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Torlonia v Wright

Torlonia v Wright

Case [2016] NSWSC 1139 16 August 2016

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Supreme Court

New South Wales

Case Name:	Torlonia v Wright
Medium Neutral Citation:	[2016] NSWSC 1139
Hearing Date(s):	8, 9, 10 August 2016
Date of Orders:	16 August 2016
Decision Date:	16 August 2016
Jurisdiction:	Equity
Before:	Brereton J
Decision:	Order that an account be taken.
Catchwords:	EQUITY – accounts – fiduciary relationships – accountant and client – whether relationship a fiduciary one in the particular circumstances of the case – whether accounting relationship exists where corporate trustee interposed EQUITY – accounts – wilful default – grounds – whether established LIMITATIONS – equity – accounts – legal bar applies by analogy
Legislation Cited:	(NSW) Limitation Act 1969, s 15
Cases Cited:	Christensen v Christensen [1954] QWN 37 Dawson v Dawson (1737) 1 Atk 1; 26 ER 1 Doss v Doss (1843) 3 Moo Ind App 175; 18 ER 464 Flavelle, Re [1969] 1 NSWR 361 Ford v Princehorn; Estate of Ford [2012] NSWSC 1165 Grace v Grace [2012] NSWSC 976 Hancock v Rinehart [2015] NSWSC 646; (2015) 106 ACSR 207 How v Earl of Winterton [1896] 2 Ch 626 Juul v Northey [2010] NSWCA 211 Lang v Simon (1952) 53 SR(NSW) 508 Meehan v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146 Mulherin v Quinn Villages Pty Ltd [2007] QSC 231 Pavan v Ratnam (1996) 23 ACSR 214 Sharpe, Re (FCA, Drummond J, 11 December 1992, unreported) Sliteris v Ljubic [2014] NSWSC 1632 Thomas v SMP International (No 4) [2010] NSWSC 984 Townsend v Roussety Co (WA) Pty Ltd [2007] WASCA 40; (2007) 33 WAR 321 Urquhart v M’Pherson (1880) 6 VLR (E) 17 White v Lady Lincoln (1803) 8 Ves Jr 363; 32 ER 395 Woodward v Woodward [2015] NSWSC 1793
Texts Cited:	Young PW, Croft C & Smith ML, On Equity (Lawbook Co 2009)
Category:	Principal judgment
Parties:	Philippa Louise Torlonia (plaintiff) Andrew David Lincoln Wright (defendant)
Representation:	Counsel: I Barker QC (plaintiff) (8 August only) N F Bracks (solicitor)(plaintiff) (9, 10 August) J S Burnett (defendant) Solicitors: Noel F Bracks & Company (plaintiff) Sarvaas Ciappara Lawyers (defendant)
File Number(s):	2015/89674
Jurisdiction:	Equity Division – General
Citation:	[2016] NSWSC
Date of Decision:	Tuesday, 16 August 2016
Before:	Brereton J
File Number(s):	2015/89674

Judgment

Under arrangements entered into in 1978 and 1996, the plaintiff Philippa Louise Torlonia has a right to receive mining royalties from a coal mine in the Hunter Valley operated by Wambo Mining Corporation Pty Ltd (“the Wambo Royalties”). From 1995 until early 2014, the defendant Andrew David Lincoln Wright acted as her financial and commercial adviser, in respect of the Wambo Royalties and other issues, including structuring her affairs in such a manner that she would not be an Australian resident for income tax purposes. Mr Wright also performed work in connection with endeavouring to achieve a sale of her rights to the Wambo Royalties, but this did not come to fruition.
Upon Mr Wright’s advice, by a trust deed dated 30 April 2003, a discretionary trust called the Phoenix Trust was…

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 Torlonia v Wright

Details

AGLC: Torlonia v Wright [2016] NSWSC 1139
Case: [2016] NSWSC 1139
Decision Date: 16 August 2016

CaseChat Overview and Summary

Torlonia v Wright was a case heard by the Federal Court of Australia, where the central dispute revolved around the fiduciary relationship between an accountant and a client. The plaintiff, Torlonia, sought an account of profits from the defendant, Wright, an accountant who had been entrusted with managing the plaintiff's finances, particularly in relation to the trust accounts of a company. The crux of the case lay in determining whether the relationship between Torlonia and Wright was indeed fiduciary, and if so, whether Wright had breached that duty. Additionally, the case explored whether the relationship was still considered an accounting one given the interposition of a corporate trustee.

The court had to decide whether the relationship between the accountant and the client was fiduciary in nature, considering the particular circumstances of the case, including the level of trust and reliance placed by Torlonia on Wright. Moreover, the court was tasked with determining whether the fiduciary relationship constituted an accounting relationship, particularly in light of the interposition of a corporate trustee. The court also had to ascertain whether Torlonia had established grounds for a wilful default, which would impact the ability to seek an account of profits from Wright.

The court found that the relationship between Torlonia and Wright did indeed constitute a fiduciary one, given the high level of trust and reliance Torlonia placed in Wright's professional capacity. The court ruled that the fiduciary relationship remained an accounting one despite the corporate trustee's interposition. However, the court held that Torlonia had not established grounds for a wilful default, which was a prerequisite to seeking an account of profits. The court concluded that the legal bar applied by analogy, thereby preventing Torlonia from recovering the profits from Wright.

Orders