Galati v Deans & Ors [2023] NSWCA 13

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Galati v Deans & Ors [2023] NSWCA 13 Hearing dates: 20 September 2022; written submissions 27 and 29 September 2022 Decision date: 15 February 2023 Before: Macfarlan JA at [1]; White JA at [2]; Basten AJA at [108] Decision: (1) Appeal allowed in part. (2) Set aside order (1) made on 1 September 2021 in the court below. (3) In lieu thereof, (a) Declare that the third respondent holds the shares in the fourth respondent on trust for the appellant and the second respondent as tenants in common in equal shares; (b) Otherwise dismiss the appellant's claim. (4) Order that within 28 days the parties file and exchange written submissions of no more than 8 pages as to the appropriate costs orders to be made in respect of the proceedings below and of the appeal. Catchwords: EQUITY – trusts – resulting trusts – constructive trusts – characterisation of trusts – where appellant and respondents engaged in joint venture in hope of redevelopment of Sydney Fish Market – where in the course of the joint venture companies controlled by appellant and first respondent acquired call option for the acquisition of shares in an unrelated company – where nominee company appointed to exercise call option on behalf of grantees – where grantees provided finance for nominee company to exercise call option – whether evidence established that grantees intended nominee company to hold acquired shares on trust for them in equal shares – whether such trust is properly characterised as a presumed resulting trust or a common intention constructive trust – whether parties intended that trust over shares should only arise upon allocation of units to appellant in nominee company's unit trust – held that nominee company holds half of its shares acquired under call option deed on trust for appellant EQUITY – fiduciary duties – secret commissions – entitlement of company related to joint venturer to commission under antecedent agency agreement – commission retained in its entirety by joint venturer's company upon receipt – whether receipt of commission amounts to breach of fiduciary duty – whether liability of other joint venturer for breach of fiduciary duty ought to be reduced by amount of commission said to be wrongfully received and retained – no breach of fiduciary duty established in circumstances where antecedent agency agreement unconnected with joint venture Cases Cited: Austin v Keele (1987) 10 NSWLR 283 Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 Bijkerk Investments Pty Ltd v Bikic [2020] NSWSC 1336 Bosanac v Commissioner of Taxation [2022] HCA 34 Calverley v Green (1984) 155 CLR 242 at 246; [1984] HCA 81 Carantinos v Magafas [2008] NSWCA 304 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353; [1956] HCA 28 Dewhirst v Edwards [1983] 1 NSWLR 34 Grant v Edwards [1986] Ch 638; 2 All ER 426 Green v Green (1989) 17 NSWLR 343 Maharaj v Chand [1986] AC 898; 3 All ER 107 Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 Parsons v McBain [2001] FCA 376; 109 FCR 120 Shepherd v Doolan & Ors; Shepherd v Doolan & Anor; Est. Doolan [2005] NSWSC 42 Category: Principal judgment Parties: Dominic Gerardo Galati (Appellant) Robert Paton Deans (First Respondent) Fishbank Development Corporation Pty Limited (Second Respondent) TRHS Pty Ltd (Third Respondent) Felan's Fisheries Pty Ltd (Fourth Respondent) Trading Australia Pty Ltd (in liq) (Fifth Respondent) Representation: Counsel: P Herzfeld SC with G Drew (Appellant) G K Burton SC with P Barham (First to Fourth Respondents)