Commercial litigation update - September 2026

Two recent decisions of the Federal Court of Australia and New South Wales Court of Appeal serve as a reminder of the serious consequences that flow from admissions and concessions made during Court proceedings.

In Target Australia v Smart Trike, the Federal Court dismissed the Respondent’s application to withdraw two admissions made in three iterations of its defence. The Court found that the Respondent had failed to adequately explain how the admissions resulted from mistake rather than deliberate forensic choice.

In Perez de la Sala v Perez de la Sala, the NSWCA refused leave to withdraw concession made by the applicant’s senior counsel, which were found to be made expressly, repeatedly and were clear and unambiguous. The Court also found it of “some significance” that the Applicant did not seek to explain why the concessions were made.

See: Target Australia v Smart Trike (withdrawal of admissions) [2026] FCA 1309

See: Perez de la Sala v Perez de la Sala [2026] NSWCA 160

The NSWCA has unanimously dismissed an appeal from the primary judge’s ruling that the ATO was liable under the first limb of Barnes v Addy for the knowing receipt of “trust property”, being the sale proceeds of property which a director of the Respondent had obtained in breach of his fiduciary duties and used to pay a personal tax debt.

The main issue on appeal was whether the proceeds from the sale of shares obtained in breach of fiduciary duty were themselves “trust property”, with the result that the ATO was liable for their knowing receipt.

The Court found that the sale proceeds were trust property as they could be traced from a trust which automatically arose over the shares at the moment of the director obtained those shares in breach of his fiduciary duties to the Company. The character of the subsequent sale proceeds as “trust property” was not altered by a decision of the Court to only grant a personal remedy against the director as the original fiduciary to account for them.  

See: Commonwealth of Australia v Kupang Resources Pty Ltd [2026] NSWCA 161 

The NSWCA has refused leave to appeal the permanent stay of a preliminary discovery application brought in breach of a dispute resolution clause.

Although an application for preliminary discovery did not full within the scope of the clause itself, the primary judge had found that it did fall within the covenant not to sue which accompanied an arbitration clause. The NSWCA agreed with this construction of the clause, which was said to be a very broadly expressed covenant not to sue other than in the arbitral forum. The Court further found that the scope of this covenant was not limited by a separate clause which gave non-exclusive jurisdiction to the Courts of Victoria and no “strong reasons” of public policy required refusal of the stay based on the fact that the arbitral forum did not have a procedure of preliminary discovery available.

See: Illawarra Basketball Club Pty Ltd v National Basketball League Pty Ltd [2026] NSWCA 182

The Applicant applied to the Supreme Court of Victoria under section 11 of the Commercial Arbitration Act 2011 (Vic) to have an arbitrator appointed pursuant to an arbitration clause in a services agreement. The Respondent contested this appointment by virtue of a claim that the signature on the services agreement was forged or otherwise of no effect. 

Justice Croft reaffirmed principles of kompetenz-kompetenz and separability, by the Court refusing to hear substantive arguments as to the validity of the underlying contract and arbitration. The Court held that, prima facie, there was a valid arbitration agreement that enlivened the Court’s power to appoint an arbitrator to substantively consider the Respondent’s claims of forgery and non est factum.

See: Zoo Property Wealth Builder Pty Ltd v Australia Red Hill Real Estate Group Pty Ltd [2026] VSC 509

See further: A light touch: Supreme Court of Victoria affirms arbitral tribunal’s authority to determine own jurisdiction 

In this ACL matter, the respondents pleaded matters regarding the state of scientific knowledge as part of their defence to an allegation of their goods not being of acceptable quality within the meaning of section 54 of the ACL. The applicant had applied to strike out those paragraphs of the respondents’ defence or alternatively seek an order for determination of a separate question.

In dismissing the interlocutory application, Owens J identified that the respondents were entitled to run a case that the state of scientific knowledge at the time of the supply of the goods (as distinct from at the time of trial) was a matter that was relevant to assessing compliance with the statutory guarantee and, if it is, how it might be relevant.

See: Donnelly v Allergan Australia Pty Limited [2026] FCA 1148