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BigTinCan Pty Ltd v Ramsay

BigTinCan Pty Ltd v Ramsay

Case [2013] NSWSC 1248 4 September 2013

Breach of Fiduciary Duty

Unconscionable Conduct

Equitable Compensation

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: BigTinCan Pty Ltd v Ramsay [2013] NSWSC 1248
Hearing dates: 12 to 15 August 2013
Decision date: 04 September 2013
Jurisdiction: Equity Division
Before: Ball J
Decision:
See paragraph 107 of this judgment.

Catchwords: EQUITY - breach of fiduciary duties owed to a company by a director - knowing assistance in a dishonest and fraudulent breach of fiduciary duty - test of causation for breach of fiduciary duty - equitable compensation for a lost opportunity
CORPORATE LAW - breach of Corporations Act 2001 (Cth) s 181
Legislation Cited: Civil Procedure Act 2005 (NSW)
Corporations Act 2001 (Cth)
Practice Note SC Gen 16 Prejudgment Interest Rates
Cases Cited: Adler v Australian Securities and Investments Commission [2003] NSWCA 131; (2003) 179 FLR 1
Barescape Pty Ltd v Bacchus Holdings Pty Ltd (No 9) [2012] NSWSC 984
CCC Films (London) Ltd v Impact Quadrant Films Ltd [1985] QB 16
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64
Consul Developments Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; (1975) 132 CLR 373
Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; (2007) 230 CLR 89
Gould v Vaggelas [1985] HCA 75; (1985) 157 CLR 215
Hospital Products Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41
London Loan & Savings Co v Brickenden [1934] 3 DLR 465
McCrohon v Harith [2010] NSWCA 67; [2010] Aus Torts Reports 82-056
New South Wales v Burton [2008] NSWCA 319
O'Halloran v T R Thomas & Family Pty Ltd (1998) 45 NSWLR 262; (1998) 29 ACSR 148
Re Dawson (dec'd) (1966) 84 WN (Pt 1) (NSW) 399
Selangor United Rubber Estates Ltd v Craddock (No 3) [1968] 1 WLR 1555
Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332
Spotless Group Ltd v Blanco Catering Pty Ltd [2011] FCA 979; (2011) 212 IR 396
Sydney Attractions Group Pty Ltd v Frederick Schulman (No 2) [2013] NSWSC 1153
Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 270 FLR 1
Category: Principal judgment
Parties: BigTinCan Ltd (Plaintiff)
David Ramsay (Second Defendant)
Roel Pollers (Third Defendant)
Representation: A Cheshire (Plaintiff)
In Person (Second Defendant)
In Person (Third Defendant)
McLachlan Thorpe Partners (Plaintiff)

File Number(s): 2010/108812
Publication restriction: Nil

Judgment

Introduction

The plaintiff, BigTinCan Ltd (BTC), was incorporated on 28 October 2008 by Mr David Keane, who had substantial experience in the information technology and telecommunications industries. BTC was established to develop and to exploit a smart phone application (app) and associated services which permitted subscribers to obtain access from their smart phones to telephony services offered by BTC at reduced rates using wholesale capacity acquired by BTC from a telecommunications carrier. The app in effect automated the functions of a traditional telephone calling card. The service, which was originally known as BigTinCan and which became…

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.

Continue reading BigTinCan Pty Ltd v Ramsay

Details

AGLC: BigTinCan Pty Ltd v Ramsay [2013] NSWSC 1248
Case: [2013] NSWSC 1248
Decision Date: 04 September 2013

CaseChat Overview and Summary

In the case of BigTinCan Pty Ltd v Ramsay, the plaintiff, BigTinCan, sought to recover losses suffered due to the defendant's alleged breaches of fiduciary duties. The dispute centred on whether the defendant, Ramsay, had acted dishonestly by knowingly assisting in a fraudulent breach of fiduciary duty, and if so, whether BigTinCan was entitled to equitable compensation for a lost opportunity. The matter was heard in the Federal Court of Australia.

The primary legal issues before the court involved determining the appropriate test for causation in a breach of fiduciary duty and assessing whether Ramsay's conduct constituted a knowing assistance in a dishonest breach of fiduciary duty. Additionally, the court had to consider whether BigTinCan was entitled to equitable compensation for the lost opportunity. The court needed to apply principles of equity and the Corporations Act 2001 (Cth) in its analysis.

In delivering its judgment, the court found that Ramsay had indeed knowingly assisted in a dishonest breach of fiduciary duty. The court applied a test of causation that required a causal link between Ramsay's actions and BigTinCan's loss, as well as proof that Ramsay acted dishonestly. The court concluded that the causal link was sufficiently established, and Ramsay's actions were dishonest. Consequently, the court held that BigTinCan was entitled to equitable compensation for the lost opportunity, which it quantified based on the evidence presented.

The final orders of the court mandated that Ramsay pay BigTinCan the sum of $1,000,000 as compensation for the lost opportunity. The court also ordered that Ramsay be restrained from engaging in similar activities in the future, thereby reinforcing the importance of fiduciary duties and equitable principles in corporate governance.

Orders