Harrison & Anor v Schipp Cameron & Anor v Schipp [2001] NSWCA 13
FILE NUMBER(S):
CA 40728/98; 40761/98
HEARING DATE(S):
15, 16, 17 May 2000
JUDGMENT DATE:
20 February 2001
PARTIES :
G Harrison & Emibarb Pty Ltd - Appellants/Cross-Respondents in 40728/98 D R Cameron & Don Cameron Real Estate Pty Ltd - Appellants in 40761/98 D J Schipp - Respondent in both matters and Cross-Appellant in 40728/98 Aegon Insurance Company (UK) Ltd & Ors - Third Cross-Respondent in 40728/98
JUDGMENT OF:
Handley JA at 1; Giles JA at 2; Fitzgerald JA at 153
LOWER COURT JURISDICTION :
Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S) :
ED 6425/91
LOWER COURT JUDICIAL OFFICER :
Einstein J
COUNSEL:
R B S Macfarlan QC & J P A Durack - Harrison & Emibarb Pty Ltd I G Roberts - Cameron & Don Cameron Real Estate Pty Ltd N C Hutley SC & P J Brereton - Aegon Insurance Company (UK) Ltd & Ors M J Slattery QC, J M Hennessey & P J Gormly - D J Schipp
SOLICITORS:
Blake Dawson Waldron - Harrison & Emibarb Pty Ltd D Cameron in person Minter Ellison -Aegon Insurance Company (UK) Limited & Ors Barker Gosling - D J Schipp
CATCHWORDS:
JOINT VENTURES - breach of fiduciary duty - obtaining advantage without knowledge and informed consent of joint venture partner - taking advantage of vulnerability of joint venture partner and of dominion and influence gained over her - liable for loss thereby suffered by joint venture partner. FIDUCIARY RELATIONSHIP - whether trust and confidence necessary - not essential. AFFIRMATION OF TRANSACTION BROUGHT ABOUT BY UNCONSCIONABLE CONDUCT - must know facts on which rights depend and what the rights are. EQUITABLE COMPENSATION - loss on resale of joint venture property - whether too remote to be loss for which liable - equitable compensation not so limited. EQUITABLE COMPENSATION - whether each delinquent joint venturer liable only for amount received - whether interest only on amount received - both liable for whole loss and interest on whole amount. COSTS - indemnity costs - whether "relevant delinquency" - whether taking advantage of joint venture partner and unconscionability warrant indemnity costs - leads to compensatory or other relief and costs on normal basis - more necessary for indemnity costs. COSTS - Bullock order - whether warranted on facts - not warranted. EQUITABLE COMPENSATION - whether could be allowance in favour of delinquent joint venturers - not necessary to decide - amount not assessable and order for inquiry not warranted.
[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.
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AGLC
Harrison v Schipp [2001] NSWCA 13
Case
[2001] NSWCA 13
Decision Date
CaseChat Overview and Summary
The appeal concerned a dispute between joint venturers, Harrison and Schipp, regarding the breach of fiduciary duty. The primary issue was whether one joint venturer had improperly obtained an advantage without the knowledge and informed consent of the other, exploiting their vulnerability and influence. The case was heard in the Court of Appeal of New South Wales.
The court was required to determine whether a fiduciary relationship existed, even in the absence of explicit trust and confidence, and whether the conduct constituted an affirmation of the transaction despite being brought about by unconscionable conduct. Further legal issues included the remoteness of equitable compensation for the loss on resale of joint venture property, the extent of liability for each delinquent joint venturer, and whether interest was payable only on the amount received or on the whole loss. The court also considered whether indemnity costs were warranted due to "relevant delinquency" and unconscionability, and whether a Bullock order was appropriate.
The Court of Appeal found that a fiduciary relationship did not necessarily require trust and confidence. It held that the appellants had taken advantage of the respondent's vulnerability and their dominion and influence, thereby breaching their fiduciary duty. Equitable compensation was not limited by remoteness, and each delinquent joint venturer was liable for the whole loss suffered by the respondent, along with interest on that entire amount. The court determined that while the conduct was unconscionable, it did not warrant indemnity costs, and a Bullock order was not justified on the facts.
The appeals were allowed in part, with the order for indemnity costs set aside and replaced with an order for costs on the normal basis. The appeals were otherwise dismissed, and the cross-appeal was dismissed against two of the cross-respondents. The appellants were ordered to pay 90 per cent of the respondent's costs of the appeals, and cross-appellants were to pay the costs of the cross-respondents for the cross-appeal, with the remaining costs of the cross-appeal to be reserved.
Orders
Orders of the court
(1) Appeals allowed in part. (2) Set aside the order that the first, second, third and fourth defendants pay the plaintiff’s costs on an indemnity basis and order in lieu thereof that they pay the plaintiff’s costs. (3) Appeals otherwise dismissed. (4) Cross-appeal dismissed as against the first and second cross-respondents. (5) Appellants pay 90 per cent of the respondent’s costs of the appeals and cross-appellants pay the first and second cross-respondents’ costs of the cross-appeal. (6) Reserve costs of the cross-appeal as between the cross-appellant and the third cross-respondents. (7) List the cross-appeal for mention on 12 March 2001.