Corona

Lac Minerals Ltd. V. International Corona Resources Ltd.

__ Facts : __ · Lac Minerals approached Corona, a junior mining company, with a view of joint development of property · Corona showed Lac information about the property: From that information, it was clear that the neighbouring property belonging to Williams was valuable and worth acquiring · Subsequently, Lac acquired Williams · Corona brought an action against Lac claiming that Lac had improperly taken advantage of the information that it had obtained from Corona

__ Issues: __

1. Is there a breach of confidence ? 2. Is there a breach of fiduciary duty? 3. Is the constructive trust an appropriate remedy?

__ Reasoning: __

__ La Forest (for the majority) __

// About duty of confidence //

· Lac breached the duty of confidence owed to Corona

// About fiduciary obligation //

· There are three elements that must be taken into account when determing if the imposition of a fiduciary duty is appropriate: a. Relation of trust and confidence : to determine whether one party could reasonably expect from the other to “act or refrain from acting against the interests of the former” b. Industry practice: The practice in the industry is such that each party should not hurt the other as the result of commercial negotiations and not to act to the other party detriment c. Vulnerability: Vulnerability arises from the inability of the beneficiary to prevent the injurious exercise of the power or discretion combined with the grave inadequacy or absence of other legal or practical remedies to redress the wrongful exercise of discretion of power. Persons are vulnerable if they are susceptible of harm or injury. La Forest underlines though that vulnerability is not an essential ingredient in every fiduciary

// About constructive trust //

· The constructive trust is the only available and appropriate remedy · The case is about unjust enrichment, and the “principle of unjust enrichment lies at the heart of constructive trust” · It is a means to deter breach of duty: “If by breaching an obligation of confidence a party is able to acquire an asset entirely for itself at a risk of only having to compensate the other for what the other would have received if a formal relationship between them were conducted, the former would be given a strong incentive to breach the obligation and acquire the asset”

__ Sopinka (dissenting in part): __

// About the duty of confidence //

· Lac has breached its duty of confidence

// About the fiduciary duty //

· Equity’s blunt tool must be used only in situations where special protection is needed · Relationships where fiduciary obligations have been imposed possess three common characteristics: i. The fiduciary has scope for the exercise of some **discretion or power** ii. The fiduciary can **unilaterally exercise that power or discretion** so that to affect he beneficiary legal or practical interests iii. The beneficiary is **vulnerable** à This last characteristic is indispensable.

In the present case, Corona’s vulnerability was gratuitously incurred: Corona could have protected itself with an agreement not to acquire Williams

// About the remedy //

· The breach of confidence does not enable to use constructive trust · The conventional remedies for breach of confidence are usually accounting of profits or damages: The object if to restore the plaintiff in the position he would have been in if no wrong had been committed