Eastland Technology Australia Pty Ltd & Ors v Whisson & Ors

[2002] WASC 150

Supreme Court of Western Australia

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Interrogate

Catchwords

1. Corporations
2. › Directors' duties
3. › Fiduciary duty
4. › Duty not to exploit corporate opportunity
5. › Whether director-inventor breached fiduciary duty by developing invention outside company
6. › Whether invention arose from research and development on behalf of company
7. › Corporations Law, s 232
1. Corporations
2. › Directors' duties
3. › Release from liability
4. › Deed of settlement containing release and bar clause
5. › Whether void under s 241(1A) of Corporations Law
6. › Whether voidable for fraud or misleading conduct
1. Corporations
2. › Shareholders' remedies
3. › Standing under s 1324
4. › Whether shareholders are persons whose interests are affected by conduct contravening the Corporations Law
1. Contract
2. › Deed of settlement
3. › Vitiating factors
4. › Fraud
5. › Misleading or deceptive conduct
6. › Whether representations in affidavits induced settlement
7. › Whether reliance established

Quick Take

A director-inventor who licenses inventions to a company but is not employed by it and has no contractual obligation to undertake research does not breach fiduciary duties by independently developing new inventions in the same field, provided the inventions do not arise from research conducted on behalf of the company. The commencement of an arbitration does not prevent a party from launching a counterclaim in court proceedings where the other party has made no application for a stay under s 53 of the Commercial Arbitration Act 1985 (WA) and has acquiesced in the court proceedings. Rejection of a generous Calderbank offer without proper consideration, particularly after a judicial indication that the claim is unlikely to succeed, will support an award of indemnity costs.