Hraiki v Hraiki [2011] NSWSC 656

Supreme Court New South Wales

Medium Neutral Citation: Hraiki v Hraiki [2011] NSWSC 656 Hearing dates: 16 and 17 February 2011 Decision date: 30 June 2011 Jurisdiction: Equity Division Before: White J Decision: Refer to para [88] of judgment Catchwords: EQUITY - constructive trust - knowing assistance - whether third defendant had knowledge of trustee's dishonest and fraudulent design - partner deliberately failed to make inquiries for fear of what he might learn - satisfies third of the categories of knowledge expressed in second limb of Barnes v Addy

PARTNERSHIP - liability to third parties - whether firm liable for wrongful act of partner committed in ordinary course of firm's business - where partner knowingly assisted in breach of trust - firm not liable where partner not pursuing business of partnership and engaged "in a frolic of his own" - Partnership Act 1892, s 10 Legislation Cited: Bankruptcy Act 1966 (Cth) Partnership Act 1892 (NSW) Partnership Act 1890 (UK) Cases Cited: Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 Robb Evans of Robb Evans & Associates v The European Bank Ltd [2004] NSWCA 82; (2004) 61 NSWLR 75 Black v S Freedman & Co (1910) 12 CLR 105 Commercial Union Assurance Company of Australia Limited v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Browne v Dunn (1893) 6 R 67 Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation (Cth) [1983] 1 NSWLR 1 Orix Australia Corporation Ltd v Moody Kiddell & Partners Pty Ltd [2005] NSWSC 1209 Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; (2007) 230 CLR 89 Barnes v Addy (1874) LR 9 Ch App 244 Chittick v Maxwell (1993) 118 ALR 728 Estate Realties Ltd v Wignall [1992] 2 NZLR 615 Dubai Aluminium Co Limited v Salaam [2002] UKHL 48; [2003] 2 AC 366 National Commercial Banking Corporation of Australia Ltd v Batty [1986] HCA 21; (1986) 160 CLR 251 Walker v European Electronics Pty Ltd (in liq) (1990) 23 NSWLR 1 Kooragang Investments Pty Ltd v Richardson & Wrench Ltd [1982] AC 462 Heperu Pty Limited v Belle [2009] NSWCA 252; (2009) 76 NSWLR 230 Category: Principal judgment Parties: George Hraiki (1st Plaintiff) Colleen Hraiki (2nd Plaintiff) Kerry Lecroix Warner (4th Defendant) Representation: A Rogers (Plaintiffs) F F F Salama (4th Defendant) Elias, Gates & Associates (Plaintiffs) Inner West Legal Solicitors (4th Defendant) File Number(s): 2008/279935