Visnic v Sywak [2009] NSWCA 173

Visnic v Sywak [2009] NSWCA 173

The only relevant breach of fiduciary duty found was the respondent's deprivation of the appellant's shareholding, expressed as a refusal to transfer legal title to shares held on trust. There was no sufficient connection between that breach and benefits or payments allegedly received by the respondent from the companies. Any such benefits, if wrongful, were matters involving duties owed to the companies and recoverable by the companies through the liquidator or derivative proceedings, not by the appellant personally through an account of profits. The trial judge was therefore correct to refuse the inquiry.

Jurisdiction
Australia
Judgment Date
01 July 2009
Procedural Posture
Appeal in Corporations and Equity Proceedings / Appeal From Dismissal of a Notice of Motion Seeking an Inquiry Under Pt 46 of the Uniform Civil Procedure Rules 2005 to Determine Equitable Damages And/or an Account of Profits for Breaches of Fiduciary Duty
Outcome
Appeal dismissed with costs.
Legal Topics
['distinction Between Company and Shareholders' "limitations on Shareholders' Rights to Enforce Duties Owed to Company" 'fiduciary Duty' 'trustee of Shares' 'account of Profits' 'equitable Compensation' 'sufficient Connection Between Breach of Fiduciary Duty and Profit' 'derivative Action' 'winding Up' 'oppression Remedies']
['corporations' 'equity' 'trusts' 'civil Procedure'] ['distinction Between Company and Shareholders' "limitations on Shareholders' Rights to Enforce Duties Owed to Company" 'fiduciary Duty' 'trustee of Shares' 'account of Profits' 'equitable Compensation' 'sufficient Connection Between Breach of Fiduciary Duty and Profit' 'derivative Action' 'winding Up' 'oppression Remedies']

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Procedural Posture

Appeal in Corporations and Equity Proceedings / Appeal From Dismissal of a Notice of Motion Seeking an Inquiry Under Pt 46 of the Uniform Civil Procedure Rules 2005 to Determine Equitable Damages And/or an Account of Profits for Breaches of Fiduciary Duty

Legal Issues

  1. 1 ["Whether there was a sufficient connection between the respondent's breach of fiduciary duty and any profit or benefit capable of being identified for the purposes of an inquiry into an account of profits." 'Whether the breach found by the trial judge should be characterised as a conflict of interest and duty permitting a broader inquiry into benefits received from the companies.' 'Whether the trial judge took into account irrelevant considerations by treating the matters sought to be investigated as possible breaches of duties owed to the companies rather than to the appellant.']

Ratio Decidendi

The only relevant breach of fiduciary duty found was the respondent's deprivation of the appellant's shareholding, expressed as a refusal to transfer legal title to shares held on trust. There was no sufficient connection between that breach and benefits or payments allegedly received by the respondent from the companies. Any such benefits, if wrongful, were matters involving duties owed to the companies and recoverable by the companies through the liquidator or derivative proceedings, not by the appellant personally through an account of profits. The trial judge was therefore correct to refuse the inquiry.

Court Disposition

Appeal dismissed with costs.

Orders

  • ['Appeal dismissed with costs.']