Dormway Pty Ltd v Wichmann

In the case of Dormway Pty Ltd v Wichmann, the plaintiff, Dormway Pty Ltd, sought summary judgment against the defendant, Wichmann, for the recovery of monies stolen during Wichmann’s employment. Wichmann’s employment was terminated due to her misuse of a business credit card for personal expenses. As part of the termination, a deed of agreement and confidentiality was executed, releasing Wichmann from claims in civil proceedings. However, it was later discovered that Wichmann was involved in a fraudulent scheme, of which Dormway was unaware when the deed was executed. The matter was heard in the Supreme Court of New South Wales.

The court was required to determine whether the general terms of the deed of agreement and confidentiality barred the plaintiff's claim for fraud and deceit. This involved interpreting the terms of the deed and assessing whether they encompassed claims related to fraudulent activities. The court also had to consider whether the doctrine of collateral contract applied, which could potentially exclude the fraud from the release.

In reaching its decision, the court held that the general terms of the deed of agreement and confidentiality did not apply to fraud or deceit. The court found that the release was intended to cover breaches of employment and confidentiality, but not fraudulent activities, which were separate and distinct. The court also rejected the argument that a collateral contract existed, which would have excluded the fraud from the release. Consequently, the court granted summary judgment in favour of the plaintiff, ordering Wichmann to repay the stolen funds plus interest.

The court ordered Wichmann to pay the plaintiff the sum of $321,593.85 plus interest of $4,458.26. The defendant was also ordered to pay the plaintiff's costs of and incidental to the application. The court further directed that ING Bank release $30,000 from the mortgage account to be held in a trust account for the payment of reasonable legal expenses. The defendant was also required to lodge an appeal.