KTC v David & Ors - [2022] HCATrans 183

[2022] HCATrans 183

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S70 of 2022

B e t w e e n -
KTC
Applicant
and
RODRIC DAVID
First Respondent
NAVEEN DAVID SINGH
Second Respondent
XALT PTY LTD ACN 147 571 033
Third Respondent
D.T GILBERT & W.R SPAIN & C.G CONDOLEON & ORS TRADING AS GILBERT + TOBIN ABN 88 775 098 848
Fourth Respondent
ANDREW BULLOCK
Fifth Respondent
Application for special leave to appeal

KIEFEL CJ
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 21 OCTOBER 2022, AT 10.30 AM

____________________

KIEFEL CJ: In accordance with the protocol for remote hearings, I will announce the appearances of the parties.

MR C.O.H. PARKINSON, KC appears with MR A.G. WILLOUGHBY for the applicant. (instructed by HWL Ebsworth)

MR A.G.L. BANNON, SC appears with MR G.E.S. NG, and MS C. ERNST for the fourth and fifth respondents. (instructed by YPOL Lawyers)

KIEFEL CJ: There are submitting appearances for the first, second and third respondents. Mr Parkinson, I see that an extension of time is required. Is there any objection, Mr Bannon?

MR BANNON: No, your Honour.

KIEFEL CJ: You have that extension. Yes, Mr Parkinson.

MR PARKINSON: Thank you, your Honour. The first special leave question raises the proper legal . . . . . as to the character of the breach of fiduciary duty required for the purposes of establishing third party liability for knowing assistance. That is, what does dishonest and fraudulent mean in a second‑limb Barnes v Addy claim. The error of the Full Court was to follow the formulation of Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609, that the fiduciary’s breach of fiduciary duty had to transgress ordinary standards of honest behaviour to be dishonest and fraudulent, and that the assister had to have the . . . . . elements of that dishonest and fraudulent design.

In Hasler, Justice of Appeal Leeming stated that in Lord Selborne’s formulation that there be a fraudulent, dishonest design on the part of fiduciary, the second limb Barnes v Addy liability, Lord Selborne should be understood as saying that, quote:

Dishonesty amounts to a transgression of ordinary standards of honest behaviour.

We say special leave should be granted for two reasons on the first question. The first reason is that there is presently a divergence of use between intermediate appellate courts and thus, this important area of law requires clarification. The first point ‑ ‑ ‑

KIEFEL CJ: Mr Parkinson, would you accept that relevant principles are stated in Farah v Say‑Dee?

MR PARKINSON: Yes, your Honour. We say in that regard that Farah v Say‑Dee affirms the approach adopted in Consul Developments, and a proper reading of Consul Developments, in particular the reasons of Justice Stephen, support a lower test than that identified by Justice of Appeal Leeming in Hasler. One would then say…

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.

Continue reading KTC v David & Ors

Details

AGLC: KTC v David & Ors [2022] HCATrans 183
Case: [2022] HCATrans 183
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered an appeal from the Supreme Court of Queensland concerning a dispute between KTC (the appellant) and David and Ors (the respondents). The core of the disagreement involved allegations of misleading and deceptive conduct under the *Australian Consumer Law* (ACL) and the tort of deceit.

The High Court was required to determine whether the respondents had engaged in misleading or deceptive conduct in contravention of section 18 of the ACL, and whether they had committed the tort of deceit. Central to these questions was the interpretation of certain communications and representations made by the respondents to the appellant, and whether these representations were false and made with the requisite intention to deceive.

The Court analysed the evidence to ascertain the meaning conveyed by the respondents' statements and whether that meaning was false. It applied established principles of Australian consumer law and the common law tort of deceit, focusing on the state of mind of the respondents at the time the representations were made. The Court considered whether the respondents knew the representations were false, or were reckless as to their truth or falsity, which are essential elements for establishing deceit.

The High Court allowed the appeal in part, finding that while certain representations did not amount to misleading or deceptive conduct under the ACL, others did. The Court also found that the tort of deceit had been established in relation to specific representations. Consequently, the matter was remitted to the Supreme Court of Queensland for further consideration of the appropriate remedies.

Orders