In Singapore, the idea of a “fiduciary” might sound like something only lawyers or business leaders need to worry about. But the truth is, fiduciary duties show up in many everyday situations, from company decisions to family arrangements.
To start, let’s unpack the definition of fiduciary law in Singapore. It refers to a set of legal principles that apply when someone is trusted to act on behalf of another person, especially in matters involving power, responsibility, or control. The person in that trusted role is called a fiduciary. Their job is to act honestly, avoid conflicts of interest, and always put the other party’s interests first.
What Does It Mean To Be A Fiduciary According To Singapore Law?
A fiduciary is someone who holds a position of trust and is legally bound to act in the best interest of someone else. It’s not just about doing what’s right; it’s a legal duty enforced by the Court.
The Courts in Singapore look closely at whether a person had power over another’s decisions, whether there was reliance or trust involved, and whether the actions taken were fair. If a fiduciary fails to meet their responsibilities, they can be held accountable.
This doesn’t just apply to formal business relationships. Fiduciaries can be company directors, lawyers, trustees, agents, and even spouses in certain family matters.
When Does Someone Owe Fiduciary Duties?
Fiduciary duties don’t just appear out of thin air. In Singapore, they usually arise when one person is placed in a position of trust and is expected to act in someone else’s best interest. This can happen in both formal and informal relationships.
For example, some fiduciary roles are created by law or contract. Company directors, for instance, automatically owe fiduciary duties to the company they manage. Lawyers and trustees are also legally bound to act in the best interest of their clients or beneficiaries.
In other cases, fiduciary duties may arise from how two people interact over time. If one person relies heavily on another to manage their affairs or make decisions on their behalf, the Court may recognise that a fiduciary relationship exists, even if nothing was ever written down.
At its core, fiduciary duty is about loyalty and trust. If someone has influence over another person’s choices or access to their information or money, they may be held to a higher standard of responsibility under fiduciary law.
What Counts As A Breach Of Fiduciary Duty?
Not every mistake or poor decision is a breach of fiduciary duty. For it to count as a breach, the fiduciary must have failed in their legal responsibility to act honestly, in good faith, and in the best interest of the person who placed their trust in them.
Here are some common examples that may be considered a breach in Singapore:
- Using confidential information for personal benefit
- Failing to disclose a conflict of interest
- Putting personal gain ahead of the client’s or company’s interests
- Improperly using or mismanaging funds or assets
- Making decisions that benefit a third party at the expense of the person owed the duty
Take the example of a director who signs a business deal that quietly benefits a company owned by their relative. Or a spouse who hides marital funds ahead of a Divorce to keep a larger share. These may be seen by the Court as clear breaches, especially if there’s deception or misuse of power involved.
Legal Consequences Of Breaching Fiduciary Duties In Singapore
The legal system in Singapore takes fiduciary breaches seriously. The Court has a range of options when dealing with someone who has abused their fiduciary position. The goal is often to correct the harm done and prevent future abuse of trust.
Here are some possible consequences:
- Compensation or damages: The fiduciary may be ordered to repay any losses caused by their actions.
- Account of profits: If they made money from the breach, they might be forced to give it up, even if the other party didn’t suffer a direct loss.
- Reversal of transactions: If any deals were made improperly, the Court might set them aside to restore fairness.
- Removal from position: The fiduciary may be removed from their role, whether as a company director, trustee, or other position of trust.
- Disqualification: In corporate settings, someone found guilty of a serious breach may be disqualified from serving as a director in the future.
In personal cases like Divorce, a fiduciary breach might influence how the Court divides assets or grants maintenance. If one party acted unfairly or dishonestly, it could impact the final settlement.
Conclusion About Fiduciary Law In Singapore
Fiduciary law in Singapore is about more than just legal theory. It’s about accountability, trust, and fairness. Whether you’re managing someone else’s money, running a company, or going through a Divorce, you need to understand your duties and your rights.
If you’re dealing with a dispute, unsure of your duties, or need trusted legal advice, Tembusu Law is here to help. Our team includes some of the best divorce lawyers and criminal lawyers in Singapore, and we’re ready to guide you with clear, honest advice.
Contact us for a free consultation today.
Frequently Asked Questions About Fiduciary Law In Singapore
Who Can Be A Fiduciary In Singapore?
A fiduciary can be anyone in a position of trust, such as company directors, lawyers, agents, trustees, or even spouses during legal proceedings.
What Happens If Someone Breaches A Fiduciary Duty?
They may be required to pay damages, reverse certain transactions, or face legal restrictions. The Court can also remove them from their position.
Is A Written Contract Needed For Fiduciary Duties To Apply?
No, fiduciary duties can arise even without a written contract. The Court looks at the nature of the relationship.
Can Fiduciary Law Affect Divorce Cases?
Yes, especially if one spouse misuses shared resources or hides financial information. The Court may consider fiduciary breaches when dividing assets.
What’s The Difference Between A Fiduciary And A Trustee?
All trustees are fiduciaries, but not all fiduciaries are trustees. Trustees manage assets under trust law, while fiduciaries can arise in many contexts.
