Beach Petroleum NL v Kennedy

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Case Copied 248 min read
Reported Decision: 48 NSWLR 1
33 ACSR 1

New South Wales


Court of Appeal

CITATION: BEACH PETROLEUM NL v ABBOTT TOUT RUSSELL KENNEDY & ORS [1999] NSWCA 408
FILE NUMBER(S): CA 40029/98
HEARING DATE(S): 8 February 1999-12 February 1999
JUDGMENT DATE:
5 November 1999

PARTIES :


Beach Petroleum NL - Appellant
Abbott Tout Russell Kennedy - Respondents
JUDGMENT OF: Spigelman CJ; Sheller JA; Stein JA
LOWER COURT JURISDICTION: Supreme Court - Commercial Division
LOWER COURT FILE NUMBER(S) : 50030/96
LOWER COURT JUDICIAL OFFICER: Rolfe J
COUNSEL: D F Jackson QC/JC Kelly SC - Appellant
T E F Hughes QC/MA Pembroke SC/JWJ Stevenson - Respondents
SOLICITORS: Piper Alderman - Appellant
Minter Ellison - Respondents
CATCHWORDS: SOLICITOR & CLIENT - retainers - scope of retainer - existence of fiduciary duties where no retainer; SOLICITOR & CLIENT - fiduciary duties - alleged breach of duty - where former directors defrauded the company - solicitors alleged to have been knowingly involved - objective dishonesty - causation of loss
ACTS CITED: Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980 (Cth)
Law Reform (Miscellaneous Provisions) Act 1965 (NSW)
Wrongs Act 1936 (SA)
Companies (South Australia) Code
Companies (Acquisition of Shares) Code
CASES CITED:
Abalos v Australian Postal Commission (1990) 171 CLR 167
Abcos v Jones (1997) 150 ALR 488
Agbaba v Witter (1977) 51 ALJR 503
Australian Breeders Cooperative Society Ltd v Jones (1997) 150 ALR 488
Australian Capital Television Pty Limited v Minister for Transport and Communications (1989) 86 ALR 119
Barnes v Addy (1874) LR 9 ChApp 244
Beach Petroleum NL v Abbott Tout Russell Kennedy 26 ACSR 114
Beach Petroleum NL v Johnson (1993) 43 FCR 1
Belmont Finance Corporation Limited v Williams Furniture Limited [1979] 1 Ch 250
Biggs v London Loan & Savings Co (1933) 3 DLR 161
Birtchnell v The Equity Trustees, Executors and Agency Co Limited (1929) 42 CLR 384
Boardman v Phipps [1967] 2 AC 46
Bray v Ford [1896] AC 44
Breen v Williams (1996) 186 CLR 71
Brickenden v London Loan and Savings Co (1934) 3 DLR 465
Bristol and West Building Society v Mothew [1998] Ch 1
Canson Enterprises Ltd v Boughton & Co (1991) 85 DLR (4th) 129
Clark Boyce v Mouat [1994] 1 AC 428
Commonwealth Bank v Smith (1991) 42 FCR 390
Devries v Australian National Railways Commission (1993) 177 CLR 472
Dresser v Norwood [1864] 17 CBNS 466
Duke Group Limited (In Liquidation) v Pilmer (1999) 31 ACSR 213
El Ajou v Dollar Land Holdings Plc [1994] 2 All ER 685
Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241
Farrington v Rowe McBride & Partners [1985] 1 NZLR 83
Gilbert v Shanahan (1998) 3 NZLR 529
Gray v New Augarita Porcupine Mines Limited (1952) 3 DLR 1
Haira v Burbery Mortgage Finance and Savings Ltd [1995] 3 NZLR 396
Hawkins v Clayton (1988) 164 CLR 539
Haywood v Roadknight (1927) VLR 512
Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41
J…
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Details
Case
[1999] NSWCA 408
Decision Date

CaseChat Overview and Summary

Beach Petroleum NL (the appellant) brought proceedings against its former directors and solicitors (the respondents) alleging fraud and breach of fiduciary duty. The dispute concerned the alleged fraudulent conduct of the former directors in defrauding the company, and the solicitors' alleged knowing involvement in this conduct. The matter was heard in the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal included whether the solicitors owed fiduciary duties to the company in the absence of a formal retainer, and if so, whether those duties had been breached. The court was also required to consider the nature of objective dishonesty in the context of solicitor-client relationships and the causal link between any alleged breaches and the loss suffered by the company. Furthermore, the court had to determine whether the defence of fully informed consent had been adequately raised by the respondents and, if so, whether the solicitors had acted with such consent in the transactions in question.

The Court of Appeal granted leave to the respondents to amend their notice of cross-appeal to include grounds relating to the defence of fully informed consent. Specifically, the respondents sought to argue that the primary judge erred in not holding that they had raised this defence and that they had acted with the appellant's informed consent in the matters where a conflict of duty was alleged. Leave was also granted to the appellant to amend its grounds of appeal.

Orders

Orders of the court

1. Leave to the respondents to amend the notice of cross-appeal to add the following grounds:

11. His Honour erred in holding that the respondents had not raised, as a defence, the existence of the fully informed consent of the appellant.

12. His Honour should have held that the respondents acted with the informed consent of the appellant in each of the matters or transactions in respect of which the appellant alleged a conflict of duty by the respondents.

2. Leave to the appellant to amend paras 10, 13 and 63 of its grounds of appeal in accordance with the amendments proposed in the letter from its solicitor to the Court dated 19 February 1999;

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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