Bluemine Pty Ltd (in liq) v AKA (Civil) Pty Ltd; Earth Civil Australia Pty Ltd (in liq) v AKA (Civil) Pty Ltd; Diamondwish Pty Ltd (in liq) v Ivana Cassaniti; Rackforce Pty Ltd (in liq) v Ivana Cassaniti; RCG CBD...

The proceedings involved appeals from decisions of the primary judge concerning allegations of breach of fiduciary duty and accessory liability. The appellants, liquidators of various companies including Bluemine Pty Ltd, Earth Civil Australia Pty Ltd, Diamondwish Pty Ltd, and Rackforce Pty Ltd, sought to recover losses allegedly caused by dishonest and fraudulent schemes, including carousel frauds. The respondents included AKA (Civil) Pty Ltd, AKA (NSW) Pty Ltd, and Ivana Cassaniti. The appeals were heard by Gleeson, Leeming, and Mitchelmore JJA in the Court of Appeal of the Supreme Court of New South Wales.

The central legal issues before the Court of Appeal were whether the primary judge erred in finding that certain individuals and companies were not liable as accessories to breaches of fiduciary duty. Specifically, the court considered the requisite level of knowledge for accessory liability, particularly in the context of corporate attribution rules and the "fraud exception" to those rules. The court also examined the application of the principle in *Jones v Dunkel* regarding inferences drawn from a party's failure to give evidence, and the limitations on appellate review of credibility-based findings made by a trial judge.

The Court of Appeal's reasoning involved a detailed analysis of the evidence presented at trial, particularly concerning the knowledge and involvement of the alleged accessories in the dishonest and fraudulent schemes. The court applied established principles of equity regarding fiduciary duties and accessory liability, considering whether the knowledge of a director could be attributed to a company, and whether the fraud exception to corporate attribution applied. The court also addressed the argument that reliance on professional advice was "glaringly improbable" and that there was a lack of understanding of the full effect of the transactions.

The Court of Appeal allowed the appeals by Bluemine Pty Ltd and Earth Civil Australia Pty Ltd, setting aside certain orders of the primary judge and substituting new judgments for equitable compensation against AKA (NSW) Pty Ltd and AKA (Civil) Pty Ltd. The court also ordered that these companies pay the plaintiffs' costs. Conversely, the appeals by Diamondwish Pty Ltd, Rackforce Pty Ltd, and RCG were dismissed, with the appellants ordered to pay the respondents' costs.