Farah Constructions Pty Ltd & Ors v Say-Dee Pty Ltd

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.