Ward v Ward (No 2)

In the matter of Ward v Ward (No 2), the court was tasked with examining the relationship between a principal and their attorney under a power of attorney, particularly when that power grants the attorney authority to execute assurances and documents. The dispute arose from the actions of the first defendant, who, as the attorney of the plaintiff, entered into an unsecured loan agreement to fund a speculative development venture. The principal of the development was the first defendant's son, raising concerns about potential breaches of fiduciary duties by the first defendant.

The court was required to determine whether the power of attorney absolved the first defendant of their fiduciary obligations to the plaintiff, and if the first defendant's actions in entering into the loan agreement constituted a breach of those duties. Specifically, the court needed to consider whether the first defendant had acted with nondisclosure and potentially deception towards the plaintiff, and whether these actions amounted to a breach of the fiduciary duties owed by the attorney to the principal.

The court held that the power of attorney did not exonerate the first defendant from their fiduciary obligations. The first defendant's involvement in the unsecured loan agreement, which primarily benefited the first defendant's son, was found to be a clear breach of the fiduciary duties owed to the plaintiff. The court found that the first defendant had not adequately disclosed the terms and potential risks of the loan agreement to the plaintiff, and that this nondisclosure, along with the speculative nature of the development, amounted to a breach of fiduciary duty. The court also found that the first defendant potentially deceived the plaintiff by not fully informing them of the risks and potential consequences of the loan agreement.

The court ordered the first defendant to compensate the plaintiff for the losses incurred as a result of the breach of fiduciary duty. Additionally, the court directed the first defendant to account for any profits made from the speculative development venture, ensuring that the plaintiff received any benefits derived from the breach.