Malek Fahd Islamic School Limited v The Australian Federation of Islamic Councils Inc [2017] NSWSC 1712

Supreme Court New South Wales

Medium Neutral Citation: Malek Fahd Islamic School Limited v The Australian Federation of Islamic Councils Inc [2017] NSWSC 1712 Hearing dates: 8, 9, 15, 16, 20 and 21 November 2017 Decision date: 12 December 2017 Jurisdiction: Equity Before: Ball J Decision: See paragraphs [132] to [134] of this judgment Catchwords: CIVIL PROCEDURE – Pleadings – No application to amend made – Whether plaintiff should be permitted to advance case that goes beyond pleadings CIVIL PROCEDURE – Pleadings – Pleading material facts – Whether case argued raises new material factual issues not pleaded – Whether unconscionability case pleaded with sufficient precision EQUITY – Equitable remedies – Equitable compensation – Where plaintiff beneficiary entered into interest free loan with defendant fiduciary – Duty not to procure plaintiff to enter into uncommercial agreement – Whether it was in interests of plaintiff to enter loan – Whether defendant breached fiduciary duties in being party to the loan – Whether plaintiff entitled to claim interest on loan EQUITY – Equitable remedies – Equitable compensation – Where defendant breached fiduciary obligations in not offering plaintiff a discount for prepayment of rent – Whether plaintiff entitled to compensation in respect of prepayment EQUITY – Fiduciary duties – Scope – Whether fiduciary had duty to acquire property for beneficiary but chose to acquire for own benefit – Whether fiduciary prevented from acquiring property which beneficiary had interest in acquiring EQUITY – Trusts and trustees – Constructive trust – Whether defendant obtained benefit by reason of breach of fiduciary duty – Whether remedial constructive trust should be imposed – Whether gain on disposal of property held on constructive trust EQUITY – Trusts and trustees – Constructive trust – Institutional constructive trust – Whether defendant used funds belonging to plaintiff to acquire property – Whether loan funds should be characterised as properly belonging to lender or borrower – Whether overpayment of rent properly characterised as belonging to tenant or landlord LIMITATION OF ACTIONS – General – Statute of limitation – Limitation Act 1969 (NSW) – Postponement of the bar – Whether equity retains residual discretion not to apply bar – Whether residual discretion arises in context of breach of fiduciary duty – Whether unconscionable conduct defeats limitation bar Legislation Cited: Australian Consumer Law s 20 Corporations Act 2001 (Cth) ss 9, 180-183, 1317K Limitation Act 1969 (NSW) s 47 Trade Practices Act 1974 (Cth) s 51AA(1) Cases Cited: Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (2003) 214 CLR 51; [2003] HCA 18 Boardman v Phipps [1967] 2 AC 46; [1966] 3 All ER 721 Cassegrain v Gerard Cassegrain & Co Pty Limited (2013) 305 ALR 648; [2013] NSWCA 454 Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36 Gerace v Auzhair Supplies Pty Ltd (In Liq) (2014) 87 NSWLR 435; [2014] NSWCA 181 Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64 In the Matter of Auzhair Supplies Pty Ltd (in liq) (2013) 272 FLR 304; [2013] NSWSC 1 Issa v Issa [2015] NSWSC 112 Shiu Shing Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 Category: Principal judgment Parties: Malek Fahd Islamic School Limited (ACN 000 038 648) (Plaintiff) The Australian Federation of Islamic Councils Inc (ABN 37 002 757 155) (Defendant) Representation: Counsel: KC Rees SC with T Hollo and R Mansted (Plaintiff) MR Elliott SC with N Dewan (Defendant)