Chirnside v Rattray Properties Limited

The Supreme Court of New Zealand was presented with an appeal brought by Wynston Chirnside and Rattray Properties Limited against Richard Fay. The case centred on whether a fiduciary relationship existed between Chirnside and Fay, and if such a relationship did exist, whether it was breached. The respondents sought damages from the appellants for their alleged failure to account for income generated from a property sale. The High Court had already ruled in favour of the respondent, leading to the current appeal.

The primary legal issues before the court were the existence of a fiduciary relationship between Chirnside and Fay, and if such a relationship existed, whether there was a breach of fiduciary duties. The court had to determine whether Chirnside and Fay's relationship was such that it imposed a duty of loyalty and trust, and if so, whether Chirnside breached those duties by failing to account for the income from a property sale. The court's decision hinged on interpreting the nature of the relationship between the parties and the obligations arising from it.

The Supreme Court found that a fiduciary relationship did exist between Chirnside and Fay, primarily due to the nature of their dealings and the level of trust and reliance placed by Fay on Chirnside. The court determined that Chirnside, as the fiduciary, had breached his obligations by failing to account for the income derived from the property sale, as required by the terms of their agreement. Consequently, the court granted leave to appeal and ordered that security for costs be fixed by the Registrar once the appeal and cross-appeal against the High Court's award of damages had been determined. The Registrar was instructed not to allocate a hearing date until that determination had been made. The court also granted liberty to apply for further proceedings.