Pastizzi Cafe Pty Ltd V Hossain Summary

Pastizzi Café Pty Ltd v Hossain (No 4) NSWSC 808 (28 July 2011)

Facts of the case:

- An agreement was made between second plaintiff , third plaintiff and first defendant that third plaintiff and first defendant would conduct a pastizzi café business.

- Second plaintiff held the guarantor of the leased premises so it was agreed that she will become an equal partner in the business.

- It was agreed that three of them will be equal partner in the business but only second plaintiff and first defendant were listed as directors but not the third plaintiff .

- Later on first defendant locked out first and second plaintiff out of premises which caused loss to plaintiff one and two and acted against corporation act and property act.

Legal Issues involved

The other legal precedents that were considered by the court to reach to the decision are (i) Ductline Pty Ltd v Arcric Investments Pty Ltd (1995) 32 IPR 419 (ii) Pennant Hills Restaurants Pty Ltd v Barrell Insurance Pty Ltd (1981)145 CLR 625 (iii)Ebrahimi v Westbourne Galleries Ltd (1973) AC 360. The case of Phillips v Lamdin (1949)2 KB 33 was cited by the judge. It relied on the concept of the fiduciary duty of the directors as outlined in the Corporations Act. The court observed that the first defendant had fiduciary duties towards the plaintiffs and the duty not to benefit self at the cost or expense of other partners, the beneficiaries of the company or the company itself is included in the fiduciary duty. It was observed by the court that there was another breach of fiduciary duty by the first defendant towards the first plaintiff when he locked him out of the premises Final decision of the court: It was finally decided by the court