B e t w e e n -
FARAH CONSTRUCTIONS PTY LTD
First Appellant
FARAH ELIAS
Second Appellant
LESMINT PTY LTD
Third Appellant
MARGARET ELIAS
Fourth Appellant
SARAH ELIAS
Fifth Appellant
JADE ELIAS
Sixth Appellant
and
SAY-DEE PTY LTD
Respondent

GLEESON CJ
GUMMOW J
CALLINAN J
HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 13 DECEMBER 2006, AT 10.05 AM

(Continued from 12/12/06)

__________________

MR DOUGLAS: If it please the Court, could I just raise a procedural matter before Mr Sullivan continues. We filed that application for special leave to appeal last night. I think the Court must have a copy of it, together with a draft notice of appeal. There is just one procedural aspect of it which I want to draw the Court’s attention to which we do not think should trouble your Honours. Apparently in the original proceedings Messrs Brian Silvia and John Melluish, the receivers of the property, were parties to an application which was made by Say‑Dee to restrain them from exercising their powers.

However, when it came to the motion which was before the Court of Appeal, Justice Tobias in paragraph 12 of the judgment made it very clear that the receivers were not parties to the motion, as no relief was being sought against them. In those circumstances, we do not see the necessity for them to be joined in the application for special leave to appeal to this Court. If the Court were to be of a contrary view, we would obviously contact them and find out what their attitude was.

GLEESON CJ: Mr Douglas, the evidence that was before the Court of Appeal in the matter that was decided recently, will that be before us in a supplementary appeal book?

MR DOUGLAS: As I understand it, the respondent to this appeal has provided to the Court the affidavits of the expert evidence which was filed on that occasion. I have not myself had the opportunity to review all of the evidence. If there is any other evidence which we feel should be before the Court, we will provide it. If the Court feels that it should have all of the evidence, we will attend to that.

GLEESON CJ: The question is whether there is any evidence that is relevant or possibly relevant to the issues that we will have to decide.

MR DOUGLAS: I would have thought that the evidence which is particularly relevant is the evidence of valuation and town planning which, as I understand it, is the evidence which is before the Court.

GUMMOW J: We need the initiating process, for goodness sake.

MR DOUGLAS: It is probably best, however, to put all of the material before the Court.

GLEESON CJ: Thank you. The other thing we wanted to clear up was this. I got the impression that - it may…

Details

AGLC: Farah Constructions Pty Ltd & Ors v Say-Dee Pty Ltd [2006] HCATrans 684
Case: [2006] HCATrans 684
Decision Date

CaseChat Overview and Summary

Farah Constructions Pty Ltd and others (the appellants) appealed to the High Court of Australia against a decision of the New South Wales Court of Appeal, which had found them liable to Say-Dee Pty Ltd (the respondent) for breaches of fiduciary duty. The dispute concerned the development of land at 11-13 Ramsay Street, Haberfield, New South Wales. Say-Dee Pty Ltd, a joint venturer with Farah Constructions in the development, alleged that Farah Constructions and its directors had breached their fiduciary duties by acquiring adjoining properties for their own benefit without the consent of Say-Dee.

The High Court was required to determine whether the directors of Farah Constructions had breached their fiduciary duties owed to Say-Dee Pty Ltd by acquiring the adjoining properties. Specifically, the court considered whether the appellants had acted in their own interests to the detriment of the joint venture and whether they had obtained the consent of Say-Dee to acquire these properties. The court also had to consider the application of the rule in *Barnes v Addy* concerning liability for knowing assistance in a breach of trust or fiduciary duty.

The High Court held that the directors of Farah Constructions had breached their fiduciary duties to Say-Dee Pty Ltd. The court reasoned that the appellants, as fiduciaries, were prohibited from placing themselves in a position where their personal interests conflicted with their duty to the joint venture. The acquisition of the adjoining properties for their own benefit, without the informed consent of Say-Dee, constituted a breach of this duty. The court affirmed that the rule in *Barnes v Addy* requires proof of dishonesty or a wilful and reckless disregard of the plaintiff's rights for a third party to be liable for knowing assistance. In this instance, the appellants' conduct was found to be a breach of their fiduciary obligations.

The High Court dismissed the appeal, upholding the decision of the New South Wales Court of Appeal. The appellants were found liable to Say-Dee Pty Ltd for the breaches of fiduciary duty.

Orders