I C Pipes Pty Ltd v DGS Trading Pty Ltd (No 2) [2023] NSWSC 1109

I C Pipes Pty Ltd v DGS Trading Pty Ltd (No 2) [2023] NSWSC 1109

The second defendant, as NSW Contract Manager, owed fiduciary duties to the plaintiff not to use his position for personal gain or profit, and not to put himself in conflict with the plaintiff. He breached these duties by arranging for overpayments to the first defendant and then receiving payments directly and via the third defendant, his company. The third defendant, as his alter ego, knowingly received profits attributable to the breach. In equity, both are required to account to the plaintiff for the profits, and the cross-claim is dismissed due to procedural defects and limitation period expiration.

Jurisdiction
Australia
Judgment Date
12 September 2023
Procedural Posture
Principal Judgment / Final Orders After Hearing; Cross Claim Dismissed
Outcome
Plaintiff succeeds in claims against second and third defendants for breach of fiduciary duty and knowing receipt; cross-claim dismissed.
Legal Topics
['breach of Fiduciary Duty' 'knowing Receipt' 'remedies for Breach of Fiduciary Duty' 'constructive Trusts' 'employment Law' 'cross Claim in Defamation']
['equity'] ['breach of Fiduciary Duty' 'knowing Receipt' 'remedies for Breach of Fiduciary Duty' 'constructive Trusts' 'employment Law' 'cross Claim in Defamation']

Case Brief

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Procedural Posture

Principal Judgment / Final Orders After Hearing; Cross Claim Dismissed

Legal Issues

  1. 1 ['Whether the second defendant breached fiduciary duties owed to the plaintiff during employment' "Whether the third defendant knowingly received profits arising from the second defendant's breach of fiduciary duty" 'Whether relief should be granted in equity to account for profits' 'Whether the cross-claim for defamation should be dismissed for lack of evidence, particulars, limitation period and procedural failings']

Ratio Decidendi

The second defendant, as NSW Contract Manager, owed fiduciary duties to the plaintiff not to use his position for personal gain or profit, and not to put himself in conflict with the plaintiff. He breached these duties by arranging for overpayments to the first defendant and then receiving payments directly and via the third defendant, his company. The third defendant, as his alter ego, knowingly received profits attributable to the breach. In equity, both are required to account to the plaintiff for the profits, and the cross-claim is dismissed due to procedural defects and limitation period expiration.

Court Disposition

Plaintiff succeeds in claims against second and third defendants for breach of fiduciary duty and knowing receipt; cross-claim dismissed.

Orders

  • ['The second defendant (Mr Sam Blanch) is to account to the plaintiff (IC Pipes Pty Ltd) in the sum of $241,227 for profits in equity arising out of his breach of fiduciary duties owed to the plaintiff.' "The third defendant (Blanch Consulting Pty Ltd) is to account to the plaintiff in the sum of $232,827 for...