Hasler v Singtel Optus Pty Ltd - [2014] NSWCA 266

Court of Appeal

Supreme Court

New South Wales

Summary available

Medium Neutral Citation: Hasler v Singtel Optus Pty Ltd; Curtis v Singtel Optus Pty Ltd; Singtel Optus Pty Ltd v Almad Pty Ltd [2014] NSWCA 266
Hearing dates: 2-3 June 2014
Decision date: 15 August 2014
Before: Barrett JA at [1];
Gleeson JA at [6];
Leeming JA at [13]
Decision:
In 2013/333672: Appeal dismissed and cross-appeal dismissed.
In 2013/342608: Appeal dismissed and cross-appeal dismissed.
In 2013/343099: Appeal dismissed.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
APPEAL - challenge to findings of fact - deference to trial judge

EQUITY - fiduciary duty - employee in position of conflict - accessory liability for knowing assistance in dishonest and fraudulent design - meaning of "dishonest and fraudulent design" - whether necessary to show knowledge of absence of informed consent - measure of equitable compensation

FRAUD - pleadings and course of trial - whether finding of dishonesty available
PRECEDENTS - departure from decision of another intermediate appellate court - where not necessary to do so in order to resolve appeal - where issue was important, causing inconsistent formulations of principle - precedential status of a decision which did not itself develop the common law but merely explained decision of High Court - comity
Legislation Cited: Companies Act 1907 (UK), s 32
Companies Act 1936 (NSW), s 361
Companies Act 1961 (NSW), s 365
Companies (New South Wales) Code, ss 229(2), 535
Corporations Act 2001 (Cth), s 1318
Evidence Act 1995 (NSW), s 140
Judicial Trustees Act 1896 (UK), s 3
Judiciary Act 1903 (Cth), s 35A
Trade Practices Act 1974 (Cth), s 52
Trustee Act 1925 (NSW), s 85
Trustee Act Amendment Act 1902 (NSW), s 9
Trustees Act 1962 (WA), s 75
Cases Cited: Alexander v Burne [2013] NSWSC 1953
Alleyne v Darcy (1854) 4 Ir Ch Rep 199
Australian Securities and Investments Commission v Vines [2005] NSWSC 1349; 65 NSWLR 281
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd [2006] 1 All ER 333
Barnes v Addy (1874) LR 9 Ch App 244
Beck v Henley [2014] NSWCA 201
Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250
BigTinCan Pty Ltd v Ramsay [2013] NSWSC 1248
Biogen Inc v Medeva plc [1996] UKHL 18; [1997] RPC 1
Bodenham v Hoskyns (1852) 21 LJ 864; 42 ER 1125
Briginshaw v Briginshaw (1938) 60 CLR 336
Bunnings Group Ltd v Borg [2014] NSWCA 240
CAL No 14 Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; 239 CLR 390
Commonwealth Financial Planning Ltd v Couper [2013] NSWCA 444
Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373
Craigcare Group Pty Ltd v Superkite Pty Ltd [2014] NSWSC 326
Dawson Investments Pty Ltd v Crystal Finance Pty Ltd [No 3] [2013] WASC 183
Derry v Peek (1889) 14 App Cas 337
Director of Public Prosecutions v Patrick Stevedores Holdings Pty Ltd [2012] VSCA 300; 296 ALR 156
Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366
Eaves v Hickson (1861) 30 Beav 136
Edwards v Attorney General [2004] NSWCA 272; 60 NSWLR 667
Elder's Trustee and Executor Co Ltd v Higgins (1963) 113 CLR 426
Esso Australia Resources v Commissioner of Taxation [1999] HCA 67; 201 CLR 49
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89
FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45
Fink v Fink (1946) 74 CLR 127
Fox v Percy [2003] HCA 22; 214 CLR 118
Gerace v Auzhair Supplies Pty Ltd [2014] NSWCA 181
Gett v Tabet [2009] NSWCA 76; 254 ALR 504
Gibbs v Mercantile Mutual Insurance (Australia) Ltd [2003] HCA 39; 214 CLR 604
Giumelli v Giumelli [1999] HCA 10; 196 CLR 101
Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296
In re Grindey; Clews v Grindey [1898] 2 Ch 593
King Network Group Pty Ltd v Club of the Clubs Pty Ltd [2008] NSWCA 344; 69 ACSR 172
Lawson v Mitchell [1975] VR 579
Maguire v Makaronis (1997) 188 CLR 449
Marshall v Director-General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603
Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; 244 CLR 427
Midgley v Midgley [1893] 3 Ch 282
National Trustees Company of Australasia v General Finance Company of Australasia [1905] AC 373
Nicholson v Morgan [No 3] [2013] WASC 110
Nocton v Lord Ashburton [1914] AC 932
Novoship (UK) Ltd v Nikitin [2014] EWCA Civ 908
Paragon Finance plc v DB Thakerar & Co [1999] 1 All ER 400
Parkview Qld Pty Ltd v Commonwealth Bank of Australia [2013] NSWCA 422
R v XY [2013] NSWCCA 121; 84 NSWLR 363
Ramshire v Bolton (1869) 8 LR Eq 294
Re Dawson (deceased); Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWR 211
RJE v Secretary to the Department of Justice [2008] VSCA 265; 21 VR 526
Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378
Saunders v Vautier (1841) EWHC Ch J82
Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555
Slim v Croucher (1860) 1 De G F & J 518; 45 ER 462
State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In liq) [1999] HCA 3; 73 ALJR 306
Sydney Harbour Casino Pty Ltd v Vignoli [1999] NSWCA 273
Twinsectra Ltd v Yardley [2002] 2 AC 164
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; 233 CLR 259
Westpac Banking Corporation v Bell Group Ltd (No 3) [2012] WASCA 157; 44 WAR 1
Willett v Thomas [2012] NSWCA 97
Williams v Central Bank of Nigeria [2014] UKSC 10; [2014] 2 All ER 489
Woodland v Swimming Teachers Association [2013] UKSC 66; [2014] AC 537
Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277
Zhu v Treasurer of NSW [2004] HCA 56; 218 CLR 530
Texts Cited: A Black, "Directors' statutory and general law accessory liability for corporate wrongdoing" (2013) 31 C&SLJ 511
J Edelman, "Nocton v Lord Ashburton" in C Mitchell and P Mitchell (eds), Landmark Cases in Equity (Hart Publishing, 2012)
S Elliott and C Mitchell, "Remedies for Dishonest Assistance" (2004) 67 Modern Law Review 16
A M Gleeson, "Judicial Legitimacy" (2000) 20 Aust Bar Rev 4
W Gummow, "Knowing assistance" (2013) 87 ALJ 3
H Hanbury, Modern Equity: The Principles of Equity, (8th ed, 1962, Stevens)
C Harpum, "The Stranger as Constructive Trustee: Part 1" (1986) 102 LQR 114
HLA Hart, The Concept of Law (3rd ed, 2012, Oxford University Press)
P Ridge, "Equitable accessorial liability: Moving beyond Barnes v Addy" (2014) 8 Journal of Equity 28
R Walker, "Dishonesty and Unconscionable Conduct in Commercial Life - Some Reflections on Accessory Liability and Knowing Receipt" (2005) 27 Sydney Law Review 187
Category: Principal judgment
Parties:
In 2013/333672:
Craig Hasler (appellant and cross-respondent)
Singtel Optus Pty Ltd (respondent and cross-appellant)

In 2013/342608:
Leon Curtis (appellant and cross-respondent)
Singtel Optus Pty Ltd (respondent and cross-appellant)
In 2013/343099:
Singtel Optus Pty Ltd (first appellant)
Optus Networks Pty Ltd (second appellant)
Optus Administration Pty Ltd (third appellant)
Almad Pty Ltd (first respondent)
Sumo Distribution & Storage Pty Ltd (in liq) (second respondent)
Leon Curtis (third respondent)
Craig Hasler (fourth respondent)
PJC333 Pty Ltd (fifth respondent)
Representation: Counsel:
B W Rayment QC with I King (Counsel for Craig Hasler and Almad Pty Ltd)
J T Johnson with I King (Counsel for Leon Curtis)
J Stoljar SC with D Mackay (Counsel for Singtel Optus Pty Ltd, Optus Networks Pty Ltd and Optus Administration Pty Ltd)
Solicitors:
MCW Lawyers (Solicitor for Leon Curtis, Craig Hasler and Almad Pty Ltd)
Minter Ellison (Solicitor for Singtel Optus Pty Ltd, Optus Networks Pty Ltd and Optus Administration Pty Ltd)

File Number(s): 2013/333672; 2013/342608; 2013/343099
Decision under appeal

Jurisdiction:

9111

Citation:

Singtel Optus v Almad [2013] NSWSC 1427

Date of Decision:

2013-09-30 00:00:00

Before:

McDougall J

File Number(s):

SC 2011/139541

HEADNOTE

[This headnote is not to be read as part of the judgment]

Mr Leon Curtis was formerly the General Manager - Logistics at Optus. Mr Craig Hasler worked for him until March 2005. They established a company (Sumo) which provided warehousing services to Optus, which were brokered through another entity, Almad. Almad charged a 20% markup. From March 2005, Mr Hasler resigned from Optus and managed Sumo's day to day operations.

Mr Curtis, as a shadow director of Sumo, set the prices Sumo charged for warehousing. As an employee of Optus, Mr Curtis approved Optus' decision to use Sumo, and to pay the 20% markup to Almad. It was admitted at the trial that Mr Curtis had been acting in breach of his fiduciary duty to Optus.

In the period from April 2005, Optus paid more than $11,000,000 for warehousing supplied by Sumo through Almad. At trial, Mr Curtis was ordered to pay equitable compensation to Optus in the amount of $1,879,333, being the 20% markup it paid to Almad over that period. Mr Hasler was found to be jointly liable for that amount, as a person knowingly involved in Mr Curtis' dishonest and fraudulent design.

The appeals of Messrs Curtis and Hasler challenged the findings of causation and loss. Further, Mr Hasler contended that (a) a finding of fraudulent and dishonest design was not open by reason of the pleadings and the course of the trial, (b) the test for second limb Barnes v Addy liability was narrower than that stated in Westpac Banking Corporation v Bell Group Ltd (No 3) [2012] WASCA 157; 44 WAR 1, which should not be followed, (c) Mr Curtis' conduct did not amount to a dishonest and fraudulent design in which Mr Hasler participated, (d) Optus had failed to show that Mr Hasler was unaware of the absence of informed consent by Optus. For its part, Optus appealed in relation to a finding of fact relevant to the way in which the warehouse charges had been calculated.

The principal issues for determination on appeal were:

(1) Was a finding of dishonest and fraudulent breach of duty open to be made against Mr Curtis?

(2) Did the conduct of Mr Curtis amount to a dishonest and fraudulent breach of duty?

(3) Was Mr Hasler sufficiently involved in, and did he have sufficient knowledge of, Mr Curtis' breaches of fiduciary duty?

(4) Was there appellable error in the findings that Mr Curtis' breaches caused Optus loss?

(5) Was there appellable error in the factual finding as to the timing of the movement of goods from Campbelltown to Lidcombe?

The Court held, dismissing the three appeals and two cross-appeals:

(1) The conduct of the trial, in the light of the pleadings as particularised and the statement of "real issues in dispute", meant that a finding of dishonest and fraudulent breach was open: [2], [6], [38]-[55].

(2) Per Leeming JA (Gleeson JA agreeing, Barrett JA not deciding): Westpac v Bell should not be followed insofar as it diluted the meaning of the words "dishonest and fraudulent design": [4]-[12], [84]-[91], [103]-[125].

Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 considered and applied.

Westpac Banking Corporation v Bell Group Ltd (No 3) [2012] WASCA 157; 44 WAR 1 not followed.

(3) Consideration by Leeming JA (Gleeson JA agreeing), of the nature of ancillary liability for breach of fiduciary duty: [6]-[8], [58]-[83], [92]-[102].

Barnes v Addy (1874) LR 9 Ch App 244 considered and applied

Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366; Williams v Central Bank of Nigeria [2014] UKSC 10; [2014] 2 All ER 489; Zhu v Treasurer of NSW [2004] HCA 56; 218 CLR 530, considered.

(4) Consideration by Leeming JA (Gleeson JA agreeing), of the principles governing departure from decisions of intermediate courts of appeal: [6], [92]-[102].

Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, CAL No 14 Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; 239 CLR 390, Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89, Marshall v Director-General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603, Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; 233 CLR 259, considered.

RJE v Secretary to the Department of Justice [2008] VSCA 265; 21 VR 526, R v XY [2013] NSWCCA 121; 84 NSWLR 363, followed.

(5) Dishonesty, for the purposes of liability for knowing assistance in a breach of fiduciary duty which amounts to a dishonest and fraudulent design, is a transgression of the ordinary standards of honest behaviour. It is not necessary to demonstrate that the person thought about what those standards were: [2], [6], [121]-[125].

Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd [2006] 1 All ER 333, Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250 followed.

(6) Mr Curtis' breach of fiduciary duty amounted to a dishonest and fraudulent design: [2], [6], [126]-[129].

(7) It was not necessary for Optus to establish that Mr Hasler had no knowledge of the absence of informed consent by Optus to Mr Curtis: [2]-[3], [6], [130]-[142].

Maguire v Makaronis (1997) 188 CLR 449; Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 considered.

(8) There was no appellable error in the findings of causation and loss of which Messrs Curtis and Hasler complained, or the factual findings of which Optus complained: [143]-[168].

Elder's Trustee and Executor Co Ltd v Higgins (1963) 113 CLR 426, Fox v Percy [2003] HCA 22; 214 CLR 118, State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In liq) [1999] HCA 3; 73 ALJR 306 applied.

Commonwealth Financial Planning Ltd v Couper [2013] NSWCA 444 referred to.

Judgment

BARRETT JA: I have had the advantage of reading in draft the judgment to be delivered by Leeming JA. I am indebted to his Honour for his concise and comprehensive exposition.

I agree that, having regard to the matters Leeming JA canvasses at [40]-[52], the question of dishonest and fraudulent conduct on the part of Mr Curtis was squarely in issue before the primary judge. For the reasons Leeming JA states at [127]-[128], the unchallenged findings of the primary judge establish that Mr Curtis, in egregious disregard of fiduciary obligations owed by him to the Optus companies, cheated those companies by a course of conduct that was fraudulent and dishonest. His breach of fiduciary duty was therefore of a quality that, in accordance with the decision of the High Court in Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89, can result in accessorial liability of another person under the second limb of Barnes v Addy (1874) LR 9 Ch App 244. Furthermore and for the reasons stated by Leeming JA at [130] and following, Mr Hasler was, in the relevant sense, knowingly concerned in Mr Curtis's breach and incurred such accessorial liability accordingly.

Like Leeming JA, I reject the proposition that there will be no liability under the second limb if the alleged accessory did not have the requisite degree of knowledge that the wronged principal's informed consent to the breach was absent. It does not lie in the mouth of such a person to say, by way of self-exculpation, "I know that the fiduciary to whom I gave assistance or support acted fraudulently and dishonestly and, by doing so, caused loss to his principal but since, for all I know, that principal may have given informed consent for the fiduciary to act in that way, there can be no recovery from me on account of my complicity in the breach". Proof of the absence of the principal's informed consent is not an element of the equitable claim against either the fiduciary or the accessory. Rather, proof of the existence of such consent operates by way of defence if the elements of the equitable claim are established.

Leeming JA's analysis calling into question aspects of the reasoning on dishonest and fraudulent design in Westpac Banking Corporation v Bell Group Ltd (No 3) [2012] WASCA 157; 44 WAR 1 (at [2112]-[2125]) is compelling. As his Honour recognises, however, the issues before this Court can be disposed of without the need to come to any conclusion on that matter. That being so, I prefer to let the matter rest for the time being.

Orders should be made as Leeming JA proposes. Subject to the foregoing, I agree with his Honour's reasons.

GLEESON JA: I also have had the advantage of reading in draft the comprehensive judgment of Leeming JA. I agree with the orders proposed by Leeming JA for the disposition of the three appeals and the two cross-appeals, for the reasons given by his Honour.

As Leeming JA observes at [58], the appeal involving Mr Hasler may be disposed of without deciding whether this Court should depart from aspects of the reasoning on the meaning of "dishonest and fraudulent design" given in Westpac Banking Corporation v Bell Group Ltd (No 3) (Bell) [2012] WASCA 157; 44 WAR 1 at [2112]-[2125]. Nonetheless, for the reasons given by Leeming JA at [59]-[63], I agree that this Court should resolve whether Bell was correctly determined on this issue.

The submissions on Mr Hasler's appeal amply demonstrate that this question is important for the ascertainment of whether claims under the second limb of Barnes v Addy (1874) LR 9 Ch App 244 are properly pleaded and particularised, and for the assessment required by Briginshawv Briginshaw [1938] HCA 34; 60 CLR 336 (see now s 140 of the Evidence Act 1995 (NSW)) when considering the fiduciary's "dishonest and fraudulent design" and the "knowledge" of the third party who participates in the fiduciary's conduct.

Insofar as Bell concluded that the High Court in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (Farah) [2007] HCA 22; 230 CLR 89 changed the meaning of the phrase "dishonest and fraudulent design" to include all breaches of fiduciary duty more serious than a trivial breach or a breach of the kind that would be excusable under statute, I respectfully disagree. The analysis by Leeming JA at [64]-[125] of the difficulties with the reasoning in Bell is compelling. His Honour's reasons demonstrate that nothing in Farah should be taken as diluting the quality of the fiduciaries' breach which is required to answer the description of a "dishonest and fraudulent design". Nothing falling short of dishonest conduct by the fiduciary is sufficient to engage the second limb of Barnes v Addy.

It follows that I am convinced that Bell is plainly wrong in this respect. I gratefully adopt the reasons of Leeming JA in reaching this conclusion.

Without detracting from his Honour's detailed analysis I would add one observation. The critical error in the reasoning in Bell is readily identifiable. It commences at [2112(c)] and is carried over into [2113], [2123] and [2125]. Shortly stated, the error in Bell was to treat the rejection in Farah (at [183]) of the submission that a breach of trust or breach of fiduciary duty had to be "significant" (to come within the second limb of Barnes v Addy), as in some way diluting the quality of conduct that is sufficient to answer the description "dishonest and fraudulent". This overlooks that the High Court had made it clear (at [180]) that in rejecting this submission, it was not adopting the suggested abandonment of the "dishonest and fraudulent design" integer as part of an accessorial liability claim.

Moreover the comments in Farah (at [184]), relating to the greatly varying seriousness of breaches of trust and breaches of fiduciary duty, were directed to an explanation for rejecting the "significant breaches" test of the fiduciary's conduct sufficient to attract liability under the second limb of Barnes v Addy. The High Court was highlighting the difficulties with accepting the "significant breaches" test. The Court was not, as suggested in Bell (at [2123]), propounding a (new) test that anything more serious than breaches of duty which are trivial or capable of relief under statute, answer the description of a "dishonest and fraudulent design". Farah does not say so expressly. Nor could it be thought that this was implicit in the reasons of the court for rejecting (at [180]) the suggested reformulation of the elements of an accessorial liability claim under the second limb of Barnes v Addy.

LEEMING JA: From a trial heard over 15 days in July and August 2013 and decided in September 2013 (with supplementary judgments as to orders and costs in October and December 2013) have been brought no fewer than three appeals accompanied by three notices of contention, and two cross-appeals. All were heard over two days. That this could occur is due to the efficiency of the parties, who have been commendably selective in identifying the issues for review on appeal and in the materials made available for the determination of those issues.

In issue on one of the appeals is whether this Court should depart from the more relaxed test for "knowing assistance" liability pursuant to the "second limb" of Barnes v Addy (1874) LR 9 Ch App 244 as formulated in Westpac Banking Corporation v Bell Group Ltd (No 3) [2012] WASCA 157; 44 WAR 1 at [2112]-[2125] (Bell). For the reasons given below, I have concluded that that aspect of Bell was wrongly decided and should not be followed. However, that conclusion does not undermine any aspect of the reasoning of the primary judge. None of the other challenges advanced in any of the appeals or cross-appeals has been made out, with the result that each should be dismissed.

Background

Three Optus companies (collectively, Optus) sued five defendants, on a suite of causes of action. Most of Optus' pleaded causes of action either failed, or else were not determined by the primary judge (on the basis that Optus, entirely properly, conceded that it could not be doubly compensated for the same loss), and, save in one respect, Optus' appeal is confined to a question of fact and does not seek to revisit those unsuccessful causes of action. Accordingly, the following summary, which is highly abbreviated, will be sufficient to understand and resolve the principal issues arising on each of the three appeals.

(a) Mr Curtis' appeal

The third defendant, Mr Leon Curtis, was at all material times an employee of one of the Optus plaintiffs, initially as "Logistics Manager" and later as "General Manager - Logistics". Over the period of his employment from 1998 until 2008, a varying number of employees reported directly or indirectly to him. At times there were as many as 30. The primary judge found that Mr Curtis owed fiduciary duties to all three Optus companies. He admitted breaching those duties, by causing a company of which the primary judge found he was a shadow director, the second defendant Sumo Distribution & Storage Pty Ltd (Sumo), to provide warehousing services to Optus for equipment known as "EOL" (or "end-of-life") equipment, which was stored on pallets, and also for some larger equipment related to cables and cable-cutting. Those warehousing services were provided via the first defendant Almad Pty Ltd (Almad), a company whose principal was Mr Philip Davey, and which acted as a broker between Optus and Sumo, charging a 20% fee by way of mark-up.

The essence of Mr Curtis' breach of fiduciary duty was in placing his personal interests (through Sumo) in conflict with the interests of Optus without obtaining Optus' fully informed consent. Essentially, he approved Optus' decision to accept Sumo's offer of warehousing services at prices he himself determined. More details about how that took place are provided when summarising Mr Hasler's appeal below.

Optus was awarded equitable compensation in the amount of $1,879,333, excluding interest. That amount reflected the way Optus had put its case. It was calculated by reference to $11,279,000 of warehousing expenses paid over the relevant period to Almad, including its 20% mark-up. One sixth of the total amount is $1,879,333. That represents the mark-up which, on the findings of the primary judge, Optus would not have incurred but for Mr Curtis' breaches.

Sumo was incorporated on 23 March 2004. Mr Curtis and his wife were each 25% shareholders, and Mrs Curtis was at all relevant times a director and its secretary. The other shareholders were Mr Craig Hasler and his wife, again, each as to 25%; the latter was also at all relevant times a director. From 2009, Mr Curtis and Mr Hasler became directors together with their wives. Sumo was in liquidation during the trial and did not defend the claims made against it.

Mr Curtis also controlled the fifth defendant (Electrosales) which sold Optus equipment. Mr Curtis and Electrosales admitted that the latter was liable in conversion to Optus in the amount of $15,000 for sales of equipment in fact owned by Optus. The primary judge recorded (at [34]) that Mr Curtis admitted to dishonest conduct in connection with this sale. His Honour went further, and found that in relation to business records showing a sale by Optus of its own stock to an American company known as Telecycling, Mr Curtis gave a false explanation. His Honour said at [36] that he found "the admitted and proved conduct of Mr Curtis, in relation to the Telecycling sale, to be inconsistent with any reasonable standard of honesty; and I regard his purported rationalisation of that dishonesty as, itself, false and dishonest."

The primary judge found that Mr Curtis caused Sumo and Electrosales to make large payments to relatives of certain Optus employees, Mr Harmanis and Mr Zotz. His Honour said at [136], "In all, payments made to the Harmanis family exceeded $153,000.00, and payments made to the Zotz family totalled almost $104,000.00." Optus submitted and his Honour found that the payments were corrupt, made to ensure that work was directed to Sumo and that payment of Almad's invoices was approved. His Honour rejected Mr Curtis' explanation, which was that the payments were acts of generosity and benevolence: at [137]-[138]. Optus was held entitled to recover those payments.

The issues arising on Mr Curtis' appeal are very narrow. There is no challenge to the findings of duty, breach or dishonesty. The grounds of appeal are confined to whether there is appellable error in the findings of the primary judge that Optus would have leased its own warehouse but for Mr Curtis' breaches of fiduciary duty, and that Optus had suffered loss as a result of those breaches.

(b) Mr Hasler's appeal

The fourth defendant was Mr Craig Hasler. Mr Hasler had worked for Optus, reporting to Mr Curtis, from May 2001 until March 2005. He worked with Mr Curtis in the creation of Sumo and the establishment of its warehouse business. On 19 January 2004, Messrs Curtis and Hasler registered Sumo as a business name, on 15 March 2004 premises at Campbelltown were leased to the wives of Messrs Curtis and Hasler, with Mr Hasler witnessing the signature of Mrs Curtis, and Sumo was incorporated on 23 March 2004. It is not necessary for present purposes otherwise to deal with the events of 2004, which were the subject of contested evidence and extensive findings of fact by the primary judge at [80]-[123]. It suffices to say that in early 2005, the principal of Almad, Mr Phillip Davey, started a broking business and became an approved supplier to Optus. Sumo had supplied warehousing services to Optus through another broker, MTM Transport and Logistics Pty Ltd (MTM), which had previously employed Mr Davey. Thereafter for some months, some of the warehousing services were supplied through MTM and some through Almad. Progressively, Optus switched to Almad from MTM.

At some stage, a document described as a "Waiver of Competition" (known within Optus as a "WOC") was brought into existence for Almad, whose internal effect within Optus was that work pursuant to it need not be put out to competitive tender. Although the document referred only to the supply of "four thousand customised pallets at a cost of $8,000", over time Almad handled some $18 million of business from Optus.

Once Almad became an approved supplier, it issued a price list to Optus. The price list was the price quoted by Sumo plus a 20% mark-up. There was no dispute, and the primary judge found at [127] that:

"Mr Curtis (who had prepared the Sumo price list) approved Almad's price list on behalf of Optus."

The primary judge described what happened thereafter as follows (at [128]-[130]:

"Thereafter, Almad began to invoice Optus for storage services provided by Sumo. The prices charged by Sumo (initially to MTM, before Mr Davey left MTM) had been prepared and authorised, on behalf of Sumo, by Mr Curtis. The same prices, quoted by MTM to Optus with MTM's broker markup of 20%, were approved by Mr Curtis on behalf of Optus.

Almad issued invoices to Optus from April 2005 until December 2010. It did so separately for various services: cable storage and cutting, EOL storage, and scrapping. The invoices were generally issued monthly, but sometimes fortnightly. The charges were calculated by taking the amount charged by Sumo to Almad and applying the 20% markup.

As a matter of practice, each time Optus received an invoice from Almad, an employee of Optus would create a purchase order (PO). The PO would quote the WOC number and repeat the amount of the Almad invoice. Another employee would then approve the PO, and in due course Optus would make payment to Almad. The POs were prepared by staff reporting to Mr Curtis, and were approved by other staff reporting to Mr Curtis."

There was no challenge to any of those primary facts.

After leaving Optus on around 9 March 2005, Mr Hasler worked full time for Sumo; the primary judge found that he effectively managed its day to day operations. There seems to have been little if any dispute that Mr Hasler did so in a way which was entirely transparent; in any event, the claim against him commenced from April 2005, after he had ceased being an Optus employee. (Optus commenced proceedings in April 2011, and a six year limitation period applied directly or by analogy: see Gerace v Auzhair Supplies Pty Ltd [2014] NSWCA 181 at [3]-[4].)

In July 2005, Sumo began to charge Almad for the storage of Optus stock at a higher rate, of $3.00 per pallet per week as opposed to $2.30 per pallet per week. That translated, in respect of those pallets, to an increased charge paid by Optus of $3.60 as opposed to $2.75 per week per pallet, when Almad's mark-up was added. The defendants' case at trial was that this was connected with a move from the premises at Campbelltown to premises at Lidcombe which commenced at that time; this factual matter is addressed further below when dealing with what is described as the fifth issue.

The primary judge found that Mr Hasler had knowingly participated in Mr Curtis' breaches of fiduciary duty, which amounted to a "dishonest and fraudulent design" within the meaning of the "second limb" of liability pursuant to Barnes v Addy. He did so notwithstanding that his Honour accepted that Mr Hasler did not know at any relevant time of the corrupt payments to the Harmanis and Zotz families. The result was that Optus obtained a judgment against Mr Hasler in the same amount as that ordered against Mr Curtis.

Grounds 5 and 6 of Mr Hasler's appeal make the same challenges to causation of loss as are made in Mr Curtis' appeal. The other grounds of Mr Hasler's appeal go further. In logical order, he contends that (a) it was not open to the primary judge to make a finding of dishonest or fraudulent design given the pleadings, the particulars, the opening and/or the conduct of the trial (ground 4); (b) the primary judge erred in finding that Mr Hasler had the requisite knowledge of any breach of duty by Mr Curtis, let alone a breach that amounted to a dishonest or fraudulent design (grounds 1 and 3), and (c) the primary judge erred in finding that Mr Hasler had participated in any breach of duty by Mr Curtis (ground 2). Mr Hasler also separately challenged one aspect of the adverse demeanour-based findings made against him, based on his cross-examination on a particular email (ground 7).

(c) Optus' appeal

The principal challenge in Optus' appeal (which was duplicated in its cross-appeals in the appeals brought by Mr Curtis and Mr Hasler) is to a finding of fact, namely, as to when Sumo had moved pallets of Optus equipment from premises in Campbelltown to Lidcombe. The primary judge found that this occurred incrementally from July 2005 until around November or December 2005; Sumo's invoices for storage of Optus equipment increased from July 2005. Both of Sumo's premises were leased, and it was common ground that the rental at Lidcombe was higher than that at Campbelltown. Optus contended at trial and on appeal that the move only took place late in 2005. Optus said that there was no basis for it to be charged higher warehousing fees if in fact its goods were still being stored at Campbelltown.

The factual matters to which the fifth issue (the timing of the transfer from Campbelltown to Lidcombe) are discrete and are most conveniently dealt with when dealing with that issue.

In certain further, albeit limited respects, Optus sought to challenge aspects of the causes of action rejected by the primary judge. By grounds 3-6 of its notice of appeal, Optus alleged a different basis in which Sumo (and thereby Almad) had overcharged, namely, by failing to apply a discount for static stock. Optus also maintained that the primary judge was wrong to reject (at [16]-[25] and [86]-[90]) the evidence of its witness Ms Grech that she had squarely said to Mr Davey that there was a conflict of interest in Mr Curtis being in substance on both sides of the warehousing transaction. And Optus submitted that the consequence was that Almad itself had engaged in conduct that was misleading or deceptive contrary to s 52 of the Trade Practices Act 1974 (Cth) by Mr Davey failing to draw those facts to the attention of Optus. Those grounds were expanded by (fairly short) written submissions served well in advance of the appeal. As articulated in the notice of appeal and in the written submissions, those grounds were advanced independently of success or failure on the primary factual issue as to the timing of the relocation from Campbelltown to Lidcombe.

However, on the hearing of the appeal, Optus conceded that those additional issues only arose if Optus succeeded on the factual issue as to the timing of the relocation from Campbelltown to Lidcombe: Transcript 2 June 2014, p 27.45, and "Issues on Appeals" handed to the Court on 2 June 2014, p 2. There was good reason for taking that course, because absent success on that factual issue, Optus would face considerable difficulty in establishing appellable error in these aspects of the reasoning of the primary judge. For the reasons given below, Optus has failed in its challenge to that primary factual issue. Accordingly, I say nothing further about these remaining aspects of its appeal which Optus only advanced contingently. Similarly, for the reasons given below, it will not be necessary to deal with Optus' notices of contention.

Issues on the three appeals

It follows that the principal issues on all appeals resolve to the following:

(1) Was a finding of dishonest and fraudulent breach of duty open to be made against Mr Curtis? - this turns on the pleadings, particulars and conduct of the trial.

(2) Did the conduct of Mr Curtis amount to a dishonest and fraudulent breach of duty? - here, Optus invites this Court to follow, and Mr Hasler invites it to depart from, what was said by Drummond AJA with the agreement of Lee AJA in Bell at [2112]-[2125].

(3) Was Mr Hasler sufficiently involved in, and did he have sufficient knowledge of, Mr Curtis' breaches of fiduciary duty? - here the focus was on the absence of knowledge on the part of Mr Hasler that Mr Curtis did not have Optus' fully informed consent.

(4) Was there appellable error in the findings that Mr Curtis' breaches caused Optus loss? - this invites appellate review of the primary judge's "counterfactual" finding of what Optus would have done had it known of Mr Curtis' breaches.

(5) Was there appellable error in the factual finding as to the timing of the movement of goods from Campbelltown to Lidcombe? - this amounts to appellate review of the factual finding, in light of the conflicting documentary and testimonial evidence, the weight of which favoured Optus' submission.

Each of Messrs Curtis and Hasler gave evidence and was cross-examined, and was the subject of unfavourable demeanour-based findings, Mr Curtis more so than Mr Hasler. In addition, a number of witnesses gave evidence as to the timing of the movement of goods from Campbelltown to Lidcombe, and here too the primary judge made demeanour-based findings. It will be seen that elements of each of the three appeals involve a challenge to factual findings made by the primary judge which attract particular deference. However, they also involve an evaluation of what was open to the primary judge based on the pleadings and the course of the trial, and the determination of two pure questions of law arising out of the second and third issues identified above.

The most convenient course is to address and resolve the issues in the order summarised above, irrespective of how and in which appeal they have arisen.

First issue - was Barnes v Addy liability open to the primary judge?

It was established by the High Court in Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 (Farah) and common ground in Mr Hasler's appeal that liability under the "second limb" of Barnes v Addy is confined to cases where the breach of fiduciary duty amounts to a "dishonest and fraudulent design". The Court said at [170] that such a breach ought to have been pleaded and, if it is to be established, the assessment required by Briginshaw v Briginshaw (1938) 60 CLR 336 (and s 140 of the Evidence Act 1995 (NSW)) must be satisfied. Neither in the pleadings, nor in Optus' opening, was it said expressly that Mr Curtis' alleged breaches of duty were dishonest or fraudulent. Indeed, in Mr Hasler's written closing submissions at trial, it was said that:

"The plaintiff's opening ... like its pleading, conspicuously does not allege any dishonest or fraudulent design on the part of Mr Curtis, let alone any knowledge of such dishonest or fraudulent design on the part of Mr Hasler. The case against him lacks any substance."

The same submission was maintained on appeal. In order to determine whether Mr Hasler succeeds or fails in this threshold aspect of his appeal, it is necessary to review, in some detail, the pleadings, particulars, openings and conduct of the trial.

(a) Pleadings

The allegations of breach ultimately pleaded against Mr Curtis (by way of amendments proposed in the second half of 2012) included that he:

"(e) used his position as General Manager Logistics to promote and direct that Sumo undertake the responsibilities of carrying out the Almad arrangements at prices determined by him, Mr Phil Davey of Almad and Craig Hasler;

(f) prepared and sent invoices of Sumo to:

(i) Brooke Grech of MTM Transport and Logistics Pty Ltd and later MTM Transport Pty Ltd; and/or

(ii) Phil Davey of Almad; and/or

(iii) Craig Hasler of Sumo.

(g) used his position as General Manager Logistics to arrange for Electrosales to sell Optus Network's equipment and stock without remitting any proceeds to the plaintiffs as referred in paragraphs 41 to 45;..."

Rightly, the solicitors for the defendants complained, after receiving the draft amended pleading, that they did:

"not accept that the plaintiff can make serious allegations, including allegations of equitable fraud, but defer the essential details of the allegations until it files its expert evidence"

and sought particulars of the allegations. Two of those requests and Optus' response were as follows:

"In relation to paragraph 46(e), what did Mr Curtis do to promote or direct that Sumo undertake the responsibilities of carrying out the Almad arrangements?

Sending emails to Craig Hasler including emails that included the tax invoices for Sumo to send to Almad, while an officer of Sumo and shadow director of Sumo an employee of Optus, as well as generally arranging for storage to be carried out by Almad (simultaneously on behalf of Sumo and Optus).

In relation to paragraph 46(f), do the plaintiffs mean to allege that Mr Curtis prepared and sent invoices of Sumo to Mr Hasler of Sumo? If so, please explain the facts, matters and circumstances relied upon which establish that this conduct was a breach of duty.

Yes. As you know, in the period 2005-2010, Mr Curtis was employed by Singtel Optus. At the same time he was preparing the invoices for Sumo which were then sent to Almad who was then charging Singtel Optus that amount plus a 20% mark-up."

The pleading then alleged that by reason of, inter alia, those matters:

"each of Sumo, Electrosales and Hasler was knowingly concerned in relation to the breach of fiduciary duty by Leon Curtis or alternatively received the proceeds of his breach of duty on trust for Optus".

No particulars were requested of that allegation, although counsel for Optus acknowledged, properly, that it would have been very difficult to refuse any such request.

(b) Openings and statement of "real issues in dispute"

The parties served written openings at the commencement of the trial. Not only was there an absence in Optus' opening of any allegation of fraud or dishonesty, but further, in the course of articulating its claim for breach of fiduciary duty against Mr Curtis, Optus went so far as to say that "the test is not whether a defaulting fiduciary acted with conscious impropriety".

On the first and second days of the trial, the primary judge obtained from the parties an agreed statement of the real issues in dispute. His Honour recorded at [7]:

"The parties agreed on the real issues in dispute that arose from the "pleadings". I set those issues out, with some amendments to delete claims that were dropped, progressively, in the course of the hearing:

1. Whether the third defendant (Mr Curtis) was in breach of:

a. his fiduciary duty to the plaintiffs (Optus);

b. his statutory duty under either sections 182 or 193 or both of the Corporations Act (2001) (Cth); or

c. his employment contract with the third plaintiff (Optus Administration),

including by placing himself in a position in which his personal interests were in conflict with the interests of Optus.

2. If so, whether one or more of the second defendant (Sumo), the fourth defendant (Mr Hasler) and the fifth defendant (Electrosales) was knowingly involved or concerned in the said breach of fiduciary or statutory duty by Mr Curtis."

When considered together, the allegations as particularised answer the description of "dishonest and fraudulent". That is patently true of (g) (selling Optus' equipment and stock without remitting the proceeds of sale to it). It is true of (e) and (f), which more elaborately involve Mr Curtis causing, for the benefit of Sumo, Optus to pay for warehousing and storage at prices determined by him. To anticipate what is elaborated in dealing below with the second issue, it amounted to a transgression of ordinary standards of honest behaviour.

The pleading and the second of the "real issues in dispute" reproduced above can only sensibly be read as invoking the second limb of Barnes v Addy. The statement in Optus' written opening, directed to its claim against Mr Curtis, that conscious impropriety was not required, does not displace this reading. In 2013, when the trial took place, it must be taken to have been known to all parties that such a claim could only succeed if a "dishonest and fraudulent design" on the part of Mr Curtis could be established. Admittedly, prior to Farah, there was a widespread view that the relaxation in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 (Royal Brunei), which attached "second limb" liability to any breach of fiduciary duty so long as the third party were objectively dishonest, applied (cf King Network Group Pty Ltd v Club of the Clubs Pty Ltd [2008] NSWCA 344; 69 ACSR 172 at [48]-[58], in which the trial, but not the appeal, had taken place before Farah had been decided). But I have no doubt that all parties were, in 2013, perfectly conscious that that was not the law in Australia following Farah.

It may be accepted that if one paused to ask at some moment during the trial precisely what was involved in establishing a "dishonest and fraudulent design", the question would have been difficult to answer: the trial took place weeks before the scheduled hearing of the Bell appeal, a central issue in which was the meaning of that phrase. It is also true that it is difficult to see how Optus could avoid amending its pleadings had it been asked:

"Do you allege that Mr Curtis was engaged in a 'dishonest and fraudulent design'? If so, should that not squarely be alleged? If not, how do you maintain a Barnes v Addy claim against Mr Hasler?"

But the issue was not raised until final addresses.

(c) Conduct of the trial

The course taken by the trial was consistent with a claim based on a dishonest and fraudulent design. Notwithstanding that Mr Curtis had admitted a breach of duty, he was asked very squarely, and without objection, questions directed to the quality of his breach.

"Q. But it was not those lower levels of management that accepted on behalf of Optus the price list provided by MTM and Almad, was it?

A. They accepted them and brought them to me for signature.

Q. Without your signature they would not have been put in place?

A. That's correct.

Q. So in respect of those two price lists it was you who committed Optus to them?

A. Yes.

Q. And it was you who had prepared the underlying prices that each of the companies passed on plus 20 percent for Sumo's services?

A. That's correct."

In connection with a proposal to shift Optus' warehousing away from Sumo, Mr Curtis was cross-examined about an internal Optus email in which he advised against that course (which was not taken). It was put to him (and the primary judge found at [221], which finding was not challenged on appeal), that Mr Curtis "had sought to manipulate events to ensure that the benefit of EOL storage went to (or remained with) Sumo":

"Q. You did that because you wanted to keep the stock at Sumo?

A. That is not the case.

Q. You did that because it was of benefit to you personally as a controller of Sumo for the stock to remain there?

A. That is not the case."

It was put to Mr Curtis, which he denied, that he "knew very well between 2004, and certainly until December 2008, you were acting in breach of your obligations to Optus". It was also put to him that:

"Q. ... [Y]ou deliberately concealed the arrangements that you had entered into, in respect of Sumo and Electrosales, during your time at Optus?

A. Did I go out of my way to deliberately conceal it?

Q. Yes?

A. No. I didn't go out of my way to deliberately sort of broadcast it either."

In contrast, there were occasions when objection was taken to the question being outside the scope of the pleadings (for example, when Mr Curtis was asked whether he caused payments to be made to the family of Mr Zotz in order to cause him to show favour to Sumo).

(d) A finding of dishonest and fraudulent design was open

The primary judge dealt with Mr Hasler's submission at [293]-[303]. His Honour did so without expressing a concluded view as to whether the pleading had been pleaded and particularised with requisite particularity (at [303]), and without relying on the corrupt payments made to the Harmanis and Zotz families. His Honour nevertheless held that by reason of the evidence which had been adduced without objection, Optus was permitted to advance a case of second limb Barnes v Addy liability.

Mr Hasler has failed to persuade me that there was any error in taking that course. His Honour was especially well placed to assess whether this caused any unfairness to the defendants (of whom he was critical for failing to address the "real issues" which had been agreed by them at the outset of the trial). No differently from his Honour, it is not necessary to express a view as to the adequacy of the pleadings and particulars to comply with the obligations to allege and particularise dishonesty and fraud.

The unobjected passages of cross-examination (of which the foregoing is merely illustrative), coupled with the allegations as particularised and agreed "real issues" which on any fair reading confirmed a claim based on Barnes v Addy knowing assistance, left it open to the primary judge to make findings of dishonesty and fraud. Mr Curtis was squarely confronted with allegations of conscious breach of duty in order to derive a substantial financial gain. I would reject this ground of appeal.

Second issue - "dishonest and fraudulent design"

The threshold element of the second issue is what is the legal test as to the quality of the breach of fiduciary duty which is sufficient to render liable a third party who in some way assists.

It is perfectly clear that breaches of fiduciary duty "vary greatly in their seriousness"; some are well-intentioned and some are trivial, but others amount to serious fraud: Farah at [184]. It is perfectly clear from Farah that only breaches which answer the description of a "dishonest and fraudulent design" can engage Barnes v Addy liability (the position is different in places where the reformulation of principle in Royal Brunei applies). It is perfectly clear that the breach need not be a breach of trust, but may be some other breach of fiduciary duty: Farah at [179]. However, it is very unclear what a "dishonest and fraudulent design" means in this context in Australia at present. The reason for that is the recent decision of the Western Australian Court of Appeal in Bell, which this Court was invited not to follow.

(a) This Court should resolve whether Bell was correctly determined

For the reasons that will be given in section (d) below, it will not be necessary in order to resolve these appeals to determine whether or not Bell was in this respect rightly decided. Nevertheless, there are good reasons why this Court should do so.

First, the issue is of general importance. As the High Court said in Farah at [179], attempts are commonly made in corporate insolvencies to rely on this form of equitable liability, which "makes a proper understanding of the second limb important, lest its application prove unjust". Of course, this form of liability is also widely invoked in other settings, including breaches of duty by solicitors, partners and agents.

Secondly, consistently with the first point above, the issue appears already to be giving rise to considerable difficulty throughout Australia. It is not yet two years since the Court of Appeal decision in Bell was delivered. Already, Justice Black, writing extrajudicially, has said that "what is required to establish the element of a 'dishonest and fraudulent design' on the part of the fiduciary presently raises issues of particular difficulty, at least for judges at first instance": A Black, "Directors' statutory and general law accessory liability for corporate wrongdoing" (2013) 31 C&SLJ 511 at 529. His observation is borne out by what was said by Edelman J in Nicholson v Morgan [No 3] [2013] WASC 110 at [56], by Beech J in EC Dawson Investments Pty Ltd v Crystal Finance Pty Ltd [No 3] [2013] WASC 183 at [659] and by Ball J in BigTinCan Pty Ltd v Ramsay [2013] NSWSC 1248 at [84].

It is also possible to identify decisions which are hard if not impossible to reconcile with the more relaxed test contained in Bell: see for example Craigcare Group Pty Ltd v Superkite Pty Ltd [2014] NSWSC 326 at [265] ("I cannot be satisfied that his conduct was 'morally reprehensible'") and Alexander v Burne [2013] NSWSC 1953 at [17] ("the words 'dishonest and fraudulent design' require something more than a serious breach of trust"). In both cases, the judge had been directed to Bell and yet it is certainly arguable that the reasoning proceeds inconsistently with what was said by Drummond AJA at [2119] and [2126] (referred to in section (c) below).

Thirdly, there is the fact that the High Court granted special leave to appeal from Bell, and set down the appeal to be heard over four days in October 2013. At the forefront of the appellant banks' argument was a challenge to the formulation of second limb liability. The appeal was settled shortly before it was listed to be heard, and so the decision of the Western Australian Court of Appeal retains it precedential force. However, the grant of special leave tends to confirm the public importance of the question (having regard to the criteria in s 35A of the Judiciary Act 1903 (Cth)) as well as the arguability of its having been wrongly decided. It is legitimate to have regard to those considerations in determining whether or not to determine Mr Hasler's submission that it is "clearly wrong": cf Sydney Harbour Casino Pty Ltd v Vignoli [1999] NSWCA 273 at [15] and [41].

In short, the issue is recurring, important, and leading to inconsistent formulations of principle in courts across Australia. The issue is producing uncertainty in an area where it is highly desirable that there be no uncertainty. Lawyers drafting statements of claim or defences should be under no misapprehension of what it means to allege or to deny a dishonest or fraudulent design. The same is true of those giving instructions to draft pleadings. The issue was squarely raised on appeal. And, having determined that the conduct of the trial permitted a finding of second limb liability to be made against Mr Hasler, the formulation of principle is, logically, the threshold issue.

(b) Barnes v Addy liability

With some reluctance, I commence with Lord Selborne's words in Barnes v Addy (1874) LR 9 Ch App 244 at 251-252:

"That responsibility may no doubt be extended in equity to others who are not properly trustees, if they are found either making themselves trustees de son tort, or actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust."

That sentence is important. But it is the immediately following sentence which gives rise to the two so-called "limbs" of Barnes v Addy liability, and which - despite its opening five words - may easily be taken out of context:

"But, on the other hand, strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a Court of Equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees."

The reason for my reluctance in commencing with Lord Selborne's language is that difficulty often arises when a court's decision is used to describe a rule of law. Only rarely is the judgment the origin of the rule, and the content of the rule tends not to be circumscribed by the precise words used by the judge. (One example is the "rule" in Saunders v Vautier, which predated the decisions, and as traditionally formulated failed sufficiently to appreciate the trustee's right of recoupment or exoneration: see Beck v Henley [2014] NSWCA 201 at [32] and [36].)

The words of a judgment should not be construed as if they were a statute. One aspect (as will be seen, it is not the only aspect) of that familiar warning is that the expression of the rule in the court's reasons turns on the particular facts before the court in light of the legal landscape at the time. There is a particular danger in the case of what is known as "first limb" and "second limb" Barnes v Addy liability. For, as one academic has recently observed, it is "clear that accessorial liability for breach of trust and fiduciary duty should not be viewed solely through the prism of Barnes v Addy; indeed, to do so is inconsistent with long-standing authority": P Ridge, "Equitable accessorial liability: Moving beyond Barnes v Addy" (2014) 8 Journal of Equity 28 at 33. Lord Nicholls said in Royal Brunei at 386 that this tendency was particularly pronounced in the case of the accessory limb of Barnes v Addy.

In Farah, the High Court emphasised that the formulation by Lord Selborne was not an exhaustive statement of the circumstances in which a person who was not a recipient of trust property and had not acted as a trustee de son tort might be liable: at [161]. It is helpful to bear in mind at the outset other ways in which third parties may become liable following a breach of fiduciary duty, not merely so as to assess the reasoning in Bell, but also so as to understand the limits of the statement of principle by Lord Selborne and the subsequent divergence of Australian and English law.

A non-trustee may be liable as a trustee de son tort if he, she or it presumes to act as a trustee although not so appointed, and then, say, commits a breach of trust or makes a profit from the position: see Williams v Central Bank of Nigeria [2014] UKSC 10; [2014] 2 All ER 489 at [54] and Parkview Qld Pty Ltd v Commonwealth Bank of Australia [2013] NSWCA 422 at [97]-[105] and [128]-[130]. That is quite different from the liability to account as a constructive trustee which may follow from either limb of Barnes v Addy. This was pointed out very clearly by Millett LJ in Paragon Finance plc v DB Thakerar & Co [1999] 1 All ER 400 at 408-409 and (as Lord Millett) in Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366 at [140]-[143]. Although the same expressions "constructive trust" and "constructive trustee" are used, the two situations are "entirely different": Dubai at [140]. A person liable pursuant to either limb of Barnes v Addy is:

"not in fact a trustee at all, even though he may be liable to account as if he were. He never claims to assume the position of trustee on behalf of others, and he may be liable without ever receiving or handling the trust property. If he receives the trust property at all he receives it adversely to the claimant and by an unlawful transaction which is impugned by the claimant": at [141].

Most recently, this entirely different use of the term "constructive trustee" has been echoed by Lord Sumption JSC in Williams v Central Bank of Nigeria [2014] UKSC 10; [2014] 2 All ER 489 at [9]:

"In its second meaning, the phrase 'constructive trustee' refers to something else. It comprises persons who never assumed and never intended to assume the status of a trustee, whether formally or informally, but have exposed themselves to equitable remedies by virtue of their participation in the unlawful misapplication of trust assets. Either they have dishonestly assisted in a misapplication of the funds by the trustee, or they have received trust assets knowing that the transfer to them was a breach of trust. In either case, they may be required by equity to account as if they were trustees or fiduciaries, although they are not. These can conveniently be called cases of ancillary liability."

Lord Neuberger PSC made the same point at [64].

In dealing with English authorities, it is necessary to bear in mind that the law in Australia diverges from its reformulation in the United Kingdom, as is noted in Farah at [162]-[164] and Novoship (UK) Ltd v Nikitin [2014] EWCA Civ 908 at [77]. Nevertheless, and as both of those appeals demonstrate, it is useful for courts of one country to examine decisions of courts of the other country. I would respectfully endorse Lord Neuberger's statement, on behalf of a unanimous Supreme Court, in FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45 at [45], an appeal in which inter alia Australian decisions proved to be influential in the reformulation of long-standing English law, that it is highly desirable for common law jurisdictions to lean in favour of harmonising the development of the common law around the world. There is frequently much to be learnt from the experience of other jurisdictions whose legal systems share a common ancestor.

It is convenient to use the term "ancillary liability" to describe those ways in which a third party who never assumed and never intended to be a trustee is treated as accountable in equity as a constructive trustee. Farah establishes that there are three quite distinct ways in which such ancillary liability may be made out.

A third party who receives trust property following a breach of fiduciary duty may become liable as a constructive trustee pursuant to the "first limb" of Barnes v Addy. In Farah the High Court observed that the expression "knowing receipt" in lieu of "receive and become chargeable" appears to have been used some ninety years after Lord Selborne's formulation.

However, third persons may also be held ancillarily liable as constructive trustees even though they received no trust property. For simplicity, I put to one side the case of a company which is the alter ego of the fiduciary: Grimaldi at [556], and focus on "true" third parties. Those third parties may be held liable if they induce or procure a breach of fiduciary duty, or if they assist in a breach of fiduciary duty.

The different bases on which equity intervenes to render the third person liable are summarised in Zhu v Treasurer of NSW [2004] HCA 56; 218 CLR 530 at [121], as follows. Where trust property has been received, equity intervenes to protect the proprietary interests of the beneficiaries. Where a third party merely assists a breach of fiduciary duty, equity intervenes in order to deter conduct which directly undermines the high standards required of fiduciaries, and because it is inequitable for such persons to retain benefits deriving from their conduct. The fact that these are described as two "limbs" of Barnes v Addy liability disguises the fact that they are quite different conceptually, a point emphasised by R Walker, "Dishonesty and Unconscionable Conduct in Commercial Life - Some Reflections on Accessory Liability and Knowing Receipt" (2005) 27 Sydney Law Review 187.

The relationship between knowing receipt and other bases of ancillary liability is considered extensively in Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 (Grimaldi), and does not arise in these appeals, and I say nothing more of it. What is important for present purposes is that as a matter of Australian law, the liability of a third party who procures or induces a breach of fiduciary duty is distinct from the liability of a third party who participates in a breach of fiduciary duty.

On the one hand, the liability of a person who induces or procures a trustee to commit a breach of trust does not turn on the quality of the breach. There is no requirement that the breach of trust be of sufficient gravity to answer the description of "dishonest and fraudulent design". As Charles Harpum wrote, "the quality of the breach of trust by the trustee appears to be equally irrelevant. In the three cases considered above [Alleyne v Darcy (1854) 4 Ir Ch Rep 199, Midgley v Midgley [1893] 3 Ch 282 and Eaves v Hickson (1861) 30 Beav 136], the breach was innocent in the sense that it was not committed for an improper motive": C Harpum, "The Stranger as Constructive Trustee: Part 1" (1986) 102 LQR 114 at 144; see also Grimaldi at [245]. That, with respect, must be so; there is no occasion for a principle pursuant to which the trustee would be liable for breaches of trust which are not dishonest or fraudulent, but the person who induced those breaches would escape liability. Although the law in Australia in this area is different from that stated by Lord Nicholls in Royal Brunei, there is force in his Lordship's example of the solicitor who persuades a trustee to apply trust property in a way the trustee honestly believes is permissible but which the solicitor knows full well to be a breach of trust, something which the solicitor deliberately conceals from the trustee: [1995] 2 AC 378 at 384. In Australia, the solicitor will be liable as a person who has procured a breach of trust; in England, the solicitor will be liable under the (reformulated) second limb of Barnes v Addy.

On the other hand, a third party who falls short of inducing or procuring a breach of trust, but nevertheless participates in it, is nevertheless liable in accordance with the "second limb" of Barnes v Addy. This requires the breach of fiduciary duty to amount to a "dishonest and fraudulent design". That is the claim made by Optus against Mr Hasler, which is the subject of his appeal.

Irrespective of whether the third party has procured, or merely assisted, in the breach of fiduciary duty, the third party may be required to account as a constructive trustee. The third party may not have received any property. In Giumelli v Giumelli [1999] HCA 10; 196 CLR 101 at [5], the High Court said that the imposition of liability upon a third party in these circumstances does not create or recognise any proprietary interest, but instead imposes "a personal liability to account in the same manner as that of an express trustee": at [4].

It might be said that there is some artificiality in the separation of those two forms of ancillary liability attaching to third parties who do not themselves receive trust property. The divergences in the current approaches to the self-same "rule" in Barnes v Addy in England and Australia reflect another aspect of the problem of reading a judgment as if it were a statute, as recently explained (in a very different context) by Baroness Hale of Richmond DPSC in Woodland v Swimming Teachers Association [2013] UKSC 66; [2014] AC 537 at [28]:

"the words used by judges in explaining why they are deciding as they do are not be treated as if they were the words of statute, setting the rules in stone and precluding further principled development should new situations arise".

To that end, the Full Court in Grimaldi said at [247] that "participatory liability as it evolved in equity in cases prior and subsequent to Barnes v Addy was not based on inflexible formulae", and Professor Gummow has recently written ("Knowing assistance", (2013) 87 ALJ 311 at 319) that:

"The better view of all species of accessorial or participatory liability is that they are not based upon inflexible formulae, nor are they parasitic upon pre-existing property rights. Rather, the liability is 'fault based', in the sense of responding to what in the eye of a court of equity is unconscientious conduct. The participation of the third party may be presented by a range of circumstances; they may include activity as participant, inducer or procurer."

Whatever its attractiveness, any reformulation along those lines is not a matter for this Court. It is clear from Farah that acceptance of that unified view is a matter for the High Court and the High Court alone. Farah proceeded expressly on the basis that nothing was being held about the liability of a third party who might be treated as a participant in a breach of trust where the third party had knowingly induced or immediately procured breaches of duty by a trustee even though the trustee had acted with no improper purpose: at [161]. The joint judgment said at [163] that:

"there is a distinction between rendering liable a defendant participating with knowledge in a dishonest and fraudulent design, and rendering liable a defendant who dishonestly procures or assists in a breach of trust or fiduciary obligation where the trustee or fiduciary need not have engaged in a dishonest or fraudulent design. ... Until such an occasion arises in this Court, Australian courts should continue to observe the distinction mentioned above."

Hence the submissions in this Court were, appropriately, confined to this subcategory of ancillary liability. However, only by surveying the whole of the surrounding legal landscape may what I regard as the difficulties with the reasoning in Bell, to which I now turn, be fully exposed.

(c) The reasoning in Bell

The reasons of Drummond AJA on second limb liability are found at [2104]-[2126] in Bell. I should say immediately that the section of his Honour's reasons which was subjected to criticism in these appeals amounts to a very small element of a very lengthy judgment on a very lengthy appeal from an extraordinarily long trial. No reader could fail to appreciate the heavy burden that all members of the Court of Appeal assumed. In contrast, I have the advantage of focussing upon a particular, much narrower issue.

Lee AJA agreed at [1100] with the reasoning of Drummond AJA in Bell on the banks' liability under both limbs of Barnes v Addy. Carr AJA found no breach of fiduciary duty and did not express a view as to the formulation of Barnes v Addy liability by Drummond AJA: at [3052], [3059]-[3066].

Drummond AJA said at [2112] that the "explication in Farah (at [179]-[184]) of the phrase 'dishonest and fraudulent design' on the part of the trustee or fiduciary is not entirely clear to me". His Honour then stated that it was not necessary to show that the trustee or fiduciary "acted with a conscious awareness that what he was doing was wrong". By way of contrast, his Honour said that it was sufficient that the breach of duty could be "characterised as dishonest or fraudulent according to equitable principles". His Honour added that it was sufficient "if the breach of duty is more than a trivial breach and is also too serious to be excusable because the fiduciary has acted honestly, reasonably and ought fairly to be excused", that being the formulation of provisions such as s 75 of the Trustees Act 1962 (WA) and s 1318 of the Corporations Act 2001 (Cth). (In New South Wales, the equivalent provision is s 85 of the Trustee Act 1925 (NSW).)

After stating the test as above, his Honour explained his reasoning at [2114]-[2125]. His Honour referred at [2115]-[2117] to statements in Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555 and Bodenham v Hoskyns (1852) 21 LJ 864; 42 ER 1125, with which Gibbs J had expressed agreement in Consul, to the effect that conduct which was "dishonest and fraudulent" was conduct which was morally reprehensible, which he observed were consistent with the principles on which the primary judge had relied: at [2118]. However, his Honour said at [2119]:

"But I do not think the court in Farah is to be understood as having accepted that conduct by trustees or fiduciaries must involve an element of moral reprehensibility before it will satisfy the requirement of the second limb that it is 'dishonest and fraudulent'."

His Honour said that the only explanation given in Farah for the kind of conduct that would answer the description of "dishonest and fraudulent design" was that in [184], given by way of explaining a rejection of the respondent's submissions in the two preceding paragraphs. His Honour said, at [2123], which was ultimately the dispositive paragraph of this aspect of his reasoning, that:

"At [183], the court in Farah rejected the submission that a breach of trust or fiduciary duty had to be 'significant' to come within the second limb of Barnes v Addy. That I think is apparent from the comments they then proceeded to make in [184] which deal with the kind of conduct by a trustee or fiduciary which will be 'dishonest and fraudulent' for the purposes of the second limb in Barnes v Addy. By making the comments they did in [184] in that context, I understand the court in Farah to have said that a trivial breach or a breach of trust or fiduciary duty of the kind that would be excusable under provisions such as s 75 of the Trustees Act and s 1318 of the Corporations Act will not be sufficient to show 'dishonest and fraudulent' conduct on the part of the trustee or fiduciary for the purposes of the second limb but that conduct by a trustee or fiduciary that involves a breach of duty more serious than that will be sufficient to constitute 'dishonest and fraudulent' conduct. The court in Farah cannot I think be understood as requiring behaviour on the part of the trustee or fiduciary so egregious as to be described as 'morally reprehensible', even if not criminally dishonest."

His Honour added at [2124] that the explanation at [186] in Farah was not inconsistent with this explanation. His Honour then acknowledged at [2125] the relatively low threshold the formulation he favoured involved:

"If Farah establishes, as I think it does, that conduct by the trustee or fiduciary not involving moral reprehensibility can still amount to 'dishonest and fraudulent' conduct, that sets the bar pretty low, so far as this particular element of a cause of action based on the second limb of Barnes v Addy is concerned. But that is consistent with the court's refusal to increase the burden on a plaintiff firstly, by rejecting Royal Brunei which required the plaintiff to show that the accessory was itself guilty of dishonesty and secondly, by affirming that knowledge by the plaintiff of the misconduct of the trustee or fiduciary less than actual knowledge will suffice for a second limb Barnes v Addy claim, so long as it comes within any of categories (ii) - (iv) of Baden knowledge. (In [170], where the court said of a claim that persons were liable as knowing participants in a dishonest and fraudulent design that it was: 'an allegation the seriousness of which means that it ought to have been pleaded and particularised, and the assessment required by Briginshaw v Briginshaw kept in mind', the court was focusing on the accessories, not the trustee or fiduciary who need not be parties to the action.)"

Accordingly, at [2126] his Honour identified error in the primary judge concluding the consciousness of wronging, and a "degree of opprobrium raising it above the level of simple breach" was necessary.

(d) The reasoning in Bell at [2104]-[2126] should not be followed

I respectfully disagree with the reasoning and conclusion of Drummond AJA in Bell.

Optus submitted that, as a careful and detailed treatment reflecting the views of an intermediate appellate court, Bell "should be followed unless the Court is convinced that it is clearly wrong (Farah at [135])". The High Court had there said that:

"Intermediate appellate courts and trial judges in Australia should not depart from decisions in intermediate appellate courts in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless they are convinced that the interpretation is plainly wrong. Since there is a common law of Australia rather than of each Australian jurisdiction, the same principle applies in relation to non-statutory law": at [135].

There are at least two complexities with that passage. What does it mean to be "convinced" that an interpretation is "plainly wrong"? And to what decisions does it apply?

In relation to the first, I do not wish here to add to the debate on how to determine whether a court is "convinced" that an interpretation is "plainly wrong": see Gett v Tabet [2009] NSWCA 76; 254 ALR 504 at [274]-[295] and R v XY [2013] NSWCCA 121; 84 NSWLR 363 at [23]-[40] and the uncertain state of current authority on this point to which Basten JA has there referred. The uncertainty has also been noted in Director of Public Prosecutions v Patrick Stevedores Holdings Pty Ltd [2012] VSCA 300; 296 ALR 156 at [113].

I am conscious that it has been said that this paragraph in Farah did not "expand" the principle formulated in Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492 by reference to national legislation, but merely restated the earlier approach to precedent: CAL No 14 Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; 239 CLR 390 at [50]. Accepting as much, there are undoubted and obvious differences between the two processes. Extracting a legal rule from the reasons of a court is very different from extracting a legal rule from a statutory text (this is another reason why judgments are construed differently from statutes). As HLA Hart famously said, "Unlike an authoritative text or statute book, judgments may not be couched in general terms and their use as authoritative guides to the rules depends on a somewhat shaky inference from particular decisions, and the reliability of this must fluctuate with the skill of the interpreter and the consistency of the judges": The Concept of Law (3rd ed, Oxford University Press, 2012) at 97. It is one thing to acknowledge that there is a range of potentially available legal meanings to be given to legislation, and to insist on a heightened deference to the decision of an intermediate appellate court which has selected one of those legal meanings. It is another when the question is whether a particular principle is or is not part of the common law of Australia. In the latter case, the leeways of choice turn on different and in some ways broader considerations (such as questions of coherence with the rest of the law, the extent to which the change departs from the previous position, and the extent to which such change has been presaged in earlier decisions).

Those obvious differences between giving legal meaning to a statute, as opposed to a judgment, entail that being "convinced" that one intermediate appellate court's interpretation is "plainly wrong" is a conclusion which is expressed at a relatively high level of abstraction. That is consistent with the adoption in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; 233 CLR 259 at [31] by the High Court, after - but without reference to - Farah, of a passage in the reasons of McHugh J in Marshall v Director-General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603 at [62]:

"But that does not mean that the courts of Queensland, when construing the legislation of that State, should slavishly follow judicial decisions of the courts of another jurisdiction in respect of similar or even identical legislation. The duty of courts, when construing legislation, is to give effect to the purpose of the legislation. The primary guide to understanding that purpose is the natural and ordinary meaning of the words of the legislation. Judicial decisions on similar or identical legislation in other jurisdictions are guides to, but cannot control, the meaning of legislation in the court's jurisdiction. Judicial decisions are not substitutes for the text of legislation although, by reason of the doctrine of precedent and the hierarchical nature of our court system, particular courts may be bound to apply the decision of a particular court as to the meaning of legislation."

In relation to the second complexity, contrary to Optus' submission, I do not consider that the passage in [135] of Farah applies to the reasoning in Bell. Bell did not identify a new principle of the common law of Australia. Instead, Bell concluded that when the High Court held that second limb Barnes v Addy liability required a breach which was a "dishonest and fraudulent design", the High Court also held that those words bore a different meaning from what had previously been assumed. Bell held that it was "established" by Farah that a breach of fiduciary duty which is incapable of being excused is sufficient to answer the description of "dishonest and fraudulent", and that the common law of Australia does not require the conduct of the fiduciary to be morally reprehensible.

This Court is bound by what the High Court said in Farah as to second limb Barnes v Addy liability. It is bound directly. Ultimately, it is bound by reason of s 73 of the Constitution. This Court is not bound indirectly by another court's interpretation of what the High Court said. To paraphrase the words of McHugh J in Marshall, the primary guide to understanding the law as stated by the High Court is the language of that Court's reasons, and a judicial decision as to what those reasons mean is at best a guide to, but cannot control, the meaning of that language.

Naturally, considerations of comity require regard to be had to decisions of other Australian courts, especially intermediate appellate courts, in applying and developing the common law of Australia. But either Farah has changed the meaning of "dishonest and fraudulent design" in second limb Barnes v Addy liability or it has not. The fact that a majority of the Western Australian Court of Appeal considered that the phrase has been diluted by Farah does not absolve this Court from its obligation to apply the law which binds it as stated by the High Court.

(1) Mr Curtis was an employee of Optus Administration, performing his duties for the benefit of the other plaintiffs;

(2) Mr Curtis' responsibilities included managing Optus' needs for transport and warehousing of its goods;

(3) Mr Curtis had cooperated with Mr Hasler to set up Sumo as a company offering, in particular, warehousing services;

(4) Mr Curtis had caused, directly or through employees, Sumo to become a supplier of warehousing services to Optus."

297. It may perhaps be (although I doubt it) correct to say, as Mr Rayment submitted, that Mr Hasler did not know that Mr Curtis had not obtained the informed consent of Optus to these activities. (It is certainly correct to say that Mr Hasler did not know that Mr Curtis had obtained such consent.) It may also be, as Mr Rayment submitted, that, subjectively, Mr Hasler saw nothing wrong with these activities. The simple fact is, however, that Mr Hasler knew of the elements of breach of fiduciary duty, and with that knowledge assisted in the execution of the breaches.

298. Whether or not, subjectively, Mr Hasler appreciated that what was going on was dishonest or fraudulent is immaterial. The facts which were known to Mr Hasler, regarded objectively, demonstrate breach of fiduciary duty. And the facts as to Mr Hasler's activities show that he assisted in, or facilitated, or furthered, that breach.

Mr Hasler's challenge to his Honour's conclusion seized on the qualified finding at [297], to the effect that Optus had not demonstrated that Mr Hasler had the requisite level of knowledge that Mr Curtis lacked the informed consent of Optus. It was said that Optus had not shown that Mr Hasler had had any contact with Mr Curtis' superiors and was therefore in no position to know what had passed between them and him. But if consent were shown to have been given, there was no breach, let alone a breach that would otherwise amount to a dishonest and fraudulent design. "[T]he existence of an informed consent would have gone to negate what otherwise was a breach of duty": Maguire v Makaronis (1997) 188 CLR 449 at 467.

Mr Rayment QC properly acknowledged that in a direct claim against a fiduciary, the onus lay upon the fiduciary to demonstrate, by way of defence, that there was informed consent to the fiduciary acting with a divided loyalty (to paraphrase the language in Maguire v Makaronis at 466). However, where the claim was against a third party, and it was necessary to establish a degree of knowledge on the part of the third party as to the character of the breach of fiduciary duty, then his submission was that the plaintiff had to establish knowledge of absence of consent. The submission was neatly encapsulated as follows:

"Once [the fiduciary] brings it forward, it's a complete defence. There is no breach of fiduciary duty, there's nothing fraudulent, there's nothing dishonest and the law has not, in our submission, has not moved to the stage where an onus for example moves to [the third party] to disprove such a thing. You wouldn't normally expect such a thing because he's outside the loop."

This submission must be rejected. Before explaining why, it is convenient to make two preliminary observations. First, consider a case brought by a company, against its former director for breach of fiduciary duty, and against the director's adviser or spouse for knowing assistance. Suppose the company proves conduct which amounts to profiting from an obvious conflict between duty and self-interest, of which the adviser or spouse was fully aware. If Mr Hasler's submission be accepted, it would follow that at the close of the plaintiff's case, the fiduciary would be forced to go into evidence in order to make out a defence of fully informed consent (which might be that it was oral), but the adviser or spouse would succeed in a no case submission. The oddness of that result calls into question the correctness of the submission.

Secondly, it is an advocate's flourish to say that there is "nothing fraudulent, nothing dishonest" if there be informed consent. Fully informed consent is a defence. It is a question of fact which depends on all the circumstances of the case: Maguire at 466. It is for the fiduciary to make it out. It may not be determined until the end of the trial, and may depend upon a complex assessment of the facts. For example, the fiduciary may assert, and the principal deny, that consent was ever sought or given, or that if it was given, that it was fully informed. All this sits ill with the seeming simplicity of the submission.

To return to Mr Hasler's submission that a plaintiff must establish the absence of fully informed consent in order to fix a third party with knowledge, it is helpful to unpack the position which obtains in a case such as this. Only if there is a breach of duty which answers the description "dishonest and fraudulent design" will a third party who participates but falls short of instigating be liable. Only if the third party has a sufficient level of knowledge of those facts so that he or she has, or ought to have, an understanding that there is a dishonest and fraudulent design can such a third party be made liable. In those circumstances, what is left in issue? Ex hypothesi, it is not the case that the third party may have a reasonably held belief that the fiduciary does not in fact owe fiduciary obligations which extend to the third party's participation (for example, because the third party fails to appreciate that he or she is dealing with a trustee). Ex hypothesi, it is not the case that the third party has a reasonably held belief that there is no conflict or other misuse of the fiduciary's position.

Where a third party has the requisite knowledge of the facts which, absent fully informed consent, would amount to a dishonest and fraudulent breach of fiduciary duty, then most likely the only question is, has there been fully informed consent? Mr Hasler submitted, "It can't be the case that the third party gets an onus of proving something to which he may not be privy". But that description misstates the position.

One possibility is that a third party like Mr Hasler may be in a position which resembles that of the third party Mr Clowes in Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373. Mr Clowes had been told that Walton was not interested in developing two of the properties in question, and knew independently two matters corroborative of that statement: his own inquiries had confirmed that (a) the Walton group's financial situation was consistent with what the fiduciary Mr Grey had told him, and (b) Mr Grey had previously, in his own name, engaged in property development: see at 400-401. In those circumstances, he was not liable to account as a constructive trustee.

However, where the third party knows the essential facts constituting what is prima facie a dishonest breach of duty, in which he or she is participating, then without more the third party will be liable on conventional principles. It will be seen that the formulation of the categories of knowledge in Baden reflects as much. "Wilfully shutting one's eyes to the obvious" and "wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make" includes studiously avoiding ascertaining whether consent has been given which is fully informed.

Let it be assumed that a third party knows of the essential facts which, absent fully informed consent, amount to a breach of fiduciary duty which is a dishonest and fraudulent design. If that third party continues to participate in what prima facie amounts to a dishonest and fraudulent breach of fiduciary duty without inquiring whether there is fully informed consent, then the third party is liable. It is not necessary for the plaintiff to take the further step of proving knowledge of the absence of fully informed consent. Once in possession of knowledge of what would otherwise amount to a dishonest breach of duty, an honest and reasonable person in the position of the third party would make inquiries. If there is no other evidence as to the third party's state of mind, the third party will have the requisite knowledge to be rendered liable to account as a constructive trustee.

It follows that it is sufficient to find, as the primary judge found (taking the case most favourably to Mr Hasler), knowledge of the essential facts that demonstrated breach. That is sufficient because, without more, Mr Hasler is to be taken to have failed to ascertain whether there was informed consent from Optus in circumstances where an honest and reasonable man in the position of Mr Hasler would have done so.

It was also put, but only briefly, that even if Mr Hasler was shown to have had the requisite knowledge, his involvement did not amount to sufficient assistance or participation so as to make him liable. The submission, echoing Farah at [180], was that Mr Hasler had not participated "in a significant way" in Mr Curtis' breach. The short answer to this submission is the unchallenged factual findings made by the primary judge at [296] which are reproduced above. Mr Hasler was shown to have been directly involved in the essential elements of Mr Curtis' breach.

Fourth issue - causation and quantification of loss

On the questions of causation and quantification of loss, Optus advanced a simple case. It declined to prove what its actual costs of alternative warehousing of EOL components would have been. Instead, it simply said that it would not have paid Almad 20% commission for sourcing warehousing services from an Optus employee who was acting breach of his duty. In substance, the submission was that a proxy for Optus' loss was the 20% commission, because the prices charged by Sumo were a good measure of the cost which Optus would otherwise have incurred had there been no breach.

The primary judge accepted Optus' submission and found accordingly: at [258]-[261]. His Honour said that it would be inconceivable that Optus would have consented to Mr Curtis continuing in business as a supplier to Optus, especially having regard to the covert nature of much of the transactions. Understandably, no challenge is made to that finding.

His Honour then framed the issue as follows:

"The question is not, as Mr Rayment appeared to suggest, whether generally Optus obtained some benefit from Almad's services. It is whether, but for Mr Curtis' breaches of fiduciary duty, Optus would have stored its EOL stock in the way that was done (with Sumo, and with Almad charging a 20% markup) or whether it would have proceeded with the proposal to lease a warehouse of its own.

As I have said, the answer is clear: Optus would have chosen the latter course."

The essential challenge to this reasoning advanced on appeal was that on no view would Optus have leased its own warehouse. It was submitted that Optus did not adduce evidence of any cheaper option than that provided through Almad, therefore it had failed to establish any loss.

I would reject this ground. In any case such as this where there is a sustained breach of fiduciary duty, the counterfactual inquiry as to what would have happened will involve a measure of imprecision, but difficulties in estimating a plaintiff's loss are familiar and do not stand in the way of a judgment. Mere difficulties in estimating a loss have never prevented an award of damages at common law: cf Fink v Fink (1946) 74 CLR 127 at 143; there is no reason for equity to be any more strict, and familiar authorities hold that equity is less strict: Re Dawson (deceased); Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWR 211.

In the present case, Optus elicited this evidence from Mr Curtis in cross-examination:

"Q. [Optus] would have saved the 20 percent mark up in respect of warehousing, is that right?

A. If you had dumped Almad you would have had a lower service and saved the 20 percent mark up, yes.

Q. Well, Sumo bills Optus directly, Optus pays Sumo directly, no 20 percent mark up; simple as that, correct?

A. That's the way you see it, yes.

Q. And that step saves Optus $2 million-odd?

A. Over the period of time, yes."

Mr Davey was cross-examined to similar effect:

"Q. At any stage Mr Curtis could have said 'I won't involve Almad any more', he [could] have done that in July 2005, correct, wearing his Optus hat?"

A. He could have, yes.

Q. He [could] have said to Sumo look, Sumo, you can just render your invoices direct to Optus and I will pay them wearing my Optus had, he could have done that?

A. I assume he could have, yes.

Q. You understood that at the time?

A. Yes.

Q. If he had done that he would have immediately saved the 20 per cent mark-up, correct?

A. Yes."

The submission that there was no evidence that Optus would have itself leased a warehouse ignores the fact that its own employee Mr Curtis had, through Sumo, leased and operated a warehouse and provided services to Optus through Almad. The conduct which in fact occurred demonstrates that it was possible, had there been no breach, for Optus to itself source warehousing services without paying the Almad mark-up. Moreover, there was evidence that Optus had itself investigated locations for an EOL warehouse in 2005 and 2006, and the unchallenged finding that Mr Curtis brought this to an end, claiming a lack of capital, but actually so as to ensure that Sumo could continue to provide warehousing. And there was unchallenged evidence from Mr Curtis' superior (Mr Wilkie) to the effect that in fact Optus would not have been prevented from establishing its own warehouse through a lack of capital ("neither fit out costs nor lack of capital would have prevented Optus from leasing an appropriate warehouse to store the EOL and cable cutting facility").

Accepting that Optus bore the onus of showing what would have happened if the breach of fiduciary duty had not occurred, and that "there is no equitable by-pass of the need to establish causation" (the authorities may be found in Willett v Thomas [2012] NSWCA 97 at [136]) the evidence amply supported the findings of the primary judge.

There is another way of considering the position. The payments which Mr Curtis caused Optus to make were made in breach of duty, but Optus did obtain a benefit of having its equipment stored. Mr Curtis' liability may be "measured by the loss or depreciation which his act or omission as caused to the trust estate": Elder's Trustee and Executor Co Ltd v Higgins (1963) 113 CLR 426 at 453. A measure of Optus' loss, which is if anything generous to Mr Curtis, is the Almad mark-up. Sumo's actual prices for storing Optus equipment are a good proxy for the prices which Optus would have paid had it found an alternative supplier (for Sumo's actual costs, as well as a healthy profit, were reflected in the price it charged Almad). (I would add - although this was not argued - that this would appear to accord with the position under the traditional form of account, because the findings would warrant a surcharge for wilful default for the Almad mark-up following the misapplication of Optus funds, whose effect would be an order that Mr Curtis be liable for the amount ordered by the primary judge: see S Elliott and C Mitchell, "Remedies for Dishonest Assistance" (2004) 67 Modern Law Review 16 at 25-31.)

Either way, no error is shown in the approach of the primary judge.

It follows that it is not to the point that Optus failed to show that Almad's price (including its mark-up) were above market. Mr Curtis caused Optus to pay a mark-up to Almad to cause Optus to receive warehousing which Mr Curtis could have supplied to Optus directly. That is sufficient to sustain the calculation of equitable compensation by reference to that mark-up.

Fifth issue - Optus' appeal

By its appeal, Optus sought to review the factual finding at [215] as to when the Optus pallets were moved from Campbelltown to Lidcombe. As noted at the outset of these reasons, Optus accepted that only if that finding were set aside could any aspect of Optus' appeal succeed.

Between [147]-[214], over some 18 pages of reasons, the primary judge recorded and made findings about substantially the whole of the contemporaneous documentary evidence and testimonial evidence on this point. Although he did not deal with every piece of contemporaneous documentary evidence, the gravamen of Optus' complaint was that in light of the cogency of the documentary evidence, the absence of obvious witnesses (such as Mrs Curtis and Mrs Hasler) and the vagaries of human recollection eight years later, there was reviewable error in failing to find in accordance with the documents. Optus candidly recognised that his Honour's finding was, expressly, based upon opinions concerning the credibility of witnesses, especially that of Mr Tull and Mr Trent Hasler, whom he regarded as reliable and having significant probative weight. In particular, Mr Tull (a truck-driver) was found to be independent and claimed to have an actual recollection of transporting Optus products from Campbelltown to Lidcombe over a number of months, commencing in winter.

The careful and extensive nature of the reasoning process of the primary judge in this respect warrants recording, for this was not merely a case where the judge states that he or she prefers the testimony of one witness over another, in part by reason of demeanour. To the contrary, there was an engagement with the force of Optus' case, including a discounting of the testimonial evidence of most of the defendants' witnesses and an appreciation of the force of the contemporaneous documents. The judgment is the opposite of what is on occasion seen, when findings are made without "a consideration of the real strength of the body of evidence [the losing party] presented": State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In liq) [1999] HCA 3; 73 ALJR 306 at 321; cf Bunnings Group Ltd v Borg [2014] NSWCA 240 at [36].

Having summarised the evidence of Mr Tull and Mr Trent Hasler, the primary judge said:

"But the striking feature of the evidence is that, although Mr Trent Hasler and Mr Tull in particular could not swear to precise months, each was insistent, and unshaken, that the move took place over a number of months.

I regard the evidence of Mr Tull as being of particular significance. He is completely independent. He impressed me as someone who sought to give honest and accurate evidence. And there is a particular matter that he recollects: that the covering, or "curtains", of his truck (which he called a "tautliner") were frozen when he arrived at the Campbelltown warehouse early in the morning.

In 2005, Mr Tull lived at Ingleburn, which is not far from Campbelltown and, on his evidence, enjoys a similar climate. Mr Tull said that the material that comprises the curtains of his tautliner absorbs moisture and that, when the temperature drops down towards freezing, the moisture freezes and makes the curtains very hard to manipulate. That is a striking and credible aspect of Mr Tull's evidence. It adds substantial probative force to his evidence that, give or take a month, he started to move pallets from Campbelltown to Lidcombe in about July or August 2005. It was not put to him that the phenomenon was consistent with the works having been done in November and December 2005."

Optus' submissions on this ground were measured, commensurate with the way in which the primary judge had dealt with the evidence:

"I suppose our short and very simple point on all this is this. One has an inconsistency between the contemporaneous record and some affidavit evidence, the recollections of witnesses after eight years. His Honour grappled with this and his Honour said on their most plausible reading the contemporaneous documents suggest that the move was at the end of the year, but he says I've got this affidavit evidence and at the end of the day his Honour went with the affidavit evidence. Our submission is in a situation like this, human memory being what it is, your Honours should follow Fox v Percy and it should accept the contemporaneous objective written record together with the objective logic of events over human memory. That would mean a finding not of dishonesty but perhaps that people have over the years become convinced in their own mind of events that they are conflating with other events."

This is a case where the facts established by incontestable evidence certainly fall short of being "incontrovertible". Fox v Percy admits of "some, quite rare, cases" where an appellate court will intervene if it concludes that the decision at trial is "glaringly improbable" or "contrary to compelling inferences": Fox v Percy [2003] HCA 22; 214 CLR 118 at [29].

This Court did not see any of the witnesses give evidence. It did not see their reaction to the cross-examination on this issue, some of whose evidence was described by the primary judge as "unshaken". It did not see Mr Hasler's cross-examination on the (very limited) contemporaneous documents which were supportive of a move of pallets from July. Considerable deference must be given to the primary judge in these respects.

Further, in terms of what is "glaringly improbable" or "contrary to compelling inferences", landlords have been known to let prospective tenants move chattels into warehouses prior to the commencement of a lease, especially if the premises are otherwise unused; it is an understandable way of cementing the hoped-for relationship of lessor and lessee.

There is also a way in which the respondent's testimony hangs together and is corroborated by some of the contemporaneous documents. Mr Hasler's handwritten notes record under the heading "Move pallets to Almad" 44 pallets being moved on 7 July and 8 July, thereafter 36, 26 and 30 on 11, 13 and 15 July and 44 on 12 July and 56 on 14 July. The notes have the appearance of being contemporaneous records of pallet movements. Mr Tull said that "my truck is able to transport 22 pallets". That evidence, particularly the entries for 7, 8 and 12 July, supported his Honour's finding on this issue.

That said, the weight of the documentary evidence, as best as can be discerned from the materials available on appeal, supports the conclusion for which Optus contends: that the relocation did not begin until November - shortly before the lease was executed, the security bond was put in place, and at a time when (by his emails of 14 and 16 November) Sumo was telling third parties of the "new premises". The directors of Sumo prepared a minute of a meeting which stated that the decision to relocate was taken in October 2005, and Optus placed particular reliance on this, and the failure to call its author (Mrs Curtis).

But the primary judge enjoyed substantial advantages this Court does not, and his reasons disclose a careful evaluative weighing of the competing testimonial and documentary evidence. The primary judge was acutely conscious of the fact that the weight of the documentary evidence supported Optus, and the fact that some of the witnesses called were not to be believed, and some (such as Mrs Curtis and Mrs Hasler) were not called. His Honour balanced his assessment of the countervailing testimonial evidence against all those matters.

This is an appeal where the deference to be accorded to trial judge's findings of primary fact matters. The question is whether Optus has shown appellable error in the fact-finding process adopted by the primary judge. Fox v Percy speaks of findings which are "glaringly improbable" or "contrary to compelling inferences". As this Court said in Commonwealth Financial Planning Ltd v Couper [2013] NSWCA 444 at [67]:

"Those terms are convenient descriptive labels or guidelines, but in truth no definitive test is possible to specify those (rare) occasions when appellate review of a credit-based finding of fact is warranted: Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277 at [15]. All that can be done is to look at all of the evidence, testimonial and documentary, while at the same time being conscious of the advantages of the primary judge, including the necessarily incomplete character of his or her reasons: Biogen Inc v Medeva plc [1996] UKHL 18; [1997] RPC 1 at 45.

Allowing for the deference to which his Honour's careful reasons coupled with the undoubted advantages at trial warrant, I am unpersuaded that Optus has discharged the heavy burden of establishing that his Honour's findings are "glaringly improbable" or "contrary to compelling inferences" such as to entitled this Court to interfere with his findings.

Finally, it also follows from the foregoing that there is no basis to interfere with the qualified criticism as to a particular a matter of credit given by his Honour to Mr Hasler. It was based on his Honour's perception of Mr Hasler's reaction to being cross-examined on a particular email. It was said that this was an isolated instance, and was not the sort of testimony that warranted an adverse finding. Once again, I disagree; those submissions serve to reflect the very real advantage enjoyed by the primary judge and the fact that his Honour's reasons inevitably do not fully disclose the assessment of the evidence: Biogen Inc v Medeva plc [1996] UKHL 18; [1997] RPC 1 at 45. It is not necessary to take this ground any further, for (very properly) Mr Hasler acknowledged that in any event, the adverse assessment in this respect did not in any significant way contribute to the result of the trial.

Orders

For those reasons, I propose that each of the three appeals and the two cross-appeals be dismissed.

Rather than making orders which will create highly arid work and perhaps lead to further disputation as to the costs attributable to each proceeding in this Court, an appropriate outcome reflecting the substantial failure of each appellant in respect of the issues each chose to advance is that there be no order as to costs.

**********

Decision last updated: 15 August 2014

Medium Neutral Citation:	Hasler v Singtel Optus Pty Ltd; Curtis v Singtel Optus Pty Ltd; Singtel Optus Pty Ltd v Almad Pty Ltd [2014] NSWCA 266
Hearing dates:	2-3 June 2014
Decision date:	15 August 2014
Before:	Barrett JA at [1]; Gleeson JA at [6]; Leeming JA at [13]
Decision:	In 2013/333672: Appeal dismissed and cross-appeal dismissed. In 2013/342608: Appeal dismissed and cross-appeal dismissed. In 2013/343099: Appeal dismissed. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	APPEAL - challenge to findings of fact - deference to trial judge EQUITY - fiduciary duty - employee in position of conflict - accessory liability for knowing assistance in dishonest and fraudulent design - meaning of "dishonest and fraudulent design" - whether necessary to show knowledge of absence of informed consent - measure of equitable compensation FRAUD - pleadings and course of trial - whether finding of dishonesty available PRECEDENTS - departure from decision of another intermediate appellate court - where not necessary to do so in order to resolve appeal - where issue was important, causing inconsistent formulations of principle - precedential status of a decision which did not itself develop the common law but merely explained decision of High Court - comity
Legislation Cited:	Companies Act 1907 (UK), s 32 Companies Act 1936 (NSW), s 361 Companies Act 1961 (NSW), s 365 Companies (New South Wales) Code, ss 229(2), 535 Corporations Act 2001 (Cth), s 1318 Evidence Act 1995 (NSW), s 140 Judicial Trustees Act 1896 (UK), s 3 Judiciary Act 1903 (Cth), s 35A Trade Practices Act 1974 (Cth), s 52 Trustee Act 1925 (NSW), s 85 Trustee Act Amendment Act 1902 (NSW), s 9 Trustees Act 1962 (WA), s 75
Cases Cited:	Alexander v Burne [2013] NSWSC 1953 Alleyne v Darcy (1854) 4 Ir Ch Rep 199 Australian Securities and Investments Commission v Vines [2005] NSWSC 1349; 65 NSWLR 281 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd [2006] 1 All ER 333 Barnes v Addy (1874) LR 9 Ch App 244 Beck v Henley [2014] NSWCA 201 Belmont Finance Corporation Ltd v Williams Furniture Ltd [1979] Ch 250 BigTinCan Pty Ltd v Ramsay [2013] NSWSC 1248 Biogen Inc v Medeva plc [1996] UKHL 18; [1997] RPC 1 Bodenham v Hoskyns (1852) 21 LJ 864; 42 ER 1125 Briginshaw v Briginshaw (1938) 60 CLR 336 Bunnings Group Ltd v Borg [2014] NSWCA 240 CAL No 14 Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; 239 CLR 390 Commonwealth Financial Planning Ltd v Couper [2013] NSWCA 444 Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 Craigcare Group Pty Ltd v Superkite Pty Ltd [2014] NSWSC 326 Dawson Investments Pty Ltd v Crystal Finance Pty Ltd [No 3] [2013] WASC 183 Derry v Peek (1889) 14 App Cas 337 Director of Public Prosecutions v Patrick Stevedores Holdings Pty Ltd [2012] VSCA 300; 296 ALR 156 Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366 Eaves v Hickson (1861) 30 Beav 136 Edwards v Attorney General [2004] NSWCA 272; 60 NSWLR 667 Elder's Trustee and Executor Co Ltd v Higgins (1963) 113 CLR 426 Esso Australia Resources v Commissioner of Taxation [1999] HCA 67; 201 CLR 49 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45 Fink v Fink (1946) 74 CLR 127 Fox v Percy [2003] HCA 22; 214 CLR 118 Gerace v Auzhair Supplies Pty Ltd [2014] NSWCA 181 Gett v Tabet [2009] NSWCA 76; 254 ALR 504 Gibbs v Mercantile Mutual Insurance (Australia) Ltd [2003] HCA 39; 214 CLR 604 Giumelli v Giumelli [1999] HCA 10; 196 CLR 101 Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 In re Grindey; Clews v Grindey [1898] 2 Ch 593 King Network Group Pty Ltd v Club of the Clubs Pty Ltd [2008] NSWCA 344; 69 ACSR 172 Lawson v Mitchell [1975] VR 579 Maguire v Makaronis (1997) 188 CLR 449 Marshall v Director-General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603 Michael Wilson & Partners Ltd v Nicholls [2011] HCA 48; 244 CLR 427 Midgley v Midgley [1893] 3 Ch 282 National Trustees Company of Australasia v General Finance Company of Australasia [1905] AC 373 Nicholson v Morgan [No 3] [2013] WASC 110 Nocton v Lord Ashburton [1914] AC 932 Novoship (UK) Ltd v Nikitin [2014] EWCA Civ 908 Paragon Finance plc v DB Thakerar & Co [1999] 1 All ER 400 Parkview Qld Pty Ltd v Commonwealth Bank of Australia [2013] NSWCA 422 R v XY [2013] NSWCCA 121; 84 NSWLR 363 Ramshire v Bolton (1869) 8 LR Eq 294 Re Dawson (deceased); Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWR 211 RJE v Secretary to the Department of Justice [2008] VSCA 265; 21 VR 526 Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 Saunders v Vautier (1841) EWHC Ch J82 Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1 WLR 1555 Slim v Croucher (1860) 1 De G F & J 518; 45 ER 462 State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In liq) [1999] HCA 3; 73 ALJR 306 Sydney Harbour Casino Pty Ltd v Vignoli [1999] NSWCA 273 Twinsectra Ltd v Yardley [2002] 2 AC 164 Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; 233 CLR 259 Westpac Banking Corporation v Bell Group Ltd (No 3) [2012] WASCA 157; 44 WAR 1 Willett v Thomas [2012] NSWCA 97 Williams v Central Bank of Nigeria [2014] UKSC 10; [2014] 2 All ER 489 Woodland v Swimming Teachers Association [2013] UKSC 66; [2014] AC 537 Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277 Zhu v Treasurer of NSW [2004] HCA 56; 218 CLR 530
Texts Cited:	A Black, "Directors' statutory and general law accessory liability for corporate wrongdoing" (2013) 31 C&SLJ 511 J Edelman, "Nocton v Lord Ashburton" in C Mitchell and P Mitchell (eds), Landmark Cases in Equity (Hart Publishing, 2012) S Elliott and C Mitchell, "Remedies for Dishonest Assistance" (2004) 67 Modern Law Review 16 A M Gleeson, "Judicial Legitimacy" (2000) 20 Aust Bar Rev 4 W Gummow, "Knowing assistance" (2013) 87 ALJ 3 H Hanbury, Modern Equity: The Principles of Equity, (8th ed, 1962, Stevens) C Harpum, "The Stranger as Constructive Trustee: Part 1" (1986) 102 LQR 114 HLA Hart, The Concept of Law (3rd ed, 2012, Oxford University Press) P Ridge, "Equitable accessorial liability: Moving beyond Barnes v Addy" (2014) 8 Journal of Equity 28 R Walker, "Dishonesty and Unconscionable Conduct in Commercial Life - Some Reflections on Accessory Liability and Knowing Receipt" (2005) 27 Sydney Law Review 187
Category:	Principal judgment
Parties:	In 2013/333672: Craig Hasler (appellant and cross-respondent) Singtel Optus Pty Ltd (respondent and cross-appellant) In 2013/342608: Leon Curtis (appellant and cross-respondent) Singtel Optus Pty Ltd (respondent and cross-appellant) In 2013/343099: Singtel Optus Pty Ltd (first appellant) Optus Networks Pty Ltd (second appellant) Optus Administration Pty Ltd (third appellant) Almad Pty Ltd (first respondent) Sumo Distribution & Storage Pty Ltd (in liq) (second respondent) Leon Curtis (third respondent) Craig Hasler (fourth respondent) PJC333 Pty Ltd (fifth respondent)
Representation:	Counsel: B W Rayment QC with I King (Counsel for Craig Hasler and Almad Pty Ltd) J T Johnson with I King (Counsel for Leon Curtis) J Stoljar SC with D Mackay (Counsel for Singtel Optus Pty Ltd, Optus Networks Pty Ltd and Optus Administration Pty Ltd) Solicitors: MCW Lawyers (Solicitor for Leon Curtis, Craig Hasler and Almad Pty Ltd) Minter Ellison (Solicitor for Singtel Optus Pty Ltd, Optus Networks Pty Ltd and Optus Administration Pty Ltd)
File Number(s):	2013/333672; 2013/342608; 2013/343099
Decision under appeal	Jurisdiction: 9111 Citation: Singtel Optus v Almad [2013] NSWSC 1427 Date of Decision: 2013-09-30 00:00:00 Before: McDougall J File Number(s): SC 2011/139541