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Craigcare Group Pty Ltd v Superkite Pty Ltd

Craigcare Group Pty Ltd v Superkite Pty Ltd

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Case Copied 26 March 2014 84 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Craigcare Group Pty Ltd v Superkite Pty Ltd [2014] NSWSC 326
Hearing dates: 24, 25, 27 February 2014
Decision date: 26 March 2014
Jurisdiction: Equity Division
Before: Hallen J
Decision:
Direct the parties to provide, within 14 days, short minutes of order that reflect the conclusions reached as to the amount to be paid to the Plaintiff by the first Defendant, including interest, and costs. If agreement is reached on the form of orders, the orders will be made and entered in Chambers. Otherwise, the matter will be listed for further argument on a date to be agreed.

Catchwords:
CONTRACT - whether contract between Plaintiff and first Defendant - Contract established between Plaintiff and first Defendant as to money paid and the terms upon which it was paid to trust account

EQUITY - TRUSTS - whether money paid into firm of solicitors' trust account was held on trust for Plaintiff as it was only to be used for prescribed purposes - whether trust was breached by payment out for purposes other than prescribed purposes - whether Plaintiff entitled to equitable compensation - whether second Defendant liable as an accessory to breach of express trust or breach of Quistclose trust under the second limb of Barnes v Addy - consideration of Quistclose trust - Express trust in favour of Plaintiff - breach of trust established - Whether Plaintiff entitled to "equitable damages" - Second Defendant is not liable for knowing assistance in breach of trust
COSTS - Whether to cap costs in view of amount of the claim - Plaintiff to recover 65% of its costs, such costs to be calculated on the ordinary basis - Second Defendant to pay his own costs of proceedings
Legislation Cited: Civil Procedure Act 2005 (NSW)
Corporations Act 2001 (Cth)
Evidence Act 1995 (NSW)
Cases Cited: Amaltal Corporation Ltd v Maruha Corporation [2007] NZSC 40; [2007] 3 NZLR 192
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (in liq) [1978] HCA 45; (1978) 141 CLR 335
Australian Elizabethan Theatre Trust, Re; Lord v Commonwealth Bank of Australia (1991) 30 FCR 491
Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345
Baffico v YMCA of Great Lakes Inc [2014] NSWCA 61
Barclays Bank Ltd v Quistclose Investments Ltd [1968] UKHL 4; [1970] AC 567
Barnes v Addy (1874) 9 Ch App 244
Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622
Baychek v Baychek [2010] NSWSC 987
Bibby Financial Services Australia Pty Ltd v Sharma [2014] NSWCA 37
BigTinCan Pty Ltd v Ramsay [2013] NSWSC 1248
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424
Briginshaw v Briginshaw [1938] HCA 34; (1938)…

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: [2014] NSWSC 326
Decision Date: 26 March 2014

CaseChat Overview and Summary

Craigcare Group Pty Ltd, the plaintiff, brought an action against Superkite Pty Ltd and another defendant, the defendants, in relation to a contractual dispute and alleged breaches of trust. The matter was heard in the Supreme Court of New South Wales. The plaintiff alleged that the first defendant had breached the terms of a contract and that the second defendant had facilitated a breach of trust by making payments from a trust account for purposes other than those agreed upon. The defendants contested these claims, denying liability on both counts.

The primary legal issue before the court was whether there was a contract between the plaintiff and the first defendant concerning the payment of money into a trust account and the terms upon which it was to be held and used. The court also needed to determine whether the money paid into the solicitors' trust account was held on trust for the plaintiff, and if so, whether the trust was breached by payments for purposes other than those prescribed. Additionally, the court considered whether the second defendant was liable as an accessory to the breach of trust, either under the second limb of Barnes v Addy or for breach of a Quistclose trust. Finally, the court needed to decide whether the plaintiff was entitled to equitable compensation for the breach of trust and whether the plaintiff could recover costs from the defendants.

The court found that a contract was indeed established between the plaintiff and the first defendant concerning the terms of the payment and its use. The court concluded that the money paid into the solicitors' trust account was held on trust for the plaintiff, with the trust being breached when the funds were used for purposes other than those agreed upon. The court determined that the second defendant was not liable as an accessory to the breach of trust under the second limb of Barnes v Addy, nor for breach of a Quistclose trust. The court held that the plaintiff was entitled to equitable compensation for the breach of trust. The plaintiff was awarded 65% of its costs, calculated on the ordinary basis, while the second defendant was ordered to pay his own costs of proceedings.

Orders