Harrison v Schipp

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.