Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd (No 2) [2017] FCAFC 101

The appeal was allowed because the primary judge erred in declining to impose pro rata liability on overpaid unit holders and to recognise accessorial liability for unconscionable conduct. Judgment was given for direct recovery against solvent parties, and costs awarded on party/party and indemnity bases as offers of compromise had not been bettered by respondents' trial result.

Parties: First Appellant/cross Respondent: Colin R Price & Associates Pty Ltd; Second Appellant: Grovan Pty Ltd; First Respondent/first Cross Appellant: Four Oaks Pty Ltd; Second Respondent/seventh Cross Appellant: Noel Jones (Carnegie) Pty Ltd; Third Respondent/third Cross Appellant: Eighty-Second Agenda Pty Ltd; Fourth Respondent/fifth Cross Appellant: Noel Reynolds; Fifth Respondent/sixth Cross Appellant: Stephen Power; Sixth Respondent/fourth Cross Appellant: Geoffrey Rice; Seventh Respondent/second Cross Appellant: Twentieth Green Pty Ltd; Eighth Respondent: Clestus Weerappah
Jurisdiction: Australia
Judgment Date: 30 June 2017
Procedural Posture: Appeal / Judgment After Full Court Hearing of Appeal and Cross Appeal
Outcome: Appeal allowed with costs (except as against the seventh respondent); cross appeal dismissed with costs (except as against the second cross-appellant)
Legal Topics: Unit Trusts, Overpayment of Distributions, Accessory Liability, Unconscionable Conduct, Offers of Compromise, Costs

Trusts and Trustees Commercial Law Corporations Law Unit Trusts Overpayment of Distributions Accessory Liability Unconscionable Conduct Offers of Compromise +1 more

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Full judgment text Downloadable case file Legal principles 3 Authorities cited 16 Party arguments 2 Amounts and remedies 9

Parties

Colin R Price & Associates Pty Ltd

First Appellant/cross Respondent

Grovan Pty Ltd

Second Appellant

Four Oaks Pty Ltd

First Respondent/first Cross Appellant

Noel Jones (Carnegie) Pty Ltd

Second Respondent/seventh Cross Appellant

Eighty-Second Agenda Pty Ltd

Third Respondent/third Cross Appellant

Noel Reynolds

Fourth Respondent/fifth Cross Appellant

Stephen Power

Fifth Respondent/sixth Cross Appellant

Geoffrey Rice

Sixth Respondent/fourth Cross Appellant

Twentieth Green Pty Ltd

Seventh Respondent/second Cross Appellant

Clestus Weerappah

Eighth Respondent

Procedural Posture

Appeal / Judgment After Full Court Hearing of Appeal and Cross Appeal

Legal Issues

1 Whether overpaid unit holders are directly liable to other unit holders or related parties for over-distributions necessary to meet the trustee's judgment liability
2 Whether accessorial liability attaches to individuals for trustee's unconscionable conduct
3 Appropriate apportionment and entitlement of costs given offers of compromise and varying success

Ratio Decidendi

Court Disposition

Appeal allowed with costs (except as against the seventh respondent); cross appeal dismissed with costs (except as against the second cross-appellant)

Orders

Orders 1 and 2 made by the primary judge on 5 August 2016 and order 1 made by the primary judge on 25 August 2016 be set aside and substituted orders made for payment of specific amounts to applicants from various respondents, in some cases with enforceability limited to the extent of aggregate recovery plus interest.
Respondents ordered to pay applicants' costs before 11:00am on 24 June 2015 on a party and party basis, thereafter on an indemnity basis.