Stambulich & Ors v Ekamper

The case of Stambulich & Ors v Ekamper was heard by the Supreme Court of New South Wales, where the dispute involved the misapplication of trust money by the respondent, Ekamper, who was found to have breached his fiduciary duty. The appellants, Stambulich and others, sought relief for the unauthorised use of trust funds, arguing that Ekamper was liable to account for the profits derived from this misapplication. The court was required to determine whether the appellants were entitled to elect between receiving interest on the misapplied funds or an account of the profit made by Ekamper. Additionally, the court considered the appropriate costs to be awarded under Rule 24A of the Supreme Court Rules 1971, and whether the relief sought could include non-monetary relief. The final issue was whether income tax becomes due and payable upon assessment or only when a notice is served on the taxpayer, as per section 204 of the Income Tax Assessment Act 1936.

The court examined the fiduciary relationship between the parties and confirmed that a breach had occurred due to the misapplication of trust funds by Ekamper. It was held that the appellants had the right to choose between claiming interest on the misapplied amount or an account of the profit Ekamper made from this breach. In assessing the costs under Rule 24A, the court acknowledged that relief need not be limited to monetary compensation and could encompass other forms of relief appropriate to the circumstances. Regarding the taxation issue, the court found that income tax only becomes due and payable upon the service of a notice on the taxpayer, as stipulated by section 204 of the Income Tax Assessment Act 1936.

The court ruled that the appellants were entitled to elect between interest and an account of the profit derived by Ekamper from the misapplication of trust funds. Costs were awarded in favour of the appellants under Rule 24A, recognising that non-monetary relief could be appropriate. The court also clarified that income tax liability does not arise until a notice is served on the taxpayer. The decision provided clarity on the rights of beneficiaries in cases of fiduciary breaches and the parameters of cost awards under the relevant rules.