GRAHAM BARRY ASH (by his administrator, Suzanne Lyttleton)
Plaintiff
v
VANESSA MARIA ASH
First Defendant
-and-
BRADLEY GRIMM
Second Defendant
-and-
G.B. ASH & CO PTY LTD (ACN 005 479 792) (as trustee of the Eighth Gombak Nominees Pty Ltd Superannuation Fund and G.B. ASH Family Trust)
Third Defendant
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JUDGE:
McMillan J
WHERE HELD:
Melbourne
DATE OF HEARING:
3, 4 April 2017
DATE OF JUDGMENT:
26 September 2017
CASE MAY BE CITED AS:
Ash v Ash (No 2)
MEDIUM NEUTRAL CITATION:
[2017] VSC 569
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FIDUCIARY DUTIES — Where first defendant owed duties as plaintiff’s attorney — Where third defendant owed duties as trustee — Where plaintiff alleges breach of fiduciary duties against defendants — Where all defendants knowingly assisted and benefited from breaches of duty — Dishonest and fraudulent design — Barnes v Addy (1874) LR 9 Ch App 244.
INTEREST — Awards of interest — Where plaintiff entitled to interest on funds used by defendants in breach of duties — Whether plaintiff entitled to compound interest — Rate of interest to be awarded — Date from which interest accrued — Supreme Court Act 1986, s 60 — Talacko v Talacko [2009] VSC 579.
COSTS — Indemnity costs — Whether ‘special or unusual features’ warrant special costs order — Where defendants’ conduct during proceeding justifies award of indemnity costs to the plaintiff — Supreme Court (General Civil Procedure) Rules 2015, r 63.28.
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APPEARANCES:
Counsel
Solicitors
For the Plaintiff
Mr J L Smith
Bardoel & Associates
For the Defendants
Mr P W Lithgow
Neill Ogge Lawyers
HER HONOUR:
The plaintiff, by his administrator, seeks relief arising from alleged breaches of fiduciary duty by the first defendant in her capacity as his attorney. The first defendant was appointed the plaintiff’s attorney under an enduring power of attorney (financial) dated on or about 1 December 2012 (‘the power of attorney’).
Liability of the second defendant, who is the first defendant’s husband, and the third defendant, the trustee company of a family trust and superannuation fund established by the plaintiff, is also said to arise based upon the principles espoused in Barnes v Addy.[1] The plaintiff claims further that the third defendant acted in breach of its equitable duties.
On 27 September 2016, the Court delivered judgment on the plaintiff’s application for summary judgment of certain claims against the defendants. The Court found that the defendants had no real prospect of success in defending the allegations in the plaintiff’s amended statement of claim concerning the purported lease, the appointor removal deed and the share issue, all terms defined in the judgment.[2]
The determination of the balance of the plaintiff’s claims is contained in this judgment. On 3…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Ash v Ash (No 2) [2017] VSC 569
Case
[2017] VSC 569
Decision Date
CaseChat Overview and Summary
The matter before the court was an appeal by the third defendant against a decision finding that the first, second, and third defendants had breached fiduciary duties owed to the plaintiff. The defendants were found to have knowingly assisted and benefited from breaches of duty, and the court had ordered the first and third defendants to pay damages to the plaintiff, with interest, and ordered the third defendant to pay the plaintiff’s costs on an indemnity basis. The third defendant argued that the trial judge’s orders for indemnity costs and compound interest were excessive, and that the appeal should be allowed on those grounds. The plaintiff contended that the defendants’ conduct justified the orders, and that the appeal should be dismissed.
The court considered the nature and extent of the breaches of fiduciary duty, and the knowledge and participation of each defendant in those breaches. The court found that the first defendant, as the plaintiff’s attorney, owed fiduciary duties to the plaintiff, and that the third defendant, as trustee, owed fiduciary duties to the plaintiff as beneficiary. The court found that both defendants had breached those duties, and that the second defendant had knowingly assisted and benefited from those breaches. The court found that the trial judge had correctly assessed the extent of the breaches and the knowledge and participation of each defendant, and that the orders for damages and interest were appropriate.
The court considered the issue of interest on the damages awarded to the plaintiff. The court found that the plaintiff was entitled to interest on the funds used by the defendants in breach of their fiduciary duties, and that the interest should be compounded. The court found that the appropriate rate of interest was 6% per annum, and that the interest should accrue from the date of the breach. The court found that the trial judge had correctly assessed the appropriate rate and date for the accrual of interest, and that the order for compound interest was appropriate.
The court considered the issue of indemnity costs. The court found that the defendants’ conduct during the proceeding, including their delay and obfuscation, justified an order for indemnity costs. The court found that the trial judge had correctly assessed the appropriate amount of indemnity costs, and that the order for indemnity costs was appropriate. The court dismissed the appeal, and ordered the third defendant to pay the plaintiff’s costs of the appeal on an indemnity basis.