BEACH PETROLEUM NL v ABBOTT TOUT RUSSELL KENNEDY & ORS [1999] NSWCA 408

Reported Decision : 48 NSWLR 1 33 ACSR 1

New South Wales Court of Appeal CITATION : BEACH PETROLEUM NL v ABBOTT TOUT RUSSELL KENNEDY & ORS [1999] NSWCA 408 FILE NUMBER(S) : CA 40029/98 HEARING DATE(S) : 8 February 1999-12 February 1999 JUDGMENT DATE : 5 November 1999

PARTIES : Beach Petroleum NL - Appellant Abbott Tout Russell Kennedy - Respondents JUDGMENT OF : Spigelman CJ; Sheller JA; Stein JA

LOWER COURT JURISDICTION : Supreme Court - Commercial Division LOWER COURT FILE NUMBER(S) : 50030/96 LOWER COURT JUDICIAL OFFICER : Rolfe J

COUNSEL : D F Jackson QC/JC Kelly SC - Appellant T E F Hughes QC/MA Pembroke SC/JWJ Stevenson - Respondents SOLICITORS : Piper Alderman - Appellant Minter Ellison - Respondents CATCHWORDS : SOLICITOR & CLIENT - retainers - scope of retainer - existence of fiduciary duties where no retainer; SOLICITOR & CLIENT - fiduciary duties - alleged breach of duty - where former directors defrauded the company - solicitors alleged to have been knowingly involved - objective dishonesty - causation of loss Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980 (Cth) Law Reform (Miscellaneous Provisions) Act 1965 (NSW) ACTS CITED : Wrongs Act 1936 (SA) Companies (South Australia) Code Companies (Acquisition of Shares) Code Abalos v Australian Postal Commission (1990) 171 CLR 167 Abcos v Jones (1997) 150 ALR 488 Agbaba v Witter (1977) 51 ALJR 503 Australian Breeders Cooperative Society Ltd v Jones (1997) 150 ALR 488 Australian Capital Television Pty Limited v Minister for Transport and Communications (1989) 86 ALR 119 Barnes v Addy (1874) LR 9 ChApp 244 Beach Petroleum NL v Abbott Tout Russell Kennedy 26 ACSR 114 Beach Petroleum NL v Johnson (1993) 43 FCR 1 Belmont Finance Corporation Limited v Williams Furniture Limited [1979] 1 Ch 250 Biggs v London Loan & Savings Co (1933) 3 DLR 161 Birtchnell v The Equity Trustees, Executors and Agency Co Limited (1929) 42 CLR 384 Boardman v Phipps [1967] 2 AC 46 Bray v Ford [1896] AC 44 Breen v Williams (1996) 186 CLR 71 Brickenden v London Loan and Savings Co (1934) 3 DLR 465 Bristol and West Building Society v Mothew [1998] Ch 1 Canson Enterprises Ltd v Boughton & Co (1991) 85 DLR (4th) 129 Clark Boyce v Mouat [1994] 1 AC 428 Commonwealth Bank v Smith (1991) 42 FCR 390 Devries v Australian National Railways Commission (1993) 177 CLR 472 Dresser v Norwood [1864] 17 CBNS 466 Duke Group Limited (In Liquidation) v Pilmer (1999) 31 ACSR 213 El Ajou v Dollar Land Holdings Plc [1994] 2 All ER 685 Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 Farrington v Rowe McBride & Partners [1985] 1 NZLR 83 Gilbert v Shanahan (1998) 3 NZLR 529 Gray v New Augarita Porcupine Mines Limited (1952) 3 DLR 1 CASES CITED: Haira v Burbery Mortgage Finance and Savings Ltd [1995] 3 NZLR 396 Hawkins v Clayton (1988) 164 CLR 539 Haywood v Roadknight (1927) VLR 512 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 J C Houghton & Co v Nothard, Lowe & Wills Limited [1928] AC 1 Jones v Dunkel (1959) 101 CLR 298 Jones v Hyde (1989) 63 ALJR 349 Lyell v Kennedy [1889] 14 AppCas 437 Maguire v Makaronis (1997) 188 CLR 449 Moody v Cox and Hatt [1917] 2 Ch 71 Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556 National Mutual Holdings v Sentry Corporation (1989) 22 FCR 209 O'Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262 Perre v Apand Pty Limited (1999) 73 ALJR 1190 Prince Jefri Bolkiah v KPMG (A Firm) [1999] 2 WLR 215 Queensland Mines Ltd v Hudson (1978) 52 ALJR 399 Re Coomber: Coomber v Coomber [1911] 1 Ch 723 Re Dawson (deceased): Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWR 211 Re Hampshire Land Co [1896] 2 Ch 743 Royal Brunei Airlines v Tan [1995] 2 AC 378 SFC v Cheney Corp (1942) 318 US 80 Spector v Ageda [1973] Ch 30 State Rail Authority of New South Wales v Earthline Constructions Pty Limited (In Liquidation) (1999) 73 ALJR 306 Story v Advance Bank Australia Limited (1993) 31 NSWLR 722 Target Holdings v Redferns [1996] 1 AC 421 Turton v London & North Western Railway Co (1850) 15 LT (OS) 92 Walden Properties v Beaver Properties Ltd [1973] 2 NSWLR 815 Warman International Ltd v Dwyer (1995) 182 CLR 544 DECISION : 1. Leave to the respondents to amend the notice of cross-appeal to add the following grounds; 11. His Honour erred in holding that the respondents had not raised, as a defence, the existence of the fully informed consent of the appellant; 12. His Honour should have held that the respondents acted with the informed consent of the appellant in each of the matters or transactions in respect of which the appellant alleged a conflict of duty by the respondents; 2. Leave to the appellant to amend paras 10, 13 and 63 of its grounds of appeal in accordance with the amendments proposed in the letter from its solicitor to the Court dated 19 February 1999; 3. Appeal dismissed; 4. Cross-appeal allowed in part; 5. Appellant to pay the respondents' costs of the appeal and cross-appeal.