Banque Commerciale SA v Akhil Holdings Limited

The case of *Banque Commerciale SA v Akhil Holdings Limited* was heard in the High Court of Australia. The appellant, Banque Commerciale SA (the Bank), appealed a decision of the Court of Appeal. The dispute concerned findings of fraudulent breach of trust made against the Bank by the Court of Appeal. The Bank contended that these findings were made in circumstances where fraud had not been pleaded against it, nor otherwise alleged, meaning the Bank had not had an opportunity to defend itself against such allegations.

The central legal issue before the High Court was whether the Court of Appeal erred in making findings of fraudulent breach of trust against the appellant Bank. This arose in the context of the Bank's contention that it was entitled to the benefit of limitation provisions under the *Trustee Act* and the *Limitation Act*, which require proceedings for breach of trust against a trustee to be commenced within six years of the breach. The Bank argued that the Court of Appeal's findings of fraud, made without such allegations being pleaded or proven, prejudiced its ability to rely on these limitation provisions.

The Court of Appeal's decision was based on a notice of contention filed by the Bank, asserting its entitlement to the benefit of the limitation provisions. The background to the dispute involved mining rights in Fiji held by Akhil Holdings, controlled by Mr Akhil. These rights were to be sold to Southland Mining Limited, a company formed by Mr Messara. An option agreement was exercised, leading to Akhil Holdings directing that shares in Southland Mining be allotted, with one million shares to Akhil Holdings and 600,000 shares to the Bank as nominee. The Court of Appeal's findings of fraud were made in response to the Bank's reliance on the limitation provisions, without fraud having been specifically pleaded against the Bank.