Blue Mirror Pty Ltd v Tan & Tan Australia Pty Ltd (in liq) [2024] NSWCA 253

Blue Mirror Pty Ltd v Tan & Tan Australia Pty Ltd (in liq) [2024] NSWCA 253

Anthony Tan and ACC are liable as knowing recipients because Anthony had actual knowledge of Ken's breach of trust when funds were received and transferred; documents relied on to justify receipt were created after the event. The common law claim fails as recipients repaid funds, but knowing receipt liability is unaffected by repayment to the immediate recipient. The positive defence that funds represented partial satisfaction of debt for supply was not established, and the onus remained with respondents; primary judge erred in reversing the onus and attributing undue significance to absence of reply/subpoenas.

Parties
Appellant: Blue Mirror Pty Ltd; First Respondent: Tan & Tan Australia Pty Ltd (in liq); Second Respondent: Anthony Tan; Third Respondent: Australian Construction Company Pty Ltd
Jurisdiction
Australia
Judgment Date
30 October 2024
Procedural Posture
Appeal / Judgment
Outcome
Appeal allowed in part. Dismissed against first respondent (Tan & Tan Australia Pty Ltd (in liq)) for lack of leave; allowed against second and third respondents (Anthony Tan and Australian Construction Company Pty Ltd).
Legal Topics
Breach of Fiduciary Duty, Knowing Receipt, Knowing Assistance, Money Had and Received, Pleadings, Burden of Proof, Tracing, Volunteers, Fabrication of Documents
Equity Restitution Civil Procedure Breach of Fiduciary Duty Knowing Receipt Knowing Assistance Money Had and Received Pleadings +4 more

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Parties

Blue Mirror Pty Ltd

Appellant

Tan & Tan Australia Pty Ltd (in liq)

First Respondent

Anthony Tan

Second Respondent

Australian Construction Company Pty Ltd

Third Respondent

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 Whether downstream recipients of trust funds transferred in breach of trust are liable to account to the beneficiary
  2. 2 Whether the primary judge erred in accepting the respondents' positive defence that funds were received in satisfaction of debts owed by Pegasus for sanitiser supply
  3. 3 Significance of absence of a reply alleging documents were fabricated

Ratio Decidendi

Anthony Tan and ACC are liable as knowing recipients because Anthony had actual knowledge of Ken's breach of trust when funds were received and transferred; documents relied on to justify receipt were created after the event. The common law claim fails as recipients repaid funds, but knowing receipt liability is unaffected by repayment to the immediate recipient. The positive defence that funds represented partial satisfaction of debt for supply was not established, and the onus remained with respondents; primary judge erred in reversing the onus and attributing undue significance to absence of reply/subpoenas.

Court Disposition

Appeal allowed in part. Dismissed against first respondent (Tan & Tan Australia Pty Ltd (in liq)) for lack of leave; allowed against second and third respondents (Anthony Tan and Australian Construction Company Pty Ltd).

Orders

  • Refuse leave to appeal against Tan & Tan Australia Pty Ltd (in liq).
  • Appeal allowed against Anthony Tan; set aside previous order dismissing claim; judgment for Blue Mirror against Anthony Tan in amount of $1,000,000 plus interest from 26 July 2020.