Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6

FEDERAL COURT OF AUSTRALIA

Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6 Citation: Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6

Appeal from: Chameleon Mining NL v Murchison Metals Limited [2010] FCA 1129

Parties: PHILLIP FELICE GRIMALDI v CHAMELEON MINING NL (ACN 098 773 785) and MURCHISON METALS LIMITED (ACN 078 257 799) CHAMELEON MINING NL (ACN 098 773 785) v MURCHISON METALS LIMITED (ACN 078 257 799) AND CROSSLANDS RESOURCES LTD (ACN 061 262 397) AND JACK HILLS HOLDINGS PTY LTD (ACN 127 384 696)

File numbers: NSD 68 of 2011 NSD 73 of 2011

Judges: FINN, STONE AND PERRAM JJ

Date of judgment: 21 February 2012

Catchwords: CORPORATIONS – Corporations Act 2001 (Cth), s 9 – "director" – "officer" – de facto director – no single test for determining whether a person is such – assuming or performing the functions of a director of the company in question – directors or consultants or both – blurring of "de facto" and "shadow" – de facto officer – unnecessary to differentiate de facto director from de facto officers CORPORATIONS – Corporations Act 2001 (Cth), ss 181 and 182 – director and de facto director misappropriating corporate funds – effecting a transaction in which they had a personal interest – using position in expectation of obtaining an introduction fee CORPORATIONS – Corporations Act 2001 (Cth), s 1317H – construction of provision – inclusion of "profits" within "damage suffered" – whether profits can be sought without claim for, or proof of, loss CORPORATIONS – knowledge of corporation – imputation of director's knowledge to corporation – knowledge of own wrongdoing – "fraud on the company" exception – receipt of a secret commission EQUITY – Fiduciary obligations – imposing standards of conduct – overlap of conflict of duty and interest and misuse of fiduciary position – defining the subject matter over which fiduciary obligations extend EQUITY – Fiduciary obligations – receipt of civil law bribe or secret commission – characteristics of secret commission – third party payer's position – assumption of risk of agent's nondisclosure to its principal EQUITY – Participation in the wrongdoing of a trustee or fiduciary – classes of case – Barnes v Addy – liabilities as a knowing recipient or a knowing assistant – fault based liabilities – the "knowledge" of wrongdoing required of a knowing recipient – present Australian law – unhelpful formulae EQUITY – Corporate property as "trust property" for Barnes v Addy purposes – money paid or property transferred under a contract – breach of fiduciary duty – whether the transaction must be avoided before proprietary relief can be awarded – Daly v Sydney Stock Exchange – constructive trusts and tracing corporate property EQUITY – Remedies – fashioning remedy to fit the nature of the case and its facts – doing what is "practically just" – awarding the remedy which is "appropriate" in the circumstances – the remedial constructive trust and appropriateness – discretionary considerations EQUITY – Fiduciaries' Liability to Account and the Account of Profits – purpose and limits of an account of profits – breach of duty only one of several sources of profit – misuse of "trust moneys" in a fiduciary's trade or business – applicable principles – the "just allowance" device EQUITY – Account of Profits – accounting for the profits actually made – when parties may be jointly and severally liable for profits EQUITY – Interest awards where trust moneys misused – presumption of profit made reflected in award of interest – award of compound interest and periodic rests EQUITY – Remedies – against knowing recipients and knowing assistances – whether joint and several as between fiduciary/trustee and the third party participants EQUITY – Remedies – for bribes and secret commissions – Lister & Co v Stubbs not followed – constructive trust of the property received an available remedy if appropriate in the circumstances PRACTICE AND PROCEDURE – Appeals – application to amend – application to reopen decision to refuse amendment to Notice of Contention – application to reopen on grounds of legal error – Grimaldi v Chameleon Mining NL (No 1) [2011] FCAFC 95 reopened – Federal Court Rules 2011 r 39.04 – application to further amend notice of appeal