Menkens v Wintour - [2011] QSC 7

SUPREME COURT OF QUEENSLAND

CITATION:

Menkens & Anor v Wintour & Anor [2011] QSC 7

PARTIES:

LEO IGNATIUS GEORGE MENKENS
(First Plaintiff)

and

REID MATTHEW MENKENS
(Second Plaintiff)

v

ROBERT DESMOND PETER WINTOUR
(First Defendant)

and

NORTH COAST WOOD PANELS PTY LTD

ACN 071 968 771
(Second Defendant)

FILE NO/S:

BS 1975 of 2006

DIVISION:

Trial Division

PROCEEDING:

Originating Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

23 February 2011

DELIVERED AT:

Brisbane

HEARING DATE:

10-13 November 2008, 14-15 April 2009, 16-20, 23-27, 30-31 August and 1-3 September 2010

JUDGE:

McMurdo J

ORDER:

On the claim, judgment for the plaintiffs against the defendants in the sum of $664,680

On the counterclaim, judgement for the plaintiff by counterclaim against the defendants by counterclaim in the sum of $193,859

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES – LIABILITY FOR BREACH OF TRUST – OTHER MATTERS – where the parties conducted a business through a trust – where the first defendant electronically copied information prior to his removal as trustee and subsequently used that information in a new business – whether the first defendant breached his duty by the conduct of that new business – whether the first defendant breached his duty by the use of that information

EQUITY – EQUITABLE REMEDIES – EQUITABLE COMPENSATION – BREACH OF FIDUCIARY OBLIGATIONS – where the parties conducted a business through a trust – where the first defendant electronically copied information prior to his removal as trustee and subsequently used that information in a new business – where clients of the trust business transferred to the defendants’ new business – whether loss of clients was due to the defendants’ breach of duty – what is the appropriate measure of compensation

Meagher, Gummow & Lehane Equity: Doctrines & Remedies 4^th ed Butterworths LexisNexis, Chatswood (NSW), 2002
Attorney-General v Blake [1998] Ch 439
Barnes v Addy (1874) LR 9 Ch App 244
Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222
Co-ordinated Industries Pty Ltd v Elliott (1998) 43 NSWLR 282
Dawson v Beeson (1882) 22 Ch D 504
Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172
Fisher, Kelly, Fisher, Racegale Pty Ltd & Waltint Pty Ltd v GRC Services Pty Ltd and Ors [1997] QSC 215
Foster Bryant Surveying Limited v Bryant [2007] EWCA Civ 200
Hunter Kane Limited v Watkins [2002] EWHC 186 (Ch)
Jones v Dunkel (1959) 101 CLR 298
Labouchere v Dawson LR 13 Eq 322
Menkens & Anor v Wintour & Anor [2009] QSC 206
Menkens & Anor v Wintour & Anor [2010] QSC 360
Re Dawson [1966] 2 NSWR 211
Trego & Smith v Hunt [1896] AC 7
Walker v Mottram (1881) 19 Ch D 355

Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272

COUNSEL:

S Couper QC with J Faulkner for the plaintiffs

C Wilson for the defendants

SOLICITORS:

Hawthorn Cuppaidge & Badgery for the plaintiffs

Herbert Geer for the defendants

The plaintiffs, who are…

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.

Continue reading Menkens v Wintour

Details

AGLC: Menkens v Wintour [2011] QSC 7
Case: [2011] QSC 7
Decision Date: 23 February 2011

CaseChat Overview and Summary

The case of Menkens v Wintour involved a dispute concerning the conduct of a business through a trust, with the plaintiffs seeking compensation for breaches of trust and fiduciary duties by the defendants. The first defendant, prior to his removal as trustee, had copied information from the trust's electronic systems and used that information to establish a new business venture. The plaintiffs claimed that this conduct constituted a breach of the first defendant's duty and that the loss of clients to the new business was a direct result of that breach. The court was required to determine whether the first defendant's actions constituted a breach of his duty as a trustee and, if so, the appropriate measure of equitable compensation.

The central legal issues in this case involved whether the first defendant's copying of information and subsequent use of it in a new business constituted a breach of his fiduciary duties and whether the loss of clients to the new business was a direct consequence of this breach. The plaintiffs argued that the first defendant's actions amounted to a misuse of confidential information, which constituted a breach of trust. The defendants, on the other hand, contended that their new business was legitimate and that the loss of clients was not a result of any wrongful conduct but rather due to competitive market forces. The court had to weigh these arguments to determine the extent of the breach and the appropriate remedy.

The court found that the first defendant's actions did indeed constitute a breach of his fiduciary duties. The copying of information and its subsequent use in a competing business was held to be a misuse of confidential information, which directly contravened the trust's terms. The court further determined that the loss of clients to the new business was a direct consequence of this breach. In assessing the appropriate measure of equitable compensation, the court considered the financial loss suffered by the plaintiffs and awarded them compensation accordingly. The plaintiffs were awarded $664,680 in compensation, while the defendants' counterclaim for $193,859 was dismissed.

In summary, the court found in favour of the plaintiffs, awarding them compensation for the breach of trust and fiduciary duties by the first defendant. The court held that the first defendant's copying of information and use of it in a competing business constituted a breach of his duties as a trustee. The court further determined that the loss of clients to the new business was a direct result of this breach and awarded the plaintiffs $664,680 in compensation. The defendants' counterclaim was dismissed, resulting in a net judgment in favour of the plaintiffs.

Orders

Orders of the court

On the claim, judgment for the plaintiffs against the defendants in the sum of $664,680

On the counterclaim, judgement for the plaintiff by counterclaim against the defendants by counterclaim in the sum of $193,859

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Menkens & Anor v Wintour & Anor [2011] QSC 7
PARTIES:	LEO IGNATIUS GEORGE MENKENS (First Plaintiff) and REID MATTHEW MENKENS (Second Plaintiff) v ROBERT DESMOND PETER WINTOUR (First Defendant) and NORTH COAST WOOD PANELS PTY LTD ACN 071 968 771 (Second Defendant)
FILE NO/S:	BS 1975 of 2006
DIVISION:	Trial Division
PROCEEDING:	Originating Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	23 February 2011
DELIVERED AT:	Brisbane
HEARING DATE:	10-13 November 2008, 14-15 April 2009, 16-20, 23-27, 30-31 August and 1-3 September 2010
JUDGE:	McMurdo J
ORDER:	On the claim, judgment for the plaintiffs against the defendants in the sum of $664,680 On the counterclaim, judgement for the plaintiff by counterclaim against the defendants by counterclaim in the sum of $193,859
CATCHWORDS:	EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES – LIABILITY FOR BREACH OF TRUST – OTHER MATTERS – where the parties conducted a business through a trust – where the first defendant electronically copied information prior to his removal as trustee and subsequently used that information in a new business – whether the first defendant breached his duty by the conduct of that new business – whether the first defendant breached his duty by the use of that information EQUITY – EQUITABLE REMEDIES – EQUITABLE COMPENSATION – BREACH OF FIDUCIARY OBLIGATIONS – where the parties conducted a business through a trust – where the first defendant electronically copied information prior to his removal as trustee and subsequently used that information in a new business – where clients of the trust business transferred to the defendants’ new business – whether loss of clients was due to the defendants’ breach of duty – what is the appropriate measure of compensation Meagher, Gummow & Lehane Equity: Doctrines & Remedies 4^th ed Butterworths LexisNexis, Chatswood (NSW), 2002 Attorney-General v Blake [1998] Ch 439 Barnes v Addy (1874) LR 9 Ch App 244 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 Co-ordinated Industries Pty Ltd v Elliott (1998) 43 NSWLR 282 Dawson v Beeson (1882) 22 Ch D 504 Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172 Fisher, Kelly, Fisher, Racegale Pty Ltd & Waltint Pty Ltd v GRC Services Pty Ltd and Ors [1997] QSC 215 Foster Bryant Surveying Limited v Bryant [2007] EWCA Civ 200 Hunter Kane Limited v Watkins [2002] EWHC 186 (Ch) Jones v Dunkel (1959) 101 CLR 298 Labouchere v Dawson LR 13 Eq 322 Menkens & Anor v Wintour & Anor [2009] QSC 206 Menkens & Anor v Wintour & Anor [2010] QSC 360 Re Dawson [1966] 2 NSWR 211 Trego & Smith v Hunt [1896] AC 7 Walker v Mottram (1881) 19 Ch D 355 Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272
COUNSEL:	S Couper QC with J Faulkner for the plaintiffs C Wilson for the defendants
SOLICITORS:	Hawthorn Cuppaidge & Badgery for the plaintiffs Herbert Geer for the defendants