Cassis and Anor. v Kalfus (No.2) - [2004] NSWCA 315

CITATION: Cassis & Anor. v. Kalfus (No.2) [2004] NSWCA 315

HEARING DATE(S): 25 and 26 March 2004

JUDGMENT DATE:
20 September 2004

JUDGMENT OF: Handley JA at 1; Giles JA at 2; Hodgson JA at 42

DECISION: 1. Appeal allowed. 2. Orders below in relation to Mr. Cassis set aside. 3. In lieu thereof, verdict and judgment for Mr. Cassis against Mr. Kalfus in the sum of $385,649.00, to take effect as at this date. 4. Mr. Kalfus to pay one-half the costs of Mr. Cassis of so much of the proceedings, including the first trial, as was referable to his claim. 5. Mr. Kalfus to pay the costs of Mr. Cassis of the appeal, and to have a certificate under the Suitors Fund Act if otherwise entitled.

CATCHWORDS: PROCEDURE - Appeal - Issues not decided by primary judge, to some extent dependent on credibility - Whether appropriate for appeal court to decide - Relevant considerations - DAMAGES - Loss caused by breach of fiduciary duty - Equitable compensation - Loss due to realisation of risk knowingly undertaken by plaintiff and not significantly affected by the breach of duty - Whether defendant liable in whole or in part.

CASES CITED: Beach Petroleum NL v. Kennedy (1999) 48 NSWLR 1
Brickenden v. London Loan & Savings Co. [1934] 3 DLR 465
Cackett v. Keswick [1902] 2 Ch. 456
Cassis v. Kalfus [2001] NSWCA 460
Henville v. Walker (2001) 206 CLR 459
Kolavo v. Pitsikas [2003] NSWCA 59
Nocton v. Lord Ashburton [1914] AC 932
Pateman v. Higgin (1957) 97 CLR 521
Quinn v. Rocla Concrete Pipes Ltd. (1986) 6 NSWLR 586
United Dominion Corporation Ltd. v. Brian Pty. Ltd. (1984) 157 CLR 1
Youyang Pty. Ltd. v. Minter Ellison (2003) 77 ALJR 895

PARTIES :
Sami Alfred Cassis and Gisele Cassis - appellants
Marcel Isador Kalfus - respondent

FILE NUMBER(S): CA 40715/03

COUNSEL: Mr. P. Roberts SC with Mr. M.K. Minehan for appellants
Mr. G. Lindsay SC with Mr. A. Ridley for respondent

SOLICITORS: Levitt Robinson for appellants
Mallesons Stephen Jaques for respondents

LOWER COURTJURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC20589/96

LOWER COURT
JUDICIAL OFFICER : Cripps AJ

CA 40715/03
SC 20589/96

HANDLEY JA
GILES JA
HODGSON JA
Monday 20 September 2004

CASSIS & ANOR. V. KALFUS (No.2)

HEADNOTE

FACTS
In 1982, the appellant (C) began work for a French company (CMF) in Australia, through its Australian subsidiary (CMA). The respondent (K) acted as a solicitor for CMA, and was an alternate director of it.

Between 1982 and 1988 CMA expanded, with turnover increasing from $425,824.00 in 1983 to $1,986,985.00 in 1988. By 1988, C was on a salary package of $100,00.00 per annum, comprised of a salary of about $85,000.00 per annum, the provision of a car and superannuation.

In 1988, C and K discussed the possibility of entering into a joint venture directed at taking over the business conducted by CMA. C and K agreed that, if CMF allowed them to take over the…

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.

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Details

Case: [2004] NSWCA 315
Decision Date: 20 September 2004

CaseChat Overview and Summary

The appeal in *Cassis and Anor. v Kalfus (No.2)* concerned a dispute between Mr. Cassis and Mr. Kalfus, heard by the Court of Appeal of New South Wales. The primary judge had made certain orders, and Mr. Cassis appealed these decisions, particularly in relation to damages awarded for a breach of fiduciary duty.

The Court of Appeal was required to determine whether it was appropriate for the appellate court to decide issues that had not been fully determined by the primary judge, especially where those issues involved an assessment of credibility. Furthermore, the court had to consider the extent of Mr. Kalfus's liability for equitable compensation for loss caused by his breach of fiduciary duty, specifically where the loss arose from the realisation of a risk that Mr. Cassis had knowingly undertaken and which was not significantly affected by the breach.

The Court of Appeal found that it was appropriate to decide the outstanding issues, notwithstanding the involvement of credibility assessments, as the primary judge had not made a definitive finding on those matters. In relation to damages, the court reasoned that Mr. Kalfus was not liable for the entirety of the loss. Instead, his liability was to be apportioned, reflecting the fact that a significant portion of the loss was attributable to a risk that Mr. Cassis had knowingly accepted, independent of Mr. Kalfus's breach of fiduciary duty.

The appeal was allowed, and the orders of the primary judge concerning Mr. Cassis were set aside. In their place, the Court of Appeal entered a verdict and judgment for Mr. Cassis against Mr. Kalfus in the sum of $385,649.00. Mr. Kalfus was ordered to pay one-half of Mr. Cassis's costs for the proceedings referable to his claim, as well as the costs of the appeal, with a certificate under the Suitors Fund Act if applicable.

Orders

Orders of the court

1. Appeal allowed. 2. Orders below in relation to Mr. Cassis set aside. 3. In lieu thereof, verdict and judgment for Mr. Cassis against Mr. Kalfus in the sum of $385,649.00, to take effect as at this date. 4. Mr. Kalfus to pay one-half the costs of Mr. Cassis of so much of the proceedings, including the first trial, as was referable to his claim. 5. Mr. Kalfus to pay the costs of Mr. Cassis of the appeal, and to have a certificate under the Suitors Fund Act if otherwise entitled.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Cassis & Anor. v. Kalfus (No.2) [2004] NSWCA 315
HEARING DATE(S):	25 and 26 March 2004
JUDGMENT DATE:	20 September 2004
JUDGMENT OF:	Handley JA at 1; Giles JA at 2; Hodgson JA at 42
DECISION:	1. Appeal allowed. 2. Orders below in relation to Mr. Cassis set aside. 3. In lieu thereof, verdict and judgment for Mr. Cassis against Mr. Kalfus in the sum of $385,649.00, to take effect as at this date. 4. Mr. Kalfus to pay one-half the costs of Mr. Cassis of so much of the proceedings, including the first trial, as was referable to his claim. 5. Mr. Kalfus to pay the costs of Mr. Cassis of the appeal, and to have a certificate under the Suitors Fund Act if otherwise entitled.
CATCHWORDS:	PROCEDURE - Appeal - Issues not decided by primary judge, to some extent dependent on credibility - Whether appropriate for appeal court to decide - Relevant considerations - DAMAGES - Loss caused by breach of fiduciary duty - Equitable compensation - Loss due to realisation of risk knowingly undertaken by plaintiff and not significantly affected by the breach of duty - Whether defendant liable in whole or in part.
CASES CITED:	Beach Petroleum NL v. Kennedy (1999) 48 NSWLR 1 Brickenden v. London Loan & Savings Co. [1934] 3 DLR 465 Cackett v. Keswick [1902] 2 Ch. 456 Cassis v. Kalfus [2001] NSWCA 460 Henville v. Walker (2001) 206 CLR 459 Kolavo v. Pitsikas [2003] NSWCA 59 Nocton v. Lord Ashburton [1914] AC 932 Pateman v. Higgin (1957) 97 CLR 521 Quinn v. Rocla Concrete Pipes Ltd. (1986) 6 NSWLR 586 United Dominion Corporation Ltd. v. Brian Pty. Ltd. (1984) 157 CLR 1 Youyang Pty. Ltd. v. Minter Ellison (2003) 77 ALJR 895
PARTIES :	Sami Alfred Cassis and Gisele Cassis - appellants Marcel Isador Kalfus - respondent
FILE NUMBER(S):	CA 40715/03
COUNSEL:	Mr. P. Roberts SC with Mr. M.K. Minehan for appellants Mr. G. Lindsay SC with Mr. A. Ridley for respondent
SOLICITORS:	Levitt Robinson for appellants Mallesons Stephen Jaques for respondents

LOWER COURTJURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S):	SC20589/96
LOWER COURT JUDICIAL OFFICER :	Cripps AJ