The Law Library of Victoria Home Menu

Break Fast Investments Pty Ltd (ACN 090 648 990) v Rigby Cooke Lawyers (A Firm) (ABN 58 552 536 547) [2022] VSCA 118

EQUITY
Victorian Court of Appeal
Judge(s): 
Kyrou, McLeish and Walker JJA
Parties: 

Break Fast Investments Pty Ltd (ACN 090 648 990) v Rigby Cooke Lawyers (A Firm) (ABN 58 552 536 547)

Judgment Date: 
23 June 2022
Catchwords: 

EQUITY - Fiduciary duties - Conflict of interest - Solicitor-client relationship - Solicitor acted for company and others in defending proceeding in which plaintiff alleged company held property on trust - Company actively defended proceeding and paid legal fees on behalf of itself and other defendants - Court found company held property as trustee - Company unable to recover legal fees from other defendants due to their insolvency - Company sought equitable compensation from solicitor calculated by reference to legal fees paid to solicitor - Whether company should have adopted passive role in proceeding - Whether interests of company conflicted with interests of other defendants - Whether duties owed by solicitor to company conflicted with duties owed to other defendants - In company's interest to actively defend proceeding - No conflict of interest or duty - Leave to appeal granted - Appeal dismissed.

EQUITY - Alleged breach of fiduciary duty by solicitor - Claim for equitable compensation - Causation - Leave to appeal refused.

EQUITY - Knowing receipt of trust funds under first limb of Barnes v Addy (1874) LR 9 Ch App 244 - Solicitor acted for company in defending proceeding in which plaintiff alleged company held property on trust - Solicitor's legal fees paid from such property - Solicitor aware of conflicting evidence on trust issue - Tangible risk Court would find company was trustee - Whether solicitor's knowledge of adverse evidence and possible adverse outcome sufficient to satisfy fourth knowledge category discussed in Baden v Société Générale pour Favoriser le Développement du Commerce et de l’Industrie en France SA [1993] 1 WLR 509 - Knowing receipt claim not established - Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (in liq) (2008) 252 ALR 41 distinguished; Carl Zeiss Stiftung v Herbert Smith & Co [No 2] [1969] 2 Ch 276 applied - Leave to appeal refused.

Citation: