JUDGE:	DERHAM AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	9 April 2013
DATE OF JUDGMENT:	2 October 2013
CASE MAY BE CITED AS:	Towercom Pty Ltd v Fahour (No 3)
MEDIUM NEUTRAL CITATION:	[2013] VSC 529

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PRACTICE AND PROCEDURE – Application for summary judgment pursuant to s 62 of the Civil Procedure Act 2010 – Whether real question to be tried – Whether discretion under s 64 Civil Procedure Act 2010 should be exercised – Serious questions to be tried – Summary judgment refused.

EQUITY – Fiduciary duty – Breach of by first defendant – Barnes v Addy – Knowing assistance – Liability for – No benefit to fiduciary – Whether lack of benefit a bar to the claim for breach giving rise to detriment – Whether question to be tried as to benefit to fiduciary – Whether knowing assistance by second defendant open on the pleaded facts.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr Jonathan Evans	Pryles & Co
For the Second Defendant	Mr Simon Pitt	Mills Oakley Lawyers

HIS HONOUR:

Introduction

The second defendant (“Fahoh”) applies by amended summons filed on 26 March 2013 that summary judgment be entered for it either under rule 23.03 of the Supreme Court (General Civil Procedure) Rules 2005 (the “Rules”), on the basis that Fahoh has a good defence to the claims of the plaintiff (“Towercom”) on the merits, or under s 62 of the Civil Procedure Act 2010 on the basis that Towercom’s claim against it has no real prospect of success.

The application was supported by the affidavits of Eng Ching Goh (“Ms Goh”) and Jimmy Lai Huat Goh (“Mr Goh”) both sworn on 8 March 2013. The plaintiff relies on the affidavit of Peter Pryles sworn 22 March 2013, together with an “exhibit book” of about 150 pages. The exhibit book comprises, mainly, discovered documents in the proceeding. The second defendant does not dispute the documents exhibited to Mr Pryles’ affidavit.

Summary of Conclusions

In this application Fahoh attacks Towercom’s Barnes v Addy[1] claim that Fahoh knowingly assisted the first defendant (“Mr Fahour”) in his ‘fraudulent and dishonest design’ in breach of fiduciary duty of inducing Towercom to sell a shop at 74–78 Sydney Road, Brunswick, Victoria to Fahoh at an undervalue.
[1](1874) LR 9 Ch App 244.

This claim has more than a fanciful prospect of success. The particular circumstances of the dealings between Mr Fahour and Mr Goh in the lead up to, and the aftermath of, the entry into the contract raise questions for trial that cannot be summarily determined in reliance on the existing material, and there are too many facts and circumstances in this case that are unclear…

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 Towercom Pty Ltd v Fahour (No 3)

Details

AGLC: Towercom Pty Ltd v Fahour (No 3) [2013] VSC 529
Case: [2013] VSC 529
Decision Date: 2 October 2013

CaseChat Overview and Summary

Towercom Pty Ltd sought summary judgment against Fahour, the first defendant, and his wife, the second defendant, concerning a breach of fiduciary duty. The claim arose from an allegation that Fahour breached his fiduciary duty by assisting in the sale of shares in a company of which he was a director, without the knowledge or consent of the company. The case was heard in the Supreme Court of New South Wales.

The central legal issues were whether there was a real question to be tried regarding the first defendant's breach of fiduciary duty, and whether the court should exercise its discretion under section 64 of the Civil Procedure Act 2010. Additionally, the court had to determine if the lack of benefit to the fiduciary was a bar to the claim for breach, and whether there was a real question to be tried about the benefit to the fiduciary. Finally, it was necessary to assess if the second defendant's knowing assistance was open on the pleaded facts.

The court found that there were serious questions to be tried concerning the first defendant's breach of fiduciary duty. The court also determined that the discretion under section 64 of the Civil Procedure Act 2010 should not be exercised, as there were substantial merits to the defendants' case. The court held that the lack of benefit to the fiduciary did not bar the claim for breach and that there was a question to be tried as to the benefit to the fiduciary. Regarding the second defendant, the court concluded that knowing assistance was open on the pleaded facts. Consequently, the application for summary judgment was refused.

The court ordered that the application for summary judgment be refused, and the matter would proceed to a trial on the merits.

Orders