs) Former business partners and employees falling out Going their separate ways and trying to make competitive business products The plaintiffs here started saying every piece of information they ever gave to the defendants is confidential and they can t use any of it BUT a lot the information was public knowledge or became public knowledge The plaintiff in the end only relies on the contents of a lens design booklet, the design of the contact lenses themselves, and a lens design computer program Some they succeed with, some they fail Have to specifically identify the confidential information. The claim must be clear and specific
7 The courts are careful to ensure that the plaintiff gives full and proper particulars of all the confidential information on which he intends to rely in the proceedings Laddie J If information is in the public domain, anyone can use it The information has the necessary quality of confidence - What kind of information can have the necessary quality of confidence? Not everyone knows about it (not in the public domain) Maybe it is a new idea (not in the public domain) Can be personal or commercial (not restricted on the type of information) - What forms of information can have the necessary quality of confidence? Franklin v Giddins [1978] Qd R 72, (ET 6.175) (OL). Information was genetic information in the form of a stick (piece of wood was the form of the information) Can be anything stick, video, recording, writing - What does it mean? Defined negatively: It is not public property or public knowledge Green MR in Saltman Defined circularly: no more than that the information in question is so generally accessible that, in all the circumstances, it cannot be regarded as confidential Lord Goff in Att-Gen v Guardian News Papers (1990, HL) Concept of relative secrecy see discussion in AFL v Age (2006, VSC) Talbot v General Television Corporation Pty Ltd [1980] VR 224; [1981] RPC 1, 5-10 (OL). - Man develops idea for a TV program about the success of self-made millionaires specific theme inspire people to get rich - Had meetings with channel 9 the plaintiff had written a concept program plan (written document/submission stating the program philosophy and what elements of the program would be like format, pilot script, how much it would cost to produce) - All these documents and pieces of information creating a specific idea taking it out of the scope of a general idea - Segments on A Current Affair using his ideas and format structure - Channel 9 the defendants argued that the idea is already in the public domain, also that there is no property in an idea - Plaintiff wins here Not general information it had a commercial twist was not in the public domain - When can an idea be protected by breach of confidence? - Does it need to be unique? This is not necessary provided that awareness of your idea in its specific form is not the subject of general awareness - Note the two ways information could be public If it was confidential and has been disclosed, or
8 If it was so general to begin with that it could never have been confidential Saltman Engineering v Campbell (1948) - FACTS: An agreement between a designer and manufacturer. The manufacturer then entered into a separate arrangement with a subcontractor. The subcontractor didn t have a contract or agreement, or any kind of arrangement with the designer. But the court held that they would have known that the plans that they had received were confidential. (Don t need a direct relationship to get a obligation of confidence) - It is perfectly possible to have a confidential document, be it a formula, a plan, a sketch - what makes it confidential is the fact that maker of the document has used his brain - But is novelty or originality required? - What is the consequence of reverse engineering a publicly available product? What if the information is public? - Can the form of information or its disclosure make something confidential? Australian Broadcasting Corporation Ltd v Lenah Game Meats Pty Ltd (2001) Lenah Game Meats wants an injunction to stop film of possums being gruesomely processes People who filmed it believe if they get the film on TV they can stop this type of cruelty The filmers had broken into Lenah Game Meats and installed hidden cameras illegally to film the footage of the possums being processed Argument should have argued that the information captured on the video is confidential BUT they NEVER argued that this information was confidential Argue that if someone secretly films in nature what they are doing is capturing confidential information (making the basis of an action for breach of confidence) Details of the possum slaughtering process were not confidential so could a film of it be confidential? If we are asking about the privacy of information are we then still asking about the way in which it is obtained? o No. How the information is obtained does not matter what is being filmed is not considered to be private. o No matter how you capture it, the information is not confidential and can t be protected by an action for breach of confidence o Just because the information can produce a public outcry it doesn t mean it is confidential information Douglas v Hello! Ltd [2008]
9 o Police used warrant to film a man in his bedroom in his underpants o Humiliating and private content being in underpants o Looks at the content and nature of information not the form of it being obtained. What is a limited number of people know? Jane Doe v Australian Broadcasting Corporation [2007] VCC 281 (OL) The plaintiff had been assaulted and raped by her husband He is about to be convicted The ABC made reports identifying him by name and the address of the attack and that the attack happened with in marriage (people could work out her name, where she lived, that she was the victim and she was named on one bulletin) The ABC employers pleaded guilty to naming a victim of sexual assault/offence The victim sued the ABC for breach of confidence and breach of statutory duty Basis of action for breach of confidence if very broad Used the idea does she have a reasonable expectation of privacy for this information? (unlikely to be Australian law) Her identity however was known to her family, friends, perpetrator s family and friends and the investigators Telling close family and friends confidential information does not make the information confidentiality and does not make it in the public domain Does not alter the private character of the information Investigators and medical practitioners involved and knowing the information does not affect the confidentiality of the information Trial conducted in open court (Disclosure): still have restrictions on how they are reported. This also does not alter the private character of the information What if the source of the public information is dubious? What if a limited number of people know? Australian Football League v Age Company Limited [2006] VSC 308, at [35]-[56] (OL) Disclosure of names of players allegedly involved with drugs The Age had received information about 3 players at stage one or two of positive drug tests. They knew that this information was confidential At the time that they published the information however, they argued that it had already entered into the public domain (was out in the print media in an earlier edition, hard copies were sent out, and the AFL
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