Most Read Contributor in Australia, September 2016
Holding Redlich recently acted for the City of Sydney in recent
NSW Supreme Court Proceedings.
In the City of Sydney v Streetscape Projects (Aust) Pty
Limited & Moses Obeid  NSWSC 1214, the Court held
that Streetscape owed the City a fiduciary duty to act in the
interests of the City in respect of Streetscape's use of
intellectual property and confidential information licensed to it
by the City in relation to a product known as the
The "Smartpole" pole was developed by the City to
integrate lighting, road and traffic signage in one unified street
pole system for the Sydney 2000 Olympics. The Smartpole
intellectual property was licensed to Streetscape for use only
within Australia, New Zealand and Spain.
The fiduciary duty arose because of the circumstances in which
the City's intellectual property and confidential information
was given to Streetscape. As part of its obligations under the
licence, Streetscape acknowledged the intellectual property in the
"Smartpole" pole belonged to the City and that certain
information in relation to the "Smartpole" pole was
confidential, and agreed to protect it and not to use the
intellectual property outside the terms of the licence.
The Court found that Streetscape breached the terms of the
licence by manufacturing and selling "Smartpole" poles
outside the licensed areas, in Singapore and throughout the Middle
Importantly, the Court found that Streetscape's sole
director, Moses Obeid, owed a fiduciary duty to the City over and
above the contractual obligations owed by Streetscape.
The Court held that Streetscape was obliged to act for the City
in all respects concerning its use and disclosure of the
confidential information and was not, without the authority and
consent of the City, permitted to obtain a benefit for itself, or
to assist third parties to obtain a benefit for themselves or to be
in a position of conflict of interest. Accordingly, by providing
the confidential information to a third party and permitting that
third party to use the confidential information, Streetscape and
Moses Obeid had both breached the fiduciary duties they owed to the
The Court recognised that contractual and fiduciary duties may
co-exist between the same parties and in many situations the
existence of a basic contractual relationship provided a foundation
for a fiduciary relationship.
The Court considered that a key circumstance relevant to the
existence of a fiduciary duty included the terms of the agreement
between the parties itself, reflecting the dependence by the City
upon Streetscape using the confidential information which the City
had provided to it in conformity with the limited purposes for
which it was provided. In this respect the City was unable to
supervise or control the manner in which the information was used
by Streetscape, so to as ensure that it was only used for the
purposes for which it had been provided.
What this means for you
The effect of the Court's findings in this case means
If a party (including a sole director) is provided with
confidential information in some circumstances they will owe a
fiduciary duty not to use the information for an improper purpose
or to gain a benefit for a third party.
Contractual and fiduciary duties may co-exist and the existence
of a contractual relationship may provide a foundation for a
The existence of such a duty will depend on the facts but the
inability of the owner of the confidential information to supervise
or control the manner in which the confidential information will be
used may be a factor in determining whether such a duty
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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