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Volume 38 - January 2010

This month:

- fiduciary duties explained

-advice on lending money to friends.

Also, a vacancy for a legal secretary.


Paul Brennan


Fiduciary duties-

exactly how sneaky are you allowed to be?


Legal cartoon, attorney, solicitor, Paul BrennanIf your doctor took out your kidney and without you knowing, sold it, should he give you a cut of the profit?  A court may not think so.


Unlike doctors, lawyers no longer deal in pounds of flesh as most, but not all, have gone metric.  However, if say, your lawyer purchased a clock from your grandmother’s estate and then immediately sold it at a profit, the courts would compel your lawyer to hand over the entire profit, even if your lawyer acted in a well intentioned manner. 


This is because lawyers automatically owe their clients a fiduciary duty.  They must not allow their own interests or those of others to conflict with their clients’ affairs.  Whereas doctors owe their patients no fiduciary duty and are allowed to get away with murder, literally in some cases.


You owe a fiduciary duty when you accept the position of trustee, executor or, in certain circumstances, as company director.  Partners owe a fiduciary duty to each other.  Your receptionist owes a fiduciary duty when she accepts movie tickets or other inducements from the stationary salesperson/ hunk.  In fact, all employees owe a fiduciary duty to their employer.


There is a long list of business people who do not automatically owe a fiduciary duty ranging from the fairly obvious used car dealer to your distributor,  real estate agent, financial planner, insurance broker, bank manager etc.  Suing them for losses arising from deals that turn sour can be difficult however unfairly they have acted.


Therefore, do not expect the law to come to your rescue unless you have been shafted by your advisor or business associate in a fairly unsubtle manner.


Before you do something sneaky in business, consider if you could owe some sort of fiduciary duty.  If so, take no chances and disclose any potential profit or conflict of interest and obtain consent to your actions in writing as that should let you off the hook.


(c) Paul Brennan 2009

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The Charge of the 300 and the 47 Samurai


legal cartoon, barrister, solicitor, Paul Brennan

Last year, when a legal software vendor increased its fees to Queensland lawyers by 300% I expected

an explosive reaction*.   Apart from some lawyers refusing to pay and an impending Law Society report on technology which is a happy coincidence, nothing much has happened.  In fact, another software vendor is, in effect, increasing its fees. 


What did I expect?  Well, something a little more creative.  For instance, in 18th century Japan under severe provocation, a Lord Asano attacked and wounded a Lord Kira.  As the attack took place within the walls of the Shogun’s palace he was ordered to commit suicide, which he promptly did.  His lands were confiscated and his Samurai retainers disbanded. Lord Kira expected an immediate backlash from the Samurai retainers, but none came.


The disbanded Samurai retainers lost their Samurai status and became Ronin. They took up menial tasks; their former Captain left his wife, became a public drunkard and frequented brothels.


Eight months later, 47 Ronin, led by the Captain, attacked Lord Kira’s mansion and finding Lord Kira in the toilet cut him to bits and put his head in a bucket.  They then killed all his staff. The 47 Samurai had only been pretending, or that was the Captain’s story, anyway. They then turned themselves in, pleaded guilty and were sentenced to commit suicide, which they did.


As touchy as Queensland lawyers can be, I am not sure that they would go that far, especially the bit about turning themselves in and pleading guilty.  


All in all, I am a little disappointed.  However, on a positive note, the software vendor gave me free probate software which may come in very handy, in the event that Queensland lawyers change their minds and opt for mass reprisals, after all.

(c) Paul Brennan 2009

* see Reason 49 at

If you wish to comment on this article go to his blog at

The lawyer and the simple question

Legal cartoon, attorney, lawyer, solicitor, hearing aid, paul brennanAsk a lawyer a simple question like how much will he charge for drawing up a loan document to lend $50,000 to a friend and you would expect a simple $ figure answer. However, your lawyer is more likely to respond, “Are you crazy?”.


Please do not get us lawyers wrong, some of our best friends are, well, friends.   However, our experience is that somehow the universe conspires to make it difficult to get repaid from friends promptly, easily, or in some cases, at all.  They die, lose their jobs, get dementia, become bankrupt, their daughters get married or their pet develops an expensive medical condition.  All sorts of things happen to make your insistance on repayment seem insensitive and a source of lifetime resentment between you and your friend.


Unlike in their dealings with their own children people expect their friends to repay loans and believe their sincere expressions of intent to do so. 


But you explain to your lawyer that it was your friend who insisted that a legal document be prepared at his expense to protect you.  Your lawyer will advise that for peace of mind the loan document should have security. For example, a mortgage against a property or charge against some other asset.  Your friend is not keen on the additional expense and may be “mortgaged up to the hilt” in any event.


You go back to your lawyer and ask for a cheaper solution.  He suggests that you obtain post dated cheques.  This may make it easier to get a judgment against your friend but enforcement may require expensive bankruptcy proceedings and even then you cannot get blood out of a stone.


All in all, if you cannot control your generous nature towards friends, take a tip from your accountant, don’t have any.

(c) Paul Brennan 2009 author of eBook and CD the 10 Greatest Legal Mistakes in Business…and how to avoid them”.   




Legal Secretary Wanted

Legal cartoon, large firm,  Paul BrennanDo you know of a legal secretary who may wish to work in a Sunshine Coast law firm?

This is not an opportunity to get rid of your own secretary.

The work is varied:  commercial, property, litigation,

wills and estates.  

Basically deals and disputes.

Enquiries in confidence to Diane Brennan by email or by telephone.



The content of this site and the Law & Disorder eZine is to give you legal basics and in some instances included unashamedly to try and make you laugh.  In law it is sometimes difficult to work out what is serious and what is just for fun.  Therefore, if you plan to do anything legal, rely on your own lawyer’s advice or instruct me to look at the particular facts of your case.  Not only will I deny responsibility for the legal content but also for some of the jokes.

© Paul Brennan 2009


Author of the The Law is an Ass...Make Sure it Doesn't Bite Yours!

In this Issue

Fiduciary duties- How sneaky are you allowed to be?

The charge of the 300 and the 47 Samurai

Lending money to friends

Advertisement-Legal Secretary wanted.


Forward to a Colleague


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