J and E Vella Pty Ltd v Hobson - [2023] NSWCA 234

Court of Appeal

Supreme Court

New South Wales

Summary available
Amendment notes

Medium Neutral Citation: J and E Vella Pty Ltd v Hobson [2023] NSWCA 234
Hearing dates: 7-8 August 2023
Date of orders: 5 October 2023
Decision date: 05 October 2023
Before: Mitchelmore JA at [1];
Adamson JA at [19];
Stern JA at [153].
Decision:
(1) The appeal is dismissed.
(2) The appellants pay the respondents’ costs of the proceedings.

Catchwords:
EVIDENCE — appellate review of witness evidence — competing accounts of central factual issue — whether primary judge’s findings were most likely affected by impressions about the credibility and reliability of the witnesses — advantage of primary judge in seeing and hearing the witnesses give evidence — whether primary judge’s findings also informed by assessment of evidence as a whole including plausibility of the accounts of various witnesses having regard to documentary evidence — whether primary judge’s findings were glaringly improbable or contrary to compelling inferences
EQUITY — appeals — fiduciary duties — where parties were equal shareholders in freight company — where labour divided between shareholder companies — whether parties relationship gave rise to fiduciary duty — whether appellants placed trust and confidence in respondents not to act to their detriment — whether fiduciary duty breached

Legislation Cited:
Supreme Court Act 1970 (NSW), s 75A

Cases Cited:
Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWSC 199
Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654
ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24; (2021) 388 ALR 128
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
Hospital Products Ltd v United States SurgicalCorporation (1984) 156 CLR 41; [1984] HCA 64
In the matter of Beverage Freight Services Pty Ltd [2022] NSWSC 874
Lee v Lee (2019) 266 CLR 129; [2019] HCA 28
Monie v Commonwealth of Australia (2005) 63 NSWLR 729; [2005] NSWCA 25
Onassis v Vergottis [1968] 2 Lloyd’s Rep 403
Stellar Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd [2023] NSWCA 102
United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49
Vagg v McPhee (2013) 85 NSWLR 154; [2013] NSWCA 29
Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9
Watson v Foxman (1995) 49 NSWLR 315
Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277

Category: Principal judgment
Parties: J and E Vella Pty Ltd (First Appellant)
Joseph Gregory John Vella (Second Appellant)
Brian Charles Hobson (First Respondent)
Hynadam Pty Ltd (Second Respondent)
Brett Soper (Third Respondent)
Mechita Pty Ltd (Fourth Respondent)
Beverage Freight Services Pty Ltd (Fifth Respondent)
Beverage Distribution Australia Pty Ltd (Sixth Respondent)
Hynadam Nominees Pty Ltd (Seventh Respondent)
McIntyre Holdings NSW Pty Ltd (Eight Respondent)
Representation:
Counsel:
Mr G Sirtes SC and Mr D Birch
(Appellants)

Mr M Ashurst SC and Ms M Castle
(Respondents)

Solicitors:
Yates Beaggi Lawyers (Appellants)
McEvoy Legal (Respondents)

File Number(s): 2022/219092
Publication restriction: Nil.
Decision under appeal

Court or…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NSWCA 234
Decision Date: 05 October 2023

CaseChat Overview and Summary

J and E Vella Pty Ltd (appellants) appealed to the Court of Appeal of the Supreme Court of New South Wales against a decision concerning alleged breaches of fiduciary duty. The dispute arose between the parties, who were equal shareholders in a freight company, regarding the division of labour between their respective companies and whether the respondents had acted to the appellants' detriment.

The Court of Appeal was required to determine whether the primary judge’s findings of fact were affected by impressions about the credibility and reliability of the witnesses, given the competing accounts of the central factual issues. Specifically, the court considered whether the primary judge’s findings were informed by an assessment of the evidence as a whole, including the plausibility of the accounts in light of documentary evidence, and whether those findings were glaringly improbable or contrary to compelling inferences. The court also had to consider whether the relationship between the parties, as equal shareholders with a division of labour, gave rise to a fiduciary duty, and if so, whether that duty had been breached by the appellants placing trust and confidence in the respondents not to act to their detriment.

The Court of Appeal applied the principle that an appellate court should be slow to overturn findings of fact made by a primary judge who has had the advantage of seeing and hearing the witnesses. The court found that the primary judge’s findings were not merely based on impressions of credibility but were also informed by a comprehensive assessment of all the evidence, including documentary evidence and the plausibility of the competing accounts. The court concluded that the primary judge’s findings were well-supported by the evidence and were not glaringly improbable or contrary to compelling inferences. The court also found that the relationship between the parties did give rise to fiduciary duties, which had been breached.

Consequently, the appeal was dismissed, and the appellants were ordered to pay the respondents’ costs of the proceedings.

Orders

Orders of the court

(1) The appeal is dismissed.

(2) The appellants pay the respondents’ costs of the proceedings.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	J and E Vella Pty Ltd v Hobson [2023] NSWCA 234
Hearing dates:	7-8 August 2023
Date of orders:	5 October 2023
Decision date:	05 October 2023
Before:	Mitchelmore JA at [1]; Adamson JA at [19]; Stern JA at [153].
Decision:	(1) The appeal is dismissed. (2) The appellants pay the respondents’ costs of the proceedings.
Catchwords:	EVIDENCE — appellate review of witness evidence — competing accounts of central factual issue — whether primary judge’s findings were most likely affected by impressions about the credibility and reliability of the witnesses — advantage of primary judge in seeing and hearing the witnesses give evidence — whether primary judge’s findings also informed by assessment of evidence as a whole including plausibility of the accounts of various witnesses having regard to documentary evidence — whether primary judge’s findings were glaringly improbable or contrary to compelling inferences EQUITY — appeals — fiduciary duties — where parties were equal shareholders in freight company — where labour divided between shareholder companies — whether parties relationship gave rise to fiduciary duty — whether appellants placed trust and confidence in respondents not to act to their detriment — whether fiduciary duty breached
Legislation Cited:	Supreme Court Act 1970 (NSW), s 75A
Cases Cited:	Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWSC 199 Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24; (2021) 388 ALR 128 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Hospital Products Ltd v United States SurgicalCorporation (1984) 156 CLR 41; [1984] HCA 64 In the matter of Beverage Freight Services Pty Ltd [2022] NSWSC 874 Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 Monie v Commonwealth of Australia (2005) 63 NSWLR 729; [2005] NSWCA 25 Onassis v Vergottis [1968] 2 Lloyd’s Rep 403 Stellar Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd [2023] NSWCA 102 United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49 Vagg v McPhee (2013) 85 NSWLR 154; [2013] NSWCA 29 Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 Watson v Foxman (1995) 49 NSWLR 315 Xu v Jinhong Design & Constructions Pty Ltd [2011] NSWCA 277
Category:	Principal judgment
Parties:	J and E Vella Pty Ltd (First Appellant) Joseph Gregory John Vella (Second Appellant) Brian Charles Hobson (First Respondent) Hynadam Pty Ltd (Second Respondent) Brett Soper (Third Respondent) Mechita Pty Ltd (Fourth Respondent) Beverage Freight Services Pty Ltd (Fifth Respondent) Beverage Distribution Australia Pty Ltd (Sixth Respondent) Hynadam Nominees Pty Ltd (Seventh Respondent) McIntyre Holdings NSW Pty Ltd (Eight Respondent)
Representation:	Counsel: Mr G Sirtes SC and Mr D Birch (Appellants) Mr M Ashurst SC and Ms M Castle (Respondents) Solicitors: Yates Beaggi Lawyers (Appellants) McEvoy Legal (Respondents)
File Number(s):	2022/219092
Publication restriction:	Nil.
Decision under appeal	Court or…