EQUITY – application for equitable relief and personal remedies for breaches of fiduciary duties – where applicant relied on respondents (property developers and an accountant) identifying and proposing properties to be purchased on applicants’ behalf – where respondents informed applicants that property would be purchased in applicant-company’s name for $45m – where respondents fashioned a back-to-back contract to purchase property in own name for $14m and misappropriated remaining $33m profit into various entities and properties owned by respondents EQUITY – whether first respondent personally owed fiduciary duties – where fiduciary duties owed by director to a company not concurrent with duties owed to shareholders on same subject matter – where any implicit undertaking was done so in capacity as director of company – where first respondent not a de facto director of applicant – where first respondent did not personally receive property that would render him constructive trustee with associated fiduciary duties – where knowing assistance not pleaded – no personal fiduciary duty owed by first respondent as distinct from those owed by company EQUITY – whether second respondent personally owed fiduciary duties – where legal principles of accountant-client relationship considered – where second respondent required to comply with tax agents’ code of professional conduct and certified practising accountants’ code of ethics – where second respondent personally undertook activities to considerable extent – second respondent did not undertake fiduciary obligations as distinct from accounting company – accounting company undertook fiduciary duties – whether second respondent knowingly assisted in generating proceeds – where dishonest and fraudulent design found – where actual knowledge of back-to-back contracts found – where no traceable money received personally by second respondent (as distinct from entities under his control) – knowing assistance found in relation to second respondent’s role as constructive trustee of sale proceeds and subsequent breaches EQUITY – consideration of tracing principles – consideration of volunteer in Black v Freeman trust (defined in reasons) being personally liable from time of knowledge – where mixed trust money – where re-mortgaging property in breach of constructive trustee duties – where inability to trace into debt – where lowest intermediate balance rule applied – where bona fide purchasers for value without notice – where trustee who pays off mortgage entitled to equitable subrogation to position of original mortgagee – where equitable subrogation available on pro rata basis – respondents’ actual knowledge imputed to entities controlled by them and tracing available where entities breached fiduciary duties CONSUMER LAW – application for relief for misleading or deceptive conduct under s 18 of the ACL (defined in reasons) concerning development potential and value of property – whether circumstances objectively gave rise to reasonable expectation that relevant facts would have been disclosed to applicants – disclosures and non-disclosures made by first respondent, second respondent (including entities) and fourteenth respondent found to be misleading or deceptive – causation and reliance found – measure of loss calculated by price paid less true value of what was acquired – apportionment applied pursuant to s 87CD(1) of the CC Act (defined in reasons) and s 35(1) of the CLA (defined in reasons) CONSUMER LAW – whether contributory negligence defence applicable under s 137B of the CC Act – where findings of intention to cause loss or damage – where applicants exercised reasonable care in the circumstances – defence not available
Original article available at: https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2026/2026fca0016For more information, see the original judgement.
