Joint Ventures & Implied Fiduciary Duties

The Court of Appeal has confirmed for the first time that a joint venture arrangement can give rise to an implied fiduciary duty owed by the director of one joint venture partner to another partner.

In Ross River Limited and anor v Waveley Commercial Limited and ors [2013] EWCA Civ 910, the claimants entered into a joint venture agreement with the first defendant, Waveley Commercial Limited ("WCL"), to develop property in Bedfordshire. Under the terms of the agreement, the claimants were to provide finance for the development. Mr Barnett and Mr Harney (the second and third defendants) owned WCL, and were more personally involved in the development on a day-to-day basis than the claimants.

After a few years, the claimants became suspicious of WCL, particular in respect of several large payments they were making to third parties...