Patrick v Capital Finance Corporation (Australasia) Pty Ltd [2004] FCA 120

FEDERAL COURT OF AUSTRALIA

Patrick v Capital Finance Corporation (Australasia) Pty Ltd [2004] FCA 120 TRADE PRACTICES - misleading and deceptive conduct - representative proceedings - prospectus issued for stage production "Crazy For You" - participants borrowed money to invest in "Crazy For You Fund" - tax-driven investment scheme - loans made to investors - assignment of loans - representations made in prospectus - allegation that representations as to use of investors' funds were misleading - allegation that 68% of investors funds used to purchase term bonds as security rather than production costs - knowledge of respondents - claim of aiding and abetting misleading conduct - onus on applicant to establish that investors' funds were misapplied in manner alleged - alleged misapplication of funds not established - causation and reliance - applicant did not rely on representations contained in the prospectus - held - applicant's case against all respondents must fail. CONTRACT - agreements underpinning investment scheme - Crazy For You Fund - Deed of Investment - Co-Producers Equity Agreement - Co-Producers Agreement - Production Services Agreement - Production Management Agreement - obligations of various respondents - allegations of breach of contractual obligations - co-producers obligations under various agreements not restricted to pre-production expenses but include production running costs. EQUITY - investment scheme - Crazy For You Fund - investors' representative - trustee - fiduciary duties - trust property - allegations of breach of fiduciary duties - claim of accessorial or recipient liability in relation to trust funds - Barnes v Addy claim - test for accessorial or recipient liability - precise principle not critical - whether a reasonable person would be put on inquiry of a breach of trust or fiduciary duty - sufficient case not established - issue of funds being knowingly received - claim to set loans aside - applicant not permitted to 'approbate and reprobate - no offer of restitution by applicant - constructive trust. PRACTICE AND PROCEDURE - representative proceedings brought under Part IVA of the Federal Court of Australia Act 1976 (Cth) - persons who borrowed money to invest in the Crazy For You Fund said to constitute a class - no challenge to proceedings being brought as a representative action.