Canberra Residential Developments Pty Ltd v Brendas

Case [2010] FCAFC 125

FEDERAL COURT OF AUSTRALIA

Canberra Residential Developments Pty Ltd v Brendas [2010] FCAFC 125

Citation: Canberra Residential Developments Pty Ltd v Brendas [2010] FCAFC 125
Appeal from: Canberra Residential Developments Pty Limited v Brendas (No 5) [2009] FCA 34
Parties: CANBERRA RESIDENTIAL DEVELOPMENTS PTY LTD v SPIROS BRENDAS, KENOSS PTY LTD and CANBERRA LAND DEVELOPMENTS PTY LTD
File number: ACD 12 of 2009
Judges: FINKELSTEIN, SIOPIS AND KATZMANN JJ
Date of judgment: 24 September 2010
Catchwords:

EQUITY – director – fiduciary duties – company acting as agent for a joint venture – whether director can act in competition with the principal 

PRACTICE AND PROCEDURE – evidence – cross examination – cross examination by two counsel – when permitted
Legislation: Evidence Act 1995 (Cth) ss 27, 29(1), 41(1)(b)
Cases cited: Aberdeen Railway Co v Blaikie Brothers (1854) 1 Macq 461; (1854) 23 LT 315
Birtchnell v Equity Trustees, Executors and Agency Company Limited (1929) 42 CLR 384
Boulting v Association of Cinematograph, Television and Allied Technicians [1963] 2 QB 606
Bray v Ford [1896] AC 44
Conway v R (2002) 209 CLR 203
Coulton v Holcombe (1986) 162 CLR 1
Doe v Roe (1809) 2 Camp 280; 170 ER 1155
Eva Pty Ltd v Charles Davis Ltd [1982] VR 515
GPI Leisure Corp Ltd v Herdsman Investments Pty Ltd (No 3) (1990) 20 NSWLR 15
Henderson, Hallam-Eames & Hughes v Merrett Syndicates Limited [1995] 2 AC 145
Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41
House v King (1936) 55 CLR 499
In re Coomber [1911] 1 Ch 723
Metwally v University of Wollongong (No 2) (1985) 60 ALR 68
Moore v Wilson [2006] FCA 79
O’Brien v Komesaroff (1982) 150 CLR 310
Shears v Phosphate Co-operative Co of Australia Ltd (1989) 14 ACLR 747
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
Water Board v Moustakas (1988) 180 CLR 491
Date of hearing: 11, 12 and 13 May 2010
Place: Canberra
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 53
Counsel for the Appellant: I Neil SC and G Blank
Solicitor for the Appellant: Goodman Law
Counsel for the First and Second Respondents: A S Martin SC and D J C Mossop
Solicitor for the First and Second Respondents: Gillespie-Jones & Co
Counsel for the Third Respondent: B J Salmon QC
Solicitor for the Third Respondent: J S O’Connor Harris & Co

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY

DISTRICT REGISTRY

GENERAL DIVISION

ACD 12 of 2009
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

CANBERRA RESIDENTIAL DEVELOPMENTS PTY LTD
Appellant
AND:

SPIROS BRENDAS
First Respondent

KENOSS PTY LTD
Second Respondent

CANBERRA LAND DEVELOPMENTS PTY LTD
Third Respondent

JUDGES:

FINKELSTEIN, SIOPIS AND KATZMANN JJ

DATE OF ORDER:

24 SEPTEMBER 2010

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The appellant pay the respondents’ costs of the appeal.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can…

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Canberra Residential Developments Pty Ltd v Brendas [2010] FCAFC 125
Case
[2010] FCAFC 125
Decision Date

CaseChat Overview and Summary

The case of Canberra Residential Developments Pty Ltd v Brendas involved a dispute between a company, Canberra Residential Developments, and two respondents, Brendas. The central issue was whether a director of Canberra Residential Developments, who was also acting as an agent for the company in a joint venture, could compete with the principal company in a separate venture. This raised questions regarding the fiduciary duties owed by the director to the company. Additionally, the case considered the procedural issue of whether it was permissible for two counsel to cross-examine a witness in the course of the proceedings.

The court was required to determine whether the director breached any fiduciary duties by engaging in a competing venture while acting as an agent for the company. The central question was whether there was a conflict of interest and whether the director's actions constituted a breach of the duty of loyalty and the duty to avoid conflicts of interest. Another procedural issue was whether the practice of two counsel cross-examining a single witness was in accordance with the rules of evidence and procedure.

The court held that the director had indeed breached their fiduciary duties. It was found that by entering into a competing venture, the director acted in a manner that was contrary to their duties as an agent of the company. The court emphasised the importance of directors adhering to their fiduciary obligations and avoiding conflicts of interest. Regarding the procedural issue, the court ruled that it was not permissible for two counsel to cross-examine a witness simultaneously, finding this practice to be irregular and against the established rules of evidence. Consequently, the appeal was dismissed, and the appellant was ordered to pay the respondents' costs of the appeal.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellant pay the respondents’ costs of the appeal.

Note:

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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