Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22

HIGH COURT OF AUSTRALIA

GLEESON CJ

GUMMOW, CALLINAN, HEYDON AND CRENNAN JJ

FARAH CONSTRUCTIONS PTY LTD & ORS APPELLANTS

AND

SAY-DEE PTY LTD RESPONDENT

Farah Constructions Pty Ltd v Say-Dee Pty Ltd

[2007] HCA 22

24 May 2007

S347/2006 & S461/2006

ORDER

1. Appeal allowed.

2. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 21 December 2005 and varied on 28 November 2006 and in their place order that the appeal to that Court from the judgment and orders of the Supreme Court of New South Wales dated 19 August 2004 and 22 November 2004 be dismissed with costs.

3. Respondent to pay the appellants' costs of the proceedings in this Court.

On appeal from the Supreme Court of New South Wales

Representation

F M Douglas QC with V R W Gray and R J Hardcastle for the appellants (instructed by Strathfield Law)

A J Sullivan QC with J K Kirk and J S Emmett for the respondent (instructed by Esplins)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Farah ConstructIons Pty Ltd v Say-Dee Pty Ltd

Equity – Fiduciary duties – Joint venture to redevelop property between first appellant and respondent – Second appellant learnt that redevelopment would gain Council approval only if the property was amalgamated with adjoining properties – Adjoining properties purchased by the second appellant, his wife and children and another company controlled by the second appellant – Whether first appellant had an obligation to disclose to the respondent opportunities to purchase adjoining properties and information concerning the Council's attitude to redevelopment – Whether first appellant fulfilled any such obligation of disclosure.

Equity – Recipient Liability – Whether property acquired through misuse of information by a fiduciary should be treated as trust property – Whether second appellant's wife and children were liable under the first limb of Barnes v Addy – Whether wife and children had notice of any breach of duty by the second appellant –Whether second appellant's knowledge could be imputed to wife and children – Whether second appellant was the agent of wife and children and, if so, whether information acquired outside scope of agency – Duty of principal to investigate conduct by agent.