Jagatramka v Wollongong Coal Ltd

The appeal concerned allegations of breaches of fiduciary duty by the appellants, who were directors of the respondent, Wollongong Coal Ltd. The dispute arose from a board resolution to purchase a property purportedly for "visiting executives" of the group. The appellants were the sole occupants of this property, and the central question was whether they were indeed "visiting executives" as contemplated by the resolution, or if they had improperly used their positions to gain a personal benefit.

The Court of Appeal was required to determine whether the primary judge erred in their application of inferential reasoning based on circumstantial evidence to make findings of fact regarding the appellants' intentions at the time of the board resolution. Specifically, the court had to consider whether the primary judge correctly applied the principle in *Jones v Dunkel* and whether the evidence, including events post-dating the resolution, reasonably supported the conclusion that the appellants had breached their fiduciary duties, particularly the duty to act in good faith in the best interests of the company and for a proper purpose, and the no-profit rule. The court also had to consider the standard of proof required, referencing the principle in *Briginshaw*.

The Court of Appeal found that it had a duty to independently weigh the conflicting evidence and draw its own inferences to determine which of the two competing hypotheses – that the appellants were acting within their directorial duties or that they had breached them – was more probable. The court concluded that it had not discharged this duty by merely accepting the primary judge's inferential reasoning. The court held that its task was to persist in weighing the evidence and drawing its own conclusions, and that the appellants' second ground of appeal was made good because the court had failed to do so.