McWilliam v Penthouse Publications Ltd

Case [2001] NSWCA 237
CITATION: McWILLIAM & ORS v PENTHOUSE PUBLICATIONS LTD & ORS [2001] NSWCA 237
FILE NUMBER(S): CA 40506/98
HEARING DATE(S): 3 and 4 July 2001
JUDGMENT DATE:
4 July 2001

PARTIES :
BRUCE SCOTT McWILLIAM & ORS v PENTHOUSE PUBLICATIONS LTD & ORS
JUDGMENT OF: Mason P at 1; Handley JA at 74; Hodgson JA at 75
LOWER COURT JURISDICTION : Supreme Court
LOWER COURT
FILE NUMBER(S) : 		CD 13527/88
LOWER COURT
JUDICIAL OFFICER :		 Maconachie AJ
COUNSEL: Appells: P R Graham QC/W Hodgekiss
1,6 Resp: T D Blackburn/P Sibtain
2,3 Resp: M Oakes SC/ J Oakley
4,5 Resp: D M Loewenstein
SOLICITORS: Appells: B M Salmon, Layton
1,6 Resp: Blake Dawson Waldron
2,3 Resp: Minter Ellison
4,5 Resp: John Fitzgerald & Associates
CATCHWORDS: Tort - conspiracy to injure by unlawful means - solicitor acting on client's instructions to terminate contract for breach or repudiation - alleged variation of contract - promissory estoppel - standing to sue for wrongs done primarily to company (ND)
DECISION: Appeal dismissed with costs




CA 40506/98


CD 13527/88

MASON P


HANDLEY JA


HODGSON JA



Bruce Scott McWILLIAM & 2 Ors v PENTHOUSE PUBLICATIONS LTD & Ors

JUDGMENT


1 The claims that were litigated in these proceedings arise out of a written Contract made in May 1979 between Penthouse Publications Ltd (PPL) and ADM Franchise Pty Ltd (ADM). Under the Contract PPL licensed to ADM intellectual property and "know-how" to enable ADM to publish the Australian Penthouse Magazine in Australia and New Zealand.

2 After what were found in the court below to have been prolonged default and continuing repudiation by ADM, PPL purported on 30 August 1982 to terminate the Contract and to exercise contractual rights to demand the handing over of books, records and work in production pursuant to cl 14 (b) of the Contract. The material consisted mainly of copy for the November 1982 issue.

3 On Wednesday 1 September 1982 ADM applied ex parte to the Equity Division for leave to serve short notice of a summons seeking to restrain PPL from using or disposing of the material taken on 30 August. Holland J made the summons returnable the following Monday 6 September. On 2 September 1982 PPL countered with proceedings to wind up ADM, including an application for the appointment of a provisional liquidator. On 6 September 1982 a provisional liquidator was appointed and ADM's summons was stood over generally. Some time later ADM was ordered to be wound up. The company was by then hopelessly insolvent: only some priority creditors and one secured creditor received any dividend.

4 Three members of the McWilliam family commenced the subject proceedings in 1988 in the Common Law Division. They asserted standing to sue based on their status as directors and shareholders of ADM and as beneficiaries, sub-beneficiaries and representatives of beneficiaries of various family trusts including the Australian Penthouse Trust of which ADM was trustee. Some of them also asserted a relevant financial interest in ADM and related companies because they had given secured…

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AGLC
McWilliam v Penthouse Publications Ltd [2001] NSWCA 237
Case
[2001] NSWCA 237
Decision Date

CaseChat Overview and Summary

McWilliam (the appellant) brought proceedings against Penthouse Publications Ltd (the respondent) alleging, among other things, conspiracy to injure by unlawful means. The dispute arose from the respondent's actions in terminating a contract with a company known as ND, which the appellant claimed was done in furtherance of a conspiracy to injure him. The appellant contended that the respondent, through its solicitor, had procured the termination of the contract by ND, and that this termination was achieved by unlawful means, specifically by alleging a breach or repudiation of the contract and subsequently varying it. The matter came before the Court of Appeal of New South Wales.

The central legal issues before the Court of Appeal were whether the respondent had engaged in a conspiracy to injure the appellant by unlawful means, and whether the appellant had the standing to sue for wrongs that were primarily done to the company ND. This involved considering whether the alleged actions of the respondent constituted unlawful means for the purpose of the tort of conspiracy, and whether the appellant, as a shareholder or otherwise, had a sufficient interest to bring such a claim when the direct harm was to the company. The court also had to consider the application of the doctrine of promissory estoppel in the context of the alleged variation of the contract.

The Court of Appeal dismissed the appeal. The court found that the appellant lacked standing to sue for wrongs done primarily to the company ND, as the alleged conspiracy and unlawful means were directed at the company, not the appellant personally. The court also held that the appellant had not established the elements of the tort of conspiracy to injure by unlawful means. Furthermore, the court found that the appellant's arguments regarding promissory estoppel were not made out on the facts.

The appeal was dismissed with costs.

Orders

Orders of the court

Appeal dismissed with costs

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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