Cassaniti v Ball as liquidator of RCG CBD Pty Limited (in liq) and related matters; Khalil v Ball as liquidator of Diamondwish Pty Ltd (in liq) and related matters

The New South Wales Court of Appeal, constituted by Gleeson, Leeming and Mitchelmore JJA, considered appeals arising from proceedings concerning alleged breaches of fiduciary duties and statutory duties by directors, and the accessorial liability of third parties. The primary dispute involved claims that certain individuals had assisted in contraventions of directors' statutory duties, leading to claims for equitable compensation.

The central legal issues before the Court of Appeal were whether the common law rule that a release of one joint tortfeasor releases all joint tortfeasors applied in equity, and specifically, whether section 95 of the *Civil Procedure Act 2005* (NSW) abrogated this rule in the context of equitable claims. The Court also considered the requisite knowledge for accessory liability under the second limb of *Barnes v Addy*, particularly whether the facts would have indicated to an honest and reasonable person that certain invoices were contrived and payments lacked a genuine commercial purpose.

The Court of Appeal dismissed the appeals. It held that the common law rule regarding the release of joint tortfeasors does not apply in equity, and therefore, the release of some parties from liability did not automatically release others. The Court found that the appellants had not established the necessary knowledge for accessory liability, as the circumstances did not demonstrate that they had assisted in dishonest breaches of fiduciary duty with the requisite degree of awareness. The Court also dismissed a notice of motion filed by the respondents in the Khalil appeals.