Jagatramka v Wollongong Coal Limited [2021] NSWCA 61

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Jagatramka v Wollongong Coal Limited [2021] NSWCA 61 Hearing dates: 24 – 25 November 2020 Decision date: 21 April 2021 Before: Bathurst CJ; Bell P; White JA Decision: (1) Appeal allowed. (2) Cross-appeal dismissed. (3) Set aside Order 1 of the orders made by the primary judge on 13 March 2020 and the orders made by him on 21 April 2020 and in lieu thereof make the following orders: (a) Proceedings dismissed. (b) The respondent to pay the appellants' costs of the appeal and the costs of the proceedings in the Court below and be entitled to a certificate under the Suitors' Fund Act 1951 (NSW) if eligible. (c) The respondent/cross-appellant pay the cross-respondents' costs of the cross-appeal. Catchwords: APPEALS – from finding of fact – inferences from primary facts – two competing hypotheses on the evidence – where primary judge applied a process of inferential reasoning based on circumstantial evidence – whether primary judge erred in applying this process to make findings of fact – duty of an appellate court to decide for itself which of the two hypotheses was the more probable – appellate court to discharge this duty by weighing the conflicting evidence and drawing its own inferences and conclusions CORPORATIONS – directors and officers – fiduciary duties – duty to act in good faith in the best interests of company and for proper purpose – where board resolved to purchase a property for "visiting executives" of the group – appellants were sole occupants of the property – whether the appellants were "visiting executives" for the purposes of the resolution of the board EQUITY – fiduciary duties – fiduciary relationships – directors – conflict of interest and duty – no profit rule – whether the appellants improperly used their position as directors of the respondent to gain a benefit for themselves – whether the appellants intended to reside at the property on an exclusive, indefinite and continuous basis at the time of the resolution EVIDENCE – circumstantial evidence – inferential reasoning – between two competing hypotheses – no direct evidence as to the appellants' intention at the relevant time – where primary judge constrained to rely on events post-dating the material resolution – reasoning by way of "links in the chain" – whether such "links" made it reasonable to conclude on the balance of probabilities that the appellants had breached their fiduciary duties EVIDENCE – inferences – Jones v Dunkel – where neither of the appellants gave evidence at trial – court entitled to infer that their evidence would not have assisted their case – court not entitled to infer that the evidence would have been adverse to the appellants EVIDENCE – standard of proof – the Briginshaw principle – where the nature of the breaches alleged amounted to serious wrongdoing on the appellants' behalf Legislation Cited: Corporations Act 2001 (Cth) Evidence Act 1995 (NSW) Suitors' Fund Act 1951 (NSW) Cases Cited: Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345; [2012] HCA 17 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 Brickenden v London Loan & Savings Co [1934] 3 DLR 465 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Carapark Holdings Ltd v Commissioner of Taxation (Cth) (1967) 115 CLR 653; [1967] HCA 5 Hyland v Hyland (1971) 18 FLR 461 Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 Nolan v Nolan [2004] VSCA 109 R v Hillier (2007) 228 CLR 618; [2007] HCA 13 Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 Wollongong Coal Ltd v Gujarat NRE Properties Pty Ltd [2020] NSWSC 254 Texts Cited: Nil Category: Principal judgment Parties: Arun Jagatramka (First Appellant/Second Cross-Respondent) Mona Jagatramka (Second Appellant/Third Cross-Respondent) Wollongong Coal Limited (Respondent/ Cross-Appellant) Gujarat NRE Properties Pty Limited (First Cross-Respondent) Representation: Counsel: