Torlonia v Wright (No 2) [2017] NSWSC 951

Supreme Court New South Wales

Medium Neutral Citation: Torlonia v Wright (No 2) [2017] NSWSC 951 Hearing dates: 7, 8, 9 June 2017 Date of orders: 17 July 2017 Decision date: 17 July 2017 Jurisdiction: Equity Before: Brereton J Decision: Plaintiff's falsifications upheld in the amount of $2,074,124.49. The court directs that the plaintiff bring in short minutes to give effect to this judgment, on a date to be fixed. Catchwords: EQUITY – accounts – procedure on taking accounts – where accounts taken before trial judge Legislation Cited: (NSW) Civil Procedure Act 2005, s 13 (NSW) Uniform Civil Procedure Rules 2005, r 46.8 Cases Cited: Torlonia v Wright [2016] NSWSC 1139 Ex parte Bax (1751) 2 Ves Sen 388 (28 ER 248) Cavasinni v Cavasinni [2007] NSWSC 619 Texts Cited: J A Watson, The Duty to Account (2016) Category: Consequential orders (other than Costs) Parties: Philippa Louise Torlonia (P) Andrew David Lincoln Wright (D) Representation: Counsel: N. Bracks (S) (P) J. Burnett (D)

Solicitors: Noel F. Bracks & Co (P) Sarvaas Ciappara Lawyers (D) File Number(s): 2015/089674

Judgment 1. In a judgment given on 16 August 2016, [1] with which this judgment should be read, I concluded (1) that Mr Wright owed fiduciary obligations to Mrs Torlonia, to deal with the Wambo Royalties moneys for her benefit and in accordance with her directions, and to account to her for them; (2) that Mr Wright had not properly or satisfactorily accounted for the Wambo Royalties; (3) that Ms Torlonia was therefore entitled to an order for accounts, but for limitation reasons only for the period commencing six years before the proceedings were instituted, that is to say from 25 March 2009; and (4) that the financial statements as at 30 June 2009 provided a convenient and uncontroversial opening balance, as they established that as at that date, Mrs Torlonia's loan account stood at $4,232,225. I therefore made an order that an account be taken of all moneys received and disbursed by the defendant (including through Leccino Pty Limited) in respect of the plaintiff's Wambo Royalties, including interest and other income received in respect of their investment, for the period from 25 March 2009 to date, and made directions for the taking of that account, to proceed (until further order) before me. 2. Mr Wright furnished accounts, verified by his affidavits of 23 September 2016 (for the period 1 July 2009 to 18 February 2014) and 31 October 2016 (for the period 25 March 2009 to 30 June 2009). He was orally examined on them on 16 November 2016. The final version of Mrs Torlonia's notice of surcharges and falsifications was filed on 21 December 2016. There were no surcharges, and the falsifications notified fell into five categories: 1. internal transfers between accounts; 2. payments to Etres Resources; 3. payments to Frank McDonald, to the extent they exceeded $250,000; 4. payments to Mr Wright or his related entities on account of remuneration and reimbursements; and 5. miscellaneous individual items. 1. Both parties then served further affidavit evidence relating to the alleged falsifications. By the time of the hearing, however, it appears to have become accepted that the internal transfers balanced out, and the falsifications in the fifth category were ultimately not pressed; accordingly, only the second (Etres Resources), the third (Frank McDonald) and the fourth (Wright remuneration) require resolution.