Corporate Alter Ego Liability in Equity

A new form of equitable third party liability is starting to develop in Australian law. Companies used by wrongdoing fiduciaries to further their breaches of duty have always been susceptible to liability on the standard Barnes v Addy grounds of knowing receipt or knowing assistance. Even when a company was owned and controlled by the fiduciary, that company would still be treated as a discrete third party and liable on its own account for its participation in the fiduciary’s wrong. But this new type of corporate alter ego liability works differently: here, the company and its human controller are treated as the same actor and their positions are conflated. This has important consequences for when the company can be made liable and for the nature and extent of the remedies available against it.