Plaintiffs v Defendants

Plaintiffs v Defendants - [2009] VSC 428 - VSC 2009 case summary — Zoe

[49]

Can you recall when you asked Banks to prepare this letter? --- Some time before 28 February, your Honour.

What was the circumstance which gave rise to you asking Banks to prepare this letter? --- There may have been a discussion concerning - as a follow-up to the September 2005 meeting where I discussed it with Ivan and Nick as regards to the transfer and informally I possibly would have discussed - well, I did discuss it with Ivan, that there was a loose end as regards to Domenic Vigliaroni still being a director of V&G Investments and accordingly, those documents were prepared by Banks Group.

It has the date of 28 February 2006. Did the form of the letter come with that date? --- I saw that, your Honour, and I cannot understand why the date is 28 February 2006. It it [sic] would have arrived under a covering letter, as was the practice of Banks Group, and it would have been around that time, around - that I would have received the letter from the Banks Group together with the memorandum.

Is 28 February 2006 a date that you provided to Banks as the date from which the resignation was to take effect? --- I would have contacted Banks some time prior to that and I cannot recall whether I gave them that date of 28 February 2006.

Yes. Thank you.

This letter of resignation was prepared by Banks on your instructions? --- Yes.

It had not been discussed with Domenic Vigliaroni before you gave the instructions to Banks? --- I don't agree with that.

Do you say that before you had the communication with Banks to prepare this resignation you told Domenic Vigliaroni that this was being prepared? --- Either Domenic or Ivan Vigliaroni. More likely Ivan Vigliaroni.

I want you to turn your mind only to Domenic Vigliaroni at the moment. Did you tell Domenic Vigliaroni that you were having a resignation letter prepared for him to sign by the Banks Group? --- I don't believe so.

The resignation was to take effect are [sic] from that date, from 28 February 2006? --- Yes. That date was Banks Group's date but I would imagine - I can't shed any light on that, Mr Magee.

What did you ask Banks to do? --- To prepare a memorandum for the resignation of Domenic Vigliaroni and - - -

But this was long after the termination agreement, wasn't it? --- Yes.

The termination agreement was in July 2005? --- Yes.

So what is the explanation for the 28 February 2006 resignation letter? --- It was post the July and September 2005 and some time, as was the occasion - that's why I can't shed any light - there were a number of documents that were sent through by Banks and one would wait until Ivan and Domenic were available if they were to sign the documents. I can't shed any light on that.

[100]

Although an account of profits, like other equitable remedies, is said to be discretionary, it is granted or withheld according to settled principles. It will be defeated by equitable defences such as estoppel, laches, acquiescence and delay. And, notwithstanding what was decided in Regal (Hastings) Ltd v Gulliver and Phipps v Boardman, it may be that:

"the liability to account for a personal benefit or gain obtained or received by use or by reason of fiduciary position, opportunity or knowledge will not arise in circumstances where it would be unconscientious to assert it or in which, for example, there is no possible conflict between personal interest and fiduciary duty and it is plainly in the interests of the person to whom the fiduciary duty is owed that the fiduciary obtain for himself rights or benefits."

The conduct of the plaintiff may be such as to make it inequitable to order an account. Thus a plaintiff may not stand by and permit the defendant to make profits and then claim entitlement to those profits.

It is necessary to keep steadily in mind the cardinal principle of equity that the remedy must be fashioned to fit the nature of the case and the particular facts. As Fletcher Moulton LJ observed In re Coomber; Coomber v Coomber:

"Fiduciary relations are of many different types ... and the Courts have again and again, in cases where there has been a fiduciary relation, interfered and set aside acts which, between persons in a wholly independent position, would have been perfectly valid. Thereupon in some minds there arises the idea that if there is any fiduciary relation whatever any of these types of interference is warranted by it. They conclude that every kind of fiduciary relation justifies every kind of interference. Of course that is absurd. The nature of the fiduciary relation must be such that it justifies the interference. There is no class of case in which one ought more carefully to bear in mind the facts of the case ... than cases which relate to fiduciary and confidential relations and the action of the Court with regard to them."

But the basic principle remains that a principal who so elects is entitled to an account of profits, subject to considerations of the kind already mentioned. (references omitted)[21]

[133]

68 These cases, properly considered, do not, in my view, place limitations on the kind of orders that I "consider[] appropriate in relation to the [CPS] company[ies]", having regard to the particular circumstances before me. The point that I have to consider was not dealt with in Kizquari or any of the other cases mentioned above. None of those cases considered the scope of the oppression power and jurisdiction of the Court to grant relief having regard to s 53, although s 53 appeared in the legislation at the time those cases were decided in terms similar to the provision as it now appears. It would appear that s 53 was not brought to the attention of the Courts in those cases. Section 53 has been brought to my attention and I must decide in light of s 53 whether my powers are circumscribed so that I cannot make an order under s 233 in respect of a trustee company. In my view, s 53 puts beyond any doubt that the Court's jurisdiction and powers under the statutory oppression provisions are not circumscribed in respect of a trustee company and accordingly I conclude that I should depart from the view expressed by Young J in Kizquari and the cases which have supported that view, in view of s 53. I would also respectfully disagree with the view that Chesterman J expressed in Re Polyresins Pty Ltd which Young JA cited with approval in McEwan that the equitable interests in the trust cannot be dealt with by the Court under s 233. The only limitation imposed on the Court on the kind of order that it can make under s 233 is the requirement for the order to be one that that the Court considers appropriate "in relation to the company". The phrase "in relation to" requires a rational and discernible link between the remedy and the company in which the oppression has occurred.[53] In other words, any remedy granted under s 233 must not be extraneous to achieving the object of relieving the oppression and must be appropriate to putting an end to the causes of oppression, including where the company acts as trustee and the oppression relates to the affairs of the trust. In appropriate cases the remedy may include orders dealing with the equitable interests in the trust, in my view.

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