Lac Minerals Ltd v International Corona Resources Ltd, page-2

http://www.austlii.edu.au/au/journals/AUMPLawAYbk/2004/7.pdf - Page 7
Trust and Confidence

The receipt of confidential information by one party during the course of
negotiations for a proposed joint venture will not, of itself, create a fiduciary
relationship, although the recipient will be liable for any unauthorised use of the
information.32

For example, in Lac Minerals Ltd (Lac) v International Corona Resources Ltd
(Corona),33 Lac approached Corona with a view to entering into a joint venture in
relation to land over which Corona held the mining rights. During negotiations,
Corona divulged its drilling results to Lac which indicated that the adjacent land
was likely to be rich in minerals. Lac subsequently made a competing bid for the
adjacent mining tenements in its own right and mined the land on its own account.

The majority held that no fiduciary obligations arose as the transaction was an
arm’s length negotiation and Corona was not in a position of vulnerability.
However, it was held that Lac had misused the confidential information obtained
during the course of negotiations for the joint venture.

DAMAGES FOR BREACH OF CONTRACT AND FIDUCIARY DUTY 121
into the contract in its own right. Master Newnes noted that it was arguable that the
relationship was analogous to prospective partners and that it assumed a fiduciary character
once the defendant took it upon itself to negotiate the bid on behalf of the proposed joint
venture and the plaintiff reposed trust and confidence in the defendant to do so. 30 Allstate Explorations NL v Beaconsfield Gold NL [1999] NSWSC 832. 31 H K McCann, “The Role of the Operator Under a Joint Venture Agreement” (1982)
AMPLJ 4(2) 256 at 257. 32 Halsbury’s Laws of Australia, 1996, Butterworths LexisNexis [185-710]. 33 (1989) 61 DLR (4th) 14.