Jagatramka v Wollongong Coal Limited [2021] NSWCA 61 (21 April 2021) (Bathurst CJ; Bell P; White JA)


Catchwords:


APPEALS – from finding of fact – inferences from primary facts – two competing hypotheses on the evidence – where primary judge applied a process of inferential reasoning based on circumstantial evidence – whether primary judge erred in applying this process to make findings of fact – duty of an appellate court to decide for itself which of the two hypotheses was the more probable – appellate court to discharge this duty by weighing the conflicting evidence and drawing its own inferences and conclusions

CORPORATIONS – directors and officers – fiduciary duties – duty to act in good faith in the best interests of company and for proper purpose – where board resolved to purchase a property for “visiting executives” of the group – appellants were sole occupants of the property – whether the appellants were “visiting executives” for the purposes of the resolution of the board

EQUITY – fiduciary duties – fiduciary relationships – directors – conflict of interest and duty – no profit rule – whether the appellants improperly used their position as directors of the respondent to gain a benefit for themselves – whether the appellants intended to reside at the property on an exclusive, indefinite and continuous basis at the time of the resolution

EVIDENCE – circumstantial evidence – inferential reasoning – between two competing hypotheses – no direct evidence as to the appellants’ intention at the relevant time – where primary judge constrained to rely on events post-dating the material resolution – reasoning by way of “links in the chain” – whether such “links” made it reasonable to conclude on the balance of probabilities that the appellants had breached their fiduciary duties

EVIDENCE – inferences – Jones v Dunkel – where neither of the appellants gave evidence at trial – court entitled to infer that their evidence would not have assisted their case – court not entitled to infer that the evidence would have been adverse to the appellants

EVIDENCE – standard of proof – the Briginshaw principle – where the nature of the breaches alleged amounted to serious wrongdoing on the appellants’ behalf