Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 9) [2023] FCA 462

Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 9) [2023] FCA 462

The quantification of secret commission liability should only be against the entities that made the relevant payments, not global cross-liability, and both Mr Meneses (fiduciary) and Hanhwa parties (knowing assisters) are liable for compound interest on those amounts with yearly rests as a compensatory remedy, reflecting their participation and knowledge in the breaches.

Parties
Applicant: Directed Electronics OE Pty Ltd; First Respondent: OE Solutions Pty Ltd; Second Respondent: HANHWA AUS PTY LTD; Third Respondent: HAN HWA HIGHTECH AUSTRALIA PTY LTD; Fourth Respondent: LEEMAN AUS PTY LTD; Fifth Respondent: HANHWA HIGHTECH CO., LTD; Sixth Respondent: JOHNNY MENESES; Seventh Respondent: CRAIG MILLS; Eighth Respondent: KICHANG (RYAN) LEE; Ninth Respondent: NATHAN MENESES; Tenth Respondent: GRIDTRAQ AUSTRALIA PTY LTD; Eleventh Respondent: WEBHOUSE SOFTWARE SOLUTIONS PTY LTD; Twelfth Respondent: LEEMAN CO. LTD; Thirteenth Respondent: QUANTAM TELEMATICS PTY LTD
Jurisdiction
Australia
Judgment Date
12 May 2023
Procedural Posture
Corporations Law, Claim for Secret Commissions and Interest / Post Liability, Determination of Quantum and Interest; Judgment on Quantification and Interest Following Earlier Liability Decision
Outcome
Applicant substantially successful in principles; judgment on quantum and interest directions only, with parties to bring in draft orders consistent with reasons.
Legal Topics
Secret Commissions, Compound Interest, Fiduciary Duties, Knowing Assistance, Corporate Liability
Corporations Law Equity Secret Commissions Compound Interest Fiduciary Duties Knowing Assistance Corporate Liability

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Parties

Directed Electronics OE Pty Ltd

Applicant

OE Solutions Pty Ltd

First Respondent

HANHWA AUS PTY LTD

Second Respondent

HAN HWA HIGHTECH AUSTRALIA PTY LTD

Third Respondent

LEEMAN AUS PTY LTD

Fourth Respondent

HANHWA HIGHTECH CO., LTD

Fifth Respondent

JOHNNY MENESES

Sixth Respondent

CRAIG MILLS

Seventh Respondent

KICHANG (RYAN) LEE

Eighth Respondent

NATHAN MENESES

Ninth Respondent

GRIDTRAQ AUSTRALIA PTY LTD

Tenth Respondent

WEBHOUSE SOFTWARE SOLUTIONS PTY LTD

Eleventh Respondent

LEEMAN CO. LTD

Twelfth Respondent

QUANTAM TELEMATICS PTY LTD

Thirteenth Respondent

Procedural Posture

Corporations Law, Claim for Secret Commissions and Interest / Post Liability, Determination of Quantum and Interest; Judgment on Quantification and Interest Following Earlier Liability Decision

Legal Issues

  1. 1 What is the appropriate quantification of secret commission payments owed by the relevant respondents?
  2. 2 Which Hanhwa parties are liable and to what extent for the secret commissions?
  3. 3 Should simple or compound interest apply to the amounts found to be owed, and with what periodic rests?

Ratio Decidendi

The quantification of secret commission liability should only be against the entities that made the relevant payments, not global cross-liability, and both Mr Meneses (fiduciary) and Hanhwa parties (knowing assisters) are liable for compound interest on those amounts with yearly rests as a compensatory remedy, reflecting their participation and knowledge in the breaches.

Court Disposition

Applicant substantially successful in principles; judgment on quantum and interest directions only, with parties to bring in draft orders consistent with reasons.

Orders

  • Parties to file and serve minutes of proposed orders consistent with reasons by 1pm on 19 May 2023
  • Compound interest to be paid by relevant parties at RBA cash rate plus 4% with yearly rests; quantum to reflect actual payments made by each entity as set out in reasons