UTi (Aust) Pty Ltd v Sheehan & Anor [2017] NSWSC 344

UTi (Aust) Pty Ltd v Sheehan & Anor [2017] NSWSC 344

The first defendant, Mr Sheehan, engaged in a fraudulent scheme by presenting false invoices and obtaining corresponding cheques from the plaintiff, which he then deposited into the account of the second defendant for his benefit. An institutional constructive trust arose over the funds received, as per authority, and the first defendant is liable to account for the sum obtained. Further, he is liable in damages in contract, tort (deceit), and under the Australian Consumer Law for the same sum. An additional sum is also owed for unpaid invoices under the contractual arrangements.

Parties
Plaintiff: UTi (Aust) Pty Ltd; First Defendant: Brian Sheehan; Second Defendant: Scarlet Amber Pty Ltd ACN 006 920 172
Jurisdiction
Australia
Judgment Date
03 April 2017
Procedural Posture
Principal Judgment / Final Judgment After Hearing, Declarations and Orders Made
Outcome
Judgment for the plaintiff. Declarations of constructive trust, orders for accounting, equitable compensation if funds dissipated, and orders for damages, interest and costs.
Legal Topics
Constructive Trust, Fraud, Joint Venture Disputes, Breach of Contract, Deceit, Misleading or Deceptive Conduct
Equity Commercial Law Trusts Constructive Trust Fraud Joint Venture Disputes Breach of Contract Deceit +1 more

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Parties

UTi (Aust) Pty Ltd

Plaintiff

Brian Sheehan

First Defendant

Scarlet Amber Pty Ltd ACN 006 920 172

Second Defendant

Procedural Posture

Principal Judgment / Final Judgment After Hearing, Declarations and Orders Made

Legal Issues

  1. 1 Whether the first defendant, Mr Sheehan, fraudulently procured the plaintiff to give cheques deposited to his company, the second defendant
  2. 2 Whether an institutional constructive trust arose over the funds received as a result of fraud
  3. 3 Whether Mr Sheehan is liable in contract, tort of deceit, and under the Australian Consumer Law for the sum obtained through fraud

Ratio Decidendi

The first defendant, Mr Sheehan, engaged in a fraudulent scheme by presenting false invoices and obtaining corresponding cheques from the plaintiff, which he then deposited into the account of the second defendant for his benefit. An institutional constructive trust arose over the funds received, as per authority, and the first defendant is liable to account for the sum obtained. Further, he is liable in damages in contract, tort (deceit), and under the Australian Consumer Law for the same sum. An additional sum is also owed for unpaid invoices under the contractual arrangements.

Court Disposition

Judgment for the plaintiff. Declarations of constructive trust, orders for accounting, equitable compensation if funds dissipated, and orders for damages, interest and costs.

Orders

  • Declaration that the First Defendant is trustee of an institutional constructive trust over $2,911,411.76 received from the Plaintiff via 299 transactions; First Defendant must account for these funds; If any part is dissipated, First Defendant liable to pay equitable compensation up to $2,911,411.76 minus any not...