Wright v Lemon

[2024] WASCA 19

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT  :   THE COURT OF APPEAL (WA)

CITATION:   WRIGHT -v- LEMON [2024] WASCA 19

CORAM:   BUSS P

VAUGHAN JA

HALL JA

HEARD:   7, 8, 9, 10 & 11 NOVEMBER 2022

DELIVERED          :   1 MARCH 2024

FILE NO/S:   CACV 62 of 2021

BETWEEN:   JULIAN DAVID MAYNARD WRIGHT

Appellant

AND

DAVID JOHN NEALE LEMON as executor of the estate of MICHAEL JOHN MAYNARD WRIGHT

First Respondent

ANGELA MARY MAYNARD WRIGHT BENNETT

Second Respondent

LEONIE BALDOCK

Third Respondent

ALEXANDRA BURT

Fourth Respondent

VOC GROUP LIMITED

Fifth Respondent

AMB HOLDINGS PTY LTD

Sixth Respondent

WRIGHT PROSPECTING PTY LTD

Seventh Respondent

TERALANI PTY LTD

Eighth Respondent

LAREMONT PTY LTD

Ninth Respondent

ON APPEAL FROM:

Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA

Coram:   LE MIERE J

Citation: WRIGHT v DAVID JOHN NEALE LEMON as executor of the estate of MICHAEL JOHN MAYNARD WRIGHT [No 2] [2021] WASC 159

File Number            :   CIV 1319 of 2017

Catchwords:

Equity - Fiduciary duties - Duties of executors of an estate - Conflicts of interest - No conflict rule - Fair dealing rule - Failure to make full disclosure of material facts - Purchase of property at an undervalue - Breach of fiduciary duties

Equity – Fiduciary duties – Duties of executors of an estate – Whether fiduciary duties owed by executors of an estate to a beneficiary of the estate ceased upon the beneficiary absolutely assigning his interest in the estate and giving notice of the absolute assignment to the executors

Equity - Fiduciary duties - Duties of company directors - Whether directors owe fiduciary duties to shareholders - Fact based fiduciary duties - Whether special circumstances gave rise to a specific fiduciary duty

Equity - Fiduciary duties - Duties of shareholders - Whether shareholders owe fiduciary duties to each other - Fact based fiduciary duties - Whether special circumstances gave rise to a specific fiduciary duty

Tort - Deceit - Common law fraud - Whether statements made knowing they were false or with reckless disregard for whether they were true - The rule in Jones v Dunkel

Tort - Deceit - Common law fraud - Whether failure to disclose amounts to common law fraud - Whether mere silence amounts to fraud

Equity - Equitable fraud - Duty of disclosure - Fiduciary relationship between executor and beneficiary

Equity - Equitable fraud - Duty of disclosure - Fiduciary relationship between director and shareholder

Contracts - Construction and interpretation of contracts - Sophisticated commercial contract

Contracts - Construction and interpretation of release clauses - Scope of a general release - Whether release covers claims that were unknown at the time of signing - Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 - Whether release covers claims of fraud

Contracts - Deed of settlement - Equitable considerations affecting release - General words - Whether releasor was aware of claim - Grant v John Grant & Sons Pty Ltd

Equity - Estoppel - Estoppel by convention - Whether parties shared a common assumption - Whether injustice caused by resiling from common assumption - Whether parties acted in reliance on the common assumption

Equity - Trusts - Creation of an express trust - Evidence of a subsisting express trust previously created

Agency - Liability of principal for misrepresentation by agent - Whether misrepresentation falls within the general class of statements or acts the principal apparently authorised - Whether agent was an 'agent to know' - Jessett Properties Ltd v UDC Finance Ltd [1992] 1 NZLR 138

Contract - Accord and satisfaction - Question of fact - Objective assessment of parties' intention - Whether objective intention was to release parties from claims that were not known at the time of signing

Limitation of actions - Limitation period - Actions in deceit - Fraudulent concealment of cause of action - Limitation Act 1935 (WA)

Limitation of actions - Limitation period - Breach of fiduciary duty - Act has no direct application to causes of action founded in equity - Whether limitation period applied by analogy - Whether common law fraud and breach of fiduciary duties sufficiently analogous for limitation period to be applied

Equity - Laches - Whether prejudice caused to defendants as a result of delay

Estoppel - Claim estoppel - Res judicata - Anshun estoppel

Legislation:

Companies (Western Australia) Code (WA)
Iron Ore (Hamersley Range) Agreement Act 1963 (WA)
Iron Ore (Hanwright) Agreement Act 1967 (WA)
Iron Ore (Rhodes Ridge) Agreement Authorisation Act 1972 (WA)
Limitation Act 1935 (WA)
Mining Act 1904 (WA)
Property Law Act 1969 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Appeal dismissed

Category:    B

Representation:

Counsel:

Appellant	:	Mr B Kremer & Mr J M Healy
First Respondent	:	Ms K Stern SC, Ms J K Taylor SC & Ms L Coleman
Second Respondent	:	Ms K Stern SC, Ms J K Taylor SC & Ms L Coleman
Third Respondent	:	Ms K Stern SC, Ms J K Taylor SC & Ms L Coleman
Fourth Respondent	:	Ms K Stern SC, Ms J K Taylor SC & Ms L Coleman
Fifth Respondent	:	Ms K Stern SC, Ms J K Taylor SC & Ms L Coleman
Sixth Respondent	:	Ms K Stern SC, Ms J K Taylor SC & Ms L Coleman
Seventh Respondent	:	Ms K Stern SC, Ms J K Taylor SC & Ms L Coleman
Eighth Respondent	:	Ms K Stern SC, Ms J K Taylor SC & Ms L Coleman
Ninth Respondent	:	Ms K Stern SC, Ms J K Taylor SC & Ms L Coleman

Solicitors:

Appellant	:	Butcher Paull & Calder
First Respondent	:	Clayton Utz
Second Respondent	:	Clayton Utz
Third Respondent	:	Clayton Utz
Fourth Respondent	:	Clayton Utz
Fifth Respondent	:	Clayton Utz
Sixth Respondent	:	Clayton Utz
Seventh Respondent	:	Clayton Utz
Eighth Respondent	:	Clayton Utz
Ninth Respondent	:	Clayton Utz

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Clay v Clay [2001] HCA 9; (2001) 202 CLR 410

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Coleman v Myers [1977] 2 NZLR 225

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Dawson v Knibb (Unreported, NSWSC, Library No 1916, 6 July 1984)

de L'Isle v Knight [2021] NSWSC 809

Demerara Bauxite Co Ltd v Hubbard [1923] AC 673

Dewar v Ollier [2020] WASCA 25

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Dunphy v Russell [2018] NSWSC 721

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Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420

Foran v Wight [1989] HCA 51; (1989) 168 CLR 385

Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 247 CLR 486

Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603

French v NPM Group Pty Ltd [2008] QCA 217

Gamer v Whip [2012] QSC 209

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Hamersley Iron Pty Ltd v The National Mutual Life Association of Australasia Ltd (1985) 60 ALJR 70

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In re Thompson's Settlement [1986] Ch 99

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Lashansky v Legal Practice Board of Western Australia [No 3] [2013] WASCA 260

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Manufacturers Mutual Insurance Ltd v Government Insurance Office (1993) 7 ANZ Insurance Cases 61 ‑ 158

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CONTENTS

BUSS P

The main natural persons of relevance to the litigation

The main corporate entities of relevance to the litigation

The 1987 Sale Agreements

WPPL and its shareholding before January 1987

The Hancock and Wright partnership

Overview of relevant agreements made between 1962 and 1984

Concentrator royalty arbitration

Julian Wright's involvement with WPPL between 1976 and 1983

The option agreements and the loan agreement executed by Peter Wright, Michael Wright, Angela Bennett and Julian Wright

Peter Wright's Will

Discussions about Julian Wright's shares in WPPL after Peter Wright's death

Initial negotiations for the sale and purchase of Julian Wright's shares in WPPL

The completion of negotiations and the signing of agreements for the sale and purchase of Julian Wright's shares in WPPL

The statement of assets and liabilities in respect of Peter Wright's estate

The Keall Brinsden memorandum of 20 March 1987

The settlement of the Concentrator Royalty Arbitration

The proceedings commenced by Natalie Wright and Timothy Wright

The facts and circumstances culminating in Julian Wright commencing the primary proceedings

The trial judge's findings of fact in relation to the non‑expert evidence at trial

The trial judge's findings of fact in relation to the expert evidence at the trial

The trial judge's reasons and conclusions in relation to Julian Wright's claim for breach of fiduciary duty by Michael Wright and Angela Bennett as executors of Peter Wright's Will

The trial judge's reasons and conclusions in relation to Julian Wright's claim for common law fraud by Michael Wright and Angela Bennett in connection with Peter Wright's estate

The trial judge's reasons and conclusions in relation to Julian Wright's claim for equitable fraud by Michael Wright and Angela Bennett in relation to Peter Wright's estate

The trial judge's reasons and conclusions in relation to Julian Wright's claim for breach of fiduciary duty by Michael Wright and Angela Bennett as directors of WPPL

The trial judge's reasons and conclusions in relation to Julian Wright's claim for common law fraud by Michael Wright and Angela Bennett in connection with the acquisition of Julian's shares in WPPL

The trial judge's reasons and conclusions in relation to Julian Wright's claim for fraudulent concealment by Michael Wright and Angela Bennett in connection with the acquisition of Julian's shares in WPPL

The trial judge's reasons and conclusions in relation to the defences of the defendants/respondents based on the Deed of Settlement

The trial judge's reasons and conclusions in relation to the defences of the defendants/respondents based on accord and satisfaction

The trial judge's reasons and conclusions on the limitation defence of the defendants/respondents in relation to the causes of action in deceit or common law fraud

The trial judge's reasons and conclusions on laches

The trial judge's reasons and conclusions on the limitation defence of the defendants/respondents in relation to breach of fiduciary duty

The trial judge's reasons and conclusions in relation to the defendants/respondents' defence of res judicata

The trial judge's reasons and conclusions in relation to the defendants/respondents' defence of Anshun estoppel

The trial judge's reasons and conclusions in relation to whether there were barriers to Julian Wright's claim for rescission of the 1987 Sale Agreements

The trial judge's reasons and conclusions in relation to Julian Wright's claims against the third to sixth, eighth and ninth defendants/respondents

The trial judge's reasons and conclusions in relation to Julian Wright's claims against the seventh defendant/respondent

The trial judge's reasons and conclusions in relation to the defendants/respondents' counterclaim

The trial judge's summary of his conclusions in the primary proceedings

The trial judge's orders in relation to the primary proceedings

Julian Wright's grounds of appeal

Julian Wright's submissions in the appeal

Julian Wright's appeal: grounds 1 and 2: Julian's submissions

Julian Wright's appeal: the merits of grounds 1 and 2

Julian Wright's appeal: grounds 3, 4 and 5: Julian's submissions

Julian Wright's appeal: the merits of grounds 3, 4 and 5

Julian Wright's appeal: grounds 6 and 7: Julian's submissions

Julian Wright's appeal: the merits of grounds 6 and 7

Julian Wright's appeal: grounds 8 and 9: Julian's submissions

Julian Wright's appeal: grounds 10 and 11(a) ‑ (b): Julian's submissions

Julian Wright's appeal: ground 11(c): Julian's submissions

Julian Wright's appeal: ground 11(d): Julian's submissions

Julian Wright's appeal: ground 12: Julian's submissions

Julian Wright's appeal: ground 13: Julian's submissions

Julian Wright's appeal: the respondents' submissions in the appeal

Julian Wright's appeal: the merits of grounds 8, 9, 10, 11, 12 and 13

Julian Wright's appeal: ground 14: Julian's submissions

Julian Wright's appeal: ground 15: Julian's submissions

Julian Wright's appeal: the merits of grounds 14 and 15

Julian Wright's appeal: ground 17: Julian's submissions

Julian Wright's appeal: the merits of ground 17

The respondents' notice of contention

The respondents' submissions on the notice of contention

The respondents' notice of contention: ground 1: the respondents' submissions

The respondents' notice of contention: the merits of ground 1

The respondents' notice of contention: ground 2: the respondents' submissions

The respondents' notice of contention: the merits of ground 2

The respondents' notice of contention: ground 3: the respondents' submissions

The respondents' notice of contention: the merits of ground 3

The respondents' notice of contention: ground 4: the respondents' submissions

The respondents' notice of contention: the merits of ground 4

The respondents' notice of contention: ground 5: the respondents' submissions

The respondents' notice of contention: the merits of ground 5

The respondents' notice of contention: ground 6: the respondents' submissions

The respondents' notice of contention: the merits of ground 6

The respondents' notice of contention: ground 7: the respondents' submissions

The respondents' notice of contention: the merits of ground 7

The respondents' notice of contention: ground 8: the respondents' submissions

The respondents' notice of contention: the merits of ground 8

The respondents' notice of contention: ground 9: the respondents' submissions

The respondents' notice of contention: the merits of ground 9

The respondents' notice of contention: grounds 10, 11 and 12: the respondents' submissions

The respondents' notice of contention: the merits of grounds 10, 11 and 12

The respondents' notice of contention: grounds 13, 14 and 15: the respondents' submissions

The respondents' notice of contention: the merits of grounds 13, 14 and 15

The respondents' notice of contention: ground 16: the respondents' submissions

The respondents' notice of contention: the merits of ground 16

The respondents' notice of contention: ground 17: the respondents' submissions

The respondents' notice of contention: the merits of ground 17

The respondents' notice of contention: ground 18: the respondents' submissions

The respondents' notice of contention: the merits of ground 18

The respondents' notice of contention: ground 19: the respondents' submissions

Julian Wright's submissions in response to the notice of contention

Julian Wright's submissions in respect of ground 19

The respondents' notice of contention: the merits of ground 19

The respondents' notice of contention: ground 20: the respondents' submissions

The respondents' notice of contention: the merits of ground 20

The respondents' notice of contention: ground 21: the respondents' submissions

The respondents' notice of contention:  the merits of ground 21

The respondents' notice of contention: grounds 22, 23, 24 and 25: the respondents' submissions

Julian Wright's submissions in response to grounds 22, 23, 24 and 25

The respondents' notice of contention:  the merits of grounds 22, 23, 24 and 25

Conclusion

VAUGHAN JA

HALL JA

BUSS P:

1. The appellant (Julian Wright) appeals against the dismissal by Le Miere J after trial of numerous causes of action he alleged against the respondents.  The causes of action included claims for deceit, common law fraud, breach of fiduciary duty and equitable fraud in connection with a sale of shares in a corporation and a sale of an interest in a deceased estate.

2. Julian Wright relies upon 16 grounds of appeal.  The respondents rely upon a notice of contention which contains 25 grounds.  The approach of each of Julian and the respondents in the appeal has been to challenge, with minimal discernment, substantially all (in the case of Julian) and all (in the case of the respondents) material adverse findings made by the trial judge.  His Honour's reasons comprised 206 pages.  On appeal, Julian's written case, the respondents' written answer, Julian's reply to the respondents' notice of contention and the related schedules and chronologies exceeded in total 600 pages.  The hearing of the appeal occupied 5 days and, on a number of those days, the court sat earlier and later than usual.

3. I am of the opinion, for the following reasons, that the appeal should be dismissed.

The main natural persons of relevance to the litigation

1. The main natural persons of relevance to the litigation are as follows.

2. Ernest Archibald Maynard Wright (known as Peter Wright) and Langley George Hancock (known as Lang Hancock) developed and promoted the iron ore industry in the Pilbara region of Western Australia.

3. Peter Wright died on 13 September 1985.

4. Peter Wright had three children:

   (a)Michael Wright (who died on 26 April 2012);

   (b)Angela Bennett, who was the second defendant in the primary proceedings and is the second respondent in the appeal; and

   (c)Julian Wright, who was the plaintiff in the primary proceedings and is the appellant in the appeal.

5. David Lemon in his capacity as executor of Michael Wright's estate was the first defendant in the primary proceedings and is the first respondent in the appeal.

6. Michael Wright had children including, relevantly:

   (a)Leonie Baldock, who was the third defendant in the primary proceedings and is the third respondent in the appeal; and

   (b)Alexandra Burt, who was the fourth defendant in the primary proceedings and is the fourth respondent in the appeal.

7. Julian Wright has two children:

   (a)Natalie Wright; and

   (b)Timothy Wright.

8. Douglas Salt was an accountant who worked for entities associated with Peter Wright, Michael Wright and Angela Bennett.

9. Carnegie Fieldhouse was a lawyer who practised in Sydney under the name CR Fieldhouse.

10. Mr Fieldhouse died in November 2007.

The main corporate entities of relevance to the litigation

1. The main corporate entities of relevance to the litigation are as follows.

2. Wright Prospecting Pty Ltd (WPPL) was incorporated by Peter Wright to carry on his mineral exploration business.  WPPL was the seventh defendant in the primary proceedings and is the seventh respondent in the appeal.

3. Hancock Prospecting Pty Ltd (HPPL) was incorporated by Lang Hancock to carry on his mineral exploration business.

4. VOC Group Ltd (VOC), AMB Holdings Pty Ltd (AMB), Teralani Pty Ltd (Teralani) and Laremont Pty Ltd (Laremont) directly or indirectly hold shares in WPPL.  VOC was the fifth defendant in the primary proceedings and is the fifth respondent in the appeal.  AMB was the sixth defendant in the primary proceedings and is the sixth respondent in the appeal.  Teralani was the eighth defendant in the primary proceedings and is the eighth respondent in the appeal.  Laremont was the ninth defendant in the primary proceedings and is the ninth respondent in the appeal.

The 1987 Sale Agreements

1. On 17 January 1987, Julian Wright executed identical agreements with each of Michael Wright and Angela Bennett (collectively the 1987 Sale Agreements).  Pursuant to each agreement:

   (a)Julian agreed to sell to Michael or Angela (as the case may be) one half of Julian's shares in WPPL and one half of his interest in all other shares he owned apart from shares in specified companies;

   (b)Julian also agreed with Michael or Angela (as the case may be) to procure, without further cost to Michael or Angela (as the case may be) the sale of one half of Julian's interest in Peter Wright's residuary estate; and

   (c)Julian also agreed to cooperate with Michael or Angela (as the case may be) in obtaining probate of Peter Wright's Will.

2. The causes of action litigated in the primary proceedings arose from the execution and completion of the 1987 Sale Agreements.

WPPL and its shareholding before January 1987

1. WPPL was incorporated in 1956.  Peter Wright was a director of WPPL and held a life governor's share in the company until his death on 13 September 1985.

2. Michael Wright became a director of WPPL before 1976.  Angela Bennett and Julian Wright became directors of WPPL in August 1976.  At all material times before January 1987, Michael, Angela and Julian each held, in essence, one third of the issued share capital of WPPL.  Julian sold his shareholding in WPPL to Michael and Angela in January 1987 pursuant to the 1987 Sale Agreements.

The Hancock and Wright partnership

1. During the 1950s and 1960s Peter Wright and Lang Hancock located large deposits of iron ore in the Pilbara region.

2. During the 1950s WPPL and HPPL began carrying on business in partnership under the name 'Hancock and Wright'.  A formal partnership agreement was not made until 1978.  The Hancock and Wright partnership acquired control of numerous temporary reserves or tenements in the Pilbara region.  The partnership was also referred to as the Hanwright partnership.

Overview of relevant agreements made between 1962 and 1984

1. It is convenient, at this stage, to provide an overview of relevant agreements made between 1962 and 1984.  It will be necessary, later in these reasons, to refer to some of the relevant agreements in more detail.

2. By a written agreement dated 12 December 1962 (the 1962 Royalty Agreement) and made between Lang Hancock, Peter Wright, WPPL and HPPL (who were described in the agreement as 'the Vendors'), Rio Tinto Management Services (Australia) Pty Ltd, Rio Tinto Southern Pty Ltd and Hamersley Iron Pty Ltd (Hamersley Iron), the Vendors sold and Hamersley Iron purchased the right, title and interest of the Vendors in respect of various temporary reserves and the land comprised in the temporary reserves and all rights to prospect or mine granted by or flowing from the temporary reserves.  The 1962 Royalty Agreement provided for Hamersley Iron to pay a royalty to the Vendors in respect of all iron ore produced by Hamersley Iron from the land comprised in the temporary reserves.

3. By a written agreement with the State that was approved on 13 November 1963 (the 1963 Hamersley State Agreement), Hamersley Iron acquired temporary reserves over the land the subject of the 1962 Royalty Agreement.

4. By a deed dated 22 October 1964 (the Perron Assignment) and made between Lloyd Stanley Perron on the one hand and WPPL, HPPL, Lang Hancock, Peter Wright and the Hancock and Wright partnership (who were described in the deed as 'the Prospectors') on the other, Mr Perron acquired a 15% interest in the rights and interests of the Prospectors under the 1962 Royalty Agreement (including a 15% interest in the royalties payable by Hamersley Iron under that agreement).

5. By a written agreement with the State that was approved on 23 October 1967 (the 1967 Hanwright State Agreement), HPPL and WPPL acquired temporary reserves over a number of areas in the Pilbara region.  The agreement stated that HPPL and WPPL were carrying on business under the name 'Hanwright Iron Mines'.  The agreement conferred on HPPL and WPPL the right to apply for a mining lease over a part or parts of the land the subject of the temporary reserves.

6. By a written agreement dated 31 January 1968 (the 1968 Royalty Agreement) and made between HPPL and WPPL trading as Hancock and Wright and as Hanwright Iron Mines on the one hand and Hamersley Iron on the other, relevantly:

   (a)HPPL and WPPL agreed to transfer temporary reserve Block 4053H to Hamersley Iron at Hamersley Iron's request made within a specified period and upon and subject to specified conditions;

   (b)Hamersley Iron agreed that iron ore won from Block 4053H would be subject to the payment to HPPL and WPPL of a royalty at the same rate and on the same conditions as applied to Hamersley Iron's present holdings;

   (c)Hamersley Iron agreed as soon as possible to form a company to be known as Mount Bruce Mining Pty Ltd (MBM); and

   (d)Hamersley Iron agreed that iron ore won by MBM from temporary reserves known as the Mount Bruce Reserves would be subject to the payment by MBM to HPPL and WPPL of a royalty at the same rate and on the same conditions as applied to Hamersley Iron's present holdings.

7. By a written agreement dated 5 May 1970 (the 1970 Royalty Agreement) and made between HPPL and WPPL trading as Hancock and Wright and as Hanwright Iron Mines, Hamersley Iron and MBM, relevantly:

   (a)Hamersley Iron relinquished the option granted to it under the 1968 Royalty Agreement;

   (b)in consideration of that relinquishment and in consideration of the payment by MBM to HPPL and WPPL of $5 million, HPPL and WPPL agreed that specified temporary reserves should be divided between HPPL and WPPL on the one hand and MBM on the other in the manner specified in the agreement; and

   (c)MBM agreed that iron ore won by MBM from the temporary reserves acquired by MBM would be subject to the payment by MBM to HPPL and WPPL of a royalty at the rate and on the conditions specified in the agreement.

8. By a deed dated 14 September 1972 (the Deed of Partition) and made between HPPL, WPPL, Lang Hancock and Peter Wright, relevantly:

   (a)it was recited that Lang Hancock and Peter Wright were parties to the 1962 Royalty Agreement and the Perron Assignment, but insofar as each of Lang Hancock and Peter Wright had any interest of any kind in the iron ore deposits the subject of the 1962 Royalty Agreement and the Perron Assignment, that interest was held by each of them upon trust for the Hancock and Wright partnership; and

   (b)each of HPPL and WPPL declared that as from the date of the Deed of Partition each of them would be entitled severally and individually to a one‑sixth part of the rights under the 1968 Royalty Agreement (as reduced by the Perron Assignment) and consequently the existing rights of the Hancock and Wright partnership would to that extent be reduced.

9. By a written agreement dated 2 March 1978 (the Agreement Not To Dissolve Partnership) and made between Lang Hancock, HPPL, Peter Wright and WPPL, relevantly:

   (a)it was recited that neither Lang Hancock nor Peter Wright had or ever has had any beneficial interest in the rights granted by the 1962 Royalty Agreement or the 1968 Royalty Agreement (collectively the Royalty Agreements);

   (b)HPPL agreed with Peter Wright and WPPL that, during the currency of the Royalty Agreements, HPPL would not determine or dissolve the Hancock and Wright partnership without the prior written consent of WPPL; and

   (c)WPPL agreed with Lang Hancock and HPPL that, during the currency of the Royalty Agreements, WPPL would not determine or dissolve the Hancock and Wright partnership without the prior written consent of HPPL.

1. By a deed dated 2 March 1978 (the Deed To Avoid Dissolution of Partnership) and made between Lang Hancock, various members of Lang Hancock's family and related entities, Peter Wright, his wife Pauline Wright, Michael Wright, Angela Bennett, Julian Wright and an entity related to the Wright family, it was agreed relevantly and in effect that, during the currency of the Royalty Agreements, no act or thing would be done to cause the determination or dissolution of the Hancock and Wright partnership.

2. By a written agreement dated 2 March 1978 (the 1978 Partnership Agreement) and made between HPPL and WPPL, the parties made a new agreement setting out the terms and conditions of the Hancock and Wright partnership.

3. By a written agreement dated 15 February 1984 (the 1984 Agreement) and made between HPPL and WPPL, the parties agreed to vary the 1978 Partnership Agreement.

Concentrator royalty arbitration

1. In 1979 Hamersley Iron installed a concentrator at the Mount Tom Price mine.  Iron ore extracted from the mine was to be put through a screening, crushing and beneficiation process.

2. In late 1979 there was a dispute between Hamersley Iron and the Hancock and Wright partnership as to when the beneficiation or other treatment of low grade iron ore began for the purposes of clause 9(b) of the 1962 Royalty Agreement.

3. In 1982 proceedings between the parties to the 1962 Royalty Agreement were commenced in the Supreme Court of Western Australia in relation to that dispute.  The proceedings were tried before Olney J.  On 23 December 1983, his Honour delivered judgment.  His Honour declared that Hamersley Iron was obliged to pay an amount equal to 2.5% of the assumed FOB price of all low grade iron ore fed into the feed chute of the wet screening plant.

4. An appeal from Olney J's declaratory order to the Full Court of the Supreme Court was allowed.

5. On 11 November 1985, the Privy Council allowed an appeal from the Full Court's judgment and, with one minor alteration, reinstated Olney J's declaratory order.

6. On 15 January 1986, a further dispute between the parties to the 1962 Royalty Agreement was referred to arbitration (the Concentrator Royalty Arbitration).  The claimants in that arbitration were Lang Hancock, Michael Wright, Angela Bennett and Julian Wright as Peter Wright's executors, HPPL, WPPL, LSP Pty Ltd and The National Mutual Life Association of Australasia Ltd.  The respondent to that arbitration was Hamersley Iron.  The dispute the subject of the Concentrator Royalty Arbitration concerned the determination of the assumed FOB price of all iron ore fed into the feed chute of the wet screening plant.  Hamersley Iron had not paid the claimants any royalty on account of that iron ore since it had commenced feeding iron ore into the concentrator.

1. On 30 April 1986, Keall Brinsden, acting for the claimants, produced their 'Points of Claim' in the Concentrator Royalty Arbitration.

2. On 12 June 1986, Hamersley Iron produced its 'Points of Defence' in the Concentrator Royalty Arbitration.  Hamersley Iron admitted that it was obliged to pay the claimants a royalty in respect of the iron ore in question, but did not admit the amount of the royalty.

3. As at 1987, the Concentrator Royalty Arbitration had not been resolved.  However, in December 1987, the arbitration was settled and a heads of agreement was signed which gave effect to the settlement.

Julian Wright's involvement with WPPL between 1976 and 1983

1. The trial judge made findings of fact in relation to Julian Wright's involvement with WPPL between 1976 and 1983 as follows.

2. Julian Wright has a Bachelor of Commerce from the University of Western Australia and a Master of Business Administration from Northwestern University in Chicago [95].

3. In 1976, Julian Wright became a director of WPPL [97]. He worked for WPPL, as head of advertising at the Sunday Independent newspaper, between 1976 and July 1983 [98] ‑ [99].

4. Between 1976 and July 1983 Julian Wright regularly attended WPPL board meetings. At those meetings the directors did not discuss WPPL's mining business. They discussed WPPL's other businesses. Peter Wright told his children that he had agreed with Lang Hancock that the children would not be involved in the mining business [100].

5. Julian Wright knew, while he was employed by WPPL, that WPPL held mining tenements and received royalties from Hamersley Iron in respect of iron ore mined at Mount Tom Price. Peter Wright told Julian that WPPL received those royalties. Julian also noticed that those royalties were recorded in WPPL's annual financial statements which he received each year [101].

6. In 1982, Julian Wright told Peter Wright that he did not want to be involved in WPPL's business. Instead, he wanted to pursue a career in investment finance [102].

7. In a memorandum dated 12 November 1982 Julian Wright recorded that he had agreed with Peter Wright that he would continue to work at the Sunday Independent newspaper, as advertising manager and deputy chief executive, until June 1983 and that Peter Wright had indicated that he would either grow closer or further away from the family and that Julian hoped that he would grow closer [102].

8. In late 1982 or early 1983 Peter Wright made a loan of $30,000 to Julian Wright to cover a 'paper loss' that Julian had incurred in trading some bank bills. Although Peter made the loan to Julian, at a family meeting Peter was angry and critical of Julian. It was apparent from a note sent by Michael Wright to Peter on 1 March 1983 and a note sent by Angela Bennett to Peter on 14 February 1983 that Michael and Angela's relationship with Julian had deteriorated and that Angela and Michael had a low opinion of Julian [103].

The option agreements and the loan agreement executed by Peter Wright, Michael Wright, Angela Bennett and Julian Wright

1. In about April 1983, Peter Wright informed Julian Wright that Peter wanted an option to acquire Julian's shares in WPPL because Julian was ceasing to work for WPPL.

2. Julian Wright obtained legal advice from a lawyer, Rodney Warren.  Mr Warren advised Julian that WPPL's articles of association conferred on the life governing director or the directors acting in concert the right to require Julian to transfer his shares to their nominee for fair value.  Mr Warren also advised Julian that the life governing director could manipulate the fair value by exercising his power to vary WPPL's articles of association and issuing new shares at a discount.  Mr Warren also advised Julian that the power to vary the articles of association and to issue new shares at a discount may be subject to control by the court, but advice on that issue required further investigation.

3. On 24 June 1983, Peter Wright, Michael Wright, Angela Bennett and Julian Wright executed an option agreement (the First Option Agreement).  Pursuant to the agreement, Julian granted Peter an option to purchase Julian's shares in WPPL for $1,070,200.  The term of the option was 10 years.  If the option was exercised, the purchase price was payable in annual instalments commencing on 1 January 1986 and ending on 1 January 1995.  The agreement provided in effect that if the option was not exercised by 31 December 1985 Peter would lend Julian free of interest the sum that would have been due on 1 January 1986.  The agreement made similar provision if the option was not exercised by each subsequent anniversary.  The agreement also provided that, in the event of Peter's death, Michael and Angela would 'honour [the] contractual obligations and [would] abide by the terms as set out in [the] agreement'.

4. On 31 July 1983, Julian Wright ceased work with WPPL.  Between 31 July 1983 and 13 September 1985 (when Peter Wright died) Julian did not have any involvement with WPPL.  He continued to be a director and a shareholder of WPPL, but he did not attend any directors' meetings and he did not receive any financial reports.

5. Julian Wright was unhappy with the provisions of the First Option Agreement.  Consequently, on 31 January 1985, Peter Wright, Michael Wright, Angela Bennett and Julian executed another option agreement (the Second Option Agreement).  Pursuant to the agreement, Julian granted Peter an option to purchase Julian's shares in WPPL for $1,070,200.  The term of the option was 10 years.  If the option was exercised before 31 December 1985, the purchase price was payable in annual instalments commencing on 1 August 1985 and ending on 1 August 1994.  The agreement also provided that, in the event of Peter's death before the payment of the final instalment of the purchase price, Peter's legal personal representatives were obliged to comply with all of Peter's obligations under the agreement.

6. By a written agreement dated 2 July 1983 (the Loan Agreement) and made between Peter Wright, Michael Wright, Angela Bennett and Julian Wright, Peter, as lender agreed to make loans to Julian, as borrower, in amounts referrable to the instalments of the purchase price that would be payable by Peter to Julian in the event that Peter exercised the option to purchase Julian's shares in WPPL.  The trial judge found that, despite the date of the Loan Agreement (namely 2 July 1983), the Loan Agreement was in fact executed 'at about the time of, or shortly before and in anticipation of,' the Second Option Agreement.

7. On 31 July 1985, Mr Salt, as the accountant and company secretary of WPPL, caused WPPL to pay to Julian Wright the amount of the first instalment payable under the Second Option Agreement.  The amount actually received by Julian was $68,095.27, being the amount of the first instalment of $170,200, less the agreed value of a property at 69 Louise Street, Nedlands and a Volvo motor vehicle which Julian had in his possession.

Peter Wright's Will

1. As I have mentioned, Peter Wright died on 13 September 1985.

2. By his Will, Peter Wright appointed Michael Wright, Angela Bennett and Julian Wright as the executors and trustees of his Will.

3. By clause 3 of his Will, Peter Wright bequeathed his shares in WPPL as follows:

   (a)as to one third, to Michael Wright;

   (b)as to one third, to Angela Bennett; and

   (c)as to one third, to Michael and Angela upon trust for Julian Wright's children in equal shares.

4. By clause 4 of his Will, Peter Wright conferred upon Michael Wright and Angela Bennett a power to apply any net income derived from the shares in WPPL held by them upon trust for Julian Wright's children for the benefit of the children and to accumulate any balance of the net income for the children's benefit until the vesting day.

5. By clause 5 of his Will, Peter Wright devised and bequeathed the residue of his estate to Michael Wright, Angela Bennett and Julian Wright in equal shares.

Discussions about Julian Wright's shares in WPPL after Peter Wright's death

1. The trial judge made findings of fact in relation to discussions about Julian Wright's shares in WPPL after Peter Wright's death as follows.

2. On 28 September 1985, Michael Wright and Angela Bennett spoke by telephone with Mr Fieldhouse.  Mr Fieldhouse acted for Lang Hancock, Peter Wright, HPPL and WPPL.  Michael recorded the conversation and arranged for a transcription of the recording.  The conversation was, relevantly, as follows [115] ‑ [118]:

   (a)Michael asked Mr Fieldhouse, in relation to Julian Wright's status as a director of WPPL, whether Michael and Angela were required to inform Julian of meetings.  Mr Fieldhouse advised that they were obliged to inform Julian.

   (b)Michael said, in relation to giving Julian information, that his understanding was that if Julian was given formal notice of a meeting then if Julian attended the meeting he would receive what everyone else received and, in addition, anything that Julian requested.  Mr Fieldhouse advised that Michael and Angela must give Julian notice of a meeting and inform him of matters that were to be discussed at the meeting, but they were not obliged to give him 'the results of the meeting'.  Mr Fieldhouse also advised that, as a director, Julian was entitled to all of the financial information including the balance sheets and 'the backup information'.

   (c)Michael, Angela and Mr Fieldhouse discussed the Second Option Agreement.  Mr Fieldhouse advised that Michael and Angela, as the executors of Peter's Will, could exercise the option and, if Julian did not agree, then Michael and Angela could 'force the issue'.  Michael asked whether he and Angela should proceed to exercise the option.  Mr Fieldhouse advised that it would be in their interests to exercise the option because under Peter's Will 'a third of the shares would go to Michael, a third to Angela and a third to Julian leaving [Julian] with a one ninth shareholding in WPPL'.  Mr Fieldhouse advised that 'it might be better to work out some separate sale arrangement with Julian for his WPPL shares but that if Julian was not a willing party, they would have no alternative but to exercise the option'.

   (d)Michael, Angela and Mr Fieldhouse discussed whether Julian's directorship in relation to WPPL could be terminated.  Mr Fieldhouse advised that it could be terminated by the shareholders of WPPL in general meeting.  Mr Fieldhouse stated, 'So putting it bluntly, you and Angela could get rid of Julian'.

   (e)Mr Fieldhouse referred to conflicts of interest.  He said that Julian would be consulting him the next day.  Mr Fieldhouse said that he acted for Peter's estate and for Michael and Angela.  He said that if Julian wanted any advice in relation to the interpretation of Peter's Will then Julian would have to seek his own legal advice.  Mr Fieldhouse would not act for Julian in relation to any matter.  Mr Fieldhouse's loyalty was to Michael and Angela.  Michael said that he and Angela would like Mr Fieldhouse to put his mind towards 'the possibility of parting of the ways with Julian'.  Michael noted that Julian had approached him and Angela and had indicated that he would like 'to revise the Option Agreement'.  Michael told Mr Fieldhouse that he would like to reconsider the option agreement 'in the context of getting [Julian] out one way or the other'.  Angela added 'in other words, buying out the 450 shares'.

   (f)Michael agreed with Mr Fieldhouse that Mr Fieldhouse should ascertain how much Julian would want for his shares in WPPL.  Mr Fieldhouse said that he would use Julian's deal with Peter 'as a weapon' in speaking with him.  Michael instructed Mr Fieldhouse, '[J]ust use your own imagination.  The basic concept is we'd like to buy him out one way or the other'.  Mr Fieldhouse said that he would work on that task at his meeting with Julian the following day.

3. On 29 September 1985, Mr Fieldhouse met with Julian Wright in Sydney.  Mr Fieldhouse reported to Michael Wright and Angela Bennett in a conversation later that day.  Michael recorded the conversation and arranged for a transcription of the recording. The conversation was, relevantly, as follows [119]:

   (a)Julian told Mr Fieldhouse that he was unhappy with the option agreement.  Julian considered that the option agreement was a transaction between him and Peter Wright and that Peter did not intend for the option agreement to survive his death.

   (b)Mr Fieldhouse told Julian that he acted for Peter's estate and for Michael and Angela.  He did not act for Julian and Julian would have to get his own advice.

   (c)Mr Fieldhouse informed Julian that, in his view, the option agreement survived Peter's death.  Mr Fieldhouse added that he had instructions from Michael and Angela to speak with Julian about Michael and Angela purchasing Julian's shares in WPPL.  Julian asserted that he was entitled to 'his third' and he wanted 'some figures' from Mr Salt to ascertain the assets and worth of WPPL and to put a value on his shares in WPPL.  Mr Fieldhouse told Julian that in reality Julian held only one ninth, and not one third, of the shares in WPPL.

   (d)The matter was left on the basis that Julian would tell Mr Fieldhouse within one week how much Julian wanted for his shares [119].

4. Later on 29 September 1985, Mr Fieldhouse had another telephone conversation with Michael Wright and Angela Bennett.  Michael recorded the conversation and arranged for a transcription of the recording.  The conversation was, relevantly, as follows [120]:

   (a)Mr Fieldhouse told Michael and Angela that he would not be surprised if the amount that Julian Wright wanted for his shares in WPPL was in the order of $8 million or $9 million.

   (b)Michael asked Mr Fieldhouse whether that amount was realistic.

   (c)Mr Fieldhouse said he thought that an amount in the order of $8 million or $9 million was 'fairly low'.

   (d)Michael asked Mr Fieldhouse whether he thought Julian could reasonably demand $5 million, $6 million or $7 million.

   (e)Mr Fieldhouse said that one third of WPPL, including one third of its assets, was worth more than $5 million, $6 million or $7 million but if they 'held him on the one ninth share, one ninth [was] not worth all that'.

   (f)Michael told Mr Fieldhouse that he should emphasise to Julian that 'as far as the law goes he (Julian) [was] only entitled to one ninth and he ought to direct his thoughts along those lines'.  Mr Fieldhouse responded that he had already made that point to Julian.

Initial negotiations for the sale and purchase of Julian Wright's shares in WPPL

1. The trial judge made findings of fact in relation to initial negotiations for the sale and purchase of Julian Wright's shares in WPPL as follows.

2. In early October 1985, Julian Wright told Michael Wright and Angela Bennett at a meeting that he wanted to retain his shares in WPPL. Michael said that he and Angela would be purchasing Julian's shares in WPPL either by agreement or by the exercise of the option agreement [121].

3. By 4 October 1985, Julian Wright had instructed Mr Warren to represent him in relation to Peter Wright's estate and to obtain an opinion from Malcolm McCusker QC as to whether the option agreement was enforceable by Peter's executors [122].

4. On 6 October 1985, there was a meeting between Michael Wright, Angela Bennett, Mr Fieldhouse and Mr Salt concerning the purchase of Julian Wright's shares in WPPL. Michael's notes of the meeting refer to an intention to exercise the option to purchase Julian's shares in WPPL, but not to exercise the option until a dividend was due. Michael's notes also refer to Mr Fieldhouse retaining a firm of lawyers, Keall Brinsden, to apply for a grant of probate in respect of Peter Wright's Will. Michael also noted that Mr Fieldhouse would be retained to negotiate with Julian [124].

5. After his meeting with Mr Fieldhouse on 29 September 1985, Julian Wright decided upon a price at which he would be willing to sell his shares in WPPL. The price was based upon one ninth of WPPL's net assets, one ninth of its mineral reserves and one ninth of its royalties. Julian conveyed the price to Mr Fieldhouse by telephone. Julian told Mr Fieldhouse that the price was based on him holding one ninth of WPPL's shares. Julian emphasised, however, that he did not accept that he held only one ninth and insisted that he held one third of WPPL's shares. Mr Fieldhouse rejected the proposed price [125].

6. By letter dated 1 November 1985, Lang Hancock informed Michael Wright, Angela Bennett and Julian Wright that there should be a meeting as soon as convenient to deal with a number of matters, including the following:

   (a)The division of mining tenements, as shown in the latest iteration of the partnership agreement, should be regarded as definite.

   (b)Under this division, the most valuable and possible saleable ore body in 'your half' was Giles Mini.

   (c)Current iron ore producers appeared to be unanimous in the view that Giles Mini was the best iron ore deposit in the whole of the Hamersley Iron field.

   (d)If Lang Hancock was able to establish McCameys then it may be decades before Lang Hancock could work Hope Downs.

   (e)If McCameys was precluded from proceeding then Lang Hancock may be able to proceed instead with some of the Hope Downs areas [126].

7. After receiving the letter dated 1 November 1985, Julian Wright informed Michael Wright that he wanted to attend the meeting with Lang Hancock [127].

8. On 4 November 1985, Mr Fieldhouse retained Max Vinnicombe, a lawyer with Keall Brinsden, to apply for a grant of probate of Peter Wright's Will [128].

9. As I have mentioned, on 11 November 1985, the Privy Council delivered judgment in the appeal from the Full Court of the Supreme Court of Western Australia in connection with the Concentrator Royalty Arbitration.

10. On 21 November 1985, Neville Boughton and Kevin Dalby, who were employees of the Hancock and Wright partnership, met with Wayne Martin and Philip McCann, lawyers with Keall Brinsden, to discuss the Concentrator Royalty Arbitration. On 22 November 1985, Mr Boughton wrote a memorandum to Mr Dalby (with a copy to Mr Martin) which recorded discussions at the meeting. Michael Wright received a copy of the memorandum. Michael had a discussion with Mr Boughton about the arbitration before 28 November 1985 [130].

11. On 28 November 1985, there was a meeting of the directors of WPPL. Michael Wright, Angela Bennett, Julian Wright and Mr Salt attended the meeting. The minutes note that the Privy Council had allowed the appeal in connection with the Concentrator Royalty Arbitration and that costs had been awarded against the respondents. Michael also informed the meeting that the arbitration could take as long as a year. The letter dated 1 November 1985 was tabled at the meeting and discussed. It was decided that all of those who were present at the directors' meeting would meet with Lang Hancock at 2.30 pm on 28 November 1985 and hear his views in regard to the future of the Hancock and Wright partnership [131].

12. During the afternoon of 28 November 1985, Michael Wright, Angela Bennett and Julian Wright met with Lang Hancock.  The trial judge records in his reasons details of the meeting as follows [132] – [136]:

    A transcript of the meeting records, amongst other things, the following discussion:

    Michael:  Julian is a minority shareholder, and he has expressed the desire to sell … we will be negotiating … so we will probably be reduced to the two of us in the foreseeable future.  He has expressed that desire a couple of times, and when the relative information comes to hand then we will be in a position to talk to him.  As the position now stands in our opinion ‑ Angela's and my opinion ‑ we have 91% and Julian has 9% of the action …

    Lang then explained 'what Hancock and Wright have in common' and referred to the areas called the Angelas.  Lang referred to his plans to mine McCameys Monster.  He said that if that succeeded the Angelas would be a long way down the track but if he did not get McCameys going then the Angelas were next in line for him to push.  Lang referred to a contract with the Romanians which would enable him to start the mine hopefully.  Lang referred to railway lines, infrastructure, ports, CRA and the Mount Newman people.  He referred to Western Ridge.  Lang referred to the division of interests between him and Peter.  Lang said:

    In your half the most valuable thing you have got, in my opinion, is a thing called Giles Mini which most of the so‑called experts in the field will regard as the best iron ore deposits in the Hamersley Ranges.  Now that is supposed to go into Rhodes Ridge but there is nothing definite about that, I don't think.  I believe there is scope for using that outside of Rhodes Ridge.  Now, the only thing I think you can do with that is do the same as what I have tried to do with Western Ridge, and sell it to Mt Newman, because they once made an approach to me to work that deposit.

    Lang referred to possibly selling Giles Mini to the parent company of Goldfields UK which mined Mount Goldsworthy in a place called Area C.  Lang said:

    The way for them to get Area C off the ground would be to buy Giles from you because Giles is high grade and very low in impurities.

    Michael referred to the two agreements between Lang and Peter.  Michael referred to sch 2 which sets out the items which Hancock has got and the items which Wright has got.  Michael referred to selling the interests.  Lang said he did not think he would get very much for them at the moment because over the last 20 years governments have been against [Lang and Peter] getting something going.  Lang said that if he was successful in getting McCameys Monster going that would set the pattern and show there is a big chance for Australia there.  Lang said he was rather optimistic that there is a future in iron ore.  There was a discussion after Angela asked about the risk of the government taking the interests away if they did not develop them.  Later Lang said:

    In my half you will see McCameys and Marandoo.  In your half you will see big of the thing is Rhodes Ridge and Giles is the cream of it.  Rhodes Ridge of course is enormous ‑ it is equal in size to a thing called Carajas in Brazil which says is worth $3 or $4 billion.  It wouldn't be too bad if we could get a bit of that.

    Michael then referred to the concentrator royalty arbitration and the Privy Council decision.  Lang said it must go to arbitration now.  Salt asked about Hamersley Iron making a compromise on the royalty.  Lang said:

    Well they did come forward previously with a compromise while Madigan was there ‑ 47.5% was the highest we got them up to.  Whether that is any indication of what we will get out of them or not I don't know, but I wouldn't be at all surprised …

1. The trial judge noted that Julian Wright acknowledged having received the letter dated 1 November 1985 from Lang Hancock [140]. His Honour accepted Julian's evidence that at the time of the trial Julian had no recollection of what was said at the meeting with Lang Hancock on 28 November 1985 [139]. His Honour also noted that Julian acknowledged that he had heard what was said at the meeting and had been able to follow the conversation sufficiently to be able to respond when asked at the meeting if he had any questions [139]. His Honour concluded [141]:

   I find that Julian knew the contents of the Hancock letter and the things said at the Hancock meeting in the sense that he read and heard what was written and said and received the information written in the letter and spoken at the meeting.  Julian may not at the meeting have had a deep understanding of the information or appreciated why all of the information was important or how it might be applied.  In that sense he may not have 'got it'.  However, Julian knew the information stated by the participants in the Hancock meeting in that the information was conveyed to him and he received it.

The completion of negotiations and the signing of agreements for the sale and purchase of Julian Wright's shares in WPPL

1. The trial judge made findings of fact in relation to the completion of negotiations and the signing of agreements for the sale and purchase of Julian Wright's shares in WPPL as follows.

2. On 28 November 1985, Julian Wright received advice from Mr McCusker QC to the effect that the Second Option Agreement was personal to Peter Wright and consequently lapsed on his death [142].

3. Prior to 27 December 1985, Mr Fieldhouse, acting on behalf of Michael Wright and Angela Bennett, sought an opinion from David Bennett QC in relation to the Second Option Agreement. On 27 December 1985, Mr Bennett QC gave advice that the Second Option Agreement was capable of exercise by Peter Wright's personal representatives [143].

4. In late January 1986, Julian Wright had a conversation with Mr Salt. Mr Salt asked Julian whether he really wanted to sell his shares in WPPL. Julian replied that he did not want to sell his shares and he would be much better off retaining them. Mr Salt said that he would speak to Michael Wright about the matter. A few days later, Mr Salt informed Julian that he had spoken with Michael and that Michael's position was that he and Angela Bennett did not want Julian to remain as a shareholder in WPPL [144].

5. In early 1986, there was a conversation between Julian Wright and Mr Fieldhouse about the price at which Julian would sell his shares in WPPL to Michael Wright and Angela Bennett. Mr Fieldhouse informed Julian of Michael and Angela's response to Julian's suggested price and of a counteroffer from Michael and Angela. Michael had given instructions to Mr Fieldhouse concerning the strategy to be followed in negotiating a purchase of Julian's shares [145].

6. During 1986 Julian Wright was advised by Mr Warren and, later, by another lawyer, Richard Reynolds of Robinson Cox, in relation to draft agreements between Michael Wright, Angela Bennett and Julian for the sale and purchase of Julian's shares in WPPL and his interest in Peter Wright's residuary estate [146].

7. Numerous discussions and communications occurred in relation to the sale and purchase between Mr Fieldhouse and Mr Salt, on the one hand, and Julian Wright, Mr Warren and Mr Reynolds, on the other [147].

8. On 23 April 1986, Michael Wright and Angela Bennett made a joint offer to Julian Wright to purchase his shares in WPPL for $3,413,127 each [148].

9. On 13 May 1986, Julian Wright and Edix Pty Ltd (Edix) as trustee of the Nattim Trust executed a deed of assignment pursuant to which Julian assigned his shares in WPPL to Edix as trustee of the Nattim Trust [149].

10. On 27 May 1986, there was a meeting of the directors of WPPL. Shortly after the meeting Mr Salt visited Julian Wright at his home to negotiate the sale and purchase of Julian's shares in WPPL. A discussion occurred about the terms of the sale [151].

11. After Peter Wright's death, Michael Wright assumed the role of chief executive officer of WPPL [153].

12. Michael Wright and Angela Bennett acquired information and knowledge about WPPL's mining and non‑mining interests. They established a 'Where are we now' Committee and a Minerals Committee. Those committees operated separately from the board of directors. Michael wrote an agenda for a meeting of the 'Where are we now' Committee. The meeting was held on 23 May 1986. According to Michael, neither he nor Angela knew enough about the mineral activities of WPPL or the Hancock and Wright partnership. Michael intended to visit the locations of those mineral activities during the June and July 1986 school holidays. Julian Wright was not invited to meetings of the 'Where are we now' Committee or the Minerals Committee. At the time, Julian was unaware of their existence [154].

13. Between 22 June 1986 and 8 July 1986 Michael Wright undertook a fact‑finding trip in the Pilbara region with WPPL's chief geologist, Shanker Madan. During the trip Michael met with a senior representative of Conzinc Riotinto of Australia Ltd (CRA). Michael made notes about the trip and expressed views about the quantity or quality of iron ore deposits at Rhodes Ridge, Marandoo and McCamey's Monster. During the trip Michael acquired an understanding about the size of the iron ore deposits and the strategic value of WPPL's mining tenements and their potential [155].

14. On 4 August 1986, there was a meeting of the directors of WPPL. Michael Wright, Angela Bennett, Julian Wright and Mr Salt attended the meeting. At the meeting Michael did not report on the knowledge he had acquired during his fact‑finding trip to the Pilbara region, apart from reporting about exploration vehicles and security at Wittenoom [156].

15. On 6 August 1986, Julian Wright, Michael Wright and Angela Bennett concluded an agreement in principle for Julian to sell his shares in WPPL to Michael and Angela for a total of $10 million payable over six years or for $7 million with $2 million payable immediately and the balance of $5 million payable by 28 February 1987 [157].

16. On 1 December 1986, Julian Wright, Michael Wright and Angela Bennett concluded another agreement in principle for Julian to sell his shares in WPPL for a total of $6,800,000 (being $7 million with a $200,000 deduction in respect of a loan that had been made to Julian) [158].

17. On 2 December 1986, Julian Wright, Michael Wright and Angela Bennett signed a note which recorded an agreement in principle for Julian to sell his shares in WPPL for a total of $6,826,254 [159].

18. Mr Fieldhouse prepared draft sale agreements.  Numerous discussions and communications ensued concerning proposed amendments to the draft sale agreements [159] ‑ [160].

19. As I have mentioned, on 17 January 1987, Julian Wright signed the 1987 Sale Agreements, one with Michael Wright and the other with Angela Bennett. See [18] above.

20. On 30 January 1987, the completion date under the 1987 Sale Agreements was extended from 31 January 1987 to 3 February 1987 [162].

21. On 23 February 1987, completion under the 1987 Sale Agreements was effected. At completion, Julian Wright delivered signed share transfer forms and resigned as a director of WPPL in exchange for payment of the purchase price [163].

22. On and from 23 February 1987, Michael Wright and Angela Bennett each owned substantially one half of the shares in WPPL [164].

The statement of assets and liabilities in respect of Peter Wright's estate

1. The trial judge made findings of fact in relation to the statement of assets and liabilities in respect of Peter Wright's estate as follows.

2. On or about 9 April 1986, Keall Brinsden, acting on instructions from Michael Wright and Angela Bennett, applied for probate of Peter Wright's Will [165].

3. The application for probate was supported by a joint affidavit sworn by Julian Wright, Michael Wright and Angela Bennett on 9 April 1986. In the affidavit, Julian, Michael and Angela deposed that the contents of the statement of assets and liabilities in respect of Peter Wright's estate that was annexed to the affidavit were true and correct so far as they had been able to ascertain [165].

4. As to the statement of assets:

   (a)the assets listed included shares in WPPL and other companies at a nominal value of $2;

   (b)the assets did not include any entitlement to royalties; and

   (c)the assets included outstanding loans, in particular, a loan of $170,200 owing by Julian Wright (being $200,000 less $29,800 paid pursuant to the Loan Agreement).

5. The liabilities listed in the statement of liabilities included an outstanding loan of $757,480 owing to MAPS (Australia) Pty Ltd.

6. The statement of assets and liabilities showed that Peter Wright's estate was insolvent. The estate had a net deficiency of $541,592.68 [166].

7. Documents tendered at the trial revealed that Mr Salt was involved in preparing the statement of assets and liabilities. However, Mr Salt had little, if any, recollection of the statement when he gave evidence [167].

8. A memorandum tendered at the trial indicated that in December 1985 Mr Salt discussed the assets of the estate with Max Vinnicombe, a lawyer with Keall Brinsden. The memorandum recorded that Mr Vinnicombe had said it may be necessary to obtain valuations of the shares but, for the time being, the shares should be included in the statement at their par or nominal value [168].

9. The trial judge made the following findings in relation to Mr Salt's evidence concerning the statement of assets and liabilities [168] ‑ [169]:

   (a)although his Honour accepted that Mr Salt's evidence that he did not deliberately exclude any assets from the statement of assets and liabilities was 'sincere', Mr Salt's evidence was of no assistance in determining what Mr Salt did and did not tell Julian Wright about the assets and liabilities of the estate;

   (b)his Honour accepted Mr Salt's evidence that the assets listed in the statement of assets did not include any entitlement to royalties because Mr Salt did not believe that Peter Wright had any entitlement to royalties and Mr Salt thought that the entitlement to royalties was held by the Hancock and Wright partnership and then by HPPL and WPPL; and

   (c)although his Honour accepted that Mr Salt's evidence that, at the date of Peter Wright's death Mr Salt believed that Peter Wright's estate was insolvent, was 'sincere', Mr Salt's belief was unreliable because his recollection of events at that time was unreliable.

10. On 10 July 1986, Peter Wright's Will was proved in the Supreme Court of Western Australia and Julian Wright, Michael Wright and Angela Bennett were appointed executors of his estate [170].

11. On 23 February 1987, Julian Wright, Michael Wright and Angela Bennett executed a deed (the Deed of Retirement), pursuant to which Julian retired as an executor and was discharged from the trusts arising under Peter Wright's Will [171]. By clause 4 of the Deed of Retirement, Michael and Angela were required, as soon as practicable, to cause an application to be made to the Supreme Court of Western Australia for leave for Julian to retire as an executor.

The Keall Brinsden memorandum of 20 March 1987

1. The trial judge made findings of fact in relation to a memorandum of 20 March 1987 prepared by Keall Brinsden as follows.

2. On 20 March 1987, Keall Brinsden sent a letter to Mr Salt in relation to Julian Wright's retirement as an executor and trustee.  The letter enclosed:

   (a)documents concerning the application for leave required to be made by Michael Wright and Angela Bennett under clause 4 of the Deed of Retirement; and

   (b)a memorandum relating to a number of legal issues.

3. The memorandum discussed the legal principles relating to the application for leave and the submissions to be made in support of the application. The memorandum included statements that the Concentrator Royalty Arbitration was 'a significant asset of the estate' and a 'valuable asset of the estate'. The memorandum included advice to the effect that Julian's retirement as an executor and trustee would enable Michael Wright and Angela Bennett to administer Peter Wright's estate more efficiently because the arbitration was a valuable asset of the estate and the administration would be delayed if Julian remained as an executor [173].

4. Michael Wright received a copy of the memorandum.  There was a dispute between the parties as to whether Julian had received a copy.  One copy of the Keall Brinsden letter dated 20 March 1987 had been annotated, relevantly, 'cc Julian 27/3'.  Mr Salt gave evidence that the annotation indicated that a copy of the letter and its enclosures had been sent to Julian.  Julian denied having received a copy of the letter or the memorandum [174] ‑ [176].

5. The trial judge found that a copy of the Keall Brinsden letter dated 20 March 1987 and its enclosures was not sent to Julian Wright on 27 March 1987 or at all [178].

6. By a different letter dated 27 March 1987 from Mr Salt to Julian Wright, Mr Salt enclosed a draft affidavit of Julian in support of the application for leave. The draft affidavit was one of the enclosures with the Keall Brinsden letter dated 20 March 1987 [177].

7. After receiving the draft affidavit, Julian Wright noted that a paragraph in the draft affidavit contained what he believed was a typographical error in that the paragraph stated that Peter Wright's estate was 'manifestly solvent'. Julian telephoned Mr Salt about the matter. Mr Salt informed Julian that the reference to the estate being 'manifestly solvent' would be fixed [181].

8. By a letter dated 14 April 1987 from Keall Brinsden to Julian Wright, Keall Brinsden enclosed another affidavit to be sworn by Julian in support of the application for leave.  Keall Brinsden noted in the covering letter that the text of the affidavit was the same as the draft affidavit previously sent to Julian by Mr Salt, apart from the deletion of the paragraph which stated that Peter Wright's estate was 'manifestly solvent'.  That paragraph had been amended to read:

   I verily believe that there are no outstanding matters pertaining to the estate which require my attention prior to relinquishing the trust.

9. Julian Wright swore the affidavit that Keall Brinsden had sent to him on 14 April 1987 [182].

10. On 24 April 1987, the Supreme Court ordered that Julian Wright had leave to relinquish to Michael Wright and Angela Bennett the trust conferred upon him by Peter Wright's Will [183].

The settlement of the Concentrator Royalty Arbitration

1. By a letter dated 16 December 1987, Lang Hancock informed Michael Wright that the Concentrator Royalty Arbitration had been settled on favourable terms.

2. By a letter dated 23 December 1987, Hamersley Iron informed Mr Boughton that Hamersley Iron had deposited a cheque for $5.1 million in favour of WPPL as payee in accordance with a letter dated 17 December 1987 from Mr Salt.  The cheque was paid in settlement of WPPL's claim for concentrator royalties in respect of the period March 1979 to October 1987.  Hamersley Iron also made payments to HPPL and Mr Perron for concentrator royalties in respect of that period.

3. On 23 December 1987, Michael Wright, Angela Bennett and Mr Salt attended a meeting of the directors of WPPL.  At the meeting it was noted that WPPL had received the $5.1 million from Hamersley Iron.  The directors resolved to pay Michael and Angela a dividend of $250,000 each.

The proceedings commenced by Natalie Wright and Timothy Wright

1. The trial judge made findings of fact in relation to proceedings commenced by Natalie Wright and Timothy Wright (who are Julian Wright's children) as follows.

2. In 2001 Natalie Wright and Timothy Wright commenced proceedings in the Supreme Court of Western Australia (the Natalie and Timothy Proceedings) against Michael Wright and Angela Bennett.

3. Natalie Wright and Timothy Wright claimed in the Natalie and Timothy Proceedings that on or about 31 July 1985 Peter Wright had exercised, pursuant to the Second Option Agreement, his option to purchase Julian Wright's shares in WPPL and, consequently, those shares were part of the assets of Peter Wright's estate [186].

4. Natalie Wright and Timothy Wright claimed, in the alternative, in the Natalie and Timothy Proceedings that the option conferred by the Second Option Agreement formed part of the assets of Peter Wright's estate and that the option was exercisable by Michael Wright and Angela Bennett as executors and trustees of Peter Wright's Will. Natalie and Timothy alleged that, in purchasing Julian Wright's shares in WPPL under the 1987 Sale Agreements rather than exercising the option to purchase as executors and trustees of Peter's Will, Michael Wright and Angela Bennett had breached their fiduciary duties to Natalie and Timothy as beneficiaries under Peter's Will [186].

5. Michael Wright and Angela Bennett filed a cross‑claim in the Natalie and Timothy Proceedings against Julian Wright as a third party. In the third party claim, Michael and Angela sought a one third contribution from Julian in respect of Natalie and Timothy's claim and, alternatively, a one third contribution from Julian in respect of the purchase price paid by Michael and Angela under the 1987 Sale Agreements [187].

6. Julian Wright filed a defence to the third party claim. He also filed a counterclaim against Michael Wright and Angela Bennett [188].

7. In his counterclaim Julian Wright alleged that he was induced to enter into the 1987 Sale Agreements because of duress or undue influence for which Michael Wright and Angela Bennett were responsible. Julian claimed that Michael and Angela held the shares that Julian sold under the 1987 Sale Agreements upon a constructive or an implied trust for his benefit. The relief counterclaimed by Julian included, in effect, an order that Michael and Angela transfer to him the shares in question and an order for an account of profits [188].

8. All of the litigation in the Natalie and Timothy Proceedings was settled. The settlement agreement was embodied in a deed dated 22 April 2008 (the Deed of Settlement) executed by the parties to the litigation [189].

9. On 30 July 2008, the Supreme Court dismissed, by consent, the Natalie and Timothy Proceedings, including Julian Wright's counterclaim against Michael Wright and Angela Bennett [191].

10. Pursuant to the Deed of Settlement:

    (a)Michael Wright and Angela Bennett agreed to pay to Natalie Wright and Timothy Wright a total amount of $70 million.

    (b)Michael and Angela released Julian Wright from the claims Michael and Angela had made against Julian in the Natalie and Timothy Proceedings and any claim Michael and Angela may have had against Julian but for the settlement agreement.

    (c)Julian released and discharged Michael and Angela from various claims and covenanted not to sue them in respect of those claims [190].

The facts and circumstances culminating in Julian Wright commencing the primary proceedings

1. The trial judge recounted the facts and circumstances which culminated in Julian Wright commencing the primary proceedings as follows.

2. As I have mentioned, on 26 April 2012 Michael Wright died. At about that time there were reports in the media to the effect that Michael Wright and Angela Bennett had a net worth of $2.7 billion. Julian Wright thought that was 'an absolutely outstanding figure' and that 'a lot must have happened since he left WPPL' [192].

3. In early 2013, a lawyer, Haydn Robinson, who had acted for Julian Wright in the Natalie and Timothy Proceedings, told Julian that he was about to dispose of documents relating to those proceedings. At Julian's request, a friend of Julian's collected the documents for him. After reading some of the documents the friend said to Julian, 'You've been had'. Julian responded, 'Well, I know that, but it's all settled now and in any case, back then the advice I had was I didn't have much of a case and I've moved on'. The friend told Julian that he knew a barrister who would examine whether Julian had a case. Julian agreed on the basis that he would not be charged for the advice [193].

1. I am satisfied, after reviewing the relevant evidence, that it was open to the trial judge, having regard to the evidence of Dr Flis, to conclude that the value of a 50% interest in the RRJV as at 31 December 1986 was $12.65 million.  His Honour was entitled to prefer the evidence of Dr Flis to the evidence of Dr Rudenno.  There was no material error by his Honour in the fact‑finding process or the reasoning he adopted.  His Honour's reasons were adequate.  The respondents have not established that the finding of value made by his Honour was wrong.

2. Ground 24 fails.

3. Ground 25 of the respondents' notice of contention alleges that the trial judge erred in fact in finding that a fair value for Julian Wright's shares in WPPL, in the context of determining 'full value' to be paid by a fiduciary acquiring the interest of his or her principal, was $20,727,000, because his Honour should have:

   (a)found that the value of WPPL as at the valuation date (when McCamey's Monster was excluded, as it ought to have been), was approximately $85.9 million;

   (b)applied a minority discount of 28.6% (instead of the 20% applied by his Honour);

   (c)applied a marketability discount of 40% (instead of the 12.5% applied by his Honour);

   (d)applied a probability weighting to account for the probability that the option would have been exercised under the Second Option Agreement (instead of finding that the agreement was not relevant to the determination of the full value or fair value of Julian's shares); and

   (e)found, on the basis of the above, that the 'full value' of Julian's shares was approximately $6.67 million.

4. His Honour made these findings at [279] ‑ [283], [289] ‑ [290] and [297]:

   McGuinness applied a minority discount of 7.5%.  I am not persuaded by the methodology adopted by McGuinness to arrive at this result.

   Samuel applied a minority discount of 28.6%.  His discount was heavily influenced by WPPL's dividend history.  In his report of 23 October 2019 Samuel said:

   'As set out in Section IV above, control premiums were in the range of 25% to 40% in the 1980's. Given the very limited dividends that had been declared in the two years up to 30 June 1986 (being only $10,000 despite profits of $7,679,455 during that period), in my opinion the minority discount would be at the upper end of the range of discounts. I conclude that a control premium of at least 40% would be appropriate. This is equivalent to a minority interest discount of at least 28.6% [245].'

   Samuel chose not to take into account the dividends paid in 1987 because it was after the valuation date.  Furthermore, he agreed that his assessment might be affected if, as was the case, the reason that dividends had not been paid in the years he took into account was related to an objection to a tax assessment.  In my opinion Samuel should not have adopted a control premium at the top of the range but rather a premium towards the bottom of his range.  If a control premium of 25% was adopted, the formula applied by Samuel to calculate a minority discount would have resulted in a discount of 20%.

   McGuinness opined that an appropriate marketability discount is 12.5%.  Samuel referred to studies which have indicated that a reasonable discount for a lack of marketability between a listed and a private company would be in the order of 33% to 35% and then stated reasons for adopting a discount for marketability of 40%.  In my opinion the business valuation discounts relied upon by Samuel are not apt when calculating a 'fair value'.  I find McGuinness's reasons for adopting a marketability discount of 12.5% to be more persuasive.

   Accordingly, I find that a fair value for Julian's WPPL shares, in the context of determining 'full value' to be paid by a fiduciary acquiring the interest of a principal to be 32.9% of $90 million, less 20% less 12.5%, which is $20,727,000, say $20 million.

   …

   The defendants submitted that given the factual circumstances in which the 1987 Sale Agreements were entered into, in determining the full or fair value of Julian's WPPL shares the court should take into account the probability of the second option agreement being exercised.  Thus, the court should consider the probability of the exercise of the second option agreement.  Samuel performed calculations using a 'probability weighted' approach by applying a 50% probability to each of the outcomes, namely the second option agreement being exercised and it not being exercised.  He also provided a sensitivity analysis which identifies a range from 25% probability of the second option agreement being exercised to 75% probability.

   In my opinion the probability of the second option agreement being exercised is not relevant to the determination of full value or fair value of Julian's WPPL shares.  It is not contended that Julian did not hold the full beneficial interest in his WPPL shares.  It is those shares which were sold and the full or fair value of those shares is the full or fair value of the full beneficial interest in the shares.  In Edmunds v Pickering [No 3] the principal consented to the purchase only because the trustee would not desist from breaching the trust and threatened the possibility of cancellation of the abalone licence.  Lander J took [neither] of those matters into account in determining the full or fair value of the licence.

   …

   I have found that full value for Julian's WPPL shares is $20 million.

5. Counsel for Julian Wright accepted (correctly, in my opinion) that the trial judge erred by failing to take into account that the expert valuers at the trial had valued WPPL on the basis that WPPL was entitled to a 50% share (rather than a 25% share) of the royalties payable under the 1962 Royalty Agreement.

6. As to the respondents' contentions concerning other alleged errors by his Honour:

   (a)Dr Flis and Dr Rudenno took into account the value of McCamey's Monster on the basis that there was a 'possibility' of WPPL earning future royalties.  See exhibit 1311.  However, it was common ground at the trial that at the material time the McCamey's Monster termination deed had been executed and consequently WPPL held no interest in the underlying tenements.  See exhibit 674.  I am satisfied that the valuation of McCamey's Monster should have been excluded.  The inclusion of its value was not justified on the basis of the mere 'possibility' of WPPL earning future royalties in circumstances where WPPL held no interest in the underlying tenements.

   (b)The respondents' contention that his Honour should have applied discounts in accordance with Mr Samuel's report is without merit.  Mr Samuel used Dr Rudenno's valuation of WPPL's mining interests.  His Honour preferred the valuation of Dr Flis in relation to Rhodes Ridge to the valuation of Dr Rudenno.  That finding, which I have upheld, affects the reliability of Mr Samuel's valuation of WPPL.

   (c)I have dealt with the issue of the minority discount and the marketability discount in considering ground 17 of the appeal.  I determined that it was open to his Honour, on the evidence at trial, to find that Julian's shares in WPPL should be valued by applying a 20% minority discount and a 12.5% marketability discount.  There was no material error by his Honour in the fact‑finding process or the reasoning he adopted.  I am not persuaded that the discounts applied by his Honour or the finding of value made by his Honour were wrong.

   (d)I am not persuaded that his Honour should have applied a probability weighting to account for the probability that the option would have been exercised under the Second Option Agreement instead of finding that the agreement was not relevant to the determination of the full value or fair value of Julian's shares.  The respondents did not plead or seek to establish at the trial that, on the proper construction of the agreement, Peter Wright's option was exercisable by his estate.  In the Natalie and Timothy Proceedings, the respondents pleaded, and subsequently settled on the basis that, the option was not exercisable by Peter's estate.  See exhibit 1230.

7. Ground 25 has been made out in part.  However, his Honour's errors do not affect his Honour's other conclusion that Michael Wright and Angela Bennett paid no or minimal consideration to Julian Wright for the acquisition of his interest in Peter Wright's estate.

Conclusion

1. The appeal should be dismissed.

VAUGHAN JA:

1. This appeal is an appeal by way of a rehearing.  While, in this respect, the court is bound to conduct a real review of the evidence and the reasons to determine whether the primary judge has erred in fact or in law, the court is concerned with the correction of error.  What, in a given case, constitutes error depends not only on the evidence but also on the nature of the challenged findings.  It is, however, inappropriate to treat the appeal as though it were a new trial on the evidence constrained merely by certain unassailable factual findings.  Nor, all the more so, is the appeal a reworking of the trial taking account of such impediments as are thrown up by the primary judge's incontestable factual findings.

2. The principles summarised in the preceding paragraph are too well known to require the recitation of authority.  They do, however, bear repeating.  While the parties' respective grounds of appeal and grounds of contention paid lip service to these principles much of the parties' written and oral submissions amounted to little more than re-arguing the position the parties advanced at trial rather than attempting to reveal or dispel error on the part of the primary judge.

3. The difficulty thereby arising for appellate review is exacerbated by the breadth and number of the parties' grounds of appeal and grounds of contention.  This has resulted in the somewhat remarkable feature of the appeal that reasons of the primary judge comprising 206 pages have spawned a White Appeal Book (containing, among other things, grounds of appeal, grounds of contention and written submissions) that exceeds 600 pages.

4. Buss P observes that the parties' approach has been to challenge, with minimal discernment, all material adverse findings made by the primary judge.  I agree with that characterisation of the parties' approach to the appeal.  The respondents challenge by notice of contention all material matters on which they failed at trial as well as seeking favourable findings on those matters which the primary judge did not determine on the basis that it was not necessary to decide them.  The appellant makes no challenge to the primary judge's rejection of his common law fraud claim in relation to Michael and Angela's acquisition of his WPPL shares.[199]  Nor does the appellant challenge the primary judge's construction of the 1968 Royalty Agreement[200] or his Honour's construction of the 1970 Royalty Agreement[201] (appeal ground 16 having been abandoned on the eve of the appeal hearing).  Otherwise all material matters on which the appellant failed at trial are re-agitated on appeal.

   [199] Wright v Lemon [No 2] [2021] WASC 159 (primary reasons) [730] ‑ [753].

   [200] Primary reasons [385] ‑ [400].

   [201] Primary reasons [401] ‑ [415].

5. In this regard, while the appellant purportedly advances a mere 16 grounds of appeal, there is in substance and reality many more alleged errors that have been pursued before the court that have had to be considered in hearing and determining the appeal.

6. Take, for example, ground 1.

7. The chapeau to ground 1 identifies a headline alleged error ‑ the primary judge allegedly erred in holding that Michael and Angela owed no fiduciary duty to the appellant in respect of the purchase of the appellant's WPPL shares.  But, rolled up within ground 1 there are some additional 17 intermediate factual findings that are challenged by sub-grounds 1(a) ‑ (e) (sub-grounds (d) and (e) containing their own sub‑sub‑grounds and some of the sub-grounds and sub‑sub‑grounds alleging two or more discrete factual errors).  These are matters which, if established, may assist in the appellant making good the headline alleged error.  Ground 1 then goes on describe, at sub-grounds 1(f) ‑ (j), the contended for legal basis for the preceding alleged errors.  Often more than one legal basis is relied on.  For example, as to some findings that are challenged by grounds 1(a) ‑ (e), it is said that the primary judge applied the wrong principle; alternatively, there was a failure to consider and determine submissions that needed to be addressed in order to resolve the point; alternatively, the primary judge's reasons were legally inadequate; alternatively, the primary judge was wrong, as a matter of fact, in concluding in terms of the finding that his Honour reached.

8. In all, ground 1 covers some two and a half pages of text.

9. Grounds of appeal of this kind are not to be emulated.  It should be remembered that grounds of appeal are an essential analytical tool for the court.  The grounds identify the issues for determination.  Grounds of appeal are meant to be stated succinctly.  Prolix grounds are unhelpful.  Grounds of appeal should be shortly and simply stated.  Ordinarily they should not exceed two or three sentences.  So too rolled up grounds of appeal are unhelpful.  Each issue in an appeal should be succinctly identified in a separate ground.  If, as in ground 1, an alleged error is put on more than one legal basis, concise particulars may be provided identifying the different ways in which it is contended that there was an error.  The all‑too‑common practice of repeating findings on which the appellant relies, with the implication that these findings undermine the finding said to be in error, is to be deprecated.  Grounds of appeal are not the place for an appellant to advance its argument.  Argument and advocacy belong in the written submissions that accompany the grounds of appeal in the appellant's case.

10. On the merits of the appeal, I have the considerable advantage of having read Buss P's reasons for decision.

11. In their oral submissions at the appeal hearing, counsel for the appellant addressed the issues in the appeal in a different order to their presentation in the grounds of appeal and the appellant's written submissions.  Lead counsel, in my view quite helpfully, presented the appellant's case on appeal in terms of two main themes.  The first dealt with the appellant's case concerning the purchase of his interest in Peter Wright's residuary estate.  In this connection counsel for the appellant addressed ground 14 (limitations), ground 15 (laches), grounds 8 ‑ 9 (the appellant's knowledge regarding the estate claim) and grounds 10 ‑ 13 (the Deed of Settlement).  The second theme dealt with the appellant's case concerning the purchase of the appellant's WPPL shares.  In this connection counsel for the appellant addressed grounds 3 ‑ 5 (Michael and Angela's fiduciary duty as executors said to extend to the WPPL shares), grounds 1 ‑ 2 (Michael and Angela's fiduciary duty as directors), grounds 6 ‑ 7 (fraud in relation to the WPPL shares) and grounds 8 ‑ 9 (the appellant's knowledge regarding the WPPL shares claim).  Ground 17, dealing with the valuation of WPPL, was dealt with on a stand-alone basis by junior counsel for the appellant.

12. Accordingly, as lead counsel for the appellant explained at the outset of the appeal hearing, grounds 8 ‑ 9 dealing with the appellant's state of knowledge was addressed twice ‑ initially in the context of the estate case and then in the context of the WPPL shares case.  It is also apparent that grounds 10 ‑ 13 dealing with the Deed of Settlement are critical to both the estate case and the WPPL shares case.  While the primary judge dismissed the WPPL shares case on its merits, his Honour also found that the claim was barred by the Deed of Settlement.[202]

    [202] Wright v Lemon [No 2] [2021] WASC 159 [805] - [814], [825], [835] - [837], [892.5].

13. I agree with Buss P, for the reasons that his Honour gives other than in one respect, that grounds 14, 15, 8 ‑ 9 and 10(b) ‑ (e), 11(b) ‑ (d) & 12 ‑ 13 as to the appellant's case concerning the purchase of his interest in Peter Wright's residuary estate must be dismissed.  This is not a complete endorsement of the primary judge's reasoning.  In particular, I, like Buss P, do not agree with every aspect of the primary judge's construction of cl 5.3(a) and cl 5.5 of the Deed of Settlement (see Buss P's reasons at [586], [590] and [609], with which I agree).  Accordingly, grounds 10(a) and 11(a) should be upheld in part.  But, as Buss P explains, those errors are not material to the disposition of the appeal in the sense of establishing that the primary judge's order dismissing the action ought to be disturbed.  That is all the more so given Buss P's construction of cl 5.10 (with which I also agree).

14. The one difference in my reasoning from that of Buss P's reasoning concerns ground 14.  It is not necessary, in my view, to conclude that ground 14 fails on the law because the appellant's relevant cause of action was purely a common law claim to which the doctrine of concealed fraud was not applicable (compare [647] ‑ [649] above).  The view has been expressed that, while there is no equitable action of deceit, in cases of actual fraud the jurisdiction of equity is strictly concurrent with that at law.[203]  In that respect it was always the case that the Court of Chancery was considered to have an undoubted jurisdiction to relieve against every species of fraud.[204]  That being the case, I prefer to dismiss ground 14 on the basis that, as Buss P notes, the primary judge found that the appellant was aware of the facts which constituted the alleged fraud from no later than 22 April 2008.[205]  The appellant has not established any material error in that conclusion.

    [203] Metacel Pty Ltd v Ralph Symonds Ltd [1969] 2 NSWR 201, 207.

    [204] Earl of Chesterfield v Janssen (1751) 2 Ves Sen 125, 155; 28 ER 82, 100.

    [205] Primary reasons [820] - [821]. See also [853].

15. Similarly, I agree with Buss P, again for the reasons that his Honour gives, that with one exception grounds 3 ‑ 5, 1 ‑ 2, 6 ‑ 7 and 8 ‑ 9 as to the appellant's case concerning the purchase of his WPPL shares must be dismissed.  In any event the appellant's overall failures in relation to grounds 10 ‑ 13 as to the Deed of Settlement (in the context of the failures as to grounds 8 ‑ 9) stand in the way of and present an insurmountable hurdle to the appellant succeeding, on appeal, on his case concerning the purchase of the WPPL shares.

16. The exception is that, like Buss P, I would uphold ground 3(c).  Ground 3(c) alleges, in substance, that the primary judge erred in finding that the sale and purchase of the appellant's interest in Peter Wright's estate was effected on 17 January 1987 (ie on the date of execution of the 1987 Sale Agreements) and instead his Honour should have found that the relevant date was 23 February 1987 (ie on the date of completion of the 1987 Sale Agreements).  In my view, this alleged error is established.  The 1987 Sale Agreements provide that the appellant agrees to procure the sale, and Michael and Angela agree to purchase, the appellant's interest in Peter Wright's estate (cl 1(b)).  The agreements for sale were subject to and conditional upon the purchaser being able to borrow the purchase price on or before the completion date; if unable to so borrow the purchase price, then - unless the condition subsequent was waived by the purchaser - the agreement terminated (cl 9(g)).  While certain acknowledgements operated from the date of the 1987 Sale Agreements (see esp. cl 3(a)(ii) and cl 3(b) ‑ (c)) the agreements contemplated particular arrangements for completion (cl 1 and cl 5).

17. In those circumstances, on the proper construction of the 1987 Sale Agreements, I do not accept that property passed on execution of the 1987 Sale Agreements.  It was for the appellant to procure the sale of his interest in Peter Wright's estate together with completion under the 1987 Sale Agreements.  The contrary construction, as accepted by the primary judge, works a commercial inconvenience that is not required by the text, context or purpose of the relevant provisions of the 1987 Sale Agreements.

1. Ground 3(c) was, however, correctly described by lead counsel for the appellant as a 'minor point' ‑ and, importantly, one which would not 'change anything' were it to succeed.[206]  The same observation was made by the primary judge.[207]  I agree.  While I would uphold ground 3(c) this has no material effect for the disposition of the appeal as a whole.

   [206] Appeal ts 155.

   [207] Primary reasons [614].

2. There is, given my conclusions as to the appellant's grounds of appeal generally, no need to consider ground 17.  Nor, all the more so, is it necessary to consider the respondents' 25 grounds of contention

(not including, in that number, the various sub-grounds).  I decline to do so for reasons of judicial economy.  Where, as here, the appellant's various claims fail on a number of levels, it is less imperative to consider and determine non-dispositive grounds of contention which are presented by the successful party as providing additional reasons for upholding the decision of the primary court.  That is particularly so where, given the number and breadth of the grounds of contention pressed by the respondents, doing so will undoubtedly extend the time for delivery of judgment on the appeal.

1. I agree with Buss P that the appeal should be dismissed.  The parties should be heard on the costs of the appeal.

HALL JA:

1. I agree with Buss P, for the reasons he gives, that the appeal should be dismissed.  It is unnecessary for me to add to the ocean of words that this case has generated. 

2. I do not consider it necessary, in the circumstances of this case, to consider the merits of the respondents' grounds of contention, and I decline to do so.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

ET

Associate to the Honourable President Buss

1 MARCH 2024