Warman International Ltd v Dwyer [1995] HCA 18

Warman International Ltd v Dwyer [1995] HCA 18

Warman was entitled to elect an account of profits because Dwyer breached fiduciary obligations by using his position, knowledge and staff arrangements to secure the Bonfiglioli opportunity for B.T.A. and E.T.A., and those companies knowingly participated in and benefited from the breach. However, because the Bonfiglioli distributorship was terminable on three months' notice, probably would have continued for only one further year, and the respondents' businesses also depended on Bonfiglioli's retained goodwill, assembly rights, capital, effort and resources, the account should be limited to profits made by the businesses in their first two years of operation, with appropriate allowances.

Jurisdiction
Australia
Procedural Posture
Appeal Concerning Remedies for Breach of Fiduciary Obligation / Appeal to the High Court of Australia From the Court of Appeal of Queensland
Outcome
Appeal allowed.
Legal Topics
['account of Profits' 'breach of Fiduciary Duty' 'constructive Trust' 'equitable Compensation' 'knowingly Participating in Breach of Fiduciary Duty']
['equity' 'fiduciary Obligations' 'remedies'] ['account of Profits' 'breach of Fiduciary Duty' 'constructive Trust' 'equitable Compensation' 'knowingly Participating in Breach of Fiduciary Duty']

Case Brief

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Procedural Posture

Appeal Concerning Remedies for Breach of Fiduciary Obligation / Appeal to the High Court of Australia From the Court of Appeal of Queensland

Legal Issues

  1. 1 ['Whether an account of profits should be awarded in favour of a successful plaintiff in an action for breach of fiduciary obligation.' 'If an account of profits should be awarded, the basis upon which the account should be taken in the circumstances.' "Whether the profits of the respondents' businesses should be accounted for in whole, in part, or for a limited period."]

Ratio Decidendi

Warman was entitled to elect an account of profits because Dwyer breached fiduciary obligations by using his position, knowledge and staff arrangements to secure the Bonfiglioli opportunity for B.T.A. and E.T.A., and those companies knowingly participated in and benefited from the breach. However, because the Bonfiglioli distributorship was terminable on three months' notice, probably would have continued for only one further year, and the respondents' businesses also depended on Bonfiglioli's retained goodwill, assembly rights, capital, effort and resources, the account should be limited to profits made by the businesses in their first two years of operation, with appropriate allowances.

Court Disposition

Appeal allowed.

Orders

  • ['Set aside the orders of the Court of Appeal of Queensland other than those relating to costs.' 'In lieu thereof, allow the appeal to the Court of Appeal of Queensland and set aside the orders made by the trial judge other than orders relating to costs.' 'Order that the matter be remitted to enable accounts to be...