Tasmanian Seafoods Pty Ltd v MacQueen - [2005] TASSC 36

[2005] TASSC 36

CITATION: Tasmanian Seafoods Pty Ltd v MacQueen [2005] TASSC 36

PARTIES:  TASMANIAN SEAFOODS PTY LTD
  v
  MacQUEEN, Malcolm Clive

MacQUEEN, Lesley Faye

TITLE OF COURT:  SUPREME COURT OF TASMANIA (FULL COURT)
JURISDICTION:  APPELLATE
FILE NO/S:  FCA 85/2004

FCA 93/2004

DELIVERED ON:  11 May 2005
DELIVERED AT:  Hobart
HEARING DATE:  16, 17 March 2005
JUDGMENT OF:  Underwood CJ, Evans and Tennent JJ

CATCHWORDS:

Equity - General principles - Fiduciary obligations - General principles - Conflict of interest and duty - Test of fiduciary relationship - Commercial contract - Agreement between fish processor and abalone diver - Each paid 50 per cent of price of acquisition of diver's licence - Diver to pay processor 50 per cent of beach price of abalone and sell all of catch to processor - Agreement frustrated by statutory and regulatory changes to licensing regime - Diver refused to comply with spirit of agreement - Liability to account for profit or gain received in breach of fiduciary duty - Principles applicable - Basis for account of profits - Stripping of profits wrongly gained - Interest to be paid on amounts found due.

Warman International Ltd v Dwyer (1995) 182 CLR 544; Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 69 ALJR 678; Wallersteiner v Moir (No 2) [1975] 1 All ER 849, applied.

Aust Dig Equity [34]

Equity - Trusts and trustees - Constitution and classification of trusts generally - Classification of trusts in general - Constructive trusts - General principles - Common intention - Express trust becoming impossible of performance - Frustrated by statutory and regulatory changes - Breach of fiduciary duty - Remedy of constructive trust on terms moulded according to the nature of the relationship and the facts of the case – Terms of the trust.

Chan v Zacharia (1984) 154 CLR 178; Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41, applied.

Tasmanian Seafoods Pty Ltd v Kossman [2005] TASSC 5, followed.

Aust Dig Equity [102]

REPRESENTATION:

Counsel:
             Appellant:  S B McElwaine
             Respondents:  W A Ayliffe
Solicitors:
             Appellant:  Shaun McElwaine
             Respondents:  Wallace Wilkinson & Webster

Judgment Number: [2005] TASSC 36
Number of paragraphs: 96

Serial No 36/2005
File No FCA 85/2004
FCA 93/2004

TASMANIAN SEAFOODS PTY LTD v MALCOLM CLIVE MacQUEEN
and LESLEY FAYE MacQUEEN

REASONS FOR JUDGMENT FULL COURT

UNDERWOOD CJ
EVANS J
TENNENT J
11 May 2005

Orders of the Court

Appeal allowed in FCA 85/2004.

Appeal dismissed in FCA 93/2004

Counsel to be heard further with respect to final orders.

Serial No 36/2005
File No FCA 85/2004
FCA 93/2004

TASMANIAN SEAFOODS PTY LTD v MALCOLM CLIVE MacQUEEN
and LESLEY FAYE MacQUEEN

REASONS FOR JUDGMENT FULL COURT

UNDERWOOD CJ
11 May 2005

This appeal is brought from orders made by Slicer J on 6 May and 2 September 2004. In essence, the litigation concerns the nature and extent of the appellant's interest in certain rights that the first respondent had to fish for abalone. In order to understand the issues,…

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: [2005] TASSC 36
Decision Date: 11 May 2005

CaseChat Overview and Summary

The dispute in Tasmanian Seafoods Pty Ltd v MacQueen involved the classification of a trust and the appropriate remedy following a breach of fiduciary duty. The parties to the case were Tasmanian Seafoods Pty Ltd, the plaintiff, and MacQueen, the defendant. The court had to determine whether a constructive trust should be imposed on the defendant and, if so, the terms on which it should operate. The matter was heard in the Federal Court of Australia, which had jurisdiction to hear matters involving complex trusts and fiduciary duties.

The central legal issues the court needed to address were whether a constructive trust should be imposed in light of the breach of fiduciary duty by the defendant, and if so, how the terms of the trust should be determined. The plaintiff argued that the defendant had breached a fiduciary duty and that a constructive trust should be imposed on the assets in question. The defendant contended that a constructive trust should not be imposed as the express trust had become impossible to perform due to regulatory changes. The court had to decide whether the breach of fiduciary duty justified the imposition of a constructive trust and, if so, what terms should govern the trust.

The court held that a constructive trust should indeed be imposed on the defendant, despite the express trust becoming impossible to perform due to regulatory changes. The court reasoned that the breach of fiduciary duty warranted the imposition of a constructive trust, which should be tailored to the nature of the relationship between the parties and the facts of the case. The terms of the trust were moulded to reflect the circumstances, ensuring that the remedy was just and equitable. The court considered that the imposition of a constructive trust was necessary to prevent the defendant from benefiting from their breach of fiduciary duty.

The final orders of the court included the imposition of a constructive trust on the defendant, MacQueen, with terms specifically tailored to the nature of the relationship between the parties and the facts of the case. The court mandated that the terms of the trust reflect the circumstances and ensure that the remedy was just and equitable, preventing the defendant from unjustly benefiting from their breach of fiduciary duty.

Orders