Fair Trading Administration Corporation v Smith

The Fair Trading Administration Corporation (the Corporation) sought to recover damages from Mr. Smith, a director of a building company, for defective work carried out by that company. The Corporation's claim was based on provisions of the *Building Services Corporation Act 1989* (NSW). Mr. Smith applied to have the Corporation's statement of claim struck out as unsustainable. The matter came before the Court of Appeal of New South Wales.

The central legal issue before the Court of Appeal was whether the Corporation could establish a cause of action against Mr. Smith personally for the defective building work undertaken by the company he directed, under the relevant provisions of the *Building Services Corporation Act 1989* (NSW). This involved determining the scope of director liability for the actions of a company in the context of building services.

The Court of Appeal considered the nature of the claim against Mr. Smith and concluded that the legislation did not create a direct cause of action against a director for the company's defective work in the circumstances presented. The Court found that the claim as pleaded was unsustainable, as it did not disclose a cause of action recognised by the law against Mr. Smith in his personal capacity for the company's breaches.

Consequently, the Court of Appeal dismissed the Corporation's appeal and ordered that it pay Mr. Smith's costs.