Scrivener v Cappello [2021] NSWCA 330

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Scrivener v Cappello [2021] NSWCA 330 Hearing dates: 28 October 2021 Decision date: 21 December 2021 Before: Bathurst CJ at [1]; Bell P at [78]; Macfarlan JA at [79] Decision: (1) Appeal dismissed. (2) Cross-appeal allowed. (3) Set aside Order 1 of the orders made by the primary judge and in lieu make the following declaration: The Court declares that there was a partnership between the first plaintiff and the first defendant that acquired the rights to control and sell the three contiguous properties situated at 88 Rouse Road, 104 Rouse Road and 96 Cudgegong Road, Rouse Hill and that the second defendant held the said rights in trust for the said partnership. (4) Vary Order 2 of the orders made by the primary judge to provide as follows: (a) The first and second defendants are liable to pay to the first plaintiff equitable compensation in an amount of $6,203,689.48 inclusive of interest. (b) The second defendant is liable to pay the second plaintiff equitable compensation in an amount of $6,203,689.48 inclusive of interest. (c) Any payment made by the first or second defendants pursuant to Order 4(a) shall result in a pro tanto reduction of the second defendant's liability under Order 4(b). (d) Any payment made by the second defendant under Order 4(b) shall result in a pro tanto reduction of the liability of the first and second defendants under Order 4(a). (5) Order the appellant pay 80 per cent of the respondents' costs of the appeal and cross-appeal. Catchwords: PARTNERSHIPS AND JOINT VENTURES – rights and duties between partners – fiduciary relationship – obligations – whether the appellant was an accessory to breaches of fiduciary obligations owed to the respondents – where the appellant caused the third respondent to fail to account to the second respondent for one half of the profits derived from the acquisition and subsequent sale of three contiguous parcels of land – where primary judge did not refer to two essential matters to establish accessorial liability under the second limb of Barnes v Addy – where the appellant knew of facts and circumstances which would indicate the fact of the breach on the part of a fiduciary to an honest and reasonable person PARTNERSHIPS AND JOINT VENTURES – rights and duties between partners – fiduciary relationship – obligations – whether the appellant was liable to the first respondent or the second respondent PARTNERSHIPS AND JOINT VENTURES – rights and duties between partners – interpretation of agreement – oral agreement – where there was an agreement to enter into a partnership to acquire and resell three contiguous parcels of land and share expenses and profits equally – whether the agreement was subject to a sunset condition – where the first respondent's evidence of oral agreement accepted – where the third respondent was a vehicle entrusted to hold assets on behalf of the partnership Legislation Cited: Supreme Court Act 1970 (NSW) Cases Cited: Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 265 CLR 1; [2018] HCA 43 Barnes v Addy (1874) LR 9 Ch App 244 Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384; [1929] HCA 24 Canny Gabriel Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd (1974) 131 CLR 321; [1974] HCA 22 Cappello v Scrivener [2020] NSWSC 1748 Cappello v Scrivener (No 2) [2021] NSWSC 168 Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266 Hillig v Battaglia [2018] NSWCA 67; (2018) 125 ACSR 171 Pateman v Higgin (1957) 97 CLR 521; [1957] HCA 62 Pittmore Pty Ltd v Chan (2020) 104 NSWLR 62; [2020] NSWCCA 344 United Dominions Corporation Ltd v Brian Proprietary Ltd (1985) 157 CLR 1; [1985] HCA 49 Texts Cited: Nil Category: Principal judgment Parties: John Sidney Scrivener (Appellant/First Cross Respondent) John Cappello (First Respondent/First Cross Appellant) Shaka Holdings Pty Ltd (Second Respondent/Second Cross Appellant) Tuscany Corporation Pty Ltd (Third Respondent/Second Cross Respondent) Representation: Counsel: C Birch SC with B DeBuse (Appellant/First Cross Respondent) D R Pritchard SC with D W Rayment (First Respondent/First Cross Appellant and Second Respondent/Second Cross Appellant)