Blue Mirror Pty Ltd v Tan & Tan Australia Pty Ltd (in liq)

The appeal concerned a dispute between Blue Mirror Pty Ltd (the plaintiff) and Tan & Tan Australia Pty Ltd (in liq), Mr Anthony Tan, and Australian Construction Company Pty Ltd (the defendants). The plaintiff alleged breaches of fiduciary duty and sought restitution of funds. The primary judge had dismissed the plaintiff's claims against all defendants. The appeal was heard by Ward P, Leeming, and Mitchelmore JJA in the Court of Appeal of New South Wales.

The central legal issues before the Court of Appeal were whether the primary judge erred in rejecting the plaintiff's contention that the defendants' case, particularly concerning the purported fabrication of documents, was unfounded. The court also considered the significance of the absence of a reply alleging fabrication and the plaintiff's failure to issue subpoenas. Furthermore, the court had to determine whether the primary judge had improperly reversed the onus of proof and whether the plaintiff had established that the recipients of the funds knew of a breach of duty. Relatedly, the court examined whether the plaintiff's claim for money had and received was available, particularly in light of the recipients being volunteers or having provided consideration, and whether the claim was defeated by the money having been repaid.

The Court of Appeal reasoned that the primary judge had erred in several respects. The court found that the primary judge had placed undue weight on the absence of a reply alleging fabrication and the failure to issue subpoenas, effectively reversing the onus of proof. The court determined that the plaintiff had established a case for knowing receipt, demonstrating that the recipients had sufficient knowledge of the breach of fiduciary duty. The court also found that the defendants had not established that the funds received were consideration for the supply of sanitiser, nor that they were volunteers in a way that would defeat the restitutionary claim. The court concluded that the plaintiff had succeeded in its claims against Mr Anthony Tan and Australian Construction Company Pty Ltd.

Consequently, the Court of Appeal refused leave to appeal as against Tan & Tan Australia Pty Ltd (in liq). However, the appeal was allowed against Mr Anthony Tan and Australian Construction Company Pty Ltd. The order dismissing the plaintiff's claim against them was set aside, and judgment was entered in favour of Blue Mirror Pty Ltd against Mr Anthony Tan for $1,000,000 plus interest, and against Australian Construction Company Pty Ltd for $6,147,000 plus interest. The parties were directed to file agreed orders or submissions regarding costs.