In 2020, Missy was hit by a 4WD Porsche and injured. On the advice of a friend - and having never dealt with lawyers before - Missy retained Cleaver to represent her in relation to the accident. Cleaver was (and still is) a prominent Sydney lawyer. The client agreement between Cleaver and Missy stated that the work that Cleaver was to perform was: 1. To advise Missy on her rights and entitlements arising from her recent car accident. 2. To take all steps necessary to recover compensation for Missy (including but not limited to issuing letters of demand to insurers and commencing proceedings). Thanks to Cleaver's hard work and dedication, Missy has received a significant settlement sum of $1,000,000. When Missy comes to Cleaver's office to thank him, they have the following conversation: Missy: Cleaver, thank you ever so much for representing me. You did a fantastic job securing such a large settlement sum! Cleaver: No worries, Annie. Have you thought about what you are going to do with the money? Missy: Well, I have to spend $500,000 on my medical expenses - but I am not sure what I will do with the rest. Cleaver: I have a good idea. I have been involved in setting up a new cryptocurrency called GreenCoin. It's going to go bananas! You should get in on the initial coin offering! Missy: That sounds like an interesting idea, thanks Cleaver. The next day, Missy searches the internet for GreenCoin. She finds the GreenCoin website and purchase $250,000 worth of GreenCoin. Three months later, Missy is pleased with the profit she had made on her investment but is displeased to discover via a friend that Cleaver receives a 20% commission on all GreenCoin purchases. Explain: 

a) Did Cleaver owe Annie fiduciary obligations? Why or why not? (4 marks) 

b) Was Cleaver in breach of those obligations? How? Is a defence available to Cleaver?

Answer rating: 100% (QA)

a Cleaver did owe Missy fiduciary obligations As her lawyer he was required to act in her best inter... View the full answer