Blue Mirror Pty Ltd v Pegasus Australia Developments Pty Ltd (in liquidation) [2024] NSWSC 28

Supreme Court New South Wales

Medium Neutral Citation: Blue Mirror Pty Ltd v Pegasus Australia Developments Pty Ltd (in liquidation) [2024] NSWSC 28 Hearing dates: 20 – 24 November 2023 Date of orders: 1 February 2024 Decision date: 01 February 2024 Jurisdiction: Equity Before: Robb J Decision: See [168] Catchwords: EQUITY – fiduciary duties – breach – rule in Barnes v Addy – where the plaintiff paid approximately $9.9 million to the first defendant to be held by it on trust pending the acquisition of one million boxes of gloves for the plaintiff for on-sale – where the second defendant caused the first defendant to breach the trust and steal the plaintiff's money – where $8.5 million of the sum paid by the plaintiff was subsequently transferred by the first defendant to the third defendant – where the third defendant subsequently transferred $1 million to the fourth defendant and approximately $6.1 million to the fifth defendant – where the third, fourth and fifth defendants are the active defendants in the proceedings – where the active defendants allege that the transfers were made pursuant to legitimate commercial agreements with the first defendant, made before the theft of the plaintiff's money – whether legitimate commercial agreements existed between the active defendants and the first defendant – whether the active defendants received the money from the first defendant knowing (in the requisite sense) that its transfer was in breach of trust – whether the active defendants assisted (with the requisite knowledge) the first defendant in its dishonest and fraudulent breach of trust EQUITY – trusts and trustees – principle in Black v S Freedman – whether the active defendants are volunteers who have received money obtained by fraud and who have learned that the money was misappropriated RESTITUTION – nature of restitutionary liability – common counts – money had and received – whether the active defendants unjustly obtained a benefit to which they were not entitled and were unjustly enriched Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW), r 7.29 Cases Cited: Baden Delvaux & Lecuit v Société Générale pour Favoriser le Développement du Commerce et de l'Industrie en France SA [1993] 1 WLR 509 Barnes v Addy (1874) LR 9 Ch App 244 Black v S Freedman & Co (1910) 12 CLR 105 Break Fast Investments Pty Ltd v Giannopoulos (No 5) [2011] NSWSC 1508 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Heperu Pty Ltd v Belle (2009) 76 NSWLR 230; [2009] NSWCA 252 Jainti Pty Ltd v Fraser Panorama Pty Ltd [2021] NSWSC 744 Category: Principal judgment Parties: Blue Mirror Pty Ltd (Plaintiff) Pegasus Australia Developments Pty Ltd (in liquidation) (First Defendant) Ken Tan (Second Defendant) Tan & Tan Australia Pty Ltd (in liquidation) (Third Defendant) Anthony Tan (Fourth Defendant) Australian Construction Company Pty Ltd (Fifth Defendant) Representation: Counsel: AP Cheshire SC (Plaintiff) Anthony Tan (Fourth Defendant, self-represented)