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Elite Realty Development Pty Ltd v Sadek

Elite Realty Development Pty Ltd v Sadek

Case [2022] NSWSC 1333 30 September 2022

Breach of Fiduciary Duty

Tort Law

Contract Law

Equity

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Supreme Court

New South Wales

Medium Neutral Citation: Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333
Hearing dates: 25 – 29 July, 3 August 2022; further written submissions 5 August 2022
Decision date: 30 September 2022
Jurisdiction: Equity
Before: Peden J
Decision:
(1) In the KPI Proceedings (2018/383933):
(a) The proceedings are dismissed.
(b) The plaintiffs to pay the defendants’ costs as agreed or assessed.
(2) In the Afyouni Proceedings (2020/114103):
(a) Judgment for the second plaintiff against the first and second defendant in the sum of $60,000.
(b) Judgment for the second plaintiff against the first defendant in the sum of $20,000.
(c) The Statement of Claim is otherwise dismissed.
(d) Defendants to pay the plaintiffs’ costs as agreed or assessed.

Catchwords:
TORTS — General principles — Intentional torts — Joint tortfeasors — Assault — Common design — Procurement — Agency — Damages — Exemplary damages — Aggravated damages — Whether accessory procured or had common design with principal wrongdoer to threaten accessory’s business partner with a gun
CONTRACTS — Duress — Forms — Duress to the person — Gun attack — Whether will deflected in entering into termination agreement after a gun attack — Whether termination agreement was affirmed
PARTNERSHIPS AND JOINT VENTURES — Joint venture agreements — Rights and duties between joint venturers — Fiduciary relationship — Position of conflict
EQUITY — Fiduciary duties — Breach — Whether company director in a joint venture entered into termination agreement — Whether entry into termination agreement was a breach of the no conflict principle — No termination agreement on the facts — No real and sensible possibility of conflict — No breach of statutory directors’ duties

Legislation Cited:
Australian Consumer Law s 20
Civil Liability Act 2005 (NSW) s 3B
Civil Procedure Act 2005 (NSW) ss 56, 57, 58, 59, 60
Corporations Act 2001 (Cth) ss 180, 181, 182, 185, 1317H
Evidence Act 1995 (NSW) s 138
Surveillance Devices Act 2007 (NSW) s 7
Uniform Civil Procedure Rules 2005 (NSW) rr 1.2, 6.1, 6.9, 10.20, 14.3, 14.26, 16.2, 16.7, 18.5, 29.7, 36.6, 42.8

Cases Cited:
Affleck v Kennedy [2010] QDC 332
Antonio v Antonio [2010] EWHC 1199
Archer v Brown [1985] QB 401
Ashford v Ashford (1970) 44 ALJR 195
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (No 3) [2021] FCA 363
Barclay v Penberthy (2012) 246 CLR 258
Barton v Armstrong (1969) 2 NSWLR 451
Barton v Armstrong [1976] AC 104
Boardman v Phipps [1967] 2 AC 46
Brook v Kempton [2017] VSC 661
Cameron v Cole (1944) 68 CLR 571
CBS Songs Ltd v Amstrad Consumer Electronics PLC [1988] AC 1013
Chan v Zacharia (1984) 154 CLR 178
Chelini v Northern Territory Port Authority (1976) 12 ALR 519
Chew v R (1992) 173 CLR 626
Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40
Croucher v Cachia [2016] NSWCA 132
Dean v Phung [2012] NSWCA 223
Defteros v Google Inc (2017) 54 VR 592
De Reus…

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.

Continue reading Elite Realty Development Pty Ltd v Sadek

Details

AGLC: Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333
Case: [2022] NSWSC 1333
Decision Date: 30 September 2022

CaseChat Overview and Summary

In Elite Realty Development Pty Ltd v Sadek, the dispute centred around allegations of assault and breaches of fiduciary duties within a joint venture. The case was heard by the Supreme Court of New South Wales. Elite Realty Development Pty Ltd alleged that Sadek, a joint venturer and director, procured an assault on their business partner and breached fiduciary duties by entering into a termination agreement under duress.

The court was required to decide whether Sadek had procured or was part of a common design with the principal wrongdoer in the assault. It also needed to determine if the termination agreement was entered into due to duress and if Sadek's actions breached fiduciary duties, specifically the no conflict principle. The court further examined if the termination agreement affirmed the joint venture relationship.

The court found that Sadek did not procure or have a common design with the principal wrongdoer in the assault. It was held that the business partner's will was not deflected by the attack in entering into the termination agreement. The court determined that there was no real and sensible possibility of a conflict of interest, and thus, no breach of the no conflict principle or statutory directors’ duties occurred. Consequently, the court ruled that Sadek did not breach any fiduciary duties.

The final orders were that Elite Realty Development Pty Ltd's claims against Sadek were dismissed. The court held that Sadek did not act as an accessory or with a common design in the assault, nor did he breach any fiduciary duties by entering into the termination agreement.

Orders