Anderson v Canaccord Genuity Financial Ltd

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.