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THE FIDUCIARY OBLIGATION IN THE CONTEXT OF THE JOINT VENTURE RELATIONSHIP
GEOFF BRODIE*
The real meaning, significance and consequences of the fusion of the two systems of law and equity brought about by s 24(3) of the Supreme Court of Judicature Act 1873 (UK) (repealed) are even now, some 135 years after the legislation, issues of lively and at times colourful academic debate.
Any consideration of the subject must begin at Meagher, Gummow and Lehane's Equity, Doctrines and Remedies, now in its 4th Edition. This is a scholarly erudite and authoritative work. The authors are equity lawyers through and through. They are, in a typically Australian way, forthright in their writing.
To them equity and common law are not fused, but simply confused in the minds of those who so assert. Equity is equity. Equity prevails over the common law. Her principles owe nothing to contract or tort. Her remedies are unique and principled. Similarity with common law remedies, where it exists, is coincidental. To equate monetary rewards for breach of equitable obligation; to award exemplary damages in equity; to allow the introduction of common law concepts such as contribution; to attempt to evaluate a lost chance and so on, are heretical. They so assert in blunt words.
They call attempts to do so 'the fusion fallacy'.
The authors bemoan the inability of the proponents of the fusion fallacy to understand the simple concept that the fusion of law and equity means effecting not a fusion of two systems of principle, but more simply a fusion of the Courts which administer the two systems.2 The principle is that the Judicature Acts, while making important changes in procedure, did not alter, and were not intended to alter, the rights of parties.
The authors argue that those who commit the fusion fallacy announce or assume creation by the judicature system of a new body of law containing elements of law and equity, but in character quite different from its components.3
They assert that the fusion fallacy involves the conclusion that the new system was not devised to administer law and equity concurrently, but to 'fuse' them into a new body of principles comprising rules neither of law nor of equity, but of some new jurisprudence conceived by accident, born by misadventure and nourished by sour but high-minded wet nurses.4
The fallacy is committed explicitly, covertly and on occasion with apparent inadvertence. The state of mind of the culprit cannot lessen the evil of the offence.5
To their minds, treating all equitable wrongs as examples of breach of contract or tort, as asserted by Professor Andrew Burrows in an article entitled 'We Do This At Common Law But That In Equity' cannot be right.6 Professor Burrows argues that both common law and equity recognise what, at root, is exactly the same phenomena, namely wrongs or breaches of duty triggering compensation. Whilst there may be good sense in treating breach of contract separately from torts, there is no rational reason for having another category of wrongs labelled equitable wrongs.
In Professor Burrow's view, there are few (if any) real differences in practice between common law and equitable principles. The wrongs being addressed are the same, the remedies that should be available match. It is said, for instance, that there should be no separate category of breaches of equitable duty triggering compensation. 'All equitable wrongs should be treated as examples of breach of contract or tort'.7
In his article, Professor Burrows reserved special criticism for those who deny the fusion of equity and common law principles, saving special mention for the authors of Meagher, Gummow and Lehane.
Speaking indirectly, he notes 'that rationality is obstructed by the unruly poltergeist which we know as the law/equity divide. These days, even the irreligious are tempted to conclude that only an exorcism of this troublesome ghost will allow us to set our house in order'.8
In short, the authors have sold out to the devil.
The learned professor was, of course, speaking of the third edition of Meagher, Gummow and Lehane. If he thought that, by implying that those who seek to sustain the clear divide between equity and common law are heretics, he might provoke a reaction, he was certainly not to be disappointed.
In their fourth edition the authors devote a new section to the riposte. They regard the professor as a participant in a systematic programme to 'take fusion seriously' and change both common law and equitable doctrine so as to produce what is asserted to be a principled product. This might be described as a 'fusion philosophy'.
The learned authors assert
The principles by which Courts are authorised to make these changes are in their view unstated and perhaps incapable of being stated. How will the content of the duty be determined? How will the breach be determined? How will remoteness and causation be determined? How will quantification of compensation be determined? Will discretionary defences beavailable and ultimately,
what compelling reason requires this programme to be attempted (all that is certain is that it will be to the heavy cost of litigants involved in the reformulation of doctrine) and by what authority are the Courts to grantthemselves such a radical law reform brief?9
The authors do not like the approach of the New Zealand Courts, which they regard as unprincipled.
They are sharply critical of Aquaculture Corp v New Zealand Green Mussel Company Limited10 in which four members of the Court of Appeal held that monetary awards for breach of equitable obligation fully equated with those applicable to awards of damages at common law so that it was unnecessary to decide whether the obligation in the instance case was founded in equity or contract. They then went on to hold that exemplary damages may be awarded for actionable breach of confidence; it being left to the remaining member of the Court, Somers J, to remind his colleagues that equity and penalty are strangers.11 The authors view subsequent decisions which have seen exemplary damages awarded for breaches of trust with amazement.
The authors are not alone. Another commentator has criticised the approach as it seems to be a free-for-all. A complete remedial lolly scramble would be the result. This would create uncertainty in the law. For the very strict duties imposed on trustees not to misuse trust funds a very strict remedy is appropriate. The wrong is an equitable one. The basis forum of equity is the conscience. The basis of the equitable wrong is the effect on the conscience of the trustee if he or she were to profit in any way from his or her position of trust and honourable responsibility. To cleanse the wrongdoing completely, all damages caused by the trustee's default, no matter how remote, must be restored to the beneficiary.12
The judgment of Cooke P in Day v Mead, which advocated the importation into claims for compensation for breach of fiduciary duty of the common law concept of contributory negligence, attracts similar criticism from the authors.13
The New Zealand Courts appear to be lost as champions of equity's cause.
Some of the Canadian Courts too receive similar strong criticism. To the authors, the assertion in Cadbury Schweppes v FBI Foods14 that the choice available to a plaintiff between a remedy in equity and a common law remedy is merely a question of appropriateness having regard to whether the particular case has a contractual, tortious, proprietary or trust flavour is as distasteful as the product 'Clamato' (a mixture of tomato and clam juices), the subject of the litigation.15
To the authors the purity of equity is encapsulated in this passage from McLachlan J
The basis of the fiduciary obligation and the rationale for equitable compensation are distinct from the tort of negligence and contract. In negligence and contract the parties are taken to be independent and equal actors, concerned primarily with their own self interest. Consequently the law seeks a balance between enforcing obligations by awarding compensation and preserving optimum freedom for those involved in the relationship in question, communal or otherwise. The essence of a fiduciary relationship by contrast, is that one party pledges herself to act in the best interest of the other. The fiduciary relationship has trust, not self interest, at the core, and when breach occurs, the balance favours the person wronged. The freedom of the fiduciary is diminished by the nature of the obligation he or she has undertaken — an obligation which betokens loyalty, good faith and an avoidance of a conflict of duty and self interest. In short, equity is concerned, not only to compensate the plaintiff, but to enforce the trust which is at itsheart.16
This is no lightweight debate and the protagonists are certainly not pulling their punches.
Well, to the Australians I say all is not lost. In the area of joint venturers' obligations the principles of equity appear to have been reinforced in a way of which I am sure they will approve.
The finding of fiduciary duties, and the consequent imposition of equitable remedies in litigation between joint venture partners, provides a fascinating illustration of the modern workings of the law of equity and the interrelationship with the common law.
Salutary indeed are the remedies provided in equity when imposing notions of conscience and fair dealing in areas that many business people might consider to be at arms length, and where compliance with the strict terms of the document or agreement reached are thought to be the limits of the enforceable obligation. Fiduciary obligations, as are well-known, are not confined to the enforcement of express undertakings or agreements.
First of all what is a joint venture?
A satisfactory definition is elusive.
In everyday terms a joint venture is a commercial term used to describe two or more persons associating together to a common commercial end. Under New Zealand law the persons associated in that venture may have their relationship regulated by contract; they may be partners; they may have a joint venture company, or although associating to some degree, there may be no formal legal relationshipbetween them at all.17
Definition may not even be helpful or needed.
For the purpose of determining the applicability of equity's principles what is more significant is to determine the nature of the duties and commitments the players have expressly or impliedly undertaken toward each other. We need to bear in mind that what we are seeking is to determine when a Court will impose, in the commercial arena, duties which are fiduciary in nature.
In this area of law the inquiry will be not to determine whether one of the parties is a fiduciary, but whether he or she will be found to have incurred fiduciary obligations. This is fortunate because in LAC Minerals Limited v International Corona Resources La Forest J said:
There are few legal concepts more frequently invoked but less conceptuallycertain than that of the fiduciary relationship.18
The problems I am discussing do not arise where the parties are in partnership. If they were, the full force of the fiduciary obligation would be felt without more.
The relationship between partners is one which has traditionally been regardedas a classic example of a fiduciary relationship.19
I am concerned with the situation where the parties will either be in business together or will at least be contemplating some kind of business relationship. The Supreme Court considers there is a strong case for saying that most joint ventures may properly be regarded as inherently fiduciary in nature because of the analogy with partnership.
In fact, the number of joint venture cases outside partnership law is likely to be quite small.
On the other hand, there are joint venture relationships which are not in their essence fiduciary. Ordinarily a commercial joint venture will involve parties who are at arms length and who can be expected to look after their own interests. Two people or enterprises can be in a business venture jointly, but on such a basis and on such terms that they are quite free to pursue self-interest.
The fact that an agreement between two parties is of a commercial kind and that they have dealt at arms length and on an equal footing has consistently been regarded by the court as important, if not decisive, in indicating that no fiduciary duty arose. But it is altogether too simplistic to suggest that commercial relationships stand outside the fiduciary regime. In truth every such transaction must be examined on its merits with a view to ascertaining whether it manifests the characteristics of a fiduciary relationship.20
Also, it is quite feasible that even an arms length relationship will be such that some particular or selected aspect will result in the court imposing equitable duties. In Maruha Corporation v Amaltal Corporation Limited21 two substantial corporates were in an essentially commercial arms length joint venture, characterised by a carefully drawn and comprehensive joint venture agreement negotiated between well resourced organisations. Yet the Supreme Court found that there existed obligations of fidelity and good faith, to the exclusion of self-interest, where the New Zealand resident had undertaken one aspect of the business undertaking in circumstances which enabled it to take advantage of the trust and confidence reposed in it by the Japanese partner.
It is well settled that, even in a commercial relationship of a generally non-fiduciary kind, there may be aspects which engage fiduciary obligations of loyalty. That is because in the nature of that particular aspect of therelationship one party is entitled to rely
upon the other, not just for adherence to contractual arrangements between them, but also for loyal performance of some function which the latter has either agreed to perform for the other or for both or has, perhaps less formally, evenby conduct, assumed.
The decision serves to remind us that a fiduciary relationship does not exist merely because the parties depend upon each other to perform the contract between them as to its terms, but would be found when one party was entitled to and did repose trust and confidence in the other.22
The core ingredient is the undertaking of trust and confidence.
Returning to LAC Minerals Limited v International Corona Resources, the court noted that fiduciary obligations have been imposed in relationships which seem to possess three characteristics:
1. The fiduciary has scope for the exercise of some discretionary power.
2. The fiduciary can unilaterally exercise the power so as to affect the beneficiary's legal or practical interests,
3. The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.23
In seeking to define where and when the fiduciary obligation would be found in a joint venture Millet LJ, writing in the Law Quarterly Review, has said to like effect that 'the search for a single, all-embracing definition is doomed to failure'.
But he went on to note at least three distinct categories, each with distinct characteristics and obligations: first, the relationship of trust and confidence; second, the relationship of influence, the defining characteristic of which is vulnerability; and third, the relationship of confidentiality. In his Lordship's view, there is no reason why parties may not simultaneously be in both a commercial and a fiduciary relationship. There is however a common thread to the fiduciary obligations that these relationships give rise to:
It is the principle that a man must not exploit the relationship for his ownbenefit.24
There are many cases where one party identifies or learns of a potential business opportunity which is then introduced to another with a view to developing the potential.25 Problems are most likely to arise where parties are negotiating towards some kind of business relationship but at least one of them considers themselves to be at arms length. The parties may negotiate a long way towards the formation of a joint venture without reaching a relationship in business together, yet still find themselves subjected to the imposition of fiduciary obligations. In 1985 the High Court of Australia noted in United Dominions Corporation Limited v Brian Pty Limited
A fiduciary relationship can arise and fiduciary duties exist between parties who have not reached and who may never reach agreement upon the consensual terms which are to govern the arrangement between them. A fiduciary relationship and its attendant fiduciary obligations may and ordinarily will exist between prospective partners who have embarked upon the conduct of a partnership business or before the precise terms of any partnership agreement have beensettled.26
The judgment in LAC Minerals Limited v International Corona Resources27 provides a good example. The plaintiff mining company was drilling exploratory holes on certain land when it was approached by the defendant with a view to a possible joint venture. In the course of negotiations the plaintiff revealed the results of its drilling program. The negotiations came to nothing. Later the defendant, in competition with the plaintiff, purchased a very valuable adjoining parcel, making use of the plaintiffs information in doing so.
The Court held on appeal:
It is my view that while no ongoing fiduciary relationship arose between the parties by virtue only of their arm's length negotiations ... a fiduciary duty arose in LAC when Corona made available to LAC its confidential information concerning the Williams property, thereby placing itself in a position ofvulnerability.
Nor is it necessary that the business relationship being discussed is one of joint undertaking in business together.
In Orangomai Reserve Limited v Cashmere Lakes Reserve Ltd28 the fiduciary had purchased at mortgagee sale the property of the financially distressed plaintiff who had introduced him to the property in the hope and expectation that following acquisition the buyer would then resell it to the plaintiff. The circumstances of the introduction to, and the acquisition of the property by, the defendant had such of the elements of trust and confidence about them as to justify the imposition of fiduciary duties on not only the defendant but also the buyer who had acquired through him.
Eschewing the idea that relief is reliant on the existence of a binding agreement Fogarty J asserted:
Ultimately as all the cases show the court must judge whether the particular facts found make it inequitable for the defendant to act in a particular way, so that relief should be granted to restrain that conduct or remedy theconsequences of it.29
Why is the finding of a fiduciary relationship significant? The imposition of such duties is not just a matter of academic interest. It is of very real consequence when it comes to determining and applying remedy.
Equity is concerned with self-interest. An errant fiduciary cannot keep for himself the profits he has made in breach of the trust reposed in him. Phipps v Boardman30 is the leading authority on the consequences which flow from a breach of the prohibition against self-interest. Boardman, a solicitor advising the trustees, negotiated unsuccessfully on behalf of the trust for the acquisition of a strategic parcel of shares. In the course of these negotiations he and Tom Phipps gained much valuable information which they would not have accessed but for their position as trustees, They later acquired their own parcel of shares, then succeeded in achieving significant gains for both the trust (in relation to the trust's shares) and for themselves in relation to the shares they had quite legitimately acquired. They were ordered to account to the beneficiaries for a proportionate share of the gain made by them on the shares they had acquired personally.
Boardman and Phipps were only able to obtain the valuable information on which they founded the plan to acquire the shares, and to profit through realisation of the assets of the company, by using their ability to represent that they acted for the trust. They effectively acquired the shares in their capacity as trustees. Applying the well-known principle in Keech v Sandford,31 the House of Lords required them to account to the beneficiaries of the trust for the gains they had made.
Another graphic example is Biala Limited v Mallina Holdings Limited.32 Mallina Holdings Limited, a small listed company, was engaged with Dempster Nominees Limited in an attempt to procure a mandate to conduct a feasibility study concerning the establishment of a petrochemical plant in Western Australia. Dempster conducted negotiations with the West Australian Government which reached the point where Cabinet approval of an exclusive mandate for a major petrochemical project would be sought in favour of the joint venture. By sleight of hand Dempster had been able to convince the shareholders in Mallina that the company had little or no prospect of being awarded the project. The shareholders were prevailed upon to abandon their interest in the company. In so doing Dempster was held to breach his fiduciary obligation to make full and accurate disclosure of all facts that he had learned in the conduct of the joint venture.
In consequence of the misrepresentation Mallina was induced to give up its rights in the joint venture in favour of Dempster and O'Connel.
The Court drew heavily on the decision of Street J in Re Dawson:
The obligation of a defaulting trustee is essentially one of effecting a restitution to the estate. The obligation is of a personal character and its extent is not limited by common law principles governing remoteness of damage ... This is consistent with the proposition that if a breach has been committed then the trustee is liable to place the trust estate in the same position as it would have been in if no breach had been committed. Considerations of causation, foreseeability and remoteness do not readily enter into the matter. The principles involved in this approach do not appear to involve any inquiry as whether loss was caused by or flowed from the breach. The obligation to make good the trust estate is of a more absolute nature then the common law obligation to pay damages for breach of contract ortort.33
In the result Dempster was required to disgorge. He had been able to persuade a new investor to buy into the project for $50 million from which the Court concluded the project all up was worth $100 million. After allowance for expenses and the assessment of the risk the share of the plaintiffs' interest which it had lost was finally settled at $38 million. The claim was brought as a derivative action by shareholders in Mallina.
The result in LAC Minerals v Corona Resources was even more spectacular. The profits required to be disgorged by LAC minerals amounted to $273,011,000.00!
This case can now be seen as a very satisfactory weaving together of all of these threads in a contemporary setting.
Chirnside and Fay were both experienced, possibly hardened, business men. They shared information, ideas and effort in the process of identifying, evaluating and seeking to acquire a valuable business opportunity.
Although sophisticated, they were not good on detail and did not resort to clearly-drawn contracts.
When Mr Chirnside decided to go it alone he might, in common with many other commercial business men, have thought that he owed no legal obligation to Mr Fay. He did not have an agreement to prevent him from so doing.
However, all of the New Zealand courts concluded that in this commercial relationship they were parties to a joint venture in the development,35 and further, that on the facts of this case, that relationship carried with it the duty that neither would act against their joint interests in the project. Mr Chirnside breached that duty of loyalty and appropriated the project to the exclusion of Mr Fay.36
It is the remedy which has created the most controversy and interest. No doubt to the chagrin of the learned authors of Equity, Doctrines and Remedies, the Green Mussel case found its way into the arena.
In the Court of Appeal their Honours concluded that the facts
led to a duty of loyalty between these two men. The chief incidence of that duty was one of good faith. The import of that obligation was that there would be no presumptive hi-jacking of the incipient transaction by either man ... and no destruction of their relationship without good faith efforts to come to terms. It necessarily follows, in our view, that those elements not having been observed, what Mr Fay lost was the chance to come to satisfactory terms with Mr Fay or his interests. This leads us logically to the question of damages towhich we now turn.37
It is at this point that the Court of Appeal starts to go slightly off the rails. After reviewing the historical equitable remedy of compensation and considering whether the remedy of awards of money in equity is more accurately 'restitutionary' in character or whether it is truly compensatory, and, observing that in Day v Mead Cooke P at page 451 had suggested that what was involved in this debate is 'difference without a distinction', their Honours concluded:
We are inclined to the view that both principle and sound usage suggest that it is more appropriate to consider equitable compensation as truly compensatory innature.38
And further that:
If then, particularly in a legal system (such as New Zealand) where the distinction between law and equity has effectively lost its force, the object of equitable 'compensation' as we have described it is the same as damages, doesthe 'compensation' differ from
'damages'?39
(T)he essential task of a Court under the head of equitable compensation is to compensate whatever real loss or detriment the plaintiff may have suffered in the particular case, on the sort of considerations which have always impelled Chancery Judges. Those considerations may be, but will not always be, the same as would have arisen at common law. A variety of remedial considerations may beappropriate.40
The Court took the view that what Mr Fay lost in this case was the opportunity or chance to enter into a joint venture agreement with Mr Chirnside.
Such an approach is maintainable in New Zealand. In Aquaculture Corporation v New Zealand Green Mussel Co Ltd this Court was clear that loss of chance damages are available for breach of the equitable obligation of confidence .. .41 In our view compensation for this kind of loss should be assessed primarily by reference to the court's assessment of the prospect of success of the particularopportunity, had it gone forward.42
Damages for loss of chance are sometimes an appropriate response where the outcome is not certain. The cause of action and breach have been established but in the circumstances it is not possible to state, to the required standard, that the events necessary to establish loss would have occurred. So long as there is a chance that they may have, the plaintiff may be awarded damages assessed as the value of the chance which has been lost. This is part of the process of placing the plaintiff in the same position as if the breach had not occurred. The current edition of the Law of Contract in New Zealand now asserts that damages on a lost chance basis can be awarded for breach of equitable obligations including the loss of an opportunity to enter into a profitable agreement.43 Chirnside v Fay in the Court of Appeal is the authority cited.
The problem is that this is inconsistent with the basic proposition in equity that an errant fiduciary may not retain to his own account the proceeds of the breach of trust. This is apparent in the decision in Re Dawson, I have referred to above, and in the outcomes in Mallina and LAC Minerals. As Boardman v Phipps demonstrates, equity will 'compensate' even where the plaintiff has not really suffered any loss.
The Supreme Court recognised this in the final judgment in this long litigation when it set aside the lost chance assessment and required Mr Chirnside to account in full.
According to the Chief Justice:
The 'pre-eminent' remedies for breach of the duties of loyalty are rescission and profit stripping through account. While compensatory damages (at common law) are measured by what the plaintiff has lost, an account of profits is measured by what the defendant has gained. The liability of defaulting fiduciaries to account for all benefits arises from the requirements of equity that fiduciaries must not place themselves in positions where their duties conflict with their own interest and must not obtain unauthorised profits from theirposition.44
And further:
the no-conflict rule is neither compensatory nor restitutionary, rather it is designed to strip the fiduciary of the unauthorised profits he has made while he is in a position of conflict. The remedy of an account of profits is more satisfactorily to be attributed to the principle that no one should be permittedto gain from his own wrongdoing.45
The remedies imposed by equity would surprise many in their severity. A businessman can embark upon a complex and risky adventure which yields significant financial reward only to find at the end that earlier loose and informal discussions, which have not led to anything like a concluded arrangement or agreement, nevertheless yield the result that all of the work and risk he has undertaken are for the benefit of another.
However this jurisdiction is firmly rooted in equity and owes nothing to concepts of ascertaining and giving effect to the terms of agreements reached.
At issue are the circumstances in which the court will impose the essential obligations of fidelity and good faith. The inquiry is as to the conduct of the parties and their relationship with each other, not necessarily the agreements they may or may not have reached. The threshold before a fiduciary obligation is reached is a high one, but once the court is satisfied that the defendant has crossed it the plaintiff is entitled to require him or her to hand over the gains made.
The inquiry in assessing those gains is focused on the benefits the defendant has achieved and is not at all concerned with the detriment the plaintiff has suffered. The plaintiff is not required to allow for contribution. Causation is not really at issue. Nor are issues of remoteness and foreseeability.
On a jurisprudential level the decision of the Chief Justice in the Supreme Court that '... it is wrong to look at the plaintiff's loss rather than the fiduciary's gain as the appropriate redress'46 is a significant affirmation of the nature of the remedy available to the beneficiary where breach of fiduciary duty occurs.
Here is unmistaken affirmation of the inherent and profound differences in principle between the fused jurisdictions of the common law and equity. I would like to think that authors of Meagher Gummow and Lehane will be slightly more kindly disposed toward New Zealand when the fifth edition of their book is published.
[*] The author is a barrister in practice in Christchurch.
[1] This paper is an edited version of an address presented to the Canterbury University Centre For Commercial and Corporate Law Inc, Spring Seminar Series, October 2008.
[2] Meagher, Gummow and Lehane's Equity, Doctrines and Remedies (4th ed) 53, [2-105].
[3] Ibid 54, [2]-[105].
[4] Ibid 57, [2]-[125].
[5] Ibid 54, [2]-[105].
[6] Professor Andrew Burrows, 'We do this at Common Law But That At Equity' (2002) 22 Oxford Journal of Legal Studies 1.
[7] Ibid 9.
[8] Ibid 3-4, quoting K Barker 'After Change of Position: Good Faith Exchange in the Modern Law of Restitution' in Laundering and Tracing (1995) at 191, 215.
[9] Meagher, Gummow and Lehane's Equity, Doctrines and Remedies (4th ed) 83, [2-320].
[10] [1990] NZCA 360; [1990] 3 NZLR 299.
[11] Meagher, Gummow and Lehane's Equity, Doctrines and Remedies (4th ed) 79, [2-310].
[12] Paul W Michalik, 'The Availability of Compensatory and Exemplary Damages in Equity, A Note On The Aquaculture Decision' (1997) 21 Victoria Univerity of Wellington Law Review 391.
[13] Ibid 81, [2-315].
[14] [1999] 1 SCR142, (1999) 167 DLR (4th) 477.
[15] Meagher, Gummow and Lehane's Equity Doctrines and Remedies (4th ed) 81, [2-315].
[16] Canson Enterprises Ltd v Boughton and Co [1991] 3 SCR 534, (1991) 85 DLR (4th) 129
[17] Chirnside v Fay [2004] NZCA 111; [2004] 3 NZLR 637, 645 [43] (CA).
[18] (1989) 61 DLR (4th) 14, 26.
[19] Chirnside v Fay [2006] NZSC 68; [2007] 1 NZLR 433, 458 [74].
[20] Extracted from Hospital Products Limited v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 99-100.
[22] Paper Reclaim Limited v Aotearoa International limited [2007] NZSC 26; [2007] 3 NZLR 169.
[23] (1989) 61 DLR (4th) 14, 27.
[24] P J Millett, 'Equity's Place in the Law of Commerce' (1998) 114 Law Quarterly Review 214.
[25] Cullen Investments Limited v Lancaster, unreported, Auckland High Court, M 208-1, Chambers J; Chirnside v Fay [2006] NZSC 68; [2007] 1 NZLR 433.
[26] [1985] HCA 49; (1985) 157 CLR 1, 11-12, per Mason J.
[27] (l989) 61 DLR (4th) 14, 16.
[28] Unreported, Christchurch High Court, CIV 2005-409-2171, Fogarty J, 21 February 2008.
[29] Ibid [20].
[30] [1966] UKHL 2; [1967] 2 AC 46.
[33] (1966) 84 Wn (Pt 1) (NSW) 399.
[34] [2007] l NZLR 433.
[35] Ibid [6].
[36] Ibid [52], and [2004] NZCA 111; [2004] 3 NZLR 637, 643, [31] (CA).
[37] [2004] NZCA 111; [2004] 3 NZLR 637, 648, [59] (CA).
[38] Ibid [65].
[39] Ibid [66].
[40] Ibid [67].
[41] Ibid [69].
[42] Ibid [69].
[43] Burrows, Finn and Todd, Law of Contract in New Zealand (3rd ed) [212.2(e)], fn 83.
[44] Chirnside v Fay [2007] l NZLR 433, [16]-[17].
[45] Ibid [17] citing Parker LJ in Murad v Al-Saraj [2005] EWCA Civ 959, [108].
[46] Ibid [23].
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