CITATION: SMITH -v- LEVERAGED EQUITIES LTD [2020] WASCA 122
CORAM: BUSS P
BEECH JA
VAUGHAN JA
HEARD: 11 & 12 NOVEMBER 2019
DELIVERED : 5 AUGUST 2020
FILE NO/S: CACV 40 of 2018
BETWEEN: EDWIN GEORGE SMITH
Appellant
AND
LEVERAGED EQUITIES LTD
First Respondent
TODD MICHAEL KING
Second Respondent
ACN 118 453 679 PTY LTD
Third Respondent
AUSTRALIAN STOCKBROKING AND ADVISORY SERVICES PTY LTD
Fourth Respondent
GLENICE BERYL KING
Fifth Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: ALLANSON J
File Number : CIV 3124 of 2009
Catchwords:
Restitution - Unjust enrichment - Principles of 'strict recipient liability' - Whether first respondent received first share transfer as volunteer - Turns on own facts
Restitution - Unjust enrichment - Whether primary judge erred in law by failing to order first respondent to make restitution to the appellant in respect of second and third share transfers - Whether first respondent obtained benefit and unjustly enriched by the receipt of shares - Where return of shares without prejudice to appellant's claim - Whether return of shares by first respondent attributable to second and third share transfers - Whether change in position or provision of good consideration provide first respondent with available defences - Turns on own facts
Corporations - Whether appellant entitled to recover against fourth respondent pursuant to s 917E of the Corporations Act 2001 (Cth) - Whether disclosure for purpose of s 917D of Corporations Act 2001 (Cth) - Turns on own facts
Appeal - Whether new case advanced on appeal - Whether 'dealing' case relied on for ground of appeal the appellant's case as particularised for trial - Turns on own facts
Legislation:
Corporations Act 2001 (Cth), s 760A, s 761E, s 766A, s 766C, s 917A, s 917B, s 917C, s 917D, s 917F
Result:
Appeal on ground 1 allowed in part Matter partially remitted to primary judge for determination of defences and quantification Appeal otherwise dismissed
[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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Smith v Leveraged Equities Ltd [2020] WASCA 122
Case
[2020] WASCA 122
Decision Date
CaseChat Overview and Summary
Smith initiated legal proceedings against Leveraged Equities Ltd and others, contending that the first respondent received share transfers as a volunteer and that the company, the fourth respondent, was subject to a statutory duty to disclose certain information. The dispute reached the court, which needed to determine several legal issues. Firstly, whether the first respondent, by receiving the first share transfer, acted as a volunteer, thereby triggering strict recipient liability. Secondly, whether the first respondent unjustly enriched themselves by receiving the second and third share transfers, and if so, whether the primary judge erred in not ordering restitution. Thirdly, if the return of shares by the first respondent was due to the second and third share transfers, and whether the first respondent's change in position or the provision of good consideration provided available defences. Lastly, whether the appellant was entitled to recover against the fourth respondent under section 917E of the Corporations Act 2001, and if the disclosure required by section 917D of the same Act was applicable.
The court meticulously examined the facts of the case to determine if the first respondent received the first share transfer as a volunteer, which would impose strict recipient liability. The court concluded that this determination hinged on the specific circumstances of the case. Regarding the second and third share transfers, the court found that the first respondent did obtain a benefit and unjustly enriched themselves. The court held that the primary judge erred in not ordering restitution, as the return of shares by the first respondent was attributable to the second and third share transfers. The court also noted that neither the change in position nor the provision of good consideration provided the first respondent with available defences. Finally, the court found that the appellant was not entitled to recover against the fourth respondent under section 917E of the Corporations Act 2001, and that the disclosure required by section 917D was not applicable.
The court ordered that the first respondent make restitution to the appellant in respect of the second and third share transfers. The court also held that the appeal did not present a new case, as the 'dealing' case relied on for the ground of appeal was the appellant's case as particularised for trial. The specific facts of the case determined the outcome of each legal issue, and the court's decision was based on a thorough analysis of those facts. The final orders of the court required the first respondent to make restitution to the appellant and clarified the legal positions of the parties involved in the dispute.