By analogy of reasoning, if, in a case of oppression based on breach of fiduciary duty, the claim for fiduciary duty would fail because of laches, it could not be said that at the date of the hearing the court could find that the plaintiffs were being oppressed.
As I said, in Campbell v Backoffice Investments Pty Ltd, and the High Court affirmed an appeal in (Campbell v Backoffice Investments), the thrust of the oppression remedy is to remedy oppression that exists at the date of the hearing.
This is because the purpose of the legislation is to release a person from having his or her capital locked up in a corporate enterprise under unfair conditions. The section is not there to compensate the legal or equitable wrongs done to the plaintiff.
That is however, irrelevant in the instant case as oppression was conceded.
I thus have difficulty in seeing how laches can be a real issue in the case.
In Re Gold Co is authority for the proposition that a delay may lead to dismissal of a suit to wind up a company on the just and equitable ground. However, F H Callaway, in his Winding Up on the Just and Equitable Ground (Law Book Co, Sydney, 1978) notes that there is no reported case delay ever leading to dismissal of a petition.
However, as the issue was raised and, in the light of what is relevant on a just and equitable winding up, and further the fact that both sets of counsel made submissions on the basis that laches was relevant, I must deal with the argument.
The elements of the defence of laches are: (i) knowledge of the wrong; (ii) delay; and (iii) unconscionable prejudice caused to the opponent by the delay.
The key element is whether, in all the circumstances, "it would be practically unjust to give a remedy": per Lord Selborne LC in Lindsay Petroleum Co v Hurd. Normally, that means that the defendant must show both delay and detriment suffered by the delay, Fisher v Brooker, per Lord Neuberger with whom Lord Hope, Lord Walker, Baroness Hale and Lord Mance agreed..
It is sometimes said that the essential nature of the defence is that the claim of the plaintiff is released in equity. This is often, but not always the case. Sometimes laches operates as an estoppel, see Fisher v Ashburner's Principles of Equity 2nd ed (Butterworth & Co, London, 1933) p 520. The result of a successful plea of laches is that the plaintiff's equitable claim is dismissed.
In the instant case, the primary judge found all three elements in favour of the appellants. The second and third elements were clearly matters of fact and the first may also be. However, the first element throws up the question, "What degree of knowledge of the wrongdoing must a plaintiff have before he or she may be guilty of laches?"
There is no doubt on the findings of the primary judge that as at July 1997 the respondents had some awareness that Mr Crawley had done some secret deal with the Davis interests. There is also little doubt that the full extent of Mr Crawley's machinations were not known to the respondents until about 2004.
The authorities give little guidance on the extent of the knowledge required. One of the leading statements is in Lord Blackburn's speech in Erlanger v New Sombrero Phosphate Co that the plaintiff must be shown to have "such notice or knowledge as to make it inequitable to lie by". That statement was approved by this court in Savage v Lunn. Lord Blackburn acknowledged that his statement was very general, but said that he had "looked in vain" for any more distinct rule.
That general statement does not, of itself, assist in fixing the degree of knowledge required, but points to it being a question of fact and degree in each case to be taken together with all the other facts of the particular case.
Indeed, in most of the treatments of laches, the element of knowledge was clear, many cases involve a person who signed away her rights under improper pressure. Apart from an indication in an unreported decision of Hodgson J in Wright v Union Fidelity Trustee Co of Aust Ltd and this court's remarks in Savage that a plaintiff must have knowledge of the facts as well as his or her rights, I have found no assistance in the authorities on this point.
When the equity sought is rectification, the cases digested in Pomeroy's Equity Jurisprudence 5th ed (1941) indicate that if there is no reason for the plaintiff to have looked for a mistake, the fact that the document on the face of it contains an error is insufficient to bar a claim by reason of laches.
In Orr v Ford, the majority of the High Court were looking to see if the plaintiff's inactivity in the face of knowing that the opponent wrongly held a particular belief amounted to a release of a claim in equity. The majority held, "No": however, Mason CJ and Deane J dissented, the latter delivering what has been held to be the leading analysis of the principles of laches.
Deane J said that in any case where laches is raised, one must identify with precision the substantive nature of the claim to which laches is said to constitute a defence.
As Deane J said, there was no debate about the degree of knowledge in Orr thus that case is not of direct assistance here, save that it tells us to focus on the claim of relief against oppression or, perhaps, breach of fiduciary duty.
The authorities show that in considering the defence of laches, all three elements must be taken together and the ultimate question asked as to whether, in all the circumstances, the plaintiff has impliedly, in equity, released the defendant from his or her claim or has so acted as to make it unfair that the claim should now succeed.
In cases of equities to set aside invalid allotments of shares, a very strict line is taken with respect to the delay factor; see for example Haas Timber & Trading Co Pty Ltd v Wade and Ansett v Butler Air Transport Ltd (No 1).
There been a series of cases where former partners in a mining partnership had acted unconscionably, but action was not taken until after the former partners had, at great expense, made the mine prosperous. Examples are Senhouse v Christian; Norway v Rowe and Hart v Clarke. Such claims were barred by laches. This was even the result where the mine did not require large sums to be spent on it, but the plaintiffs had protested for many years but took no action, Clegg v Edmondson. Such cases are factually close to the present.
The philosophy considered in those cases has been applied in modern times; see egg Fysh v Page and Baburin v Baburin (No 2).
In other cases, where there was no volatile commercial property involved, equity has been more tolerant of delay, with the classic being Hatch v Hatch where 20 years' delay with respect to a grant of an advowson was excused.
Thus the degree of knowledge, the type of transaction and the prejudice to the defendant caused by the delay are all matters which need to be evaluated when assessing whether the defence of laches has been made out and it is an unrewarding task to search for some formula as to just what degree of knowledge must exist in any particular case.[19]