Kaklikos v Property Alliance Group Ltd - [2004] FMCA 303

FEDERAL MAGISTRATES COURT OF AUSTRALIA

KAKLIKOS & ANOR v PROPERTY ALLIANCE GROUP LTD & ORS

[2004] FMCA 303

TRADE PRACTICES ACT – Misleading and deceptive conduct – whether fiduciary duty – constructive trust – whether third party liable – Barnes & Addy limbs – whether solicitor liable – negligence – breach of trust – cross-claim.

Trade Practices Act 1974, s.51AB, 51AC, 52
Fair Trading Act 1999, s.8, 8A, 9

Barnes v Addy (1874) 9 Ch. App. 244
Agip (Africa) Ltd v Jackson (1990) 1 Ch 265
Consul Developments Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 66 CLR 768
Carl Zeiss Stiftung v Herbert Smith & Co (1969) 2 Ch 276
Lintrose Nominees Pty Ltd v King (1995) 1 VR 574
Quistclose Investments Ltd v Roll Razor Ltd (1970) AC 567
Barclays Bank v Weeks Legg & Dean [1999] QB 309
Attorney General for Hong Kong v Reid (1994) 1 AC 324
Agip (Africa) Ltd v Jackson (1990) 1 Ch 265
Koorootang Pty Ltd v Meldrum Jeffries P/L (1998) 3 VR 16
Neilsen v Hemptston Holdings Pty Ltd (1986) 65 ALR 302
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 66 CLR 768
McCracken & McCracken v Pippet & Groenwald (1999) VSCA 156 (Unreported 29 September 1999)

Applicants:

MICHELLE KAKLIKOS and IAN WOODS

Respondents:

PROPERTY ALLIANCE GROUP LTD (ACN 092 256 696), DARREL JOHN McLEOD, MICHELLE ANDREA RYAN and RIGBY COOKE (a firm)

Cross-claimants:

PROPERTY ALLIANCE GROUP LTD (ACN 092 256 696) and DARREL JOHN McLEOD

Cross-respondents:

MICHELLE ANDREA RYAN, DALE BOWEN and RIGBY COOKE (a firm)

File No:

MZ 378 of 2002

Delivered on:

13 May 2004

Delivered at:

Melbourne

Hearing Dates:

19, 20, 23, 24 December 2002,
28, 29, 30, 31 January 2003 and
12 February 2003

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicants:

Mr A Panna

Solicitors for the Applicants:

Pryles & Defteros

Counsel for the First and Second Respondents and Cross-claimants:

Mr I Williams

Solicitors for the First and Second Respondents and Cross-claimants:

Phillips Fox

Third Respondent, First and Second Cross-respondents:

No appearance

Counsel for the Fourth Respondent and Third Cross-Respondent:

Mr K Oliver

Solicitors for the First and Second Respondents and Cross-claimants:

Minter Ellison

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MZ 378 of 2002

MICHELLE KAKLIKOS and IAN WOODS

Applicants

and

PROPERTY ALLIANCE GROUP LTD (ACN 092 256 696), DARREL JOHN McLEOD, MICHELLE ANDREA RYAN and RIGBY COOKE (a firm)

Respondents

and

PROPERTY ALLIANCE GROUP LTD (ACN 092 256 696) and DARREL JOHN McLEOD

Cross-claimants

and

MICHELLE ANDREA RYAN, DALE BOWEN and RIGBY COOKE (a firm)

Cross-respondents

REASONS FOR JUDGMENT

Introduction

The claim in this application is for the return of the sum of $110,000 paid by Michelle Kaklikos (Kaklikos) and Ian Woods (Woods) (the applicants) by cheques given in the sums of $50,000 and $60,000…

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: [2004] FMCA 303
Decision Date: 13 May 2004

CaseChat Overview and Summary

Kaklikos and Woods sued Property Alliance, McLeod, Ryan, and Rigby Cooke seeking the return of deposit moneys paid to Ryan for the purchase of property units. Kaklikos and Woods claimed that Ryan, acting as their agent, had breached fiduciary duties by using their deposit moneys for her own purposes, and that McLeod and Property Alliance were liable for knowingly receiving trust property. The applicants also sought relief under the Trade Practices Act and Fair Trading Act. Property Alliance and McLeod filed a cross-claim against Ryan and Bowen for repudiation of a contract and damages, and against Rigby Cooke for professional negligence. Ryan did not appear. The court found Kaklikos and Woods had established a fiduciary relationship with Ryan, who had breached her duties by misapplying their deposit moneys. McLeod and Property Alliance were liable for knowingly receiving trust property under the Barnes & Addy limbs. Rigby Cooke was not liable as it had not breached its duty of care and skill. The applicants were awarded their deposit moneys, costs, and interest. The cross-claim against Ryan and Bowen was upheld, and the cross-claim against Rigby Cooke was dismissed.

Orders