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Anderson v Canaccord Genuity Financial Ltd

Anderson v Canaccord Genuity Financial Ltd

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Court of Appeal

Supreme Court

New South Wales

Summary available
Amendment notes

Medium Neutral Citation: Anderson v Canaccord Genuity Financial Ltd [2023] NSWCA 294
Hearing dates: 8 – 12, 15 – 17 May 2023
Decision date: 08 December 2023
Before: Gleeson JA; Leeming JA; White JA
Decision:
In 2022/00048359:
1. Appeal allowed as against all respondents save the fifth respondent Acorn Capital Ltd and the sixth respondent Albany Capital Investors Pty Ltd.
2. Set aside orders 1 and 2 made on 7 February 2022, except insofar as order 2 enters judgment in favour of the fifth respondent Acorn Capital Ltd and the sixth respondent Albany Capital Investors Pty Ltd, and in lieu thereof enter judgment in favour of Mrs Anderson against each of the first, second, third and fourth respondents in the amount of $3,016,304.23.
3. Set aside orders 1, 3, 5, 11 and 13 made on 24 May 2022 (concerning the first, second, third and fourth respondents’ costs of the trial).
4. Cross-appeal dismissed.
5. Direct the parties to file and serve written submissions as to the costs of the appeal and costs at first instance not exceeding 10 pages, and any other materials in support of those submissions, on or before 2 February 2024, and written submissions in reply not exceeding 5 pages, or in the case of Mrs Anderson, 10 pages, on or before 16 February 2024, with a view to resolving the question of costs on the papers.
6. Any application for further orders to be made by notice of motion filed no later than 2 February 2024, together with affidavits and submissions in support, with the parties thereafter to supply affidavits and submissions in response and in reply in accordance with the timetable in order 5 above and with a view to the application being resolved on the papers.
In 2022/00173413:
1. Direct Mr Anderson to file a notice of appeal in accordance with the draft notice of appeal within 7 days of today, and dispense with the requirements as to service.
2. Appeal allowed.
3. Set aside order 12 made on 24 May 2022.
4. The first, second, third and fourth respondents to pay Mr Anderson’s costs of proceeding 2022/173413, and (to the extent that separate costs were incurred by Mr Anderson) to pay his costs in the Equity Division in respect of the application for a third party costs order.

Catchwords:
EQUITY – fiduciary duty – existence – whether employee owes fiduciary obligations to employer – whether employee recognised as accepted category of fiduciary – separate element as to whether employee’s conduct falls within scope of fiduciary obligation – whether open to Australian courts below the High Court to reject separate elements of existence and scope of fiduciary obligations of senior employees – Nottingham University v Fishel [2000] EWHC 221 (QB); [2000] IRLR 471 disapproved
EQUITY – fiduciary duty – knowing involvement in breach – level of assistance sufficient to render third party liable – extent of knowledge sufficient to render third party…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NSWCA 294
Decision Date: 08 December 2023

CaseChat Overview and Summary

In *Anderson v Canaccord Genuity Financial Ltd*, the Court of Appeal of New South Wales considered appeals and cross-appeals arising from a dispute concerning alleged breaches of fiduciary duty by employees and the knowing involvement of third parties in those breaches. The primary dispute involved allegations that senior employees of a financial services firm breached their fiduciary obligations to their employer by engaging in conduct that caused loss, and that other entities knowingly assisted in these breaches.

The court was required to determine several key legal issues. These included the existence and scope of fiduciary obligations owed by employees to their employers, particularly whether Australian courts below the High Court were bound to reject the approach of distinguishing between the existence and scope of such obligations, as seen in *Nottingham University v Fishel*. The court also had to consider the principles governing third-party liability for knowing involvement in a breach of fiduciary duty, including the level of assistance and knowledge required, and when knowledge might be imputed. Furthermore, the court examined issues of causation, particularly whether an alleged further breach of trust by the trustee could prevent the assessment of liability against fiduciaries and knowing assistants, and how to assess loss of a chance when the opportunity was speculative or its loss was a consequence of the breaches.

The Court of Appeal reasoned that the approach of distinguishing between the existence and scope of fiduciary obligations for senior employees, as adopted in *Nottingham University v Fishel*, was not to be rejected by Australian courts below the High Court. The court applied established principles of equity regarding fiduciary duties, focusing on the specific conduct of the employees and whether it fell within the scope of their accepted fiduciary roles. Regarding third-party liability, the court considered the extent of knowledge and assistance necessary to establish knowing involvement in a breach. The court also addressed the causation issue, holding that an alleged further breach of trust by the trustee did not necessarily preclude liability for the initial fiduciaries and knowing assistants, particularly where such a proposition could lead to a windfall for dishonest parties. The assessment of loss of a chance involved considering the speculative nature of the opportunity and applying appropriate discounts for future contingencies, with inferences being drawn against the fiduciaries where evidence was lacking due to their breaches.

The Court of Appeal allowed the appeals in part, setting aside certain orders and entering judgment in favour of Mrs Anderson against the first, second, third, and fourth respondents for a significant sum. The appeals against the fifth and sixth respondents were dismissed. The court also made orders regarding the costs of the appeal and at first instance, directing parties to file written submissions to resolve these questions on the papers. A separate appeal by Mr Anderson was also allowed, with orders made concerning his costs.

Orders

Orders of the court

In 2022/00048359:

1. Appeal allowed as against all respondents save the fifth respondent Acorn Capital Ltd and the sixth respondent Albany Capital Investors Pty Ltd.

2. Set aside orders 1 and 2 made on 7 February 2022, except insofar as order 2 enters judgment in favour of the fifth respondent Acorn Capital Ltd and the sixth respondent Albany Capital Investors Pty Ltd, and in lieu thereof enter judgment in favour of Mrs Anderson against each of the first, second, third and fourth respondents in the amount of $3,016,304.23.

3. Set aside orders 1, 3, 5, 11 and 13 made on 24 May 2022 (concerning the first, second, third and fourth respondents’ costs of the trial).

4. Cross-appeal dismissed.

5. Direct the parties to file and serve written submissions as to the costs of the appeal and costs at first instance not exceeding 10 pages, and any other materials in support of those submissions, on or before 2 February 2024, and written submissions in reply not exceeding 5 pages, or in the case of Mrs Anderson, 10 pages, on or before 16 February 2024, with a view to resolving the question of costs on the papers.

6. Any application for further orders to be made by notice of motion filed no later than 2 February 2024, together with affidavits and submissions in support, with the parties thereafter to supply affidavits and submissions in response and in reply in accordance with the timetable in order 5 above and with a view to the application being resolved on the papers.

In 2022/00173413:

1. Direct Mr Anderson to file a notice of appeal in accordance with the draft notice of appeal within 7 days of today, and dispense with the requirements as to service.

2. Appeal allowed.

3. Set aside order 12 made on 24 May 2022.

4. The first, second, third and fourth respondents to pay Mr Anderson’s costs of proceeding 2022/173413, and (to the extent that separate costs were incurred by Mr Anderson) to pay his costs in the Equity Division in respect of the application for a third party costs order.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Anderson v Canaccord Genuity Financial Ltd [2023] NSWCA 294
Hearing dates:	8 – 12, 15 – 17 May 2023
Decision date:	08 December 2023
Before:	Gleeson JA; Leeming JA; White JA
Decision:	In 2022/00048359: 1. Appeal allowed as against all respondents save the fifth respondent Acorn Capital Ltd and the sixth respondent Albany Capital Investors Pty Ltd. 2. Set aside orders 1 and 2 made on 7 February 2022, except insofar as order 2 enters judgment in favour of the fifth respondent Acorn Capital Ltd and the sixth respondent Albany Capital Investors Pty Ltd, and in lieu thereof enter judgment in favour of Mrs Anderson against each of the first, second, third and fourth respondents in the amount of $3,016,304.23. 3. Set aside orders 1, 3, 5, 11 and 13 made on 24 May 2022 (concerning the first, second, third and fourth respondents’ costs of the trial). 4. Cross-appeal dismissed. 5. Direct the parties to file and serve written submissions as to the costs of the appeal and costs at first instance not exceeding 10 pages, and any other materials in support of those submissions, on or before 2 February 2024, and written submissions in reply not exceeding 5 pages, or in the case of Mrs Anderson, 10 pages, on or before 16 February 2024, with a view to resolving the question of costs on the papers. 6. Any application for further orders to be made by notice of motion filed no later than 2 February 2024, together with affidavits and submissions in support, with the parties thereafter to supply affidavits and submissions in response and in reply in accordance with the timetable in order 5 above and with a view to the application being resolved on the papers. In 2022/00173413: 1. Direct Mr Anderson to file a notice of appeal in accordance with the draft notice of appeal within 7 days of today, and dispense with the requirements as to service. 2. Appeal allowed. 3. Set aside order 12 made on 24 May 2022. 4. The first, second, third and fourth respondents to pay Mr Anderson’s costs of proceeding 2022/173413, and (to the extent that separate costs were incurred by Mr Anderson) to pay his costs in the Equity Division in respect of the application for a third party costs order.
Catchwords:	EQUITY – fiduciary duty – existence – whether employee owes fiduciary obligations to employer – whether employee recognised as accepted category of fiduciary – separate element as to whether employee’s conduct falls within scope of fiduciary obligation – whether open to Australian courts below the High Court to reject separate elements of existence and scope of fiduciary obligations of senior employees – Nottingham University v Fishel [2000] EWHC 221 (QB); [2000] IRLR 471 disapproved EQUITY – fiduciary duty – knowing involvement in breach – level of assistance sufficient to render third party liable – extent of knowledge sufficient to render third party…