Cassaniti v Ball as liquidator of RCG CBD Pty Limited (in liq) and related matters; Khalil v Ball as liquidator of Diamondwish Pty Ltd (in liq) and related matters [2022] NSWCA 161

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Cassaniti v Ball as liquidator of RCG CBD Pty Limited (in liq) and related matters; Khalil v Ball as liquidator of Diamondwish Pty Ltd (in liq) and related matters [2022] NSWCA 161 Hearing dates: 16, 17, 18 May 2022 Date of orders: 25 August 2022 Decision date: 25 August 2022 Before: Gleeson JA; Leeming JA; Mitchelmore JA Decision: Cassaniti appeals (2021/242905, 242906, 242909, 242910 and 242957) (1) Appeals dismissed. (2) In each appeal, the appellant to pay the respondents' costs in this Court. Khalil appeals (2021/242618, 242626, 242639, 242648 and 242667) (1) Extend time for the filing of the notice of appeal to the date on which the document was filed in each appeal. (2) Appeals dismissed. (3) Dismiss the respondents' notice of motion filed 7 April 2022 in each appeal. (4) In each appeal, the appellants to pay the respondents' costs in this Court, including the costs of the respondents' notice of motion filed 7 April 2022. RCG appeal (2021/289069) In the liquidator's appeal on behalf of RCG CBD Pty Ltd (in liq) against the Borg parties, dismiss ground 1 of the notice of contention. Catchwords: EQUITY – fiduciary duties – breach – accessorial liability – second limb in Barnes v Addy – involvement in contravention of director's statutory duties – where fiduciary and some accessories released from liability – whether Civil Procedure Act 2005 (NSW) s 95 abrogates joint liability release rule – whether the common law rule applies in equity EQUITY – fiduciary duties – breach – accessorial liability claim – whether assistant had requisite knowledge of dishonest breaches of fiduciary duty – whether facts would have indicated to honest and reasonable person that invoices were contrived and payments lacked genuine commercial purpose Legislation Cited: Civil Liability (Contribution) Act 1978 (UK), s 3 Civil Procedure Act 2005 (NSW), s 95 Corporations Act 2001 (Cth), ss 79, 180, 181, 182, 183, 184, 185, 1317E, 1317H(1), Pt 5.7B Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), ss 5, 7 Law Reform (Law and Equity) Act 1972 (NSW) Law Reform (Miscellaneous Provisions) Act 1946 (NSW), ss 5(1)(a), 11 Supreme Court Act 1970 (NSW), s 97 Trustee Act 1925 (NSW), s 85 Uniform Civil Procedure Rules 2005 (NSW), rr 6.18, 6.21, 42.1, 51.36 Wrongs Act 1958 (Vic), ss 23A, 24AA Cases Cited: Apley Estates Co Ltd v De Bernales [1947] Ch 217 Baden v Sociéte Générale pour Favoriser le Développement du Commerce et de l'lndustrie en France SA [1993] 1 WLR 509 Barnes v Addy (1874) LR 9 Ch App 244 Blackwood v Borrowes (1843) 4 Dru & Watts 441 Blyth v Fladgate [1891] 1 Ch 337 Brinsmead v Harrison (1872) LR 7 CP 547 Carr and Purves v Thomas [2009] NSWCA 208 Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373; [1975] HCA 8 Daniels v Anderson (1995) 37 NSWLR 438 Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543; [2002] HCA 49 Dorgal v Buckley (1996) 22 ACSR 164 Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366; [2002] UKHL 48 Duck v Mayeu [1892] 2 QB 511 Edgewater Homes Pty Ltd v Donohoe [2019] NSWSC 44 Ex parte Waterfall (1851) 4 De G & SM 199; 64 ER 797 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2003) 230 CLR 89; [2007] HCA 22 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC Harplex Pty Ltd v Konstandellos (2018) 54 VR 174; [2018] VSCA 67 Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613; [2013] HCA 10 In re EWA [1901] 2 KB 642 In the matters of Earth Civil Australia Pty Ltd v RCG CBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (All in liq) [2020] NSWSC 293 Kendall v Hamilton (1879) 4 App Cas 504 King v Hoare (1844) 13 M & W 494; 153 ER 206 Lavin v Toppi (2014) 87 NSWLR 159; [2014] NSWCA 160 Lowe & Sons v Dixon & Sons (1885) 16 QBD 455 Madox v Jackson (1746) 3 Atk 405; 26 ER 1034 Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd [2022] NSWCA 150 Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 Nau v Kemp & Associates (2010) 77 NSWLR 687; [2010] NSWCA 164 Newcrest Mining Ltd v Thornton (2012) 248 CLR 555; [2012] HCA 60 Purves v Thomas [2009] NSWCA 208 Ramsay v Pigram (1968) 118 CLR 271; [1968] HCA 34 R v Reynhoudt (1962) 107 CLR 381; [1962] HCA 23 Robinson v Tait [2002] 2 NZLR 30; [2001] NZCA 217 State of New South Wales v Loh Min Choo [2012] NSWCA 275 Thompson v Australian Capital Television Pty Ltd 186 CLR 574; [1996] HCA 38 Thompson v Harrison (1787) 2 Bro CC 164; 29 ER 94 United States Surgical Corporation v Hospital Products International [1982] 2 NSWLR 766 Vella v Commissioner of Police (NSW) (2019) 269 CLR 219; [2019] HCA 38 Walker v Bowry (1924) 35 CLR 48; [1924] HCA 28 Woodgate v Davis (2002) 55 NSWLR 222; [2002] NSWSC 616 Yeshiva Properties No 1 Pty Ltd v Marshall [2005] NSWCA 23; 219 ALR 112 Texts Cited: Annual Report of the American Bar Association (48 Annu Rep ABA 560 (1925) M Conaglen, "Equitable Compensation for Breach of Trust: Off Target" (2016) 40 Melbourne University Law Review 126 J Dietrich and P Ridge, Accessories in Private Law (Cambridge University Press, 2016) Daniell's Chancery Practice (5th ed, Stevens, 1871) C Eberhart, 13 Cornell Law Quarterly 640 (1928) Glanville Williams, Joint Obligations (Butterworths, 1949) Halsbury's Laws of England (4th ed) D Hayton et al, Underhill and Hayton, Law Relating to Trusts and Trustees (19th ed, LexisNexis, 2016) Higgins and Fletcher, The Law of Partnership in Australia and New Zealand (8th ed, LBC Information Services, 2001) Lewin on Trusts (19th ed, Sweet & Maxwell, 2014) Lewin on Trusts (20th ed, Sweet & Maxwell, 2020) C Mitchell, in P Birks and A Pretto (eds), Breach of Trust (2002, Hart Publishing) J Perry, A Treatise on the Law of Trusts and Trustees (Cambridge Mass, 1871) G Sweet, Bythewood's and Jarman's System of Conveyancing (3rd ed, S Sweet, 1844) Williston's A Treatise on the Law of Contracts (rev ed 1936 by S Williston and G Thompson) Category: Principal judgment Parties: Cassaniti appeals