Ferrari & Anor v Ferrari Invest (T'ville) P/L (in Liq)

[1999] QCA 230

Queensland Court of Appeal

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Interrogate

Catchwords

1. Corporations
2. › Directors and officers
3. › Fiduciary duties
4. › Breach of duty
5. › Misappropriation of company property
6. › Transfer of rent roll to company controlled by directors
7. › Remedy
8. › Equitable compensation
9. › Whether assessed by analogy with common law damages or according to value in hands of wrongdoer
1. Equity
2. › Equitable compensation
3. › Breach of fiduciary duty
4. › Defaulting fiduciary
5. › Measure of compensation
6. › Whether value to wrongdoer or hypothetical market value
7. › Distinction between equitable compensation and common law damages
8. › Whether equitable damages always assessed on same principles as common law damages
1. Equity
2. › Constructive trust
3. › Knowing recipient of misappropriated company property
4. › Liability of company controlled by defaulting directors
1. Corporations
2. › Directors and officers
3. › Duty not to compete
4. › Whether directors could rely on potential resignation to avoid restraint
5. › Whether duty continues after company becomes insolvent

Quick Take

Equitable compensation for directors' misappropriation of company property (here, a rent roll) is to be assessed by reference to the value of the asset in the hands of the wrongdoing fiduciary, not by a hypothetical open market sale that allows the wrongdoer to rely on their own unwillingness to provide restrictive covenants. The statement in Markwell Bros v CPN Diesels that equitable damages are always assessed on common law principles is erroneous; equitable compensation is more flexible and may exceed what common law damages would produce.