Linton v Telnet Pty Ltd

(1999) 30 ACSR 465; [1999] NSWCA 33

NSW Court of Appeal

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Interrogate

Catchwords

1. Equity
2. › Fiduciary duties
3. › Directors' duties
4. › Group of companies
5. › Whether Charterbridge test applies where directors had regard to interests of group rather than particular company
6. › Whether directors required to consider interests of creditors
1. Equity
2. › Constructive trusts
3. › Knowing receipt
4. › Barnes v Addy second limb
5. › Nature of knowledge or notice required
6. › Whether knowledge or notice established on the evidence
1. Practice and Procedure
2. › Appeals
3. › Notice of contention
4. › Leave to amend
5. › Whether new case may be raised on appeal that was not part of case at trial
6. › Suttor v Gundowda principles

Quick Take

The Charterbridge objective test applies where directors of a company in an informal group have had regard to the interests of the group rather than the particular company, at least where both parties adopt that test. A case based on directors' failure to have regard to creditors' interests requires evidence directed to the company's financial position at the relevant time, including evidence of insolvency or concern for solvency, and the relevant matters must be put to witnesses in cross-examination. On a knowing receipt claim under Barnes v Addy, the evidence relied upon to establish the recipient's knowledge or notice must be sufficient on whichever version of the test is applied.