Case: Houghton v Arms [2006] HCA 59 ; (2006) 225 CLR 553)
Outcome: followed
There can be no doubt that there was a causal connection between the negligence and each of the identified statutory breaches, and the loss making investment by Tosich. Each cause of action is established against Tasman Investments. There is no doubt about Warne's personal liability for all causes of action so established. He was the moving force for Tasman Investments in all respects relevant to the investment in the Queen Victoria Project and is responsible for all acts and omissions giving rise to the liability of the company ( Houghton v Arms [2006] HCA 59 ; (2006) 225 CLR 553). 26 The deed of assignment was executed on 16 June 2005 between Tosich as assignor and All Saints as assignee. At that time this proceeding was on foot, and a receiver had been appointed to the Queen Victoria Project by the Supreme Court of New South Wales in proceedings brought by ASIC. The substantive operative provisions of the deed were as follows: "1. The assignee will pay to the assignors by bank or trust account cheque the sum of One-Hundred and Fifty Thousand Dollars ($150,000) on the exchange of this Deed. 2. The assignors hereby transfer set-over and assign to the assignee absolutely all of their right, title and interest both at law and in equity in:- (a) the investment in their names in the Queen Victoria Project referred to in recital A; (b) all rights to receive any dividend or other monies from or by virtue of the receivership of the Queen Victoria Project referred to in recital C; (c) all claims demands causes of action and rights of action maintainable by the assignors or either of them arising out of or connected with the facts matters and circumstances referred to in the statement of claim filed in the Tosich proceedings;" 27 There are other features of the deed to note. The first is that the defendants Tasman Investment and Warne were each party to the deed and gave joint and several warranties as to the financial position of the assignee and Warne. They also (together with the assignee) indemnified the assignors against future legal costs and expenses in the proceeding, and covenant that they will not seek costs or expenses from the assignors in relation to this proceeding. Then there are clauses dealing with later recovery as follows: "11. If the receiver declares and pays a dividend in respect of the Queen Victoria Project prior to the conclusion of the Tosich proceedings and the connected proceedings, that dividend will be paid to the assignors once the Tosich proceedings and the connected proceedings have been finally concluded. If the receiver declares and pays a dividend in respect of the Queen Victoria Project once the Tosich proceedings and the connected proceedings have been finally concluded, that dividend will be paid to the assignors forthwith. 12. In circumstances where the assignors become entitled to any further payments consequent upon any award or judgment obtained by it, Tasman and/or Warne, the assignors shall be entitled to a further payment equivalent to: (a) $125,000; (b) plus interest which is hereby agreed in the amount of $54,225; plus (c) costs and disbursements which are hereby agreed in the amount of $55,000 inclusive of GST; less any amount paid pursuant to this Deed."