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[2015] VSCA 53
Court of Appeal (Vic)
2015-04-01
Mr J, Redlich JA, Kyrou JA, Leish JA
Original judgment source is linked above.
Eliana Construction and Developing Group Pty Ltd v Assad [2014] VSC 143
CONTRACT - Whether parties had concluded a settlement agreement to settle disputes arising in the course of a joint venture - Absence of credibility findings on important factual questions - Matter remitted for new hearing.
COURTS - Whether reasons for finding that there had been no settlement agreement were adequate - Competing witness statements, documentary evidence and primary arguments not referred to by trial judge - Appeal allowed.
FIDUCIARY DUTIES - Joint venture - Whether appellant owed a fiduciary duty to respondent - Matter raised for the first time on appeal - Absence of evidence - Notice of contention dismissed.
**1 The respondent company was incorporated in 2008 and carries on business as a builder and developer. Magdy Sowiha, a licensed builder, is the sole director and shareholder of the respondent. The appellant is a medical doctor who also engages in property development. Mr Sowiha and the appellant became acquainted in 2008 and established a business relationship.
2 In September 2008, the respondent purchased a property at 231 High Street, Lower Templestowe, Victoria, with the intention of building a block of 11 units. Both parties contributed to the purchase price at settlement. The parties together entered into a loan agreement to facilitate the development, and entered into a mortgage over the property to secure the loan. They became registered on the title to the property as tenants in common in equal shares. The solicitor acting for both parties throughout the project was Ellen Assad, the appellant's wife. Between 3 October 2008 and 13 October 2010 the parties each made payments in furtherance of the development.
3 Between August 2009 and May 2011 the respondent constructed 11 apartments on the property. On 26 July 2011 the plan of subdivision for the property was registered. By late July 2011, seven of the apartments had been sold. Those unsold were apartments 2, 3, 4 and 11.
4 It appears that, in mid-2011, contracts of sale and transfer of title forms for the four remaining apartments were signed by the parties and given to Mrs Assad. The contracts of sale were backdated to 3 October 2009, and provided that apartments 2, 3 and 4 were to be sold to the appellant and apartment 11 was to be sold to the respondent. The transfer of title forms contained all relevant details except for the title particulars. The appellant's evidence was that at or before this time the parties had agreed to a transfer of the properties in accordance with the contracts of sale. Mr Sowiha's evidence was that he signed the documents in order to expedite the sale and registration of title of the apartments once they were sold, and that he did so before any dispute arose between the parties.
5 In mid-2011, disputes arose between the parties over monies owed and the potential transfer of the apartments. On 9 March 2012, the appellant registered the transfer of title forms for apartments 2, 3 and 4 in his name. On 16 March 2012, the respondent received the transfer of title form for apartment 11. On 22 March 2012, the respondent lodged caveats over apartments 2, 3 and 4. On 7 January 2013, the respondent registered the transfer of title form for apartment 11.
6 The respondent commenced proceedings against the appellant in May 2012, claiming on a number of different bases that the appellant was not authorised to transfer the properties into his name and seeking to have the transfers and registration set aside.
7 At trial, the appellant denied that the parties were in a joint venture in developing the property. He claimed that he had contributed funds to develop the property pursuant to a loan agreement, in order to facilitate the respondent's development of the property. He further claimed that in May or June 2011 the parties concluded an agreement (the settlement agreement) the terms of which were that the appellant would become the sole registered proprietor of apartments 2, 3 and 4, that the respondent would become the sole registered proprietor of apartment 11, and that the existing legal relationship between the parties would be at an end. The settlement agreement was pleaded as a complete defence. Its existence was a core issue in dispute at trial.
8 The trial judge found that a joint venture had existed between the parties in developing the property as they did between 2008 and 2011. His Honour found that the parties had agreed to bring the joint venture agreement to an end in about July 2011 but that the parties did not otherwise come to an agreement as to the terms upon which the dispute would be settled.[1] He ordered that the parties could apply for a special referee to be appointed to decide the percentage of ownership of the joint venture and any monies owed between the parties.
9 The appellant does not challenge the trial judge's finding that the parties had been engaged in a joint venture but otherwise appeals from the trial judge's orders on the following grounds:**
10 The respondent on appeal filed a notice of contention claiming that the judge should have found that the appellant owed a fiduciary duty to the respondent, defeating his claim that the parties had made a settlement agreement. The notice was as follows:
The Respondent contends that the decision of the learned Trial Judge should be affirmed on the following grounds which were not decided or were erroneously decided or were not raised for decision below:
**11 For the reasons that follow, we would allow the appeal but only on the first ground. As we propose to order a retrial, it is desirable that we also address the respondent's contention that the appellant owed a fiduciary duty to the respondent.
12 We turn to the appellant's two primary arguments. First, that his Honour's reasons for finding that there was no concluded settlement agreement were inadequate. Secondly, that his Honour should have found that the settlement agreement was concluded and was in the terms claimed by the appellant.**
13 It is necessary to briefly review the evidence in respect of the settlement agreement. In his witness statement, which constituted his evidence-in-chief, the appellant gave an account of the genesis of the agreement:
In or around late September or early October 2010 I had a telephone discussion with Mr Sowiha about the Loan and Further Loans in which I again asked Mr Sowiha to make some part payment of the Further Loans. Mr Sowiha said that he could pay off the Loans and/or Further Loans by assigning the Apartments to me if I agreed to assign Apartment 11 to Eliana Construction. I said I would be happy to do this. Sowiha said 'but we have to make sure the project makes a profit and not a loss, so we have to agree on the value of the apartments' or words to that effect. I said 'fine, that is no problem'. Sowiha said 'okay, we probably put it in writing shortly then'. I said 'yeah, the sooner the better'.
**14 In his witness statement, the appellant described meetings with Mr Sowiha, the first being some two weeks after the telephone call described above, at which paperwork for the settlement agreement was discussed. The appellant said that at a meeting in May or June 2011, Mr Sowiha signed the contracts of sale and the transfer of title forms for the apartments 'pursuant to the Settlement Agreement'.
15 The appellant was not specifically cross-examined on this part of his evidence. He said, in cross-examination:**
The agreement is I will take Apartment[s] 2, 3 and 4 and he will take Apartment 11 and we'll call it quits.
**16 The appellant relied on the signed contracts and transfer forms as documentary evidence that was said to be consistent with the settlement agreement pleaded by him.
17 Mr Sowiha, in his witness statement, also described a settlement agreement, albeit on different terms:**
Following approval of the occupancy permit stage for the development, both Mr Assad and I had various meetings and eventually agreed to the valuation of each remaining apartment left unsold so as we could apportion the profits. The remaining unsold apartments were apartments 2, (Agreed by the parties at $635,000.00) apartment 3 (Agreed by the parties at $590,000) apartment 4 (Agreed by the parties at $645,000.000) and apartment 11 (Agreed by the parties at $845,000.00). At that particular meeting it was agreed Mr Assad was to purchase apartments 2, 3 and 4 leaving the [respondent] Apartment 11 and payment from Mr Assad of $420,000.00 to the [respondent]. At that meeting, I was asked by Ellen Assad to sign blank transfer of title forms in preparation and anticipation of a transaction sale. I signed these forms on her advice to me as the lawyer for the joint venture. It is important to note that Ellen Assad has acted for my associated Companies and me many times as my lawyer. At no stage did I give Ellen Assad, or anyone else, a mandate to alter or lodge the signed transfer of title forms.
Approximately a few weeks after the initial meeting, on 30 August 2011, Mr Assad changed his mind ...[2]
18 According to Mr Sowiha's account, this meeting seems to have taken place in approximately July or August 2011. The terms of the agreement, described in the italicised text, included that the appellant pay the respondent $420,000. This figure does not appear to have been raised in pleadings or evidence prior to the filing of his witness statement. In cross-examination, Mr Sowiha confirmed that an agreement had been reached that the appellant would receive apartments 2, 3 and 4 and pay 'the balance':
My question to you is very specific and that is, in any of the meetings that you've just given evidence about in which there was discussion about these apartments, my question is in these meetings, there was discussion about Dr Assad taking up Apartments 2, 3 and 4. That's right, isn't it?---Yes and pay the balance.
It was also discussed in these meetings that Eliana would take Apartment 11. That's right, isn't it?---That's true, plus the tenants [sic]. ...
So just be absolutely clear, your evidence here today was or is that, during some - several meetings, there was an agreement that Dr Assad was to take Apartments 2, 3 and 4. That's right?---Yes. Yes and pay the balance. Pay the balance, don't forget it.
**19 The thrust of Mr Sowiha's oral evidence was that the relevant meetings took place in 2011 including in September 2011. Taken with his witness statement, Mr Sowiha was, it appears, asserting that the meetings took place from July 2011 onwards rather than in May or June 2011.
20 It was the appellant's case that the events of July through to September 2011 involved a failed attempt by the respondent to renegotiate the settlement agreement concluded in May or June 2011, and that the suggested term requiring the appellant to pay $420,000 was a recent invention.**
21 There was plainly a dispute between the parties regarding whether or not there was an agreement made in May or June 2011 as to how the joint venture would be concluded. In his reasons for judgment, under the heading 'Attempted Settlement of the Joint Venture Disputes', the trial judge said:
I am also satisfied on the evidence that the Joint Venture continued between 2008 and 2011, when in about July 2011 disputes arose between Dr Assad and Mr Sowiha over the money advanced by Dr Assad to Eliana for the Project.
Apart from agreeing that the Joint Venture had come to an end, the parties did not come to clear agreement as to any terms on which the matter would be settled. Certainly there was no agreement as to what, if anything, was owing from one party to the other in regards to a settlement.[3]
**22 After making those findings - that the joint venture continued until about July 2011 and that the parties did not clearly agree the terms upon which the joint venture had concluded - the judge declared that a joint venture existed between 1 September 2008 and 30 June 2011.
23 The appellant and Mr Sowiha gave evidence that after the meeting in mid-2011 at which the transfer documents were signed, discussions and email communications between the parties continued. The judge then briefly outlined those subsequent communications between the parties under the heading 'Alleged Loan Agreement of September 2011'.
24 The appellant said that some months later Mr Sowiha sent him an email containing a draft loan agreement, which had been prepared for the purpose of paying back what he characterised as the loans made by the appellant to the respondent. The email was said to have been sent on or around 8 September 2011. The appellant also said that he received an email dated 9 September 2011 from Mr Sowiha in which Mr Sowiha was said to have changed his mind as to the settlement agreement, and proposed to pay the appellant a sum of money in lieu of the transfer of the three apartments to the appellant and that all four apartments be transferred to him. The appellant said that the parties were unable to agree to a sum to be paid instead of the transfer of the apartments to the appellant.
25 Mr Sowiha, by contrast, testified that it was the appellant who changed his mind after the initial agreement on settlement terms. Mr Sowiha's evidence was that on 30 August 2011 he and the appellant agreed that the respondent would purchase all four apartments, with the respondent paying the appellant consideration of $1,450,000, including $1,270,000 for the appellant's contribution to the joint venture. Mr Sowiha testified that on 9 September 2011 he received an email from the appellant claiming $1,275,000 plus interest, and that he replied the same day rejecting the appellant's claims. Mr Sowiha said that he never agreed to the transfer of title to the apartments on the appellant's terms.
26 The email from the appellant to Mr Sowiha dated 9 September 2011, marked as being sent at 1:03pm, said:**
Further to our discussion on the Tuesday the 30/08/11, I confirm that S Assad family trust total loan amount to Eliana Construction and Developing Group P/L is $1.275000 in addition to agreed interest of $180,000, which totals $1455,000.
I would like to draw your attention that that figure is calculated up till the 30/08/2011.
We agreed that you will buy me out (buy apartments 2, 3, 4 and 11) for that agreed figure also you agreed to take that step as soon as possible due to the financial difficulties which I am going through at the moment as a result of my loan to you.
Off course on the day of settlement between us, that figure ($1,455.000) will be changing due to interests accumulating against the loan. The interest calculated daily on the amount $1455,000 starting from 30/08/11 will be added to your liability at settlement.
It came to my attention that you have advertised all of the apartments to be leased without my consent. I thing once you pay out the loan to S Assad Family Trust first, then you are free to deal with the properties the way you like. (this is illegal as I did not consent to that). Therefore you must draw the apartments from the market until our settlement first.
I give two weeks to settle this matter from today's date so settlement should take place on the 23/9/2011 or earlier.[4]
27 The email from Mr Sowiha to the appellant dated 9 September 2011, marked as being sent at 3:53pm, said:
I just respond to your email to correct some point and make it very clear so we don't have any miss understand in the future
3. there is no interest so ever to be paid for any delay
at the end ..please Dr Sam if you finish your side quickly will help the settlement to be sooner .....the delay is not from my side ...I don't understand why you send me that email.....anyway you refused couple of meeting between us and Ellen as well ...it looks like you don't want to continuo that way ..let us back to the original agreement ... That email make me very angry and I totally not accept what on it....I totally deny that and not accept what you send in the email ..it is totally refused by us.
by the way I asked you many times and Ellen to return the signed contract of sales of the four apartment and I don't know why you delay ...the sales is not on anymore and Ellen as our lawyer should return them as been promised a few times before.[5]
28 The trial judge accepted Mr Sowiha's evidence that it was only at the time of these further communications that the appellant for the first time sought to characterise his investment from its inception as a loan. His Honour also found that in their discussions in September 2011 the parties had unsuccessfully attempted to resolve their differences under the joint venture by means of a loan agreement.[6]
**29 It was accepted by both parties that the trial judge's reasons included a finding that there had been no clear agreement as to the terms of a settlement agreement. The appellant submitted that the reasons were wholly inadequate in explaining why that conclusion had been reached.
30 It has frequently been emphasised how important is the giving of reasons to the process of judicial decision-making.[7] What is sufficient by way of reasons in a given case will always depend upon the circumstances. In Soulemezis v Dudley (Holdings) Pty Ltd, McHugh JA said that 'the extent of the duty to give reasons is related "to the function to be served by the giving of reasons"'.[8] However, it is only in an exceptional case that a judge does not have a duty to state reasons for a final order.[9] There is no suggestion that the present was such a case.
Reasons must be such as reveal - although in a particular case it may be by necessary inference - the path of reasoning which leads to the ultimate conclusion. If reasons fail in that respect, they will not enable the losing party to know why the case was lost, they will tend to frustrate a right of appeal, and their adequacy will in such circumstances constitute an error of law.[12]
32 The objectives served in the giving of reasons by a trial judge were explained in these terms by Buchanan JA in Perkins v County Court of Victoria:[13]
Moreover, the provision of reasons for decisions affecting persons' rights and liabilities is usually desirable, serving objectives such as candour in decision-making, the accountability of decision-makers, the reconciliation of parties to the results of litigation and promoting the drawing of conclusions which are rational and soundly based on legal principles.[14]
**33 There is a need for transparency in a trial judge's reasons. A court when considering the decision under appeal or review should not be left to speculate from collateral observations the basis of a particular finding.[15] A bald statement of an ultimate conclusion, even by reference to the evidence said to support it, is unlikely, in most cases, to be sufficient.[16]
34 The trial judge, though not required to set out every detail of the process of reasoning to a finding, must expose the reasons for resolving points critical to the contest between the parties. This is an indispensible requirement. The parties must be able to understand the basis of the judge's decision and the extent to which their arguments have been understood and accepted. The losing party is entitled, at a bare minimum, to an explanation why their case has not been preferred.
35 Nettle JA stated in Hunter v Transport Accident Commission[17] that the reasons should:**
deal with the substantial points which have been raised; include findings on material questions of fact; refer to the evidence or other material upon which those finding are based; and provide an intelligible explanation of the process of reasoning that has led the judge from the evidence to the findings and from the findings to the ultimate conclusion.[18]
**36 Where the decision explicitly or by necessary implication involves a rejection of evidence which was critical to a party's case or a preference of one witness's account over another's, the reasons must advert to and provide an explanation for that preference.[19] If there is documentary material arguably supporting an important part of a party's case, that material should usually be considered in the judge's reasons.
37 At the same time, however, reasons for decision are to be read fairly and in the context of the manner in which the trial was conducted. In particular, reasons may appear by necessary inference from what is stated expressly.[20]
38 If the reasons are deficient in one or more of the above ways, so that steps in the reasoning process are not revealed, an appellate court will ordinarily be driven to conclude that there is a substantial risk that the fact-finding task miscarried.[21]
39 In oral argument, counsel for the respondent was unable to point to anything in the trial judge's reasons regarding the settlement agreement that satisfied any of these important requirements. He all but conceded that the trial judge's reasons were deficient in each of the respects referred to above.
40 Both the appellant and Mr Sowiha had given evidence that they had reached agreement which included as a term that the three relevant apartments be transferred to the appellant. Their dispute was as to whether this was the whole of the agreement. Each had said that a settlement was agreed, but on different terms and at different times.
41 Although he examined the evidence regarding a possible agreement in September 2011, the trial judge did not specifically deal with the appellant's evidence that a resolution of the parties' relationship was agreed in principle in September or October 2010 and concluded with the signing of the contracts of sale and transfers of title in May or June 2011. He held, without elaboration, that he was satisfied on the balance of probabilities that the joint venture continued until disputes arose in about July 2011. Also without elaboration, he found that there was no agreement at all beyond an agreement to end the joint venture.[22]
42 The appellant had given explicit evidence of an agreement having been reached before July 2011. While critical of aspects of the appellant's evidence, his Honour made no general finding as to his credit. It cannot therefore be inferred that he rejected this particular evidence on grounds of credibility (although it may be speculated that he did so). Nor can it be inferred that his Honour preferred the evidence of Mr Sowiha as to the timing of the meetings and the content of the agreement. To the contrary, his Honour found that there were substantial contradictions and inconsistencies in the account given at trial by Mr Sowiha regarding the precise nature and content of the agreement in dispute,[23] and found that the later agreement alleged by Mr Sowiha had not been made. Nor did he accept Mr Sowiha's account of an agreement having been reached including the 'balance' of $420,000.
43 There was significant documentary evidence which each party submitted bore upon the terms of the agreement in issue. For example, the appellant at trial and on appeal relied heavily upon the signed transfers as evidencing a concluded agreement. The respondent relied upon the subsequent loan negotiations in September 2011, briefly discussed by his Honour in his reasons, as casting doubt upon whether the settlement agreement was reached as the appellant contended. The trial judge did not explain how he viewed such documentary material and how it bore upon the competing contentions of the parties.
44 Each party strongly attacked the credibility of the other at trial. The respondent relied upon the adverse credit findings that are implicit from the trial judge's rejection of the appellant's and Mrs Assad's evidence in denying the joint venture, the backdating of the transfers to 2009, and from other express and implied criticisms of their conduct. The appellant, on the other hand, alleged that Mr Sowiha's claim that the appellant had agreed to pay $420,000 as part of the settlement agreement was a recent invention. It is not apparent from the reasons whether any of these matters, central to the parties' arguments, were considered.
45 The evidence of both the appellant and Mr Sowiha was not altogether consistent internally and there are difficulties in understanding aspects of what each of them said. Their evidence-in-chief, which was given by witness statements, is not easily read together with their oral testimony. On some important aspects of the case, issue was not explicitly joined in the course of the oral evidence. These features of the case placed the trial judge in a difficult position. However, the conclusion is in our respectful view inescapable that the trial judge failed to sufficiently expose his reasons for determining that the joint venture continued until the end of June 2011 and that there was no clear agreement as to the terms of settlement.
**47 Where a failure to give adequate reasons requires a judgment to be set aside, the authorities contemplate that two avenues are available to an appellate court in disposing of the appeal: remitter to the court below for rehearing or, where the appellate court is as well-placed as the court below, deciding the relevant matter for itself.[24]
48 The remaining grounds of appeal invite this Court to consider the merits and conclude that, contrary to the judge's finding, there was in existence a settlement agreement on the terms pleaded by the appellant. These grounds must fail.
49 It was plainly open to the trial judge to reject the appellant's account or to conclude that there was no settlement of the dispute. This is not a case where the uncontested evidence adduced by the parties dictated an outcome in the appellant's favour.[25] The judge made adverse findings as to the appellant's credit in other contexts and was highly critical of the role played by the appellant's wife in the transaction, she having acted as solicitor for the respondent. The judge's disinclination to accept aspects of the appellant's evidence in various other respects permeated the judgment.
50 The credibility of the parties being central to any determination of the terms upon which a settlement was agreed, the absence of credit findings on the important factual questions relevant to such an assessment precludes this Court from making the determination sought under these grounds.
51 Accordingly, grounds 2 and 3 should be dismissed and the matter should be remitted for rehearing. It follows that ground 4, concerning the resolution of the appellant's counterclaim for the removal of caveats on apartments 2, 3 and 4, must also be dismissed.**
Notice of contention - fiduciary duty owed by appellant
**52 As already mentioned, the respondent sought to uphold the decision of the trial judge by way of notice of contention. It contended that the trial judge should have held that the appellant at all times owed a fiduciary duty to the respondent, such that the appellant was obliged to render to the respondent (or to allow the respondent to obtain) a full and fair statement of the accounts of the joint venture before proposing an agreement for its winding up. It further contended that, as a result, the settlement agreement (if found to have been entered into) conferred an undisclosed benefit on the appellant and ought to be set aside.
53 The respondent submitted that the existence of such a fiduciary duty was a conclusion of law compelled by the findings made by the trial judge. Counsel for the respondent relied on the facts that: the profits and losses of the joint venture were to be shared; the land was owned by the joint venturers equally (as tenants in common); and there was joint liability under the loans and guarantees, joint liability to the State Revenue Office and the Australian Taxation Office, and joint liability in relation to holding overheads. It was submitted that, as a result, the case was on all fours with United Dominions Corporation Ltd v Brian Pty Ltd.[26] Particular reliance was placed on the following passage in the reasons of Mason, Brennan and Deane JJ:**
In the present case, it is apparent that the relationship between the participants in the shopping centre venture was a fiduciary one at least from the time when the formal agreement was executed. Under the agreement, the participants were joint venturers in a commercial enterprise with a view to profit. Profits were to be shared. The joint venture property was held upon trust. The participants indemnified the managing participant (SPL) against losses. The policy of the joint enterprise was ultimately a matter for joint decision. Apart from the absence of any reference in the agreement to 'partnership' or 'partners', the relationship between the participants under the agreement exhibited all the indicia of, and plainly was, a partnership ...
**54 It is true that many (but not all) of the features identified by their Honours in the above passage are also to be found in the present case. However, as counsel accepted, there is no generally accepted checklist by reference to which it can be determined whether or not a joint venture involves a fiduciary relationship between the joint venturers. The most that can be said, as their Honours pointed out, is that 'whether or not the relationship between joint venturers is fiduciary will depend upon the form which the particular joint venture takes and upon the content of the obligations which the parties to it have undertaken'.[27]
55 Their Honours went on to say that a fiduciary relationship with attendant fiduciary obligations may, and ordinarily will, exist between prospective partners who have embarked upon the conduct of the partnership business or venture before the precise terms of any partnership agreement have been settled.[28] Again, however, this is not to say that a fiduciary relationship arises by operation of law in every joint venture. Instead, the position depends on the facts in each particular case.
56 The appellant pointed out in response to the notice of contention that the question of a fiduciary relationship was neither pleaded nor argued at trial. It was submitted that, since the existence or otherwise of a fiduciary relationship depends on the facts, evidence might have been led by the appellant at trial, had the matter been raised. He relied upon the well-known decision of the High Court in Water Board v Moustakas,[29] in which it was held that a point cannot be raised for the first time upon appeal when it could possibly have been met by calling evidence below. That principle applies as well to a point raised by a respondent by way of notice of contention.[30]
57 The appellant submitted that, even if the facts sufficed to infer the existence of a fiduciary relationship, a necessary step in the respondent's argument must be to identify the scope of fiduciary duties arising from such a relationship.[31] The appellant relied in this connection on the absence of evidence regarding the full and fair statement of accounts upon which the respondent's notice of contention depends. In particular, the appellant submitted that numerous factual issues would have arisen had the matter been pleaded at trial, including the identification of the relevant accounts, whether the appellant had access to them, the extent to which he had been involved in their preparation, whether or not he had disclosed them to the respondent and the nature of any discussions between the parties in relation to such accounts. Counsel also relied on evidence of the extent to which it was the respondent through Mr Sowiha, rather than the appellant, who principally had involvement in the preparation of the financial statements of the joint venture and who had knowledge of their contents.
58 In our opinion, there is considerable force in these submissions. Had the argument regarding fiduciary obligations been raised below, evidence would have been required as to the transactions between the parties concerning the financial statements of the joint venture. It would not be appropriate in these circumstances to permit the respondent to raise the matter now for the first time upon appeal.
59 In any event, based on the evidence that was led at trial, in our opinion the notice of contention would be bound to be rejected, even if the argument were able to be relied upon. There is no evidence upon which this Court could now be satisfied either that the appellant withheld material facts regarding the financial position of the joint venture from the respondent, or that there were such material facts of which the respondent was unaware. Still less could it be satisfied that the appellant breached any fiduciary duty in failing to make a full and frank disclosure of such material facts.
60 In oral argument, counsel for the respondent also submitted that there was a 'conflict of interest' involved by reason of the fact that, according to the settlement agreement which was the subject of dispute, the appellant would have stood to make more out of the joint venture than the respondent. It was submitted that the settlement involved a division of profits otherwise than in accordance with the respective shares of the joint venturers. There is no substance in this submission. In the first place, there is no material before the Court by reference to which it could conclude that the settlement failed to reflect an equitable distribution of profits between the joint venturers having regard to their prior contributions to the joint venture. The difference in value between the apartments transferred to the respective parties would only be one element in any calculation as to the distribution of profits, and could not by itself be conclusive. In particular, it would need to be determined whether that difference was attributable to a difference in the parties' respective prior contributions.
61 Secondly, and more importantly, even if the settlement agreement caused the appellant to receive a greater share of the joint venture profits than the respondent, no basis has been established for interfering with any such agreement, by reference to a breach of fiduciary obligations or otherwise. Mere inequality in the distribution of the profits of the joint venture would not of itself establish any breach of fiduciary duty by the appellant in the course of reaching the agreement to take such a course.
62 For these reasons, in our opinion, the notice of contention should be dismissed.
[1] Eliana Construction and Developing Group v Assad [2014] VSC 143, [56]-[58] ('Reasons').
[5] All errors and ellipses in original.
[7] De Iacovo v Lacanale [1957] VicRp 78; [1957] VR 553, 557-9 (Monahan J); Pettitt v Dunkley [1971] 1 NSWLR 376, 380-2 (Asprey JA); Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, 278-81 (McHugh JA); Palmer v Clarke (1989) 19 NSWLR 158; Sun Alliance Insurance Ltd v Massoud [1989] VicRp 2; [1989] VR 8, 19-20 (Gray J).
[8] (1987) 10 NSWLR 247, 280, quoting Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378, 386 (Mahoney JA).
[9] Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, 279.
[10] Wainohu v New South Wales (2011) 243 CLR 181, 219 [68] (French CJ and Kiefel J); see also 230 [109] (Gummow, Hayne, Crennan and Bell JJ).
[11] [2005] VSCA 317, [38] (citations omitted).
[12] See also, eg, Church v Echuca Regional Health [2008] VSCA 153; (2008) 20 VR 566, 584 [90] (Ashley JA, Buchanan JA and Pagone AJA agreeing); Transport Accident Commission v Kamel [2011] VSCA 110, [70]-[71] (Kyrou AJA, Warren CJ and Ashley JA agreeing); ACN 005 565 926 Pty Ltd v Snibson [2012] VSCA 31, [78]-[80] (Kyrou AJA, Mandie and Hansen JJA agreeing).
[14] Ibid, 271 [56] (citations omitted).
[15] Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110, [56] (McColl JA, Ipp JA and Bryson AJA agreeing), citing Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, 280 (McHugh JA).
[16] Justice Mark Weinberg, 'Adequate, Sufficient and Excessive Reasons' (Speech delivered at the Judicial College of Victoria, 4 March 2014).
[18] Ibid [21] (Batt and Vincent JJA agreeing) (citations omitted).
[19] Rodda v Transport Accident Commission [2008] VSCA 276, [98] (Hargrave AJA, Ashley and Dodds-Streeton JJA agreeing); see also ACN 005 565 926 Pty Ltd v Snibson [2012] VSCA 31, [80] (Kyrou AJA, Mandie and Hansen JJA agreeing).
[20] Transport Accident Commission v Kamel [2011] VSCA 110, [86] (Kyrou AJA, Warren CJ and Ashley JA agreeing), citing Franklin v Ubaldi Foods Pty Ltd [2005] VSCA 317, [38] (Ashley JA); ACN 005 565 926 Pty Ltd v Snibson [2012] VSCA 31, [81] (Kyrou AJA, Mandie and Hansen JJA agreeing).
[21] Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110, [56]-[66] (McColl JA, Ipp JA and Bryson AJA agreeing).
[24] Hunter v Transport Accident Commission [2005] VSCA 1, [37] (Nettle JA, Batt and Vincent JJA agreeing); Church v Echuca Regional Health [2008] VSCA 153; (2008) 20 VR 566, 585 [92] (Ashley JA, Buchanan JA and Pagone AJA agreeing).
[25] Cf Rodda v Transport Accident Commission [2008] VSCA 276, [108] (Hargrave AJA, Ashley and Dodds-Streeton JJA agreeing).
[29] [1988] HCA 12; (1988) 180 CLR 491, 497.
[30] See Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635, 645 [12] (Gleeson CJ).
[31] News Ltd v Australian Rugby Football League Ltd [1996] FCA 870; (1996) 64 FCR 410, 539 (the Court).
Assad
Eliana Construction & Developing Group Pty Ltd [2015] VSCA 53
(1987) 10 NSWLR 247
(2000) 2 VR 246
(2008) 232 CLR 635
(2008) 20 VR 566
(1988) 180 CLR 491
(1996) 64 FCR 410
(1989) 19 NSWLR 158
(2011) 243 CLR 181
(1985) 157 CLR 1