Naumoski v NCR Australia Pty Ltd [2004] NSWCA 310

Naumoski v NCR Australia Pty Ltd [2004] NSWCA 310

The Court of Appeal held that the evidence did not support a finding that Mrs Naumoski's failure to discharge her directorial duties was motivated by fear of what inquiries would reveal or amounted to deliberate shutting of the eyes. Although she may have failed to participate in CC's management or discharge directorial duties, something more was required to establish dishonesty or actual knowledge for liability under the second limb of Barnes v Addy, and the matters relied on by the trial judge did not provide that basis.

Jurisdiction
Australia
Judgment Date
10 September 2004
Procedural Posture
Appeal From a Judgment Imposing Liability for Assisting With Knowledge in a Dishonest and Fraudulent Design by a Trustee Under the Second Limb of Barnes V Addy / Court of Appeal Judgment
Outcome
Appeal allowed with costs.
Legal Topics
['liability for Assisting in Breach of Trust' 'director of Defaulting Trustee' 'knowledge and Dishonesty' 'deliberate Shutting of Eyes' 'barnes V Addy Second Limb']
['equity' 'trusts' 'company Law'] ['liability for Assisting in Breach of Trust' 'director of Defaulting Trustee' 'knowledge and Dishonesty' 'deliberate Shutting of Eyes' 'barnes V Addy Second Limb']

Case Brief

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Procedural Posture

Appeal From a Judgment Imposing Liability for Assisting With Knowledge in a Dishonest and Fraudulent Design by a Trustee Under the Second Limb of Barnes V Addy / Court of Appeal Judgment

Legal Issues

  1. 1 ["Whether the facts entitled the trial judge to find that Mrs Naumoski deliberately shut her eyes to CC's dishonest and fraudulent design and was therefore to be regarded as having actual knowledge of CC's breach of trust." "Whether a director's failure to participate in management or discharge directorial duties, without more, supported liability for knowing assistance in breach of trust."]

Ratio Decidendi

The Court of Appeal held that the evidence did not support a finding that Mrs Naumoski's failure to discharge her directorial duties was motivated by fear of what inquiries would reveal or amounted to deliberate shutting of the eyes. Although she may have failed to participate in CC's management or discharge directorial duties, something more was required to establish dishonesty or actual knowledge for liability under the second limb of Barnes v Addy, and the matters relied on by the trial judge did not provide that basis.

Court Disposition

Appeal allowed with costs.

Orders

  • ['Appeal allowed with costs.' 'The respondent to have a certificate under the Suitors Fund Act if otherwise qualified.']