In Trustees of the Roman Catholic Church for the Diocese of Maitland-Newcastle v AA [2025] NSWCA 72 (15 April 2025), the New South Wales Court of Appeal overturned a trial judge’s adjudication that a tortious duty of care was owed by a Catholic Diocese in respect of alleged sexual abuse by an assistant priest.  Such abuse was alleged to have occurred when the plaintiff, in about 1968, was in attendance with the assistant priest, Father Pickin, at the presbytery of the local Catholic Church on a Friday night.  While a lengthy decision dealing with other issues, the point given treatment here concerns the obligation of another priest in the parish to pass on to his superiors a prior complaint by another child of sexual conduct by Father Pickin.

The court wrote:

The knowledge from Mr McClung’s report (notice of contention, para 5)

[219]  The plaintiff relied on the knowledge of Fr Pickin’s misconduct, which Mr McClung had reported at the time, to support the existence of a duty. This was the subject of paragraph 5 of the notice of contention, which was:

The Primary Judge erred in failing to find that, prior to the sexual abuse of the respondent by the late Father Ronald Pickin in 1969, the Diocese of Maitland-Newcastle knew or ought to have known that Father Pickin had sexually abused Mr Stephen McClung.

[220]  Mr McClung was not cross-examined so as to invite the rejection of his account, and the primary judge regarded Mr McClung’s evidence as credible and reliable. Mr McClung said that Fr Pickin touched his genitals, outside his trousers, repeatedly, in 1965, when he was 16 or 17, when Fr Pickin was an assistant priest at St Columba’s Church in Adamstown.

[221]  The primary judge accepted Mr McClung’s evidence, but did not rely upon it to establish that there was a foreseeable risk.

[222]  Mr McClung said that in 1966:

… I went to speak to Father Doran at St Columba’s. Father Doran had been my science teacher at St Pius and was a practical, level-headed guy who I respected a lot.

I cannot remember the words that I said, but I told Father Doran that I was being sexually touched by Ron. I did not disclose the abuse by Hodgson because I felt I was burying that and leaving the abuse at St Pius behind me.

[223]  The plaintiff submitted that Mr McClung’s disclosure to Fr Doran ought to have led to a finding of actual or, at least, constructive knowledge by the Diocese, because Fr Doran was a priest in the Diocese, and, according to Fr Dillon, “the responsibilities of priests towards their parishioners … were consistent with the normal and traditional practice of the Church and the expectations of the people of the Parish”.

[224]  The plaintiff submitted that child sexual abuse was abhorrent, and any right-thinking person would find any disclosure of such conduct deeply disturbing, and requiring report and investigation. He asserted that “it cannot be said that a reasonable person would have taken a contrary view in 1969”.

[225]  The plaintiff submitted that:

the evidence was sufficient to find that the notification to Fr Doran by Mr McClung put the Diocese on notice of the risk posed by Fr Pickin because Fr Doran was a representative of the Diocese (particularly in the eyes of a minor) who operated “in communion” with the Bishop, to be regarded by the Bishop as his “co-worker”. Fr Doran, as a priest, was also a person of sufficient responsibility and duty within the Diocese to establish notice for the Diocese.

[226]  The appellant disagreed. The appellant submitted that what Mr McClung told Fr Doran was insufficient. It was not suggested that Fr Doran was a senior member of the clergy, “let alone a Trustee”, or that he in fact told anyone. The appellant’s submissions continued:

Further, it is worth noting that the Respondent’s expert Father Dillon observed that reservations and fears now held about children being alone with a non-family member adult were a rarity. And that the tragic catalogue of offences and crimes which have been so well documented and proven since the mid-1980s was still virtually unknown (in the late 1960s).

It’s not to the point that Father Pickin was engaging in conduct that with the benefit of hindsight reasoning ought to have raised a red flag amongst the Trustees and senior members of the clergy. The question is whether the Trustees, as the individuals who are said to be liable, had relevant actual or constructive knowledge of Father Pickin’s alleged offending and there is no evidence that they did.

[227]  (It was said or at least implied by both sides during the hearing that Mr McClung’s reporting of abuse during the confessional concerned Fr Pickin (including 27 February 2025 T 58.6 “reported the same thing to Father Doran and to another Father who had been giving confession”; see also T 25.23). That was an (inadvertent) error. Mr McClung said that he had been sexually abused by another priest, Fr Hodgson, in 1963, while a student at St Pius X High School, and had confessed that. That did not concern Fr Pickin, and in any event nothing was put to suggest that the priest who took Mr McClung’s confession was at liberty to pass on the information concerning that other priest to anyone.)

Consideration

[228]  I shall pass over the lack of precision in the submissions as to the meaning of “actual” or “constructive” knowledge of “the Diocese”, which were asserted but not explained in submissions. This issue may be resolved on the basis that (a) the mere report to Fr Doran of itself did not amount to the imputation of any form of knowledge to “the Diocese”, and (b) it was not established that Fr Doran was under any obligation to report what Mr McClung told him.

[229]  Knowledge on the part of Fr Doran is not knowledge of the appellant, whether in its own right or as the “proper defendant”. The Roman Catholic Church was and is hierarchical. The knowledge of each and every priest is not taken to be the knowledge of the institution as a whole.

[230]  Fr Doran was a parish priest. The plaintiff’s case turned on establishing knowledge by the Bishop or senior members of the Diocese. No attempt was made by the plaintiff to establish who they were. Whoever they were, it was not suggested that Fr Doran was one of them. So far as the evidence suggests, he was not. The yearbook for 1969–1970 identifies seven Diocesan Consultors, the Diocesan Chancellor, and the members of a large number of committees (including the Vicars Forane, the Synodal Judges and Examiners, the Pro-Synodal Judges and Examiners, the Parish Priest Consultors, the members of the Tribunal for Matrimonial Causes, the Diocesan Commission for Sacred Liturgy, the Censor of Books, the Diocesan Director of Pontifical Mission Aid Societies, the Diocesan Directorate of Education, the Director of the Diocesan Priests’ Eucharistic League, the Director of Pastoral Course for Priests, the Director of Priestly Vocation Campaign, the Catholic Family Welfare Bureau and the Sick Clergy Relief Fund Trustees) and Fr Doran was a member of none of them.

[231]  If Fr Doran were an employee, it would not follow that his knowledge would be imputed to his employer. The question of imputation of knowledge of a company’s officers and employees to the company depends in every case on context, and is not automatic. That fundamental proposition was emphasised by Lord Hoffmann in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 [1995] UKPC 5 and has been repeatedly applied in this jurisdiction: see for example Anderson v Canaccord Genuity Financial Ltd (2023) 113 NSWLR 151; [2023] NSWCA 294 at [255] and Aidzan Pty Ltd (in liq) v K. & A. Laird (NSW) Pty Ltd (in liq) [2024] NSWCA 185 at [70]. In South Sydney Junior Rugby League Club Ltd v Gazis [2016] NSWCA 8, Basten JA said for this Court at [112] that:

It is not correct that the knowledge of every employee of the company, particularly as to the activities of independent contractors having different functions on the company’s premises, becomes the knowledge of the company. As Spigelman CJ noted in Nationwide News Pty Ltd v Naidu “[w]hether a principal is affected by an agent’s knowledge depends upon the context.” Further, “[w]hether the knowledge of a particular person should be imputed to a corporation depends on the scope of that person’s employment.” The Chief Justice continued, by contrasting the functions of specific officers who gave evidence with, “[a] person in a supervisory position … [who] has duties which encompass the receipt of the relevant knowledge and accordingly, could be said to have a duty to communicate and/or act upon it … [t]hat cannot be said to be the case for the other employee witnesses.” [footnotes omitted].

[232]  Parish priests are not employees, and there is no reason why, in the absence of a duty to communicate a complaint, more senior priests within a diocese should have the parish priest’s knowledge attributed to them. No submission was made that the effect of s 6O(b) was that the knowledge of each and every priest in a diocese was to be imputed to the proper defendant. If so, that would place unincorporated associations in a different position than incorporated organisations, which would be contrary to s 33 of the Interpretation Act 1987 (NSW). It would also be unrealistic. It is to be borne in mind that the Diocese of Maitland took in the entirety of one of Australia’s largest cities, and more than 12,000 square miles, and there were in the order of 55 parishes and some 200 priests and nuns.

[233]  The analysis of the position at law is not assisted by invoking metaphor. The Bishop may as a matter of canon law be in “communion” with a priest who learns of an allegation (just as he may be in “communion” with the assistant priest who committed the assault). That does not mean as a matter of the law of negligence that the knowledge of the priest (or the assistant priest) is imputed to the Bishop.

[234]  Nor do I accept the assertion that in the late 1960s it was clear beyond any argument that a priest to whom a complaint was made of sexual abuse such as that told to him by Mr McClung, a first year undergraduate, concerning touching of his genitals the previous year when he was around 17, should have been passed on.

[235]  This is a question of evidence. It turns on what a reasonable person in the position of Fr Doran in 1969 would have done. It is important not to assess what a reasonable person in Fr Doran’s position in 1969 would have done against the expectations and knowledge of 2025. The plaintiff did not adduce any evidence that in response to the report of the abuse described by Mr McClung, Fr Doran or some other parish priest would take the matter further. Such evidence as there was pointed in the opposite direction. As the appellant pointed out, Fr Dillon confirmed that in the late 1960s, “[a]mong Catholic people and even among the vast majority of Priests, Religious Brothers and Sisters, the tragic catalogue of offences and crimes which have been so well documented and proven since the mid-1980’s was still virtually unknown”.

[236]  A further matter bearing upon whether a reasonable person in the position of Fr Doran would have taken further steps was the attitude of Mr McClung. There was no reason to think that Mr McClung sought to take the matter further. To the contrary, Fr Pickin officiated at Mr McClung’s wedding in 1972, and his family continued to be involved in the church, including with Mr McClung reading Epistles on Sundays at Merewether where Fr Pickin was parish priest in the 1980s. Of course, Mr McClung’s subsequent conduct was not known in around 1966. Nonetheless, Mr McClung’s conduct after 1966 tends to confirm that when he reported the allegation to Fr Doran he did not expect any further steps to be taken.

[237]  I am inclined to agree that what was said by Lord Neuberger MR in Maga v The Trustees of the Birmingham Archdiocese of the Roman Catholic Church [2010] EWCA Civ 256 [2010] 1 WLR 1441 at [65] was equally applicable in Newcastle in 1969:

In the mid-1970s, an allegation by one boy that a priest had fondled his genitals should plainly not have been simply dismissed, but it would not have been treated nearly as seriously then as it would be now. As Lady Hale said in A v Hoare [2008] AC 844 at [54], “until the 1970s people were reluctant to believe that child sex abuse took place at all.” In my view, Father McTernan would have been acting properly, according to the standards of the time, if he had taken the allegation up with Father Clonan and, provided that he was given a convincing denial, he then took the matter no further either in the Archdiocese or through the police. The alleged abuse, though serious, was not of the grossest type, and such allegations are all too easy to make, and if they are passed on and investigated, they can cause considerable damage to the person against whom they were made and to the institution for which he works. By the standards of 1974, such considerations could reasonably have been accorded greater weight than they would today.

[238]  It is to be borne in mind that the abuse of which Mr McClung complained was the repeated touching of his genitals, outside his trousers, when he was aged around 16 or 17. It was very wrong of Fr Pickin to do so. It was a crime, it was contrary to Fr Pickin’s vocation, and it was contrary to the relationship of trust which Mr McClung was entitled to expect from a priest. But the wrongness of what Mr McClung reported does not mean that the plaintiff is released from his obligation to establish by evidence all elements of his case.

[239]  The issue is whether the plaintiff established that Fr Doran was under any obligation to report what he had been told. Let it be assumed that Fr Doran considered that Mr McClung’s account of what Fr Pickin had done a year before was credible. He should have raised it with Fr Pickin. He may have done so. Fr Pickin may have denied it. He may have said that he could recollect a time when he accidentally touched Mr McClung, but denied any intention to do so. He may have said that he had touched him deliberately, had been in a deal of internal turmoil about it, and said that it would not recur. It is most unlikely that Fr Pickin told Fr Doran that he took every opportunity to indecently assault children entrusted into his care, and would continue to do so. All this is speculation, serving to emphasise what is absent from the evidence relied on at trial.

[240]  It may fairly be said that establishing that Fr Doran did something, or ought to have done something, some 60 years ago, is a heavy burden for the plaintiff in a case such as the present. But it is a consequence of the fact that the plaintiff has sued someone other than Fr Pickin in relation to a tort committed many decades ago by Fr Pickin, of which he made no complaint until 2023, leading to the result that he needs to establish that the Bishop or senior priests in the Diocese of Maitland had some level of knowledge, in 1969, that Fr Pickin posed a risk to children.

[241]  In the absence of evidence of any knowledge or belief or suspicion by the Bishop or senior priests in the Diocese that Fr Pickin posed a risk to children, I do not see how the appellant, making every assumption in the plaintiff’s favour as to the effect of Part 1B of the Civil Liability Act and the parties’ agreement that it was the “proper defendant” for a claim against the Catholic Church insofar as it operated in the Diocese of Maitland in 1969, owed a duty of care to the plaintiff. …

…

(emphasis added)

A link to the full case is here.

The SASCA analyses all the current case law: Rangelea Holdings Pty Ltd v Anyamathanha Traditional Lands Association & ors [2025] SASCA 32.

The continuing controversy

The NSW Court of Appeal considered this issue in the recent decision in Tok v Rashazar [2025] NSWCA 94 (7 May 2025).

Such an assessment will normally be assessed as at the date of breach, but that rule may yield in certain circumstances, as discussed by Stern JA (with whom Payne and Kirk JJA agreed).

The topic of using wasted expenditure in such an assessment was also considered.

Stern JA said:

Date of assessment of damages for breach of contract

50. An important predicate of the primary judge’s reasoning at [102] (set out at [31] above) was that the value and profitability of Rashazar on the counterfactual that it had become a 30% shareholder of Fresh Cut were relevant to the assessment of damages for breach of contract. Implicit in this was a finding that events after the date when the obligation of Mr Tok to transfer the shares crystallised would be relevant to the assessment of damages. The correctness of this finding was implicitly raised in ground one, as the appellants contended that they could have put evidence before the Court as to the value of the 30 shares in Fresh Cut as at the date of breach.

51. In considering this contention, the starting point is necessarily “[t]he rule of the common law … that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed”: Robinson v Harman [1848] EngR 135; (1848) 1 Exch 850 at 855 (Parke B); Tabcorp Holdings Ltd v Bowen investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 (“Tabcorp”) at [13] (French CJ, Gummow, Heydon, Crennan and Kiefel JJ). As to when damages are assessed, ordinarily, as was held in Johnson v Perez [1988] HCA 64; (1988) 166 CLR 351 at 367; [1988] HCA 64, damages for breach of contract are assessed as at the date of the breach, however:

“The rule will yield if, in the particular circumstances, some other date is necessary to provide adequate compensation: see, for example, Wenham v Ella [1972] HCA 43; (1972) 127 CLR 454; Dodd Properties Ltd. v Canterbury County Council [1979] EWCA Civ 4; [1980] 1 WLR 433; [1980] 1 All ER 928; County Personnel Ltd. v Alan R. Pulver & Co. [1987] 1 WLR 916; [1987] 1 All ER 289.”

52. Wenham v Ella (1972) 127 CLR 454; [1972] HCA 43 (“Wenham”), cited in the extract set out above, involved a breach of contractual obligation of the appellant to transfer shares which would have given the respondent a 6/20 undivided share in a profit-making property. The High Court, upholding the trial judge’s award, held that the respondent’s compensable loss included the loss of “the product of the interest in the land” from the date of the failure to transfer to the date of judgment: at 461 (Barwick CJ; see also Menzies J at 463, Walsh J at 464-465; Gibbs J at 472-4; Stephen J at 474). Menzies J observed that the “rules which operate satisfactorily in cases where purchasers have not paid money, cannot be applied automatically to cases where purchasers have paid money for what has not been delivered to them”: at 464 (see also Barwick CJ at 463 and Gibbs J at 473). Walsh J at 466 (cited with approval by Steward J in Elisha v Vision Australia Ltd [2024] HCA 50; (2024) 99 ALJR 171 at [82]) described an error in the appellant’s contention as:

“treating rules which constitute useful guidance in the ascertainment of damages as rigid rules of universal application, instead of treating them as prima facie rules which may be displaced or modified whenever it is necessary to do so in order to achieve a result which provides reasonable compensation for a breach of contract without imposing a liability upon the other party exceeding that which he could fairly be regarded as having contemplated and been willing to accept.”

53. In a passage recently cited with approval by Ward P (Meagher JA and Griffiths AJA agreeing) in Khattar v Khattar [2023] NSWCA 133 at [215], Gibbs J observed at 473-4 that:

“The general principle that damages are normally measured by reference to the circumstances at the date of the breach of contract does not mean that events that have occurred after that date may never be considered. The appellants’ contention on this point, if correct, would mean that evidence could never be given of the amount of profits lost as the result of a breach and that the every-day practice of receiving evidence as to the damage that had in fact flowed from a breach and as to steps that were or could have been taken to mitigate a loss is erroneous. However, the evidence as to the income in fact lost by the breach was in my opinion plainly admissible. As to the contention that it was wrong that the amount of damages should have depended on the time that elapsed until judgment, the answer simply is that until that time the respondent was kept out of his profits as well as deprived of his asset and its value.”

54. To similar effect, the link between the date at which damages for breach of contract are assessed and the duty to mitigate was explained by Oliver J, in Radford v de Froberville [1977] 1 WLR 1262 at [1285] (referred to by the High Court in Tabcorp and cited with approval in Renown Corporation Pty Ltd v SEMF Pty Ltd (2022) 110 NSWLR 246; [2022] NSWCA 233 at [11] (Brereton JA, Meagher and Mitchelmore JJA agreeing)):

“It is sometimes said that the ordinary rule is that damages for breach of contract fall to be assessed at the date of the breach. That, however, is not a universal principle and the rationale behind it appears to me to lie in the inquiry — at what date could the plaintiff reasonably have been expected to mitigate the damages by seeking an alternative to performance of the contractual obligation?”

(See also H G Beale, Chitty on Contracts (35th ed, 2023, Sweet & Maxwell) at [30-107] and E Peel, Treitel, The Law of Contract (15th ed, 2020, Thomson Reuters) at p 1162.)

55. Consistent with this, Wenham was distinguished in CH Leahman Investments Pty Ltd v Tuesday Enterprises Pty Ltd [2024] WASCA 142 (“CH Leahman”) at [274] (Buss P, Vaughan JA, Lundberg J) on the basis that in Wenham the purchaser had paid the full purchase consideration whereas in CH Leahman “[a]t all times the appellant continued to be in a position to deploy the resources that it would otherwise have had to commit to the completion of the purchase of the Rexwells’ share”.

56. Further, in the passage set out at [53] above, Gibbs J recognised that events after the date of breach may be relevant to the assessment of damages even when assessed as at the date of breach. To similar effect, in Hungerfords v Walker [1989] HCA 8; (1989) 171 CLR 125 at 163; [1989] HCA 8, Dawson J held:

“That is not to say, however, that when damages are assessed as at the time of the wrong, foreseeable future losses which flow from the wrong, and not merely from delay in compensating for the wrong, may not be included in any award. … Moreover, the quantification of future losses may be made by reference to events which have occurred between the time when the cause of action arose and judgment upon the basis that actual facts are preferable to speculation: Willis v. The Commonwealth. Damages so assessed nevertheless form part of the loss flowing from the breach and are not damages for delay in the payment of damages.” (footnotes omitted)

57. Having regard to this authority, the primary judge did not err in finding events after the breach of contract were relevant to the assessment of damages for breach given that Rashazar paid in full for the 30 shares in Fresh Cut in 2016 and none of the respondents were aware of the breach of contract until some years after it occurred.

Using wasted expenditure as the basis for assessing damages for breach of contract

58. A second critical premise of the primary judge’s conclusion at J[102] is that this was an appropriate case in which to assess damages for breach of contract by reference to wasted expenditure. The primary judge’s key finding in this regard was predicated both upon the lack of information available to the respondents and the Court and upon her Honour’s finding that the question of what might have happened to Fresh Cut if Rashazar had been a 30% shareholder was imponderable.

59. The plurality judgment of Edelman, Steward, Gleeson and Beech-Jones JJ in Cessnock at [61] explained when it is that damages for breach of contract can properly be calculated by reference to wasted expenditure:

“The legal onus to prove loss arising from a breach of contract rests on the plaintiff as the party seeking to recover damages. However, where a breach of contract has resulted in (namely, caused or increased) uncertainty about the position that the plaintiff would have been in if the contract had been performed, then the discharge of the plaintiff’s legal burden of proof will be facilitated by assuming (or inferring) in their favour that, had the contract been performed, then the plaintiff would have recovered the expenditure they reasonably incurred in anticipation of, or reliance on, the performance of the contract. The strength of this assumption or inference, and thus the weight of the burden placed on the party in breach to adduce evidence to rebut the inference in whole or in part, will depend on the extent of the uncertainty that results from the breach. Expressed in this way, this facilitation principle is tied to its rationale, namely the uncertainty in proof of loss occasioned to the plaintiff by the defendant’s breach.”

60. At [139], the plurality further explained:

“In summary, the facilitation of the plaintiff’s proof arises in cases where the defendant’s breach of an obligation results in uncertainty and difficulty of proof of loss for the plaintiff, who has incurred expenditure in anticipation of, or reliance on, the performance of the obligation that was breached. The facilitation of proof that reasonably incurred expenditure would have been recovered has been described by Leggatt J as an example of courts doing the ‘best they can not to allow difficulty of estimation to deprive the claimant of a remedy, particularly where that difficulty is itself the result of the defendant’s wrongdoing’. In applying the principle ‘reasonably … according to the circumstances of each case’, the plaintiff is given an evidential ‘benefit of any relevant doubt’ that expenditure would be recouped to the extent that it was reasonable, with the practical effect of giving the plaintiff ‘a fair wind’ to establish loss. The strength of the wind will depend upon the extent of the uncertainty resulting from the breach by the defendant. And all of the circumstances, including any evidence led by the defendant, must be considered. The plaintiff is given a ‘fair wind’ but not a ‘free ride’.” (footnotes omitted)

61. Having regard to these principles, the appellants’ contention that the primary judge erred in assessing damages for breach of the share sale agreement by reference to wasted expenditure should be rejected. The primary judge correctly identified that integers relevant to the assessment of damages premised upon Mr Tok’s compliance with the share sale agreement were “imponderable”. As I explain below, that plainly flowed from Mr Tok’s breach. That, together with the obvious difficulty in obtaining reliable financial information about the financial performance of Fresh Cut, justified the primary judge facilitating the respondents’ burden of proof by assuming (or inferring) in their favour that, had the contract been performed, they would have recovered the expenditure they reasonably incurred in anticipation of, or reliance on, the performance of the contract.

….

The link to the decision is here.

In Evans v Air Canada [2025] HCA 22 a recent unanimous decision of the High Court considered whether passengers had capacity to recover damages for bodily injury allegedly caused by turbulence experienced on an Air Canada flight.

Consideration was given to whether Air Canada’s International Passenger Rules and Fares Tariff (“Air Canada Tariff”) formed part of the contract of carriage with passengers.

The Court also considered whether certain treaty provisions could be given effect in domestic law, including whether defences to liability recognised by the Convention for the Unification of Certain Rules for International Carriage by Air (1999) (“Montreal Convention”) were expressly incorporated into the Air Canada Tariff.

A partial defence contained in the Montreal Convention was raised and the Court considered whether Air Canada had waived the partial defence limiting the extent of recovery of damages.

The Court described the issue as follows:

2. The issue in this Court arises from a claim, made by two passengers who travelled on an Air Canada flight from Vancouver to Sydney in July 2019, for damages arising from spinal and psychological injury allegedly caused by turbulence experienced on the flight. In the Supreme Court of New South Wales, the passengers sought damages from Air Canada for these bodily injuries under Art 17 of the Montreal Convention, as incorporated into Australian law. Air Canada relied upon a partial defence in Art 21(2) of the Montreal Convention, available where the damage was not due to negligence or any other wrongful act or omission by Air Canada or its servants or agents. Under that partial defence, damages would be subject to a cap that limited the extent of the passengers’ recovery to 113,100 Special Drawing Rights (an international reserve asset created by the International Monetary Fund) which is approximately $240,000 at present exchange rates. The appellant passengers replied that, under Art 25, Air Canada had waived the partial defence in Art 21(2) because the Air Canada Tariff provided in r 105(C)(1)(a) that “[t]here are no financial limits in respect of death or bodily injury”.

The Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (“Civil Aviation Act”) gives the Montreal Convention domestic legal effect in Australian law.  The Court found however that although the appellant passengers’ claim was brought under the Civil Aviation Act as a matter of domestic law, the treaty provisions that are given effect in domestic law have meaning in public international law that is not altered by the Civil Aviation Act. 

The Court noted that the system of rules governing liability for international air carriers and their application had been described as “an unusual hybrid of public international law and private transnational law”.  Consideration therefore needed to be given to the history of and background to the Montreal Convention, the Warsaw Convention and the Hague Protocol in order to interpret rule 105 of the Air Canada Tariff relating to liability of carriers and, in particular, limitations to that liability.

The Court found:

47. The interpretation of r 105(C)(1)(a) requires consideration of the meaning of the words of that rule in their context and in light of their purpose. Contrary to the submissions of Air Canada relying upon reasoning of the Court of Appeal, it cannot be assumed that it made “no commercial sense for Air Canada to volunteer to accept unlimited liability for death or bodily injury … on a no-fault basis” by waiving the defence in Art 21(2) of the Montreal Convention or that an acceptance of such liability by Air Canada without the benefit of the Art 21(2) defence was “unprecedented in a century of international commercial aviation”. Indeed, on another view, Professor Cheng observed in 2004, with reference to statements from market participants, that:

“in serious death and injury cases, major airlines tend increasingly to ignore the limits, and to pay full awardable damages. In fact, in view of the enormous cost of modern aircraft and of operating international air services, not to mention air travel claiming to be the safest means of transport, the difference in cost between insuring passenger liability for SDR100,000 a head or even for what could be compensation in full becomes negligible”. 

48. There is also no room in this context for the application of any expectation or “presumption”, as relied upon by Air Canada, to the effect that “for a party to be held to have abandoned or contracted out of valuable rights arising by operation of law, the provision relied upon must make it clear that that is what was intended. … ‘The more valuable the right, the clearer the language will need to be.'” Any such principle could have no application where the “right” in question is the application of a regime that (in Art 21) establishes the limit or threshold for tiers of liability for the application of a defence but also contemplates (in Art 25) that that limit or threshold can be raised or abolished by the stipulation of a carrier.  
49. Although the meaning of r 105(C)(1)(a) is not to be determined by such a priori assumptions, the provision must nevertheless be interpreted having regard to its context and purpose. That context and purpose make clear that r 105(C)(1)(a) only describes the effect of Arts 17 and 21 of the Montreal Convention, rather than stipulating a higher limit of liability for the purposes of Art 25 of the Montreal Convention. …

The Court unanimously dismissed the passengers’ appeal.

The judgment can be read here.

The judgment summary can be read here.

This case considers the enforceability of post-employment restraint clauses and the limits of interlocutory injunctive relief. Here, the Court declined to grant interlocutory relief restraining a former employee from accepting approaches by former clients. While a prima facie case existed that the respondent had accepted client approaches contrary to the restraint clause, the Court found no prima facie case of solicitation and noted that the case for enforceability of the restraint was weak. Weighing heavily against the grant of relief was the potential impact on 22 clients who had expressed a desire to continue working with the respondent. Accordingly, the balance of convenience favoured refusing the injunction.

In Perpetual Limited v Maglis [2025] QSC 71, the Court considered an application for interlocutory injunctive relief sought by Perpetual Limited and a related entity (the applicants) against a former employee, a financial adviser (the respondent). The applicants alleged that the respondent breached post-employment restraints by soliciting clients after commencing work with a competitor firm, Ord Minnett.

By way of background, the respondent’s employment came to an end on 28 February 2025. His contract included a restraint clause—Clause 5.1— prohibiting him, for 24 months post-employment, from “approach, canvass, solicit, accept any approach from or deal with any Client with a view to obtaining the business or custom of that Client in a business that is the same as or similar to any part or parts of the Business” or “counsel, procure or otherwise assist any person, firm or entity to do any of the acts referred to above…”.

After commencement at Ord Minnett in March 2025, the respondent was contacted by 24 former clients. In response, he sent each of them a letter explaining that he was bound by contractual restraints and could only act with Perpetual’s express consent. He enclosed a pro forma letter which clients could send to Perpetual to request such consent.

Several clients did so. Perpetual responded by offering to arrange a phone call to “discuss how the team can assist you.” The letter further stated: “I am confident that [the current Adviser] will continue delivering best-in-class advice while managing your portfolios…If, however, you still wish to transfer your portfolio from Perpetual to Mr Maglis who we understand is now working at Ord Minnett, we will respect your decision and adhere to your request. We note, however, that your former adviser owes a number of post-employment contractual obligations to Perpetual, and as a consequence of this, he is restricted from managing your portfolio until after 28 February 2026. For this reason, Perpetual regrets that it cannot consent to Mr Maglis providing financial services to you and, in the event that he should do so, we will have no choice in those circumstances other than to commence Court proceedings against him (and potentially his new employer) to protect Perpetual’s legitimate business interests and ensure his strict compliance with his post-employment contractual obligations to our business.”

Despite this, several clients contacted the respondent again, and he began what he described as an “onboarding process”, involving a “comprehensive discovery meeting” to discuss their financial objectives and risk profiles.

The applicants contended that this conduct, including the provision of draft letters and onboarding activities, amounted to solicitation and breach of the restraint.

Prima facie case

The issue for determination was whether the applicants had established a prima facie case. At [16]–[17], Bowskill CJ set out the applicable general principles:

[16] There are two aspects to the question whether the applicants have made out a prima facie case – the validity and enforceability of the restraint clause and, assuming it is valid, whether there has been, or is a threat of, breach of it.

[17] In order to show a prima facie case (or serious question to be tried) the applicants do not have to show that they will probably succeed at trial. It is sufficient that the applicants show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. How strong the probability of success needs to be depends on the nature of the rights asserted and the practical consequences likely to follow from the orders sought.

Validity and enforceability of the restraint clause

Her Honour expressed reservations regarding the argument for validity and enforceability of the restraint clause:

[31] On balance, and accepting that this is a determination at an interlocutory stage, I consider the argument for validity of the restraint clause has real challenges, having regard to the extremely broad definition of “Client”, which I do not accept is capable of being severed, read down, or read with additional words, as submitted by the applicants. The focus of the arguments was on the breadth of the clause itself, rather than the cascading periods of time during which it is said to apply. But I would regard that as a significant feature also, in the context of this case, in which it is difficult to see how a restraint – particularly on accepting approaches – for a substantial period of time would be enforceable.

[32] I do not go as far as concluding, on this interlocutory hearing, that there is no prima facie case for the validity of the restraint clause, but I do not consider the argument for validity to be a strong one.

Assuming the restraint clause is valid, whether there has been, or is a threat of, a breach

Her Honour considered that the respondent had accepted approaches from clients of a related entity of Perpetual, contrary to the restraint in clause 5.1:

[39] The evidence (exhibited to Mr Lunn’s affidavit) indicates some of the clients who received a letter in these terms forwarded it to Mr Maglis. There is also evidence of clients contacting Mr Maglis, after informing Perpetual of their desire to take their business elsewhere and receiving a response in the terms outlined above, and Mr Maglis then proceeding to begin what he called an “onboarding process”, which seems to have involved a “comprehensive discovery meeting” with them, discussing their financial objectives and reviewing their risk profile.

[40] I accept that, as a matter of principle, whether solicitation has occurred depends on the substance of what passes between the former employee and the client, and that the matter of who makes the initial contact is not decisive. However, simply responding positively to an approach from a former client will not amount to solicitation – “the line is crossed where the former employee, in response to an approach by a customer, does not merely indicate a willingness to be engaged, but positively encourages the customer to engage him or her”.

[41] Having regard to the evidence before the Court, I do not accept that there is a prima facie case in so far as solicitation is concerned. I accept on its face Mr Maglis’ sworn evidence that he did not initiate contact with the clients; they called him; and I do not accept that he “crossed the line” in terms of his engagement with those clients, in terms of the letter he sent (an example of which is at paragraph [35] above). However, I do accept that there is a prima facie case that Mr Maglis has “accepted any approach from” clients of the second applicant. This is apparent from the evidence broadly described in paragraph [39] above. Counsel for the respondent accepted it was open to reach such a conclusion, at this interlocutory stage.

[42] I therefore conclude, in terms of the first enquiry, that there may be a prima facie case in so far as the first applicant is concerned, albeit a weak one in so far as the enforceability of the restraint clause is concerned, that the respondent has accepted approaches from clients of a related entity of Perpetual, contrary to the restraint in clause 5.1. As already noted, the basis on which the second applicant may be entitled to relief, by way of enforcement of a restraint clause in a contract to which it is not a party, was not explained.

While the Court was not satisfied that solicitation had occurred, it found a prima facie case of the respondent accepting approaches from clients in a way that might contravene clause 5.1—particularly through the onboarding of clients via a “comprehensive discovery meeting”.

Balance of convenience

The balance of convenience weighed against granting the injunction. Bowskill CJ emphasised the weak enforceability case, the absence of solicitation and in particular, the clients’ freedom to choose their adviser:

[44] In considering where the balance of convenience lies, I take into account the view I have reached as to the strength of the applicants’ case on the enforceability of the restraint clause, and the conclusion that there is no prima facie case in terms of solicitation, but only in terms of accepting approaches.

[45] The impact of the grant of an injunction in the terms sought by the applicants on third parties – in particular, the 22 clients who have said that they no longer want Perpetual to handle their financial affairs – is an important factor in this case, tending to weigh the balance against the grant of the relief sought. In addition, counsel for Mr Maglis submits that any protectable “customer connection” that Perpetual might have in those clients has already dissipated, and as a result there is no basis for any injunctive relief in so far as they are concerned. That argument has force, although counsel for the applicants submits they have not “given up” on the prospect of getting those clients to return.

[46] Lastly, in terms of whether damages are an adequate remedy, it is significant that, as Mr Baker acknowledges, clients are free to terminate their relationship with Perpetual and go elsewhere and, on the evidence, 22 of them have already done that. It does seem to me to be a matter of serious concern to be making an order, the effect of which would be to restrict the choice of clients to have their personal financial matters looked after by a person they trust and, in some cases, have worked with for a number of years. Indeed, it has been observed that a restraint which restricts choices available to customers of services may be unreasonable in the public interest.

[47] As against that, Mr Baker also says, on the assumption that there has been a breach of the restraint by Mr Maglis, that it would be difficult to assess the loss and damage to Perpetual as a consequence of the alleged conduct of Mr Maglis, because there will always be a degree of uncertainty as to the length of time that clients would have stayed with Perpetual if there had been no breach; given that Perpetual has a history of servicing clients across generations, the loss of a client can result not only in loss of that client’s business, but also future business of that client’s children; and Perpetual will also lose the referral base its current clients provide. I accept that it would be difficult to assess damages in this case, even assuming the applicants are ultimately successful in the proceeding. Questions of causation (given the importance of the free will of clients in this context) and remoteness (in so far as the generational and referral points are concerned) would seem to loom large.

[48] Both parties are willing to work towards an early trial date for this dispute, and this can be accommodated by the Court.

[49] Taking all these factors into account, the balance of convenience favours refusing the grant of any injunctive relief, given the weak case for enforceability of the restraint (subject to severance of parts of clause 5.1, and limitation of the time period during which it applies) and the fact that the interests of third parties will be affected by the making of such an order in a manner which I consider to be inconsistent with the public interest, particularly as it concerns those third parties’ private financial affairs.

Conclusion

The Court ultimately refused to grant the interlocutory relief. Although a prima facie case existed that the respondent had accepted client approaches contrary to Clause 5.1, the absence of solicitation, the weak case for enforceability of the restraint, and the impact on client choice, weighed against granting the application. Bowskill CJ placed particular weight on the potential impact on the 22 clients who had expressed a desire to continue their relationship with the respondent. Her Honour observed that client autonomy—particularly in a trust-based industry such as financial advice—was an important public interest consideration.

The decision can be found here.

In David & Ros Carr Holdings Pty Ltd v Ritossa [2025] NSWCA 108 (25 May 2025), the NSW Court of Appeal dealt with a dispute between two families which had set up a trading trust to engage in investment.  The families fell out – rendering it difficult to manage the trust assets at monthly meetings – but continued to invest and protect the trust assets.  The case points up the need to carefully draft the trust deed – depending on the requirements of the parties – and to the need to point to clear evidence of deadlock short of gaining corporate remedies.  Given the complexities of the matter, it suffices, for the purpose of this case note, to set out the lengthy headnote, followed by the link to the case if the reader wishes to descend further into the case or any particular issue.

The headnote provides:

HEADNOTE

[This headnote is not to be read as part of the judgment]

In 2010, Mr and Ms Carr and Mr and Ms Ritossa constituted Darbalara Holdings Pty Ltd as the corporate trustee of a unit trust – the Darbalara Property Trust – for the management of farmland near Gundagai, NSW. The two families are equal unit holders. Each of the Carrs and the Ritossas are directors of Darbalara Holdings. Clause 2 of the trust deed provided that “The Unit Holders are presently entitled to the Income [and Capital] of the Trust” and “may require the Trustee to wind up the Trust and distribute the Trust property or the net proceeds of the Trust property”. In 2019, disagreements emerged between the Carrs and the Ritossas, and they had a falling out in a meeting in December 2019. The Carrs expressed an intention to terminate the trust relationship; the Ritossas wished to continue their investment.

In 2020, the Carrs commenced proceedings in the Equity Division seeking the winding up of the trust relationship on the basis that (a) clause 2 of the trust deed allowed a unit holder to unilaterally call for a winding up, (b) the corporate trustee’s conduct was oppressive so as to justify orders under s 233 of the Corporations Act 2001 (Cth), and (c) a receiver should be appointed to wind up the trust given jeopardy to the trust assets.

The primary judge held that cl 2 of the trust deed did not entitle a unit holder to unilaterally call for a winding up. The primary judge found that the evidence did not establish deadlock. Even if there was deadlock, that would not be a sufficient basis for a realisation of the trust assets under s 233. Because the primary judge found that the assets were being adequately managed in monthly board meetings between the directors, there was no jeopardy to the trust assets justifying the appointment of a receiver to liquidate the trust assets and make final distributions to unit holders.

On appeal, the appellants submitted that the primary judge erred in failing to find that (a) cl 2 entitled each unit holder unilaterally to bring the trust to an end (Ground 1), (b) there was a series of deadlocks in the management of Darbalara Holdings Pty Ltd such that the conduct of the corporate trustee, including its failure to allow a redemption of units when requested, was oppressive to the Carrs and contrary to the interests of members as a whole (Grounds 2-8), and (c) a receiver could be appointed, either under s 67 of the Supreme Court Act 1970 (NSW) or in the Court’s inherent jurisdiction over trusts, to “wind up” the trust where there was an irretrievable breakdown in mutual trust and confidence between unit holders who were “quasi-partners” (Ground 9).

The Court (Leeming JA, Stern JA and Griffiths AJA agreeing) held, dismissing the appeal:

As to Ground 1:

1. On its proper construction, cl 2’s reference to unit holders being “presently entitled” to require the trustee to wind up the trust means the unit holders collectively, rather than individually. The purpose of including the clause was only to make the unit holders owners of an equitable estate under a fixed trust, and thereby eligible for the tax-free threshold under s 3A(3B) of Land Tax Management Act 1956 (NSW). It did not have the effect of allowing a unit holder unilaterally to wind up the trust and claim their own interest: [66]-[93] (Leeming JA); [258] (Stern JA); [259] (Griffiths AJA).

Sayden Pty Ltd v Chief Commissioner of State Revenue (2013) 83 NSWLR 700; [2013] NSWCA 111, distinguished.

CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic) (2005) 224 CLR 98; [2005] HCA 53; Davis v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2023) 279 CLR 1; [2023] HCA 10; Vanderstock v Victoria [2023] HCA 30; 98 ALJR 208, considered.

As to Grounds 2-8:

2. There is no basis to exclude from the scope of “the conduct of a company’s affairs” the conduct of a corporate trustee in the management of the trust or to exclude from the scope of orders “in relation to the company” an order concerning the interests of the trust beneficiaries: [105]-[112] (Leeming JA); [258] (Stern JA); [259] (Griffiths AJA).

Kizquari Pty Ltd v Prestoo Pty Ltd (1993) 10 ACSR 606; Trust Company Ltd v Noosa Venture 1 Pty Ltd [2010] NSWSC 1334, disapproved.

Melrob Investments Pty Ltd v Blong Ume Nominees Pty Ltd [2022] SASCA 29; Wain v Drapac [2012] VSC 156, approved.

3. Mr Carr as a discretionary object of the Carr Family Trust, which was one of the unit holders of the trust, did not have standing to complain of any oppression: [135]-[139] (Leeming JA); [258] (Stern JA); [259] (Griffiths AJA).
4. Mere deadlock in the operation of the corporate trustee or a breakdown in the relationship between its managers does not constitute “oppression” under s 232. The deadlock must be one which leads to further consequences in order to reach the evaluative judgment required by s 233. Mere differences in opinion as to the sale of investments, the unpleasantness of board meetings, and delays in the finalisation of leases, are insufficient: [113], [159]-[177] (Leeming JA); [258] (Stern JA); [259] (Griffiths AJA).

As to Ground 9:

5. The principle in Ebrahimi v Westbourne Galleries Ltd [1973] AC 360concerns the scope of the statutory power to wind up a company, rather than a proposition at general law that a trust can be terminated where there has been a breakdown in an original relationship of mutual trust and confidence. No such general law proposition can be developed by analogy with statute: [215]-[236] (Leeming JA); [258] (Stern JA); [259] (Griffiths AJA).
6. Because the purpose of the inherent jurisdiction is to preserve trusts and not destroy them, a receiver cannot be appointed in the court’s inherent jurisdiction over trusts to terminate the trust merely because there has been a breakdown in mutual trust and confidence. The position is not otherwise under section 67 of the Supreme Court Act 1970 (NSW): [237]-[254] (Leeming JA); [258] (Stern JA); [259] (Griffiths AJA).

Mir v Mir [2023] NSWSC 408; Baba v Sheehan [2019] NSWSC 1281; Re Austec Wagga Wagga Pty Ltd (in liq) [2018] NSWSC 1476, approved.

The link to the case is here.

In Turner v Richards [2025] NSWCA 83 (1 May 2025), the New South Wales Court of Appeal wrote concerning the vexed issue of adjudicating an agreement made orally in a commercial context.  The trial judge found the agreement was made.  Payne JA (Leeming and Adamson JJA agreeing) wrote:

…

[2]  These proceedings involve a narrow question relating to several corporate entities associated with the Heartland Motor Group. Ms Joanne Richards and Ms Bernice Hooker, the first and second respondents, are sisters. The applicant is Mr Kieran Turner, who I will refer to as KT to distinguish him from his brother Anthony Turner, the fifteenth respondent, who I will refer to as AT. KT is the nephew of Ms Richards and Ms Hooker; his mother, the late Ms Kathryn Turner, was the sister of Ms Richards and Ms Hooker.

[3]  The issued share capital of the holding company of the Heartland Motor Group, B.G. Webb Pty Ltd (“BG Webb”), is owned by Mr and Mrs Webb’s descendants. Ms Richards and Ms Hooker (Mr and Mrs Webb’s surviving daughters) hold the majority of the shares in BG Webb. KT, personally and through his ownership of the shares in Turnercorp Pty Ltd, owns or controls a minority of the issued shares in BG Webb.

[4]  BG Webb in turn owns all the shares in the third respondent, Bernley Corporation Pty Ltd (“Bernley”). Since 28 June 2013, Bernley has owned 599 of the issued shares in the fourth respondent, Heartland Group Pty Ltd (I will refer in these reasons to this company as “Heartland Group” and to the corporate group of related entities, including Heartland Group, as “the Heartland Motor Group”). One share in Heartland Group is owned by its wholly owned subsidiary, the fifth respondent, Boyded Industries Pty Ltd (“Boyded”) as trustee for the Rossfield Group Trust (“Trust”). The remaining corporate respondents, the sixth to thirteenth respondents inclusive, are all (directly or indirectly), subsidiaries of Heartland Group.

…

[6]  The narrow issue in this case relates to the purported appointment of AT as a director of various Heartland Motor Group companies on 6 December 2022. That narrow issue turns on the acceptance or rejection of a single conversation in 2019, which was not recorded in any contemporaneous document, in which KT asserted that he had been validly appointed as chair of the board of directors of all of the companies in the Heartland Motor Group for so long as he retained his direct or indirect shareholding in BG Webb. Two of the participants in that alleged conversation, KT’s grandmother and KT’s mother, had died before the hearing. The primary judge was not satisfied that a conversation occurred in the terms asserted by KT.

…

[9]  For the reasons that follow, the appeal should be dismissed.

…

Grounds of appeal

[56]  The applicant’s draft notice of appeal, contained two grounds:

1 The primary judge erred in failing to find that the Appellant was the chairman at meetings of Heartland Group Pty Ltd (Heartland Group), Rossfield Nominees (ACT) Pty Ltd (Rossfield Nominees) and Boyded Industries Pty Ltd held on 6 December 2022, because a meeting had occurred in 2019 at which it was agreed that the Appellant was to be the chair of the companies in the group so long as he held shares in BG Webb Pty Ltd.

2 The primary judge erred in finding that, on the proper construction of the articles of association of Heartland Group and Rossfield Nominees, any appointment of Anthony Turner as a director expired by 31 December 2023.

[57]  It was common ground that unless the applicant succeeded in relation to ground 1, ground 2 did not arise.

Ground 1 of the notice of appeal

[58]  The primary judge adopted a conventional approach to fact finding in a case based on an alleged oral agreement. His Honour had regard to the fallibility of human memory which increases with the passage of time, particularly where disputes or litigation intervene: Watson v Foxman (1995) 49 NSWLR 315 at 318 –319; Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [41]; Varma v Varma [2010] NSWSC 786 at [424] –[425].

[59]  His Honour also had regard to the fact that objective evidence, where available, is likely to be the most reliable basis for determining matters of credit that arise as to the affidavit evidence: Armagas Ltd v Mundogas SA [1985] 1 Lloyd’s Rep 1 at 57; Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789 at [10]. The primary judge noted the matters relevant to the assessment of spoken words in the context of a contractual dispute, which were identified by Hammerschlag J in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451:

[94] Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319.

[60]  His Honour bore in mind the observations of Bell P (with whom Bathurst CJ agreed) in ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24 at [27] –[29] quoting with approval Legatt J in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC (Comm) 3560 at [22]:

…the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose — though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.

[61]  There was every reason for the primary judge not to be satisfied about the reliability of KT’s evidence of an asserted 2019 agreement. I do not accept the applicant’s submission that the decision of this Court in Tjiong v Chang [2025] NSWCA 25 at [41] and [502] intended to change the method of fact-finding in cases involving alleged oral agreements. The Court in Tjiong was not describing a new legal principle. The application of Tjiong leads to no different conclusion in this case. The point made by Basten AJA in Tjiong at [41] was that in a case where there is disputed oral evidence, all the evidence must be considered together. This task, the primary judge undertook here. Price AJA in Tjiong at [502] made the point that oral testimony should not lightly be disregarded in a case where there was no cross-examination casting doubt on the evidence and where there was no question of the reliability of the evidence. Here there was cross examination of KT about his account and a significant question about the reliability of that account.

[62]  No error has been shown in the conclusion of the primary judge, essentially for the reasons his Honour gave, that he was unable to reach a state of actual persuasion that the 2019 Meeting took place in the manner or substantially in the terms set out in KT’s evidence.

[63]  KT’s case was essentially a simple one. Shortly put, it was that in the absence of an adverse credibility finding about KT’s evidence there was no reason not to accept his evidence about the 2019 agreement. KT stressed that the primary judge made no adverse finding about his credibility. KT emphasised that what he said was a realistic possibility, namely that the meeting could have occurred before 14 February 2019. Accordingly, it was submitted that the primary judge erred in not reaching a state of actual persuasion that the alleged 2019 oral agreement had been reached in the terms asserted by KT.

[64]  I am unable to accept this submission. The primary judge made a finding of fact. Although no adverse credibility findings were made against KT or Ms Richards, the primary judge’s failure to be persuaded by KT’s evidence was affected by his Honour’s assessment of the reliability of that evidence, having seen and heard KT and Ms Richards being cross-examined.

[65]  As Lord Pearce said in Onassis v Vergottis [1968] 2 Lloyd’s Rep. 403 at 431:

‘Credibility’ involves wider problems than mere ‘demeanour’ which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be… Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.

[66]  In Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 at [55], Bell, Gageler, Nettle and Edelman JJ made clear that a court of appeal is bound to conduct a “real review” of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the trial judge has erred in fact or law. Appellate restraint is, however, warranted in relation to a trial judge’s findings of fact unless those findings are “glaringly improbable” or “contrary to compelling inferences” if those factual findings “are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence” (emphasis added).. This principle of restraint applies to findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts.

[67]  KT’s evidence was given more than five years after the date of the alleged conversation in a context of ongoing hostility and litigation between the parties. The conversation was unsupported by any contemporaneous record and was inconsistent with a number of such records. I reject the applicant’s submission that the reliability of KT’s account was not challenged before the primary judge. The principal submission on behalf of Ms Richards at the trial was that KT’s evidence about this conversation should not be accepted as reliable. The reliability of KT’s account was expressly challenged in cross-examination.

[68]  The applicant submitted that there was nothing exceptional about the subject matter of the 2019 Meeting that might cause anyone to wish to record it. I do not agree. If such an agreement had been reached, it would have been a significant matter in the history of the Heartland Motor Group. While the Heartland Motor Group had a practice of the CEO of each company in the group acting as chair of the company, never before had there been a formal agreement to appoint a chair, in advance, dependent upon the CEO continuing to hold or control shares in BG Webb. There would have been every reason to have documented such a significant change.

[69]  Such contemporaneous documents as there are do not support the existence of an agreement in the terms asserted by KT. The high point of the applicant’s case is what the applicant submits is “a relatively contemporaneous” email of 27 June 2019 recording KT’s understanding that he was chair of the Heartland Group of companies. While this document does contain a reference to a subjective belief on KT’s part consistent with his case, at best it is neutral. The date of the email, 27 June 2019, is months after the conversation, if it occurred, must have taken place. The document is more consistent with the primary judge’s finding that it was a reflection of a long standing informal company practice of the CEO acting as chair, rather than a result of the asserted agreement.

[70]  It is true that the minutes of a directors’ meeting of BG Webb on 30 November 2022 contain the following:

(KT) opened the meeting and stated that he was the chairman, (JR) advised she would put herself up as chair for the meeting and voted in favour of her appointment. (BH) voted in favour of (JR) being appointed chair. (KT) said is the paid and appointed chairman.

…

Meeting proceeded with (KT) saying he was the chair.

[71]  By November 2022, relations between KT and Ms Richards had become fraught. Despite the claim by KT the “he was the chair” there is no record of his asserting that an agreement had been made with, inter alia Ms Richards, that he be appointed chair for so long as he held or controlled shares in BG Webb.

[72]  There is also a recorded claim by KT of the existence of the asserted agreement on 29 May 2024, where KT is recorded as saying he was “voted Chairperson in 2018 for the duration of while he is a shareholder”. As well as referring to the wrong year, the primary judge observed that by 2024, the dispute between KT and Ms Richards was well-advanced. Further, KT participated in and signed minutes in a series of 2021 meetings of various of the Heartland Group of companies which record the separate election of KT as chairperson “of the meeting”: Boyded Industries Pty Ltd directors minutes 7 June 2021 (signed by KT on 22 June 2021); Chicago Properties Pty Ltd directors minutes 7 June 2021 (signed by KT on 22 June 2021); Heartland Blacktown Pty Ltd directors minutes 7 June 2021 (signed by KT on 22 June 2021). These company records are inconsistent with the existence of the oral agreement KT asserts was made. If such an agreement existed there would be no need separately for KT to be elected as chairperson “of the meeting”.

[73]  The primary judge was entitled to find, having considered all of the evidence, that his Honour was simply not persuaded that KT had proved to his satisfaction that a conversation occurred in the terms asserted by KT. The case was decided by considering whether KT had discharged his onus of proof. No doubt if his Honour had made a credibility finding, it would have been difficult for him to sit on the potential future stages of the proceedings. His Honour was also no doubt conscious that there was a possibility that more cogent evidence might come to light in the continuation of the trial that bore upon findings his Honour might have made as to credibility or reliability of the evidence he was considering.

[74]  The primary judge had the advantage of seeing and hearing KT and Ms Richards give evidence. Weight must be given to the advantage that the primary judge had in those circumstances. No error has been shown in the conclusion of the primary judge that his Honour was not satisfied of the existence of the oral agreement KT asserts was made.

[75]  I would dismiss ground 1.

…

(emphasis added)

The link to the full decision is here.

Author: Phil Brown
Publisher: Transit Lounge
Reviewer: Stephen Keim

Phil Brown, who lives a few streets from me, will be known from his writing to many of Hearsay’s readers. Many will know his work as long time Arts Editor of the Courier-Mail and many from his column in the Brisbane News.

Kowloon Kid is a memoir which focuses mostly, but not exclusively, on a patch of Brown’s childhood, from 1963 to 1970, during which Brown, born in 1956, lived the privileged life of a child of Empire among the primarily Asian population of what was still one of the last outposts of that same Empire.

Brown was born in 1956. He had, until the family’s uprooting and transfer to Kowloon, to further Brown’s father’s construction business, lived in the relatively small Hunter Valley town of Maitland in New South Wales. After the seven years in Hong Kong, the family moved back to live on the Gold Coast in Queensland requiring Brown to return to the persona and lifestyle of an Aussie teenager.

Very few people have had seven of their formative years spent in the exotic environs of Hong Kong sandwiched between years of mundanity, living in Australia. It is not surprising that Brown retains a deep love of those years of his childhood as well as great affection for and deep interest in Hong Kong, itself, now a unique outpost of the Middle Kingdom.

Kowloon Kid opens on one of Brown’s many visits back to Hong Kong in the company of his wife, Sandra, and their son, Hamish. Suffering from a bad case of flu, Brown is feeling sorry for himself in the lobby of the Peninsula Hong Kong Hotel, a place of refined luxury, hosting the remains of the Hotel’s famous High Tea.

It turns out that the Peninsula is a symbol of the life that the Brown family lived in the sixties. The same lobby doubled as Brown senior’s de facto business office where Brown senior not only conducted his appointed meetings but, also, hailed fellow well met movie stars and states people and any other famous or interesting person who happened to be, otherwise, having a quietly anonymous time within the lobby’s classy and classical décor.

Brown and his siblings were also familiar with the Peninsula dining there with their parents on a regular basis.

Brown introduces the reader to a number of other famous institutions of Kowloon among them the Kowloon Cricket Club. Not unlike the Peninsula, the Cricket Club was a familiar destination for Brown and his siblings as children. Also, characteristically, the Cricket Club displayed the type of self-importance and stuffy traditions which hundreds of years of empire is particularly good at developing.

Just as Brown introduces the reader to the Peninsula through his illness (accompanied by Sandra’s skepticism developed through years of Brown’s hypochondria), Brown’s contemporary experience of the Cricket Club is ventilated through his embarrassment and annoyance at being called to account for breaching the stuffy tradition that receiving phone calls is strictly off limits in the green and pleasant land that is the Cricket Club.

Brown’s narrative technique is recognisable for his self-deprecation and his use of the much more recent past to give contemporary relevance to the distant past (the focus of the narrative). And, Brown, the likeable fool who makes so many missteps to the scorn of loved ones doubling as travel companions, is a source of humour that shines throughout the text and gives a lightness and interest to the essential narrative.

Kowloon Kid is not just about respected institutions of the Empire. The ordinary and daily life of Brown and his siblings as children living in Kowloon is as important as the streetscape and the institutions. As was de rigeur for Europeans living in Hong Kong, the Brown family had servants. The children had closest contact with their amahs or child minders who looked after them on an ongoing basis. Despite this close contact, Brown marvels at his complete lack of knowledge of anything about Ah Chan and Ah Moy, the two amahs who, between them, served the family for most of the seven years. Amahs traditionally wore a “uniform” of black and white clothing. They were wholly dependent on their employer family so that, if an Australian or British family transferred back to their country of origin, the amah may have faced a lengthy period without employment.

Brown’s years in Hong Kong almost coincided exactly with the years in which the Beatles were a band. Brown’s love of rock music in general and the Beatles in particular is a highlight of those years. Kowloon Kid details the occasions when singles and albums became available for the first time on the streets of Kowloon as well as the experiences of Brown and his friends in discovering the magic that lay within those discs. He reminds the reader that the White Album was actually called, simply, The Beatles” and that it was the world of fans who christened it by reference to the defining colour of the album cover.

Rock music was not just a listening experience. A group of school friends, led by an American friend of Brown, formed a group and performed, at the invitation of a cool and empathetic teacher, on one occasion only, a number of popular songs of the time. The Hutchence family, including young Michael, were friends of the Brown children and Michael and Brown attended the same school. In his characteristic, self-mocking manner, Brown suggests that, not only was he a performing rock star years before Michael Hutchence, but, just maybe, it was Brown’s musical prowess that inspired the young Hutchence to the major musical successes he experienced before his tragic death.

Kowloon Kid covers a lot of bases. It documents, beautifully, long past days of empire ambience in one of the world’s great cities. For boomers, it evokes a beautiful nostalgia for those days when we were young and, despite our youth, we knew everything. It also conveys a humorous but empathetic tale of family life in which trivial events carry importance for individuals and the people they love.

Kowloon Kid was published in 2019. Brown has another book being launched at Queensland Writers Festival in October 2025. Kowloon Kid is a very enjoyable read. But, despite the lightness of its tone and narrative, it is an important book, as well.

Authors: Richard Douglas KC, Gerard Mullins KC and Simon Grant
Publisher: LexisNexis Australia
Reviewer: Kevin Holyoak

“Isn’t that this new personal injuries statute?”, an opponent said to me when I raised it in a commercial matter almost 20 years ago.  Such was the shock of the new then, coupled with the dawning realisation that the Civil Liability Act 2003 (Qld) (“CLA”) applied to vastly more than personal injuries.  Indeed, some of its most important aspects apply to civil liability generally or not to personal injuries at all.

Our appreciation of the scope, and application, of the CLA would not be so readily ascertainable were it not for this work, first published in 2004, by Richard Douglas KC, Gerard Mullins KC and Simon Grant.

As the cover rightly, and proudly, proclaims, this is the 20^th anniversary edition of the only comprehensive text annotating legislation the like of which this State had not experienced before in the area of civil liability. 

When the first edition was published, the then Chief Justice, De Jersey CJ, penned in the foreword that the fields of law which were to be regulated by the CLA were “exceedingly complex and daunting”, and the CLA had many “puzzling pathways”, but that the authors of this text had “come to the rescue” His Honour predicted that the text would “become a standard source of reference for the profession and the Courts”.

And so it has transpired to be, since the rather slender first edition.  The Courts have since wrestled with what Her Honour, the Chief Justice, when complimenting the scope of the work in the current foreword, refers to as a “testament to the complexity of this area of law and the prevalence of issues arising in Court proceedings leading to an increasing number of decided cases”.

Some of the changes introduced by the CLA were dramatic, such as “Proportionate Liability”.  This then novel regime is still being developed judicially.  It can be complex in its application.  With a few exceptions (notably personal injury claims), the centuries old era of solidary liability, where “1% is 100%”, ended.  The Plaintiff must now identify a “non‑apportionable claim” or join all alleged wrongdoers.  The Plaintiff bears the risk of the impecunious wrongdoer or an “empty chair”.  This text, and its national companion, are almost unique in its overview of the law before the enactment of proportionate liability and how it has developed (not always consistently) since.

Other changes have proved far more subtle before their importance was revealed.  One of those is the identification of the “risk” spoken of in the now statutory analysis of whether there is a breach of duty (itself an important defined concept in the CLA) in section 9 of the CLA.  The vital importance of the correct identification of the risk, now a statutory requirement, and its correct pleading, is essayed[1].  As a salutary warning, there is a discussion of authorities where a failure to identify the risk, and to plead it, correctly, to engage the statutory formula in section 9 of the CLA, are highlighted, including recent examples in the Court of Appeal.

Some areas are still yet to be fully worked out such as the complicated interface between the CLA (which relevantly refers only to a breach of “duty” as defined) and Commonwealth legislation such as the Australian Consumer Law (Cth)[2], which has the capacity to oust the CLA.  Another is the underdeveloped jurisprudence surrounding the modified Bolam test in section 22 of the CLA, in relation to claims against professionals.[3]

Other more recent amendments are also still being understood as decisions arise, or await decision.  These include the statutory “Sullivan v Gordon” provisions, starting with section 59A and the statutory imposition of liability of institutions for child abuse in Chapter 2, Part 2A. As with proportionate liability, these provisions are peculiar statutory responses where common law, or equitable, principles were thought by the legislature to be wanting or in need of reform.  This text is the first point of reference for those of us that seek to come to grips with how these reforms might apply, and frankly, in some instances, what the awkward, or opaque, text of the legislation may be held to mean.

As our understanding of the CLA continues to grow, that will be matched by our increasing reliance upon this text, which is also reflected in its expanded girth, now it is enjoying its 20^th birthday.

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[1] Paragraphs 9.47 and 9.54.

[2] Paragraph 9.7 and 23.6.

[3] E.g. paragraph 22.14.

Author: Becky Manawatu
Publisher: Scribe Publications
Reviewer: Stephen Keim

Kataraina is a sequel to Becky Manawatu’s Aue. Aue is centred on the story of Taukiri and his nine years younger cousin/brother, Arama, and Taukiri’s mother, Jade. Taukiri’s father, Toko, was murdered in a gang related crime in 2005 when Taukiri was four years old.  

Arama goes to live with their aunt, Kataraina and her husband, Stuart Johnson, in a household that is dominated by Stuart’s violent and dominating personality.

Aue won Aotearoa New Zealand’s top prize for fiction and an international prize for crime fiction. Reviews of Aue indicate that the book raised controversy about its discussion of gang violence among Maori communities and brought comparisons to Keri Hulme’s 1984 novel, The Bone People and Alan Duff’s 1990 novel, Once Were Warriors.  

Aue was also published in Australia by Scribe. Scribe has, as part of its business plan, a policy of obtaining the Australian rights to great writing published elsewhere in the world and, by republishing in Australia, bringing that literature to a greater collection of Australian readers. It has done so with Kataraina.  

Kataraina is not a sequel in the sense that a sequel commences at the point where the narrative of the previous work finished. Kataraina works the same generational timeline as Aue. Kataraina changes the focus of the narrative. The blurb on the back cover of Kataraina describes Aunty Kat as being at the centre of events in Aue but silenced by abuse such that her voice was absent from the story. Kataraina, by contrast, is, primarily, her story.

Kataraina is told in the first person plural. The narrators appear to include all of the surviving members of the family and, perhaps, one or two important friends. The composition of the group narrator shifts from scene to scene depending on which of the collective are present and privy to that part of the story.

The complexity of telling an intergenerational story is acknowledged by a partial genealogy/family tree at the beginning of the book. A reader who, like this reviewer, has not read Aue finds themselves turning back to this guiding diagram, many times, in the opening chapters to remind themselves who, exactly, Granny Liz, Grandpa Jack, Jade, Toko, Aroha, Taukiri and Arama are.

The dramatis personae complexity is matched by the chronological complexity of the narration. The key event of Kataraina is an event at the end of 2017 when “the girl shot the man”. One finds out early in the novel that this event was the shooting of Kataraina’s husband, Stuart Johnson by Arama’s good friend, seven year old, Beth Aiken. The context of that shooting emerges slowly as the narrative jumps forward and back. The reader travels back to thirty-seven years before the girl shot the man as the story of Kataraina’s birth and her enduring importance to Granny Liz and her husband, Jack and their relationship is revealed.

The narrative also starts and finishes with “many years after the girl shot the man”, the latter chapter bringing a denouement in which the various actors have found a form of resolution and self-understanding to their relationships and trauma filled lives.

A second narrative (twisted around the story of Kataraina’s life and experiences) involves a day by day description of the work taking place in January 2020 of a scientific study group researching the dynamics of Johnson’s Swamp which, two years earlier, after being drained and confined for more than two centuries, has embarked on a massive expansion reclaiming its pre-colonial boundaries. One member of the study group, Cairo, is also related to Kataraina and her family’s principal actors of the main narrative.

A third narrative is foreshadowed in short enigmatic lines that appear between some of the chapters developing the main narrative. It is of an ancestor young woman who was first offered food in the form of peaches from a newly opened can and then attacked by a white colonist. The genealogy at the beginning of the book reveals an ancestor, Tikumu, who died in 1890. Cairo’s scientific team are party to discovering Tikumu’s story. Tikumu’s story plays a role in everyone’s attempts to find understanding and resolution.

Kataraina is set in Kaikoura, a coastal town on the northern part of the east coast of South Island. It is a fishing town. Kataraina draws on Maori lore and magic. A water spirit, a taniwha, plays an important role in the novel, assisting, advising and informing Kataraina at important times in her life. A glossary of Maori terms appears at the end of the book. Again, as with the genealogy at the front, the reader, regularly, turns to the glossary to feel the full power of the writing.  

Kataraina’s story includes a youth of academic promise foiled by experiences in respect of which she had little control but for which she blamed herself. Her sense of shame and lack of self-worth led to a life of bad choices. She continued to blame herself for the unkindnesses piled upon her by her violent husband. The reader while not sharing Kataraina’s harshness on herself, nonetheless, is also able to understand Stuart and his self-experiences which led him to wreak pain and misery upon himself and those with whom he came into contact, including, most particularly, Kataraina.

Kataraina asks to understand the lives of others and to avoid blaming people for the misfortunes to which they are subject. Kataraina also invites us to understand the importance of love and friendship. It stresses the importance of understanding ourselves and others. It stresses the importance of hope among our sadnesses.    

Kataraina is beautifully written. The complexity of the structure and the chronology is belied by the clarity of the writing. Descriptions of simple cooking producing delicious food bring colour and texture to lives of ordinary people. Descriptions of ordinary day clothes of people make the characters real enough that the reader can almost reach out and touch. The use of dialogue, extended at times, add to the reader’s sense of the relationships that are being portrayed. Kataraina also excels in describing the beauty of the Kaikoura landscape and wetlands. And, beyond portraying the scenes and sounds of everyday life, Kataraina also manages to convey the inner life of its characters especially Kataraina, herself. The combination of these traits makes reading Kataraina a joyful experience.

One of the joys of writing a review is that the reviewer is forced to return to the pages which, a short time ago, one has left with a sense of the achievement of having got to the book’s end. That sense of achievement may be tinged with a sense of melancholy in that a unique experience has come to an end. At other times, the tinge may be the colour of relief. Nonetheless, the sense of mission to understand the story and find out what happens, that every reader carries with them, causes us to miss the particular merits and beauty of the words we are reading along the way. We forget that what we can read in a few days or weeks has cost the writer years of careful craftmanship.

Having returned to Kataraina for this review, I have discovered a magical paragraph on the very first page about the importance of story telling. I leave you with Becky Manawatu’s words on that subject:

“Telling allows us to live in the plain and pointless space of proving the moving, flailing, contesting and yielding parts of a contradiction to all be true, or at the very least honest. Tika.[1] Pono.[2] Together we listen. One of us might sometimes create the scratch, whistle, scratch of lead on paper. Who even does that anymore. She does. Kataraina.”

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[1] Correct

[2] Truth