Khouj v Acropolis Capital Partners Ltd & Anor

An agency or fiduciary relationship may arise from consent to a state of affairs which in law attracts those consequences, even where the parties do not describe their relationship in those terms. The essential question is whether trust, reliance and confidence were reposed in one party so that it undertook to act in the interests of the other. The content of fiduciary duties depends on the particular commercial context. An agent or fiduciary managing another’s investments may owe duties to account, maintain proper records and provide transaction documents. Those document-production obligations generally survive termination of the agency.

The claimant, administrator of the estate of a former Saudi Arabian Assistant Foreign Minister, sought declarations that the defendant companies had acted as his agents or fiduciaries in managing investments and related assets. He also sought access to documents concerning those assets and transactions.

The defendants denied any relevant relationship with the deceased and maintained that their activities were conducted only for associated family companies. The central issues were whether the defendants had acted on the deceased’s behalf, whether the circumstances created fiduciary obligations, the duration of any such relationship, and whether corresponding accounting and document-production duties arose.

1. Agency and fiduciary relationship. The defendants’ labels and the absence of a written retainer were not determinative. Agency could arise where the parties consented to a state of affairs which in law imposed the consequences of agency. The relevant inquiry was whether trust, reliance and confidence were reposed in the defendants so that they undertook to act in the deceased’s interests.
2. The evidence showed that the defendants undertook or arranged dealings in private equity investments, fund investments and the Park Lane flat or its corporate owner for the deceased. They also handled money connected with those dealings. The companies operated through the same personnel without a coherent practical division, and both were equally part of the relationship.
3. The occasional provision of services such as obtaining charter quotations, purchasing foreign currency and renewing car insurance did not itself establish a continuing agency or fiduciary relationship.
4. Content of duties. Fiduciary obligations depend on the particular circumstances and commercial context. In this case the defendants owed duties to account for transactions and business conducted on the deceased’s behalf, to keep proper records, and on request to provide originals or copies of relevant records.
5. Duration. The relationship continued until the deceased’s death and was not ended by the April 2010 meeting, letters or share-transfer forms. In any event, the entitlement to require production of agency documents generally survives termination. The claimant’s case therefore succeeded for the period from 2002 to 5 June 2010. Remedies were to be discussed after judgment.