Torlonia v Wright

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.