J and E Vella Pty Ltd v Hobson

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.