Galati v Deans [2021] NSWSC 1094

Supreme Court New South Wales

Medium Neutral Citation: Galati v Deans [2021] NSWSC 1094 Hearing dates: 30 November, 1-2, 7-10, 14-15 December 2020 Date of orders: 1 September 2021 Decision date: 01 September 2021 Jurisdiction: Equity Before: Ward CJ in Eq Decision: As to the statement of claim: 1. Dismiss Mr Galati's claim with costs. As to the fourth amended cross-claim: 1. Order that Mr Galati pay damages at law and/or equitable compensation to Fishbank Development Corporation in the sum of $899,910.48 (being half of the $1,799,820.95 secret commission), plus interest. 2. Order that Wealth Shift Pty Ltd and Ms Pritchard be jointly and severally liable with Mr Galati to pay damages for misleading or deceptive conduct to Fishbank Development Corporation in the sum of $899,910.48 (being half of the $1,799,820.95 secret commission), plus interest. 3. Order Mr Galati to pay the sum of $100,000 to Fishbank Development Corporation as exemplary damages for the tort of deceit. 4. Order Mr Galati, Wealth Shift Pty Ltd and Ms Pritchard to pay the cross-claimants' costs of the fourth amended cross-claim. Catchwords: EQUITY — Fiduciary duties — Fiduciary relationships — Partners and joint venturers — Breach — Unauthorised profit ESTOPPEL — Promissory estoppel — Existing or expected legal relationship — Estoppel by convention — Mutual assumption EQUITY — Assignment — Of causes of action — Nature of interest required EQUITY — Unconscionable conduct — Special disability or disadvantage CONSUMER LAW — Misleading or deceptive conduct — Conduct evaluated in all the circumstances— Silence or non-disclosure— "Likely" to mislead or deceive CONSUMER LAW — Unconscionable conduct — Unconscionable conduct within the meaning of the unwritten law — Special disadvantage CONSUMER LAW — Enforcement and remedies — Person involved in a contravention — Person knowingly concerned TORTS — Miscellaneous torts — Deceit — Exemplary damages Legislation Cited: Civil Liability Act 2002 (NSW), Pt 4, ss 34-39 Companies Act 1936 (NSW), s 26, 37A, 66G Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, ss 2, 18, 20, 21, 75B, 87, 236 Conveyancing Act 1919 (NSW), s 37A Corporations Act 2001 (Cth), ss 249, 477, 1322 Partnership Act 1892 (NSW), ss 1, 2, 24 Trade Practices Act 1974 (Cth), s 52 Cases Cited: 13 Coromandel Place Pty Ltd v CL Custodians Pty Ltd (in liq) (1999) 30 ACSR 377 Anthony v Morton [2018] NSWSC 1884 Attorney General for Hong Kong v Reid [1994] 1 AC 324 Ausintel Investments Australia Pty Ltd v Lam (1990) 19 NSWLR 637) Australian Building & Technical Solutions Pty Ltd v Boumelhem; Boral Australia Ltd v Boumelhem; Boumelhem v Jones (2009) 2 ASTLR 336; [2009] NSWSC 460 Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 388 ALR 577; [2021] FCAFC 40 Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; [2019] HCA 18 Bao v Qu; Tian (No 2) (2020) 102 NSWLR 435; [2020] NSWSC 588 Barnes v Addy (1874) LR 9 Ch App 244 Barrett v Maradaca Pty Ltd [2020] NSWSC 440 Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 BB Australia Pty Ltd v Danset Pty Ltd [2018] NSWCA 101 Blomley v Ryan (1956) 99 CLR 362 BM Sydney Building Materials Pty Ltd v AWT Building Group (Aust) Pty Ltd [2019] NSWSC 421 Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600; [1982] HCA 53 Boulos Holdings Pty Ltd v Edwin Davy Pty Ltd [2021] NSWSC 689 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66 Bristol and West Building Society v Mothew [1998] Ch 1 BSP Technical Services Pty Ltd v AMEV-UDC Finance Ltd (Supreme Court (NSW), Hodgson J, 25 March 1985, unrep Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) (1974) 131 CLR 321 Cassell & Co Ltd v Broome [1972] AC 1027 Cetojevic v Cetojevic [2006] NSWSC 431 Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14 Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373; [1975] HCA 8 County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 Cresswell v Potter [1978] 1 WLR 255 Cribb v Korn (1911) 12 CLR 205 Daraydan Holdings Ltd v Solland International Ltd [2005] Ch 119 Delehunt v Carmody (1986) 161 CLR 464; [1986] HCA 67 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348 Director General, Department of Services, Technology and Administration v Veall (No 4) [2011] NSWSC 904 Domain Administration v Domain Names Australia Pty Ltd (2004) 207 ALR 521; [2004] FCA 424 Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8 Falcke v Scottish Imperial Insurance Company (1887) LR 34 ChD 234 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 98; [2007] HCA 22 FHR European Ventures LLP v Mankarious [2015] AC 250 Furs Ltd v Tomkies (1936) 54 CLR 583; [1936] HCA 3 Galati v Deans (No 2) [2018] NSWSC 181 Giorgianna v R (1985) 156 CLR 473; [1985] HCA 29 Gipps v Gipps [1978] 1 NSWLR 454 Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; [2013] HCA 1 Gould v Vaggelas (1984) 157 CLR 215; [1984] HCA 68 Grant v Gold Exploration and Development Syndicate Ltd [1900] 1 QB 233 Gray v Motor Accident Commission (1998) 196 CLR 1; [1998] HCA 70 Greenaway v Auzhair 1 Pty Ltd (2010) 80 ACSR 538; [2010] NSWSC 1339 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298; [2003] NSWCA 10 Havyn Pty Ltd v Webster (2005) 12 BPR 22,837; [2005] NSWCA 182 He Kaw Teh v R (1985) 157 CLR 523; [1985] HCA 43 Hill v James [2004] NSWSC 55 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64 Howard v Mechtler (1999) 30 ACSR 434; [1999] NSWSC 232 Hybernia Management & Development Co v Newfoundland Steel Inc (1996) NFLD & PEIR 91 Indeco Pacific Pty Ltd v Geneva Investments Pty Ltd [2012] VSC 621 Industrial Equity Ltd v Lyons (Supreme Court (NSW), Cohen J, 15 October 1991, unrep) Industries & General Mortgage Company Ltd v Lewis [1949] 2 All ER 573 Ipstar Australia Pty Ltd v APS Satellite Pty Ltd (2018) 356 ALR 440; [2018] NSWCA 15 James v Hill [2004] NSWCA 301 Jiangsu Lianguan Zhaoxing Petrochemical Science and Technology Co Ltd v Wu [2021] VSC 228 John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 Johnson v Mackinnon [2012] NSWCA 152 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 King v Adams [2016] NSWSC 1798 Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 Lewis v Australian Capital Territory (2020) 381 ALR 375; [2020] HCA 26 Liquor National Wholesale Pty Ltd v Redrock Co Pty Ltd [2007] NSWSC 392 Magill v Magill (2006) 226 CLR 551; [2006] HCA 51 Marzec v Lysiak [2015] NSWSC 647 Metalcorp Recyclers Pty Ltd v Metal Manufactures Ltd (2004) ASAL (Digest) 55-119; [2003] NSWCA 213 Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31 Miller Heiman Pty Ltd v Sales Principles Pty Ltd (2017) 94 NSWLR 500; [2017] NSWCA 106 Moratic Pty Ltd v Gordon (2007) 13 BPR 24,713; [2007] NSWSC 5 Mortimer v Ah Sam [2020] NSWSC 1763 Musca and Others v Astle Corporation Pty Ltd (1988) 80 ALR 251 Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262 Owen v Tate [1976] QB 402 Owners of Strata Plan 5290 v CGS & Co Pty Ltd (2011) 81 NSWLR 285; [2011] NSWCA 168 Panama and South Pacific Telegraph Company v India Rubber, Gutta Percha and Telegraph Works Company (1875) LR 10 Ch App 515 Payne v Parker [1976] 1 NSWLR 191 Pentridge Village Pty Ltd (in liq) v Capital Finance Australia Ltd (2018) 58 VR 1; [2018] VSC 633 Phillips-Higgins v Harper [1954] 1 QB 411 Placer Development Ltd v The Commonwealth (1969) 121 CLR 353; [1969] HCA 29 Rafferty v Madgwicks (2012) 203 FCR 1; [2012] FCAFC 37 Re Anglican Development Fund Diocese of Bathurst (2015) 336 ALR 372; [2015] NSWSC 1856 Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ASCR 223; l2104] NSWSC 789 Re Steel; Public Trustee v Christian Aid Society [1979] Ch 218; 2 All ER 1026 Re Suco Gold Pty Ltd (in liq) (1983) 33 SASR 99 Reinhold v New South Wales Lotteries Corporation (No 2) (2008) 82 NSWLR 762; [2008] NSWSC 187 Rema Tip Top Asia Pacific Pty Ltd v Gruterich [2019] NSWSC 1594 Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 Sealed Air Australia Pty Ltd v Aus-lid Enterprises Pty Ltd (2020) 375 ALR 324; [2020] FCA 29 Semrani v Manoun ; Williams v Manoun [2001] NSWCA 337 Sergienko v AXL Financial Pty Ltd [2021] NSWSC 297 Sydney Water Corporation v Makucha [2010] NSWSC 114 T Mahesan s/o Thambiah v Malaysia Government Officers Co-op Housing Society Ltd [1978] 2 WLR 444 Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 The Nominal Defendant v Cordin (2017) 79 MVR 210; [2017] NSWCA 6 Thorby v Goldberg (1964) 112 CLR 597; [1964] HCA 41 Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49 Tonto Home Loans Australia Pty Ltd v Tavares (2011) 15 BPR 29,699; [2011] NSWCA 389 Trio Capital Ltd (Admin App) v ACT Superannuation Management Pty Ltd (2010) 79 ACSR 425; [2010] NSWSC 941 United Builders Pty Ltd v Mutual Acceptance Ltd (1980) 144 CLR 673 United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 Violet Home Loans Pty Ltd v Schmidt (2013) 44 VR 202; [2013] VSCA 56 Vouzas v Bleake House Pty Ltd [2013] VSC 534 Walters v Scarborough [2011] NSWSC 1380 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7 Warman International Ltd v Dwyer (1995) 182 CLR 544; [1995] HCA 18 Watson v Foxman (1995) 49 NSWLR 315 Weiner v Harris [1910] 1 KB 285 West v Mead [2003] NSWSC 161 White v Philips Electronics Australia Ltd [2019] NSWCA 115 Yorke v Lucas (1983) 49 ALR 672 Zobory v Federal Commission of Taxation (1995) 64 FCR 86 Texts Cited: Roderick l'Anson Banks, Lindley & Banks on Partnership (18th ed, 2002, Sweet & Maxwell) Category: Principal judgment Parties: Dominic Gerardo Galati (Plaintiff) Robert Paton Deans (First Defendant) Fishbank Development Corporation Limited (Second Defendant) TRHS Pty Ltd (Third Defendant) Felan's Fisheries Pty Ltd (Fourth Defendant) Trading Australia Pty Ltd (in liq)(Fifth Defendant) Wealth Shift Pty Ltd (Eighth Cross-Defendant) Caroline Pritchard (Ninth Cross-Defendant) Representation: Counsel: Mr R Marshall SC with Mr A Butt (Plaintiff) Mr M Einfeld QC with Mr P Barham (First to Fourth Defendants/Cross-Claimants) Mr M Fantin (Eighth and Ninth Cross Defendants)