George v Webb & ors [2011] NSWSC 1608

George v Webb & ors [2011] NSWSC 1608

Funds paid into the solicitors’ trust account were held on express trust for the plaintiff, only for the Elderslie/Allco HIT acquisition; their payment out for unrelated purposes was a breach of trust by the solicitors, making them liable to pay equitable compensation. The third defendant was liable as an accessory under both limbs of Barnes v Addy for knowingly receiving and assisting the breach. The claim is not an apportionable claim under the Civil Liability Act, as it is not based on failure to take reasonable care. The third defendant is further liable for misleading and deceptive conduct and must indemnify the cross-claimants for their liability to the plaintiff.

Jurisdiction
Australia
Judgment Date
20 December 2011
Procedural Posture
Principal Judgment / Judgment
Outcome
Judgment for the plaintiff on the claim against the first and second defendants for equitable compensation for breach of trust and against the third defendant for accessorial liability; judgment for cross-claimants against the third defendant for misleading and deceptive conduct.
Legal Topics
['quistclose Trust' 'express Trust' 'breach of Trust' 'equitable Compensation' 'accessorial Liability' 'barnes V Addy' 'negligence' 'proportionate Liability' 'misleading and Deceptive Conduct' 'failure of Consideration' 'frustration of Contract' 'duty of Care' 'fair Trading Act']
['equity' 'trusts' 'contracts' 'torts' 'consumer Law'] ['quistclose Trust' 'express Trust' 'breach of Trust' 'equitable Compensation' 'accessorial Liability' 'barnes V Addy' 'negligence' 'proportionate Liability' 'misleading and Deceptive Conduct' 'failure of Consideration' 'frustration of Contract' 'duty of Care' 'fair Trading Act']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Principal Judgment / Judgment

Legal Issues

  1. 1 ['Whether $150,000 paid into trust account was held on express trust for plaintiff and only to be used for a prescribed purpose' 'Whether trust was breached by payment out of trust account for purposes other than prescribed purpose' 'Whether plaintiff entitled to equitable compensation' 'Whether third defendant liable as accessory to breach of trust or Quistclose trust under Barnes v Addy' 'Whether claim for breach of trust is apportionable under proportionate liability regime' 'Whether cross-defendant liable for misleading and deceptive conduct under Fair Trading Act']

Ratio Decidendi

Funds paid into the solicitors’ trust account were held on express trust for the plaintiff, only for the Elderslie/Allco HIT acquisition; their payment out for unrelated purposes was a breach of trust by the solicitors, making them liable to pay equitable compensation. The third defendant was liable as an accessory under both limbs of Barnes v Addy for knowingly receiving and assisting the breach. The claim is not an apportionable claim under the Civil Liability Act, as it is not based on failure to take reasonable care. The third defendant is further liable for misleading and deceptive conduct and must indemnify the cross-claimants for their liability to the plaintiff.

Court Disposition

Judgment for the plaintiff on the claim against the first and second defendants for equitable compensation for breach of trust and against the third defendant for accessorial liability; judgment for cross-claimants against the third defendant for misleading and deceptive conduct.

Orders

  • ['First and second defendants to pay equitable compensation for breach of trust to the plaintiff in the sum of $150,000 plus interest of $41,953.77 up to 28 November 2011 and interest thereafter at the RBA cash rate + 4% until judgment pursuant to s 100 Civil Procedure Act 2005 (NSW).' 'Third defendant to pay to the...