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Disgorgement of Profits in Australian Private Law

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Part of the book series: Ius Comparatum - Global Studies in Comparative Law ((GSCL,volume 8))

Abstract

This chapter discusses the availability of remedies effecting disgorgement of profit in Australian private law. It is noted that there are three main remedies which may effect disgorgement of profits: the account of profits, the constructive trust and restitutionary remedies. However, disgorgement of profit in Australian is generally only available for causes of action where equity allowed such a remedy prior to the English Judicature Acts of the nineteenth Century. In the exclusive jurisdiction, such remedies were available for breach of fiduciary duty, breach of trust, breach of confidence, and in the auxiliary jurisdiction, they were available for intellectual property breaches. The rationale of these awards is to deter breaches and to reverse unjust enrichment. Disgorgement of profit is not generally readily available for causes of action with a common law background including breach of contract and tort. Nor is it available for statutory breaches such as consumer law and competition law.

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Notes

  1. 1.

    The complex history is described in Meagher et al. (2002), 11–30.

  2. 2.

    See Supreme Court Act 1970 (NSW), ss 57–63; Law Reform (Law and Equity) Act 1972 (NSW), s 5.

  3. 3.

    See now Supreme Court Act 1933 (ACT) ss 25–32; Supreme Court Act 1995 (Qld), ss 242–249 (previously Judicature Act 1876 (Qld), ss 4–5; Supreme Court Act 1935 (SA), ss 20–28; Supreme Court Civil Procedure Act 1932 (Tas), ss 10–11; Supreme Court Act 1986 (Vic), s 29; Supreme Court Act 1935 (WA), ss 24–25.

  4. 4.

    Heydon et al. (2015).

  5. 5.

    Ibid, 48–49.

  6. 6.

    Ibid, 48.

  7. 7.

    Tilbury (2003), 358–59.

  8. 8.

    However, see Gleeson et al. (2005), 676–708, who argue that accounts of profits were available for breach of contract in equity’s auxiliary jurisdiction prior to the Judicature Acts. They cite: M’Intosh v Great Western Railway Co (1850) 2 Mac & G 74; 42 ER 29; Barry v Stevens (1862) 31 LJ Ch 785; Shepard v Brown (1862) 4 Giff 208; 66 ER 681; Manners v Pearson [1898] 1 Ch 581 and Davis v Hueber (1923) 31 CLR 583.

  9. 9.

    See Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 (Spigelman CJ and Heydon JA, Mason P dissenting).

  10. 10.

    Meagher JA (New South Wales Supreme Court and New South Wales Court of Appeal); Gummow J (Federal Court and of the High Court of Australia); Lehane J (Federal Court); Heydon J (New South Wales Court of Appeal and High Court); Leeming JA (New South Wales Court of Appeal).

  11. 11.

    Degeling and Edelman. (2004), 197.

  12. 12.

    See e.g., Kirby (2008), 444–69 (then a High Court Judge) and Mason (1997–1998), 3 (former Chief Justice of the High Court).

  13. 13.

    See e.g., Edelman (2002); Harder (2010); Barnett (2012).

  14. 14.

    Edelman J formerly of the Western Australian Supreme Court now on the Federal Court of Australia.

  15. 15.

    Cf Testel Australia Pty Ltd v KRG Electrics Pty Ltd [2013] SASC 91, [106]. Blue J reads Emmett J’s suggestion that gain-based relief should be allowed for tort in Hospitality Group v Australian Rugby Union (2001) 110 FCR 157 as allowing for exemplary damages.

  16. 16.

    Whitfield v De Lauret & Co Ltd (1920) 29 CLR 71, 77 (Knox CJ), 81 (Isaacs J); Rookes v Barnard [1964] AC 1129, 1221 (Lord Devlin); Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118, 129–30 (Taylor J), 149 (Windeyer J).

  17. 17.

    Lamb v Cotogno (1987) 164 CLR 1, 9.

  18. 18.

    Warman International Ltd v Dwyer (1995) 182 CLR 544.

  19. 19.

    Attorney-General v Guardian Newspapers (No. 2) [1990] 1 AC 109.

  20. 20.

    See Barnett and Harder (2014), 351.

  21. 21.

    Patents Act 1990 (Cth), s 122(1), Copyright Act 1968 (Cth), s 115(2); Designs Act 1906 (Cth), s 32B(1); Trade Marks Act 1995 (Cth), s 126; Circuit Layouts Act 1989 (Cth), s 27(2); Plant Breeder’s Rights Act 1994 (Cth), s 56(3).

  22. 22.

    Hastie (1996), 13.

  23. 23.

    My Kinda Town Ltd v Soll [1983] RPC 15.

  24. 24.

    Hospitality Group v Australian Rugby Union (2001) 110 FCR 157, 197–99 (Hill and Finkelstein JJ).

  25. 25.

    (1984) 156 CLR 41, 124–25.

  26. 26.

    Testel Australia Pty Ltd v KRG Electrics Pty Ltd & Anor [2013] SASC 91, [101].

  27. 27.

    Patel v London Borough of Brent [2003] EWHC 3081, [29] (Morritt V-C); Regal (Hastings) Ltd v Gulliver and Others [1967] AC 134, 154 (Lord Wright); O’Sullivan v Management Agencies & Music Ltd [1985] QB 428, 458 (Dunn LJ).

  28. 28.

    Hospital Products Pty Ltd v United States Surgical Corporation (1984) 156 CLR 41, 108–09 (Mason J) referring to Vyse v Foster (1872) LR 8 Ch App 309, 333 (James LJ).

  29. 29.

    Hospital Products Pty Ltd v United States Surgical Corporation (1984) 156 CLR 41, 109–10 (Mason J).

  30. 30.

    Scott v Scott (1963) 109 CLR 649; see also Paul A Davies (Australia) Pty Ltd (in liq) v Davies [1983] 1 NSWLR 440.

  31. 31.

    Harding (2009), 346–47.

  32. 32.

    Brown v Litton (1711) 1 P Wms 140, 24 ER 329; Yates v Finn (1880) 13 Ch D 839; Chirnside v Fay [2007] 1 NZLR 433, [2006] NZSC 68 [153] (Tipping J).

  33. 33.

    Brown v De Tastet (1821) Jac 284; 37 ER 858; Featherstonhaugh v Turner (1858) 25 Beav 382; 53 ER 683; Lord Provost of Edinburgh v Lord Advocate (1879) 4 App Cas 823; Phipps v Boardman [1964] 1 WLR 993; O’Sullivan v Management Agencies & Music Ltd [1985] QB 428.

  34. 34.

    Dart Industries Inc v Décor Corporation Pty Ltd (1993) 179 CLR 101, 111 (Mason CJ, Deane, Dawson and Toohey JJ). See also Warman International Ltd v Dwyer (1995) 182 CLR 544, 558; Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25, 37 (Windeyer J).

  35. 35.

    Warman International Ltd v Dwyer (1995) 182 CLR 544, 559. See also Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25, 32 (Windeyer J). See Watterson (2004), 471–494, who argues that the requirement to elect is a relatively recent phenomenon.

  36. 36.

    Tang Man Sit (dec’d) v Capacious Investments [1996] AC 514.

  37. 37.

    Keech v Sandford (1726) Sel Cas T King 61; 25 ER 223; Boardman v Phipps [1967] 2 AC 46; Chan v Zacharia (1984) 154 CLR 178.

  38. 38.

    See e.g., Lac Minerals Ltd v International Corona Resources Ltd (1989) 61 DLR (4th) 14.

  39. 39.

    Bant (2010), 286–311; Swadling (2011), 399–433; Bant and Bryan (2011), 171–198; Bant and Bryan (2012), 181–207; Bant and Bryan (2013), 211–228.

  40. 40.

    [2012] FCAFC 6, (2012) 200 FCR 296, [569]–[584] (Finn, Stone and Perram JJ).

  41. 41.

    [2012] FCAFC 6, (2012) 200 FCR 296, [576].

  42. 42.

    Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566, [42]; Giumelli v Giumelli (1999) 196 CLR 101, [10], [49]–[50] (the Court); John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19, [126]–[129].

  43. 43.

    [2012] FCAFC 6, (2012) 200 FCR 296, [583].

  44. 44.

    Attorney-General for Hong Kong v Reid [1994] 1AC 324.

  45. 45.

    Lister v Stubbs (1890) 45 Ch D 1; Sinclair v Investments (UK) Ltd v Versailles Trade Finance Ltd [2011] EWCA Civ 347, [2012] Ch 453.

  46. 46.

    Cedar Capital Partners LLC v FHR European Ventures LLP [2014] UKSC 45.

  47. 47.

    Barnett (2015).

  48. 48.

    Finch and Worthington (2000), 19.

  49. 49.

    See e.g., Lake v Bayliss [1974] 1 WLR 1073; Bunny Industries Ltd v FSW Enterprises Pty Ltd [1982] Qd R 712; Luxe Holding Ltd v Midland Resources Holding Ltd [2010] EWHC 1908.

  50. 50.

    See the extensive discussion of the various academic points of view in Barnett and Harder (2014), 360–63.

  51. 51.

    See e.g., LJP Investments v Howard Chia Investments (1989) 24 NSWLR 499; Hampton v BHP Billiton Minerals Pty Ltd (No. 2) [2012] WASC 285; Strand Electric & Engineering v Brisford Entertainment [1952] 2 QB 246; Gaba Formwork Contractors Pty Ltd v Turner Corp Ltd (1991) 32 NSWLR 175; Bunnings Group Limited v Chep Australia Limited [2011] NSWCA 342.

  52. 52.

    Supreme Court Act 1933 (ACT), s 20; Supreme Court Act 1970 (NSW), s 68; Supreme Court Act 1979 (NT), s 14(1)(b); Civil Proceedings Act 2011 (Qld), s 8; Supreme Court Act 1935 (SA), s 30; Supreme Court Civil Procedure Act 1932 (Tas), s 11(13); Supreme Court Act 1986 (Vic), s 38; Supreme Court Act 1935 (WA), s 25(1).

  53. 53.

    See e.g., Wrotham Park Estates Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798; Jaggard v Sawyer [1995] 1 WLR 269; Bracewell v Appleby [1975] Ch 408.

  54. 54.

    Edelman (2002), 83–86; Worthington (1999), 218–40; Conaglen (2010); Cooter and Freedman (1991), 1045–75.

  55. 55.

    Warman International Ltd v Dwyer (1995) 182 CLR 544, 558.

  56. 56.

    Warman International Ltd v Dwyer (1995) 182 CLR 544, 561. Cf Boardman v Phipps [1967] 2 AC 46, 104 (Lord Cohen), 112 (Lord Hodson); Guinness plc v Saunders [1990] 2 AC 663, 701 (Lord Goff).

  57. 57.

    Dart Industries Inc v Décor Corporation Pty Ltd (1993) 179 CLR 101, 111.

  58. 58.

    Warman International Ltd v Dwyer (1995) 182 CLR 544, 557.

  59. 59.

    (1970) 122 CLR 25.

  60. 60.

    Colbeam Palmer Ltd v Stock Affiliates Ltd (1970) 122 CLR 25, 31.

  61. 61.

    Colbeam Palmer Ltd v Stock Affiliates Ltd (1970) 122 CLR 25, 33.

  62. 62.

    See for a detailed consideration of the differences: Barnett and Harder (2014), 352–53.

  63. 63.

    Brennan (2011), 214.

  64. 64.

    Chabot v Davies [1936] 3 All ER 211, 228.

  65. 65.

    Lewis Trusts v Bambers Stores [1982] FSR 281.

  66. 66.

    General Tire and Rubber Co v Firestone Tyre and Rubber Co Ltd [1976] RPC 197, 221, 225 (Lord Wilberforce).

  67. 67.

    Australasian Performing Rights Association v Grebo Trading Co Pty Ltd (1978) 23 ACTR 30, 31 (Blackburn J).

  68. 68.

    Brennan (2003), 190.

  69. 69.

    Edelman (2002), 217–42; Brennan (2011), 214–27.

  70. 70.

    Patents Act 1990 (Cth), s 123; Plant Breeder’s Rights Act 1994 (Cth), s 57; Designs Act 2003 (Cth) s 75; Copyright Act 1968 (Cth), s 115 (3); Circuit Layouts Act 1989 (Cth), s 27(3). See Barnett and Harder (2014), 352–53, 364.

  71. 71.

    Hospitality Group v Australian Rugby Union (2001) 110 FCR 157, 197–99 (Hill and Finkelstein JJ). See also Esperance Cattle Company Pty Ltd v Granite Hill Pty Ltd [2014] WASC 279, [463]–[467], esp [464]. Cf USA: Edwards v Lee’s Administrator 96 So W 2d 1028 (1936).

  72. 72.

    ibid, 198–99.

  73. 73.

    Oughton v Seppings (1830) 1 B & Ad 241; 109 ER 776; Lamine v Dorrell (1706) 2 Ld Raym 1216; 92 ER 303.

  74. 74.

    Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 227 (Mason and Wilson JJ); 255–56 (Deane J). See Roxborough v Rothmans of Pall Mall Australia Limited (2001) 208 CLR 516, [2001] HCA 6, [90] (Gummow J).

  75. 75.

    LJP Investments v Howard Chia Investments (1989) 24 NSWLR 499; Hampton v BHP Billiton Minerals Pty Ltd (No. 2) [2012] WASC 285.

  76. 76.

    Strand Electric & Engineering v Brisford Entertainment [1952] 2 QB 246; Gaba Formwork Contractors Pty Ltd v Turner Corp Ltd (1991) 32 NSWLR 175; Bunnings Group Limited v Chep Australia Limited [2011] NSWCA 342.

  77. 77.

    Martin v Porter (1839) 5 M & W 351, 151 ER 149; Jegon v Vivian (1871) LR 6 Ch 742; Phillips v Homfray (1871) LR 6 Ch App 770; Whitwham v Westminster Brymbo Coal & Coke Company [1896] 2 Ch 538.

  78. 78.

    Elliott v Boynton [1924] 1 Ch 236; Wilson v Kelly [1957] VR 147; Swordheath Properties Ltd v Tabet [1979] 1 WLR 285; Ministry of Defence v Ashman [1993] 2 EGLR 102; Ministry of Defence v Thompson [1993] 2 EGLR 107; Lollis v Loulatzis [2007] VSC 547.

  79. 79.

    Balanced Securities Ltd v Bianco [2010] VSC 201, [16].

  80. 80.

    Bracewell v Appleby [1975] Ch 408; Jaggard v Sawyer [1995] 1 WLR 269.

  81. 81.

    Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157, 196 (Hill and Finkelstein JJ); Town & Country Property Management Services Pty Ltd v Kaltoum [2002] NSWSC 166, [85] (Campbell J); Biscayne Partners Pty Ltd v Valance Corp Pty Ltd [2003] NSWSC 874, [232]–[235] (Einstein J); Short v Crawley [2005] NSWSC 928 [24] (White J); Hydrofibre Pty Ltd v Australian Prime Fibre Pty Ltd and Anor [2013] QSC 163, [91]–[94]; Testel Australia Pty Ltd v KRG Electrics Pty Ltd & Anor [2013] SASC 91, [99]–[109].

  82. 82.

    Edelman (2002); Harder (2010); Barnett (2012).

  83. 83.

    [1974] 1 WLR 798.

  84. 84.

    [2000] UKHL 45, [2001] 1 AC 268.

  85. 85.

    Jolowicz (1975), 227.

  86. 86.

    Barnett (2012), 121, 126–28.

  87. 87.

    Snepp v United States, 444 US 507 (1980); Reading v Attorney General [1951] UKHL 1, [1951] AC 507; Reid-Newfoundland Co. v Anglo-American Telegraph Co Ltd [1912] AC 555.

  88. 88.

    Australian Consumer Law, Schedule 2 to the Competition and Consumer Act 2010 (Cth).

  89. 89.

    Corporations Act 2001 (Cth), ss 180–183.

  90. 90.

    ‘Civil penalty provisions’ are defined by Corporations Act 2001 (Cth), s 1317E.

  91. 91.

    Corporations Act 2001 (Cth), ss 1317H(2), 1317HA(2), 1317HB(2).

  92. 92.

    Attorney-General v Blake [2000] UKHL 45, [2001] 1 AC 268.

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Barnett, K. (2015). Disgorgement of Profits in Australian Private Law. In: Hondius, E., Janssen, A. (eds) Disgorgement of Profits. Ius Comparatum - Global Studies in Comparative Law, vol 8. Springer, Cham. https://doi.org/10.1007/978-3-319-18759-4_2

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