Gunasegaram v Blue Visions Management Pty Ltd; Blue Visions Management Pty Ltd v Chidiac [2018] NSWCA 179

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Gunasegaram v Blue Visions Management Pty Ltd; Blue Visions Management Pty Ltd v Chidiac [2018] NSWCA 179 Hearing dates: 16 and 17 November 2017 Decision date: 14 August 2018 Before: Basten JA at [1] Meagher JA at [52] Gleeson JA at [82] Decision: CA 2017/168664 (Mr Gunasegaram's appeal)

(1) Appeal dismissed. (2) Appellant to pay the respondent's costs. (3) Discharge orders (1) and (2) made by Leeming JA on 24 July 2017, staying the enforcement of the judgment in par 7 and the orders in pars 8, 9 and 13 of the Orders made on 10 May 2017 in proceedings 2014/192899. (4) Order that the amount of $400,000 paid into court by Mr Gunasegaram pursuant to order (3) made by Leeming JA on 24 July 2017 be paid out to Blue Visions Management Pty Ltd. (5) Grant liberty to apply, if necessary, to a single Judge of Appeal on 3 days' notice in respect of the implementation of order (4) above.

CA 2017/168769 (Blue Visions' appeal)

(1) Appeal dismissed. (2) Appellant to pay the respondents' costs. Catchwords: EQUITY – fiduciary duties – conflict of interest and duty – where two senior employees give notice of resignation – where employer subsequently agreed to novation of part of existing contract with client to company in which the two employees had an interest – whether employees preferred their personal interests to the interests of their employer – whether employees improperly diverted part of their employer's business when in a position of conflict CORPORATIONS – Corporations Act 2001 (Cth), s 182 – whether employees improperly used their position to divert part of their employer's business PRACTICE AND PROCEDURE – pleadings and particulars – whether the defence of informed consent was properly pleaded – whether new point could be raised on appeal EQUITY – fiduciary duties – breach – causation – whether sufficient causal relationship between the alleged breach of fiduciary duties and profit earned by employees in relation to new contract obtained after competitive tender process TORTS – liability in deceit – whether employee found liable in deceit in respect of representations that were not pleaded or raised at trial EQUITY – remedies – calculation of damages in deceit – whether errors in assessment of damages Legislation Cited: Civil Procedure Act 2005 (NSW), s 100 Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, s 18 Corporations Act 2001 (Cth), ss 79, 181, 182, 183, 1317E, 1317H Uniform Civil Procedure Rules 2005 (NSW), r 42.1 Cases Cited: Angas Law Services Pty Ltd (in liq) v Carabelas (2005) 226 CLR 507; [2005] HCA 23 Australian Careers Institute Pty Ltd v Australian Institute of Fitness Pty Ltd [2016] NSWCA 347; (2016) 116 ACSR 566 Banque Commerciale SA (En liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1; [1999] NSWCA 408 Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356; [2010] FCAFC 133 Blackmagic Design Pty Ltd v Overliese (2011) 191 FCR 1; [2011] FCAFC 24 BLB Corporation of Australia Establishment v Jacobsen (1974) 48 ALJR 372 Boardman v Phipps [1967] 2 AC 46 Bolton Gems Pty Ltd v Gregoire (Supreme Court (NSW), Young J, 10 November 1995, unrep) Bray v Ford [1896] AC 44 Breen v Williams 91996) 186 CLR 71; [1996] HCA 57 Brookfield Multiplex Ltd v Owners SP61288 (2014) 254 CLR 185; [2014] HCA 36 Canadian Aero Service Ltd v O'Malley (1973) 40 DLR (3d) 371 Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36 Chew v The Queen (1992) 173 CLR 626; [1992] HCA 18 Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25 Colour Control Centre Pty Ltd v Ty [1995] NSWSC 96 Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 75 ALJR 312 Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373; [1975] HCA 8 Cook v Deeks [1916] 1 AC 554 Dare v Pulham (1982) 148 CLR 658; [1982] HCA 70 Dart Industries Inc v Décor Corporation Pty Ltd (1993) 179 CLR 101 Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Doyle v Australian Securities and Investments Commission (2005) 227 CLR 18; [2005] HCA 78 Duncan v Independent Commission Against Corruption [2016] NSWCA 143 Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2009] FCAFC 6 Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 Grove v Flavel (1986) 43 SASR 410 Gunasegaram v Blue Visions Management Pty Ltd [2017] NSWCA 187 Hart Security Australia Pty Ltd v Boucousis [2106] NSWCA 307 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64 Howard v Federal Commissioner of Taxation (2014) 253 CLR 83; [2014] HCA 21 Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443 John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 Keech v Sandford (1796) Sel Cas t King 61; (1796) 25 ER 223 Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 Krupace Holdings Pty Limited v China Hotel Investments Pty Limited [2018] NSWSC 862 Kuringai Council v Chan [2017] NSWCA 226 Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 Lifeplan Australia Friendly Society Ltd (ACN 087 649 492) v Ancient Order of Foresters in Victoria Friendly Society Ltd (ACN 087 648 842) [2017] FCAFC 74; [2017] 120 ACSR 421 Magill v Magill (2006) 226 CLR 551; [2006] HCA 51 Manildra Laboratories Pty Ltd v Campbell [2009] NSWSC 987 Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68 Phipps v Boardman [1967] 2 AC 46 Pilmer v Duke Group Limited (in liq) (2001) 207 CLR 165; [2001] HCA 31 Queensland Mines Ltd v Hudson (1978) 52 ALJR 399 SBA Music Pty Ltd v Hall (No 3) [2015] FCA 1079 Strategic Management Australia AFL Pty Ltd v Precision Sports & Entertainment Group Pty Ltd [2016] VSC 303; (2016) 114 ACSR 1 Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19 The Queen v Byrnes (1995) 183 CLR 501; [1995] HCA 1 V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd (2013) 296 ALR 418; [2013] FCAFC 16 Warman International Ltd v Dwyer (1995) 182 CLR 544; [1995] HCA 18 Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272 Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 44 WAR 1; [2012] WASCA 157 Texts Cited: J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (5th ed, Lexis Nexis Butterworths, 2015) at [5-055] Category: Principal judgment Parties: 2017/168664 Arun Gunasegaram (Appellant) Blue Visions Management Pty Ltd (Respondent)