Recent Cases

Murdoch v Mudgee Dolomite and Lime Pty Ltd (in liq) [2022] NSWCA 12 (16 February 2022) (Macfarlan, Gleeson and Leeming JJA)


Catchwords:


EQUITY – fiduciary obligations – scope of duty – company’s contracts to provide crushing services to a mine were performed by a director’s and employee’s own companies without disclosure – whether constituted a breach of duty – whether inability of company to perform its obligations a defence – whether acquisition of separate quarry in Victoria within scope of duty – scope of fiduciary duty identified by company’s actual course of conduct – primary judge correct to hold that performance of company’s existing contracts was breach of duty, and acquisition of separate quarry in Victoria not in breach of duty

EQUITY – remedies for breach of fiduciary duty – account of profits – contracts entered into by companies controlled by director and employee in breach of fiduciary and statutory duties – contracts incapable of rescission – whether principles in Peninsular and Oriental Steam Navigation Co v Johnson (1938) 60 CLR 189; [1938] HCA 16 precluded account of profits – consideration of breadth and continuing applicability of principles in Peninsular and Oriental Steam Navigation Company v Johnson – principles only applied to cases where fiduciary acquires property when acting on behalf of principal – principles inapplicable to contracts for the supply of services

EQUITY – remedies for breach of fiduciary duty – account of profits – discretionary withholding of relief – where principal is less than fully informed, but nonetheless “stands by” while fiduciaries continue to derive profits – whether principal had sufficient information to make it inequitable to stand by while profits continued to be made, and thereafter to obtain an account of those profits – profits made after October 2011 held not to be within account

APPEAL – procedural fairness – complaint that aspects of reasoning at first instance denied procedural fairness – appeal by rehearing – not said that different evidence would have been led – no retrial sought – appellate court empowered and required to make appropriate findings – any denial of procedural fairness incapable of being material – in any event no denial of procedural fairness

EVIDENCE – coincidence evidence – whether primary judge’s reasoning contravened coincidence rule – evidence tendered without objection – reasoning concerning company’s actual course of conduct not amount to use of evidence contrary to s 95 of Evidence Act 1995 (NSW)