By Daniela Faggionato and Alev Byrne -
Snapshot
- A recent NSW Supreme Court decision confirms that, outside the narrow Brickenden exception, a client seeking equitable compensation for breach of fiduciary duty must still prove causation and loss.
- The decision is no comfort to conflicted solicitors; acting for parties with competing interests, and without adequate disclosure remains a serious risk, even where the solicitor has no personal financial interest in the transaction.
- The practical message is simple — identify conflicts early, disclose them clearly, recommend independent advice where appropriate, and record the advice and instructions on the file.
A recent judgment, CPF Group Pty Ltd v Everest Index International Pty Ltd (Receivers and Managers Appointed) [2026] NSWSC 416 (‘Everest’), confirms that a plaintiff alleging breach of fiduciary duty by a solicitor must establish causation. However, the case highlights the need for solicitors to adequately disclose any conflicts of interest to their clients, irrespective of a solicitor’s personal financial interest in the subject transaction.
The Brickenden exception
Ordinarily, where a plaintiff seeks equitable compensation for a solicitor’s breach of fiduciary duty arising from a failure to disclose a material interest, the plaintiff bears the onus of establishing what would have occurred had the breach not occurred and the quantum of any resulting loss. The ‘Brickenden principle’, as established in Brickenden v London Loan & Savings Co (1934) 3 DLR 465 (‘Brickenden’), is often seen as an exception to this general rule.
