Galati v Deans & Ors [2023] NSWCA 13

Galati v Deans & Ors [2023] NSWCA 13

TRHS Pty Ltd holds the shares in Felan's Fisheries Pty Ltd on trust for Mr Galati (as assignee of TA) and Fishbank Development Corporation Pty Ltd as tenants in common in equal shares. This follows either as a presumed resulting trust (majority) or common intention constructive trust (alternative reasoning) because the shares were acquired for the joint venture, with funds provided by both parties, and there was no basis to conclude an intention for one party to benefit exclusively. There was no breach of fiduciary duty by Mr Deans regarding the commission received from Bidvest, as it originated from an agreement antecedent to the joint venture. No reduction in damages was warranted.

Jurisdiction
Australia
Judgment Date
15 February 2023
Procedural Posture
Appeal / Decision of Court of Appeal Following Hearing of Appeal From Equity Division, Supreme Court of NSW
Outcome
Appeal allowed in part.
Legal Topics
['resulting Trusts' 'constructive Trusts' 'characterisation of Trusts' 'fiduciary Duties' 'secret Commissions']
['equity'] ['resulting Trusts' 'constructive Trusts' 'characterisation of Trusts' 'fiduciary Duties' 'secret Commissions']

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Procedural Posture

Appeal / Decision of Court of Appeal Following Hearing of Appeal From Equity Division, Supreme Court of NSW

Legal Issues

  1. 1 ["Whether TRHS Pty Ltd holds shares in Felan's Fisheries Pty Ltd on trust for Mr Galati and Fishbank Development Corporation Pty Ltd as tenants in common in equal shares" 'Whether Mr Deans breached a fiduciary duty to the joint venture by receiving a commission from Bidvest' 'Whether damages awarded against Mr Galati should be reduced by the alleged commission received by Mr Deans']

Ratio Decidendi

TRHS Pty Ltd holds the shares in Felan's Fisheries Pty Ltd on trust for Mr Galati (as assignee of TA) and Fishbank Development Corporation Pty Ltd as tenants in common in equal shares. This follows either as a presumed resulting trust (majority) or common intention constructive trust (alternative reasoning) because the shares were acquired for the joint venture, with funds provided by both parties, and there was no basis to conclude an intention for one party to benefit exclusively. There was no breach of fiduciary duty by Mr Deans regarding the commission received from Bidvest, as it originated from an agreement antecedent to the joint venture. No reduction in damages was warranted.

Court Disposition

Appeal allowed in part.

Orders

  • ['Set aside order (1) made on 1 September 2021 in the court below.' 'Declare that the third respondent holds the shares in the fourth respondent on trust for the appellant and the second respondent as tenants in common in equal shares.' "Otherwise dismiss the appellant's claim." 'Order that within 28 days the...