AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
Hasler v Singtel Optus Pty Ltd ( “Hasler” ) Curtis v Singtel Optus Pty Ltd; Singtel Optus Pty Ltd v Almad Pty Ltd (2014) 87 NSWLR 609 clarified that the Bell decision did not intend to broaden the class of breaches of fiduciary duty in the context of “knowing assistance” . Notwithstand - ing this, in Hasler, the court found that the rel - evant conduct was caught within the meaning of “dishonest and fraudulent design” on any view. More recently, the Victorian Court of Appeal case, Harstedt Pty Ltd v Tomanek [2018] VSCA 84, has provided guidance as to the liability of parties who assist or facilitate another’s fraudu - lent acts. In a case where a party has, by reason of a breach of fiduciary duty or fraudulent activ - ity, received or otherwise profited from misap - propriated funds, that party may become liable in the following ways: • “knowing assistance” in the breach – where a person knowingly assists with a dishonest and fraudulent scheme; “knowing induce - ment” or immediate procurement of the breach – a third party may be liable as an accessory if they induce or otherwise procure fraudulent conduct or a breach of fiduciary duty; • corporate alter ego – a company will be fully liable for the profits derived as a result of fraudulent conduct or the breach of fiduciary duty if the company is the wrongdoer’s “cor- porate creature or vehicle” ; and • trustee de son tort – a party may be held liable as “trustee de son tort” or “of his own wrong” where they are not a trustee but pre - sume to act as a trustee and then commit a breach of trust or fraudulently profit from their position. With respect to breach of fiduciary duty and knowing assistance claims, a question that may
arise is whether a plaintiff is entitled to obtain both the remedies of equitable compensation and an account of profits from multiple wrong - doers. In Xiao v BCEG International (Australia) Pty Ltd [2023] NSWCA 48, the New South Wales Court of Appeal recently determined that although a plaintiff cannot obtain both equitable compensation and an account of profits from a single defendant, where multiple defendants are involved, a plaintiff is entitled to make “split election” seeking different remedies from differ - ent wrongdoers. This is because the liability of the knowing recipient (who profited from their own misconduct) is different in nature and extent from the liability of the fiduciary (who made no profit from the default), particularly given that the knowing recipient does not owe a duty of loyalty to the principal. For this reason, seeking “a gain-based remedy from a knowing recipient is not inconsistent with a compensation remedy against the defaulting fiduciary” (at [69]). 1.4 Limitation Periods At the federal level, fraud offences have the fol - lowing limitation periods: • no time limitation for offences where the maximum imprisonment for a first offence exceeds six months; • one year after the offence was committed for offences where the maximum imprisonment is six months or less; and • one year for offences where punishment is a pecuniary penalty and no imprisonment (Crimes Act 1914 (Cth) Section 15B). Recently, the Full Federal Court in Walker v Members Equity Bank Ltd [2022] FCAFC 184 also confirmed that there is a three-year limita - tion period on criminal prosecutions brought by the Australian Securities & Investments Com - mission (ASIC) for false or misleading repre -
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