The approach taken by the Court to the calculation of compensation to be awarded in a case involving a breach of fiduciary duty and breach of directors duty …
In late 2012 Mr Schmidt entered to discussions with Mr Haim Bzezinski, Danny Ruschin and companies that they controlled about entering into a joint venture to export live cattle to Israel. Mr Schmidt became a direction of AHRKalimpa Pty Ltd, the company that would conduct the export trade. It was part of the negotiation that in the event of the agreement for Mr Schmidt to attend to the general management of the joint venture was terminated the parties and related entities of AHRKalimpa Pty Ltd would not sell, trade or facilitate delivery of livestock for 2 years.
A number of export shipments were made but the first two of these were not profitable. In late 2013 Mr Schmidt and his company Otway Livestock Pty Ltd devised a plan to takeover the business. After the negotiations on the joint venture terms broke down Mr Schmidt resigned as a director of AHRKalimpa Pty Ltd and he took steps to continue the export trade to the exclusion of AHRKalimpa and the other joint venturers. To aid him in carrying on the business, in late 2013 he broke into the offices of AHRKalimpa Pty Ltd and stole information needed to conduct the live export trade.
The Court found that Mr Schmidt took advantage of information, which was confidential to the joint venture, in order to continue to conduct the business through his company Otway Livestock Pty Ltd. The Court further found that Mr Schmidt breached duties owed as a director of AHRKalimpa Pty Ltd by planning to divert revenue and ultimately profits from AHRKalimpa Pty Ltd to himself or his associated entities using the confidential information he stole to advance his purpose.
Because of Mr Schmidt’s conduct Otway Livestock Pty Ltd breached fiduciary duties it owed to AHRKalimpa Pty Ltd. Otway Livestock Pty Ltd was also found liable, as an accessory for Mr Schmidt’s breaches of his director’s duties. Mr Schmidt was also found liable, as an accessory for the breaches of fiduciary duties by Otway Livestock.
Judge Elliott of the Supreme Court of Victoria ordered that the defendant pay the plaintiffs more than $2.7 million dollars in damages.
Breaches of director’s duties and fiduciary duty can arise in a multitude of scenarios. If any of our newsletter readers require more guidance in this aspect, they can contact Peter Jackson at pjacksonassoc.com.au or Costin Stan at email@example.com
Making a will during the Covid19 Pandemic …
In order for a will to be properly executed by the testator it must be witness by two independent witnesses. Those witnesses and the testator must be in the presence of each other at the time of signing the will.
For a six month period from 22 April 2020 the New South Wales government, by legislation, authorised the signing of wills using video platforms such a Zoom, Skype or FaceTime. After the will is prepared by the solicitor, the testator and the solicitor with a witness convene on the video platform, each with a copy of the will before them. The testator signs his or her copy and at the same time the witnesses sign the copy before them. The will maker then sends the signed copy to the solicitor and the two documents represent the final will.