Legal Research
Cases
Nicholls v Michael Wilson & Partners Ltd

Nicholls v Michael Wilson & Partners Ltd

Link copied

Case Copied 28 November 2012 74 min read

Contents

On this page

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Nicholls & Ors v Michael Wilson & Partners Ltd [2012] NSWCA 383
Hearing dates: 25, 26 July 2012; 17, 28 August 2012 (further written submissions)
Decision date: 28 November 2012
Before: Meagher JA at [1]
Barrett JA at [2]
Sackville AJA at [3]
Decision:
1. The parties file agreed short minutes of order within 14 days, including provision for interest, costs and any other outstanding issues.
2. In the absence of agreed short minutes, the appellants file and serve their draft short minutes of order and brief submissions in support within 14 days.
3. The respondent file and serve its draft short minutes of order and brief submissions in support within a further 14 days.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
EQUITY - equitable compensation for breach of fiduciary duties by employees and consultants - assessment after remitter of case by High Court to Court of Appeal - fiduciaries deliberately breached duties by diverting opportunities for legal work from a legal and consulting firm in Kazakhstan to their own firm and by knowingly assisting in other breaches of fiduciary duty - principles governing assessment of equitable compensation for lost opportunity to perform legal work and to receive financial rewards for involvement in projects - need to establish causation - significance of fiduciaries' resignation from firm in order to further their wrongful conduct - extent to which plaintiff is entitled to rely on the presumption against wrongdoers where there are gaps in the evidence.
EVIDENCE - admissibility of expert report - report estimates legal work likely to be performed on particular projects and fees or other rewards likely to be derived by the firm performing the work - whether expert's opinion met the requirements of s 79 of the Evidence Act 1995 - whether opinions shown to be based on the expert's specialised knowledge - whether report should be given any probative weight.
Legislation Cited: Evidence Act 1995
Cases Cited: Armory v Delamirie (1722) 1 Stra 505; 93 ER 664
Barnes v Addy (1874) LR 9 Ch App 244
Beach Petroleum NL v Kennedy [1999] NSWCA 408; 48 NSWLR 1
Canadian Aero Service Ltd v O'Malley [1974] SCR 592; 40 DLR (3d) 371
Canson Enterprises Ltd v Broughton & Co (1991) 85 DLR (4th) 129
Edmonds v Donovan (2005) 12 VR 513
Environment Agency v Empress Car Co (Abertillery) Ltd [1998] 2 WLR 350
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89
Furs Ltd v Tomkies [1936] HCA 3; 54 CLR 583
Harris v Digital Pulse Pty…

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.

Keep reading for free

Create a free CaseChat account to read Nicholls v Michael Wilson & Partners Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2012] NSWCA 383
Decision Date: 28 November 2012

CaseChat Overview and Summary

The case of *Nicholls v Michael Wilson & Partners Ltd* concerned a dispute between a legal and consulting firm, Michael Wilson & Partners Ltd (MWP), and its former employees and consultants. MWP alleged that these individuals had deliberately breached their fiduciary duties by diverting opportunities for legal work to their own newly established firm and by knowingly assisting in other breaches of fiduciary duty. The matter came before the Court of Appeal after a remitter from the High Court.

The central legal issues before the Court of Appeal were the principles governing the assessment of equitable compensation for the loss of opportunities to perform legal work and to receive financial rewards. The court was required to determine the extent to which causation needed to be established, the significance of the fiduciaries' resignation from MWP to further their wrongful conduct, and the degree to which MWP could rely on the presumption against wrongdoers in the face of evidentiary gaps. Additionally, the admissibility and probative weight of an expert report, which estimated the legal work and fees likely to be derived from particular projects, were in question, specifically in relation to the requirements of section 79 of the *Evidence Act 1995*.

The court considered the principles of equitable compensation for breach of fiduciary duty, particularly in the context of lost opportunities. It was noted that the fiduciaries' deliberate breaches and their subsequent resignation to pursue their own interests were significant factors. The court also addressed the admissibility of the expert report, assessing whether the expert's opinions were based on specialised knowledge and met the statutory requirements for admissibility. The court acknowledged that where fiduciaries have deliberately acted to conceal or obscure the extent of their wrongdoing, the plaintiff may be entitled to rely on presumptions against the wrongdoers to fill evidentiary gaps.

Ultimately, the court determined that MWP was disentitled to relief by way of a constructive trust. However, MWP was entitled to elect between various forms of relief, including an equitable account of profits or equitable compensation, in consequence of the liability judgment.

Orders

Orders of the court

131.

" in consequence of the Liability Judgment, as follows:

"[MWP] disentitled to relief by way of a constructive trust. [MWP] entitled to elect as between ultimate forms of relief on the sundry causes of action upheld in the reasons inter alia including an election for an equitable account of profits or equitable compensation."

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.

Medium Neutral Citation:	Nicholls & Ors v Michael Wilson & Partners Ltd [2012] NSWCA 383
Hearing dates:	25, 26 July 2012; 17, 28 August 2012 (further written submissions)
Decision date:	28 November 2012
Before:	Meagher JA at [1] Barrett JA at [2] Sackville AJA at [3]
Decision:	1. The parties file agreed short minutes of order within 14 days, including provision for interest, costs and any other outstanding issues. 2. In the absence of agreed short minutes, the appellants file and serve their draft short minutes of order and brief submissions in support within 14 days. 3. The respondent file and serve its draft short minutes of order and brief submissions in support within a further 14 days. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	EQUITY - equitable compensation for breach of fiduciary duties by employees and consultants - assessment after remitter of case by High Court to Court of Appeal - fiduciaries deliberately breached duties by diverting opportunities for legal work from a legal and consulting firm in Kazakhstan to their own firm and by knowingly assisting in other breaches of fiduciary duty - principles governing assessment of equitable compensation for lost opportunity to perform legal work and to receive financial rewards for involvement in projects - need to establish causation - significance of fiduciaries' resignation from firm in order to further their wrongful conduct - extent to which plaintiff is entitled to rely on the presumption against wrongdoers where there are gaps in the evidence. EVIDENCE - admissibility of expert report - report estimates legal work likely to be performed on particular projects and fees or other rewards likely to be derived by the firm performing the work - whether expert's opinion met the requirements of s 79 of the Evidence Act 1995 - whether opinions shown to be based on the expert's specialised knowledge - whether report should be given any probative weight.
Legislation Cited:	Evidence Act 1995
Cases Cited:	Armory v Delamirie (1722) 1 Stra 505; 93 ER 664 Barnes v Addy (1874) LR 9 Ch App 244 Beach Petroleum NL v Kennedy [1999] NSWCA 408; 48 NSWLR 1 Canadian Aero Service Ltd v O'Malley [1974] SCR 592; 40 DLR (3d) 371 Canson Enterprises Ltd v Broughton & Co (1991) 85 DLR (4th) 129 Edmonds v Donovan (2005) 12 VR 513 Environment Agency v Empress Car Co (Abertillery) Ltd [1998] 2 WLR 350 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 Furs Ltd v Tomkies [1936] HCA 3; 54 CLR 583 Harris v Digital Pulse Pty…