SUPREME COURT OF QUEENSLAND
CITATION:
Johnston & Anor v Herrod & Ors [2012] QSC 98
PARTIES:
HARELLA CAROLINE JOHNSTON
(first plaintiff)
LEAH DELILAH FELSMAN
(second plaintiff)
v
HAREL JOSEPH HERROD
(first defendant)
ROBERT MATTHEW HERROD
(second defendant)
RACHEL REBECCA HOLLINGSWORTH
(third defendant)FILE NO/S:
No 501 of 2007
DIVISION:
Trial Division
PROCEEDING:
Trial
ORIGINATING COURT:
Supreme Court, Townsville
DELIVERED ON:
18 April 2012
DELIVERED AT:
Brisbane
HEARING DATE:
21 February 2012-24 February 2012; 10 April 2012
JUDGE:
Chief Justice
ORDER:
There will be declarations and orders as follows:
a declaration that the agreement entered into by each plaintiff to forego her interest in the estate of her deceased father or the Moonoomoo cattle partnership, in return for payment of a sum of money, on or about 18 February 1999, is unenforceable and is set aside;1.
a declaration that each of the defendants has breached his or her fiduciary duty owed to each plaintiff, whether as executor of the deceased estate or as partner in the Moonoomoo cattle partnership;2.
a declaration that each plaintiff is entitled, at that plaintiff’s election:3.
to an account of the profits which have accrued to the respective defendants by reason of their breach of duty; ora.
to equitable compensation, assessed in the amount of $433,709.67for the payment of which the defendants are jointly and severally liable, to the intent that the aggregate amount receivable by each plaintiff does not exceed $433,709.67. b.
that within 21 days, each plaintiff inform the defendants (by their solicitors) of the election she makes and file an affidavit in this proceeding (personally or by her solicitor) confirming which election has been made;4.
that upon the filing of that affidavit, it will be taken, without further application, that consistently with the election, there is judgment as follows:5.
for an order for the taking of an account of profits which have accrued to the respective defendants by reason of their breach of duty, with liberty to apply for directions as to the manner in which that account will be taken; ora.
against each defendant, in favour of the plaintiff, for equitable compensation in the amount of $433,709.67;b.
that the Registrar is authorised to enter formal judgment accordingly;6.
that there be liberty to apply;7.
that costs be reserved.8.
CATCHWORDS:
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – MATTERS NOT GIVING RISE TO BINDING CONTRACT – AGREEMENTS NOT INTENDED TO CREATE LEGAL RELATIONS – DOMESTIC, SOCIAL AND OTHER AGREEMENTS – where all parties are siblings and members of the Jehovah’s Witness faith – where the deceased, the parties’ father, was in partnership in a cattle property with the first and second defendants – where deceased’s interest in cattle partnership and residue was left to the first plaintiff, second plaintiff, and third defendant in equal shares – where discussions took place regarding the plaintiff and second plaintiff assigning their interest in the partnership to the first and second defendants for $55,000 –…
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- Johnston & Anor v Herrod & Ors [2012] QSC 98
- Case
- [2012] QSC 98
- Decision Date
CaseChat Overview and Summary
The court examined the nature of the agreements between the siblings, considering their domestic and social context, and whether they were intended to create legal relations. The plaintiffs argued that the agreements were unenforceable due to the lack of intention to create legal relations and the defendants' alleged misrepresentation and breach of fiduciary duty. The court found that the agreements were unenforceable as they were not intended to be legally binding, given the familial and social context. Additionally, the court found that the defendants breached their fiduciary duties owed to the plaintiffs by failing to act in their best interests.
The court issued several declarations and orders. It declared that the agreements made by the plaintiffs were unenforceable and set aside. It also declared that the defendants had breached their fiduciary duties. The plaintiffs were granted the choice of receiving an account of the profits accruing to the defendants by reason of their breach of duty or equitable compensation in the amount of $433,709.67. The defendants were jointly and severally liable for the payment of this amount. The court further ordered the plaintiffs to inform the defendants of their election within 21 days and authorised the Registrar to enter formal judgment accordingly. Costs were reserved for another determination.
Orders
Orders of the court
There will be declarations and orders as follows:
a declaration that the agreement entered into by each plaintiff to forego her interest in the estate of her deceased father or the Moonoomoo cattle partnership, in return for payment of a sum of money, on or about 18 February 1999, is unenforceable and is set aside;1.
a declaration that each of the defendants has breached his or her fiduciary duty owed to each plaintiff, whether as executor of the deceased estate or as partner in the Moonoomoo cattle partnership;2.
a declaration that each plaintiff is entitled, at that plaintiff’s election:3.
to an account of the profits which have accrued to the respective defendants by reason of their breach of duty; ora.
to equitable compensation, assessed in the amount of $433,709.67for the payment of which the defendants are jointly and severally liable, to the intent that the aggregate amount receivable by each plaintiff does not exceed $433,709.67. b.
that within 21 days, each plaintiff inform the defendants (by their solicitors) of the election she makes and file an affidavit in this proceeding (personally or by her solicitor) confirming which election has been made;4.
that upon the filing of that affidavit, it will be taken, without further application, that consistently with the election, there is judgment as follows:5.
for an order for the taking of an account of profits which have accrued to the respective defendants by reason of their breach of duty, with liberty to apply for directions as to the manner in which that account will be taken; ora.
against each defendant, in favour of the plaintiff, for equitable compensation in the amount of $433,709.67;b.
that the Registrar is authorised to enter formal judgment accordingly;6.
that there be liberty to apply;7.
that costs be reserved.8.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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