DAVID JOHN NEALE LEMON as executor of the estate of MICHAEL JOHN MAYNARD WRIGHT
First Defendant
ANGELA MARY MAYNARD WRIGHT BENNETT
Second Defendant
LEONIE BALDOCK
Third Defendant
ALEXANDRA BURT
Fourth Defendant
VOC GROUP LTD
Fifth Defendant
AMB HOLDINGS PTY LTD
Sixth Defendant
WRIGHT PROSPECTING PTY LTD
Seventh Defendant
TERALANI PTY LTD
Eighth Defendant
LAREMONT PTY LTD
Ninth Defendant
Catchwords:
Equity - Fiduciaries' duties - Duties of executors of an estate - Conflicts of interest - No conflict rule - Fair dealing rule a sub-rule of the no conflict rule - Failure to make full disclosure of material facts - Purchase of property at an undervalue - Breach of fiduciary duties
Equity - Fiduciaries' duties - Duties of company directors - Whether directors owe fiduciary duties to shareholders - Fact based fiduciary duties - Whether special circumstances give rise to a specific fiduciary duty - No fiduciary obligation
Equity - Fiduciaries' duties - Duties of shareholders - Whether shareholders owe fiduciary duties to each other - Fact based fiduciary duties - Whether special circumstances give rise to a specific fiduciary duty - No fiduciary obligation
Tort - Deceit - Common law fraud - Whether statements made knowing they were false or with reckless disregard for whether they were true
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 - Defined terms - Sophisticated commercial contract - Whether natural meaning is congruent with business sense
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 releaser was aware of claim - Grant v John Grant & Sons Pty Ltd(1954) 91 CLR 112
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
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…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Wright v Lemon (No 2) [2021] WASC 159
Case
[2021] WASC 159
Decision Date
CaseChat Overview and Summary
In the case of Wright v Lemon (No 2), the plaintiff, Julian, sought to bring a claim against the defendants, including the estate of Michael and Angela, over shares in a company. The defendants raised a laches defence against Julian’s claim, arguing that he had delayed unreasonably in bringing the proceedings. The court was required to determine whether Julian’s delay in bringing the claim was so unreasonable as to bar the claim under the doctrine of laches.
The court examined the principles of laches and whether Julian’s delay caused substantial prejudice to the defendants. The court found that Julian had failed to act on information in his possession that could have led to earlier proceedings, and his assertion of unconscionable conduct by Michael and Angela did not excuse his delay. The court held that Julian’s delay caused substantial prejudice to the defendants, particularly as Michael and Fieldhouse were deceased and unable to defend the allegations. The court concluded that it would be practically unjust to afford Julian a remedy given his significant delay and the prejudice suffered by the defendants. Therefore, the court found that Julian was precluded from maintaining his claim by laches.
The court did not need to determine the statutory limitation defence as the laches defence was sufficient to bar Julian’s claim. The court also noted that the Limitation Act did not apply directly to actions for breach of fiduciary duty or equitable fraud, but could be applied by analogy where there is a requisite analogy between the equitable cause of action and one to which the statutory limitation period applies.
The court dismissed Julian’s claim and ordered that he pay the defendants' costs.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
His failure to do anything to obtain more detail or prevent the defendants from proceeding on the basis that there was no challenge to their rights, despite asserting unconscionable conduct by Michael and Angela against him, brings laches into application. Julian claims not to have appreciated the significance of the information in his possession, but the 'availability of the means of knowledge is as good as knowledge'.[210][210] Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239; (2008) 39 WAR 1 [9306]. Substantial prejudice is caused to the defendants as a result of Julian's delay in bringing these proceedings. Fieldhouse and Michael were central participants in the events the subject of the allegations in this action. Both are alleged to have been the agents or perpetrators of fraud. Fieldhouse died in November 2007, and Michael died on 26 April 2012. There is prejudice and unfairness arising out of the inability of each of Fieldhouse and Michael to defend the allegations now levelled against them. The seriousness of a finding of dishonesty or reckless indifference to the truth will ordinarily mean that it may not be made without an opportunity being given to deal with the criticism.[211] Michael and Fieldhouse have each been denied that opportunity.[211] Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 [67]; Bale v Mills [2011] NSWCA 226; (2011) 81 NSWLR 498 [66] ‑ [67]. Michael, Michael's estate and Angela have each been deprived of the use of the $70 million paid to Natalie and Timothy pursuant to the Deed of Settlement in exchange amongst other things for their title to the shares now sought by Julian. In the period since (relevantly) 23 February 1987 Michael and Angela expended time and effort in acting as directors of WPPL. The company has not only been a passive recipient of royalties, it has engaged in very substantial litigation to assert and maintain its rights in relation to the Rhodes Ridge and Mount Bruce mineral deposits during the time Michael and Angela were directors. Equity will not readily countenance delay in such circumstances.[212] It would be 'practically unjust' to afford Julian a remedy in these proceedings having regard to his own significant delay and to the prejudice suffered by the defendants as a result of that delay.[213][212] Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 [177], [179] - [180].[213] Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 [164]. In view of my finding that Julian is precluded from maintaining this claim by laches it is unnecessary to determine this defence. I will set out my finding in a summary way. The Act does not specifically deal with actions for breach of fiduciary duty or equitable fraud. Where the Act has no direct application to causes of action founded on equity, the Act may be applied by analogy under doctrines developed by equity. It is a prerequisite for a limitation period by way of analogy that there is a requisite analogy between the equitable cause of action and one to which the statutory limitation period applies. To determine the closeness of the respective causes of action, the court examines, amongst other things, the scope, policy and purpose of each.