STATE RAIL AUTHORITY OF NEW SOUTH WALES v EARTHLINE CONSTRUCTIONS PTY LIMITED [1994] NSWCA 296

STATE RAIL AUTHORITY OF NEW SOUTH WALES v EARTHLINE CONSTRUCTIONS PTY LIMITED

SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

HANDLEY JA 19 October 1994

[1994] NSWCA 296

Handley JA. Mr Martin has moved this morning on notice of motion filed on 13 October to continue Mareva injunctions which I granted on an urgent interim basis on Monday, 17 October at a time when I was unable to do anything else having regard to the volume of the material and the lack of any opportunity at that time to have read and understood it even on a provisional basis. I have since had an opportunity to read the material, in particular the reasons for judgment of O'Keefe J of 14 September in the principal proceedings which comprised 145 pages.

The case of the State Rail Authority at the trial was based upon breaches of fiduciary duty by its former officers, Messrs Greber, Child and Bell and the knowing participation by the defendant companies and the Davies Brothers in those breaches of fiduciary duty, together with a claim in restitution against the companies for money paid under a mistake of fact. The corporate defendants were earthmoving contractors the State Rail Authority engaged on an informal basis in connection with a major upgrading of the main northern railway line from Sydney to Brisbane which was carriedout by the Authority from late 1989 until mid-1992. The case of the Authority was that the corporate defendants, in particular Earthline Constructions Pty Limited, had submitted to it invoices and work dockets which were false and fraudulent making claims for work which had not been done or making more than one claim for work which had been done. I need not go into the details of these claims for the purposes of this judgment. The case was a complex one as the length of the reasons for judgment demonstrates. In the result the claimants failed at first instance except in respect of certain duplicated claims and claims for work done by machines which, at the relevant time, were out of service for repair and maintenance. The net result of the litigation was that judgment was entered in favour of the Authority for $146,587.63 together with twenty per cent of its costs. The Authority had made two alternative claims at the trial, one to recover $2,765,002 which was set out in Exhibit CC and the other to recover $1,765,609 based on Exhibit AA.