Warman International Limited & Anor v Dwyer

The parties before the High Court were Warman International Limited and Peko-Wallsend Operations Ltd (applicants) and Bonfiglioli Transmission (Aust) Engineering Transmission (respondent). The dispute concerned the assessment of damages following a breach of fiduciary duty. The High Court was considering an application for special leave to appeal.

The primary legal issue before the Court was the appropriate method for assessing relief for a breach of fiduciary duty. Specifically, the Court had to determine whether the Court of Appeal's approach of assessing damages by reference to the applicant's loss, framed as a "loss of a chance," was the correct method in the circumstances. This involved considering the flexibility of equitable remedies and the accurate measure of profit or benefit obtained by the fiduciary in breach of their duty.

The Court considered the surrounding facts, including that the Italian distributor, Bonfiglioli, had previously approached Warman about assembling its products and had been rebuffed. There was also evidence of Bonfiglioli's intention to make new arrangements in Australia, discontentment with Warman's actions, and a finding that Warman itself might have abandoned the agency business. In light of these circumstances, the Court of Appeal had determined that the fiduciary had acted in breach of duty and that the most appropriate method of assessment was by reference to the loss of a chance, considering the likelihood of Warman retaining the distributorship. The applicants argued that this approach was open to the Court of Appeal, reflecting a flexible discretion in assessing damages.