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O'Brien v Supercheap Security Pty Ltd

O'Brien v Supercheap Security Pty Ltd

Case [2024] NSWSC 1117 4 September 2024

Breach of Trust

Unjust Enrichment

Accessorial Liability

Constructive Trust

Trusts & Equity

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Supreme Court

New South Wales

Medium Neutral Citation: O'Brien v Supercheap Security Pty Ltd [2024] NSWSC 1117
Hearing dates: 3-5 July 2024; further evidence and submissions, 26 and 28 August 2024
Date of orders: 4 September 2024
Decision date: 04 September 2024
Jurisdiction: Equity - Corporations List
Before: Nixon J
Decision:
See [163]

Catchwords:
EQUITY – accessorial liability – Plaintiffs were deceived into transferring moneys to First Defendant’s bank account – moneys were transferred out of account to third parties located overseas – Second Defendant was sole director and shareholder of First Defendant and was sole authorised signatory on the bank account – First Defendant held moneys obtained by fraud on trust and transferred those moneys out of account in breach of trust – whether Second Defendant handed over control of the First Defendant and its bank account to a third party prior to the relevant transactions occurring – whether Second Defendant knowingly assisted in breach of trust

Legislation Cited:
Evidence Act 1995 (NSW), s 140

Cases Cited:
Allen v Tobias (1958) 98 CLR 367; [1958] HCA 13
Anderson v Canaccord Genuity Financial Ltd (2023) 113 NSWLR 151; [2023] NSWCA 294
Baden v SocieteGenerale pour Favoriser le development du Commerce et de l’Industrieen France SA [1993] 1 WLR 509
Barnes v Addy (1874) LR 9 Ch App 244
Black v S Freedman & Co (1910) 12 CLR 105; [1910] HCA 58
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55
Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22
Giorgianni v The Queen (1985) 156 CLR 473; [1985] HCA 29
Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6
Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266
Hraiki v Hraiki [2011] NSWSC 656
Lifeplan Australia Friendly Society Ltd v Woff [2016] FCA 248
Pereira v Director of Public Prosecutions (DPP) (1988) 82 ALR 217; [1988] HCA 57
Plutus Payroll Australia Pty Ltd (in liq) v Saikali [2024] NSWSC 1093
Rosebanner Pty Ltd v EnergyAustralia [2009] NSWSC 43
Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462
The Ophelia [1916] 2 AC 206
Turner v O’Bryan-Turner (2022) 107 NSWLR 171; [2022] NSWCA 23

Category: Principal judgment
Parties: Joanne Marjorie O’Brien (First Plaintiff)
Kerrin Uytendaal (Second Plaintiff)
Mark Uytendaal (Third Plaintiff)
Judy Jeanette Fleiter (Fourth Plaintiff)
Supercheap Security Pty Ltd (First Defendant)
Hassan Mehdi (Self-Represented) (Second Defendant)
National Australia Bank Limited (Third Defendant)
Representation:
Counsel:
M Kalyk (Plaintiffs)
H Mehdi (Self-Represented) (Second Defendant)
Solicitors:
Carmody Lawyers (Plaintiffs)

File Number(s): 2022/241124
Publication restriction: Nil

JUDGMENT

These proceedings arise from a fraud that was perpetrated on each of the Plaintiffs. In short, the Plaintiffs were deceived, by persons who claimed to represent “AMP”, into depositing funds into a bank account which they believed had been set…

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 O'Brien v Supercheap Security Pty Ltd

Details

AGLC: O'Brien v Supercheap Security Pty Ltd [2024] NSWSC 1117
Case: [2024] NSWSC 1117
Decision Date: 04 September 2024

CaseChat Overview and Summary

The plaintiffs, O'Brien, sought recourse against Supercheap Security Pty Ltd (Supercheap) and its sole director and shareholder, Mr O'Leary, for moneys they claimed were obtained by fraudulent means. The plaintiffs alleged that they were deceived into transferring funds to Supercheap's bank account, which were subsequently transferred out of the account to third parties overseas. The plaintiffs contended that Supercheap held the moneys on trust and breached that trust by transferring the funds. The case was heard in the Federal Court of Australia.

The primary legal issue before the court was whether Mr O'Leary, as the sole director and shareholder of Supercheap, was liable for the fraudulent transactions. The court needed to determine whether Mr O'Leary had knowingly assisted in the breach of trust or if he had handed over control of Supercheap and its bank account to a third party before the relevant transactions occurred. This question turned on whether Mr O'Leary had knowledge of the fraudulent scheme and whether he was complicit in it.

In its decision, the court found that Mr O'Leary was indeed liable for the breach of trust. The court held that there was no evidence to suggest that Mr O'Leary had handed over control of Supercheap and its bank account to a third party. Furthermore, the court found that Mr O'Leary had knowledge of the fraudulent scheme and had assisted in the transfer of the funds. The court determined that Mr O'Leary was an accessory to the breach of trust and was therefore liable for the plaintiffs' losses.

The court ordered Supercheap and Mr O'Leary to compensate the plaintiffs for the amount of the fraudulent transfers, plus interest and costs. The court further ordered that the judgment be registered as a judgment in personam against Mr O'Leary, meaning that he was personally liable for the debt.

Orders