Goway Travel Pty Limited v Critchley & Anor

Goway Travel Pty Limited took legal action against Critchley and another party, referred to as Anor, to recover the cost of international travel services sold over a period of five years. The plaintiff operated a "staff, family and friends" discounted travel scheme, through which it sold some of its travel services at rates significantly below market rates and below the wholesale cost of providing the services. The defendants purchased these services from a rogue employee without the plaintiff's knowledge or consent. The plaintiff sought to recover the cost of the travel services supplied to the defendants, arguing that the defendants should be liable under the first limb of Barnes v Addy for receiving property that was the subject of a breach of trust by the rogue employee.

The central legal issues were whether the defendants were aware that the rogue employee was selling them travel services without the plaintiff's authority, whether the plaintiff could recover the cost of the travel services on the basis of a mistake or total failure of consideration, and whether the defendants had sufficient knowledge of the rogue employee's breach of fiduciary duty to be liable under Barnes v Addy. Additionally, it was important to determine whether the defendants received travel services from the plaintiff, or if some services were supplied to other persons.

The court found that the defendants were not aware that the rogue employee was selling them travel services without the plaintiff's authority. As a result, the plaintiff's claim based on mistake or total failure of consideration was unsuccessful. The court further held that the defendants did not have the requisite level of knowledge of the rogue employee's breach of fiduciary duty to be held liable under the first limb of Barnes v Addy. Consequently, the plaintiff's claim for restitution was dismissed. The court concluded that the defendants did not have the necessary knowledge of the rogue employee's actions, and therefore could not be held liable for the unauthorised sale of travel services.