Galati v Deans [2021] NSWSC 1094

Galati v Deans [2021] NSWSC 1094

The court held that Mr Galati and Trading Australia breached fiduciary duties to their co-joint venturers (Fishbank/Deans) by receiving and failing to disclose to Fishbank the payment of $1,799,820.95 (the secret commission) in connection with the sale of the Bidvest Land option rights. The receipt and retention of this undisclosed benefit—accomplished through false invoicing and diversion of funds—constituted both a breach of fiduciary duty and misleading/deceptive conduct under the ACL. Mr Galati was liable in deceit and not entitled to offset personal or selected payments against Fishbank's share. Wealth Shift and Ms Pritchard, in the circumstances and with the knowledge established,...

Jurisdiction
Australia
Judgment Date
01 September 2021
Procedural Posture
Civil / Final Judgment at Trial
Legal Topics
['fiduciary Duties' 'joint Ventures' 'secret Commission/bribes' 'misleading or Deceptive Conduct' 'constructive Trusts' 'estoppel' 'equitable Compensation' 'exemplary Damages' 'unconscionable Conduct' 'assignment of Causes of Action']
['equity' 'commercial Law' 'corporations Law' 'torts' 'consumer Law'] ['fiduciary Duties' 'joint Ventures' 'secret Commission/bribes' 'misleading or Deceptive Conduct' 'constructive Trusts' 'estoppel' 'equitable Compensation' 'exemplary Damages' 'unconscionable Conduct' 'assignment of Causes of Action']

Case Brief

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Procedural Posture

Civil / Final Judgment at Trial

Legal Issues

  1. 1 ["Whether TRHS held shares in Felan's Fisheries on trust for Mr Galati and Trading Australia;" 'Whether Mr Deans held shares in TRHS on trust for Mr Galati and/or Trading Australia;' 'Whether a $1.5 million success fee was agreed and payable;' 'Whether Galati interests and Deans interests were partners, joint venturers, or owed fiduciary duties;' 'Whether Mr Pho was wrongly removed as director;' 'Characterisation and liability for receipt and payment of the $1,799,820.95 secret commission;' 'Claims for misleading or deceptive conduct, unconscionable conduct, and deceit;' 'Appropriate remedies and damages.']

Ratio Decidendi

The court held that Mr Galati and Trading Australia breached fiduciary duties to their co-joint venturers (Fishbank/Deans) by receiving and failing to disclose to Fishbank the payment of $1,799,820.95 (the secret commission) in connection with the sale of the Bidvest Land option rights. The receipt and retention of this undisclosed benefit—accomplished through false invoicing and diversion of funds—constituted both a breach of fiduciary duty and misleading/deceptive conduct under the ACL. Mr Galati was liable in deceit and not entitled to offset personal or selected payments against Fishbank's share. Wealth Shift and Ms Pritchard, in the circumstances and with the knowledge established,...

Court Disposition

Orders

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