He Had Been Warned Not to Trust Forrest(1)

8/4/2019 He Had Been Warned Not to Trust Forrest(1)

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http://www.thepoliticalsword.com/post/2011/07/02/putting-the-

squeeze-on-mr-sqiggle.aspx

July 3. 2011 11:58 AM

I noticed Patricia WA's reference to Mr Andrew Forrest. I also note a

recent article by Laura Tingle noting how the credentials of the "Mr

Forrests" of the world, self appointed spokespeople for the odinary

people, are never examined by the lazy journos who give oxygen to

them.

The excerpt following comes from Edensor v Anaconda, a case in the

Vic Supreme Court. The full court repoert can be seen at the link

provided.

The case was one of Promissory Estoppel, and for those not familiar

with that area of law, it deals specifically with cases where someone

has deliberately, maliciously, and planfully caused harm to another.

The law describes such conduct as "unconscionable", and to be so

described by the law is an immense negative reflection on one's

character.

In this case, Mr Forrest was found to have deliberatley, maliciously

and planfully caused harm to his then friend, Joseph Gutnick. Here are

the excerpts:

www.austlii.edu.au/au/cases/vic/VSC/2001/502.html

Supreme Court of Victoria
http://www.thepoliticalsword.com/post/2011/07/02/putting-the-squeeze-on-mr-sqiggle.aspxhttp://www.thepoliticalsword.com/post/2011/07/02/putting-the-squeeze-on-mr-sqiggle.aspxhttp://www.austlii.edu.au/au/cases/vic/VSC/2001/502.htmlhttp://www.thepoliticalsword.com/post/2011/07/02/putting-the-squeeze-on-mr-sqiggle.aspxhttp://www.thepoliticalsword.com/post/2011/07/02/putting-the-squeeze-on-mr-sqiggle.aspxhttp://www.austlii.edu.au/au/cases/vic/VSC/2001/502.html


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________________________________________

Edensor Nominees Pty Ltd v Anaconda Nickel Ltd [2001] VSC 502

(18 December 2001)

122. In his dealings with Anaconda he had been warned not to trust

Forrest. Nevertheless, he regarded Forrest as a friend whom he had

known for many years. Indeed, at a time of much tension between the

Gutnick interests and Anaconda in October and November 2000Forrest reminded Gutnick of their friendship. The relevant

correspondence from Forrest had all the hallmarks of cultivating trust.

The extensive commercial and corporate experience and acumen of

Gutnick was at odds with the acceptance by him, on his version, of

Forrest's proposal on 4 September 2000 whereby Gutnick agreed to

surrender control and management of Centaur to Anaconda. This he

did contrary to the advice of his solicitor. When asked why he did so,Gutnick's response was brief and emphatic; it was because he trusted

Forrest. Such acceptance on first blush may appear commercially

foolish. It probably was. However, that is not the issue.

144. Despite being warned of the untrustworthiness of Forrest, on 4

September 2000 Gutnick trusted him and gave Forrest an important

stepping stone in fulfilling the goal of the three provinces strategy,namely, control of Centaur.

145. I reject Forrest's evidence that he was not concerned about

competitors gaining a foothold in Cawse. On the contrary, I am

satisfied he was very conscious of the potential presence of

competitors at the time including BHP, Billiton, Falconbridge and

others. I am satisfied that when confronted with the Dennis

memorandum and the strong opposition of Dennis to proceeding with

the share sale agreement, Forrest needed to devise an interim


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arrangement to preserve the share sale deed and necessarily

Anaconda's strategy in relation to the three provinces. In particular,

Forrest wanted to quarantine Gutnick from outsiders who might

interfere that strategy.

148. Gutnick was a truthful witness in all respects of his evidence.

Having observed Forrest, including his physical demeanour, especially

in the course of giving evidence-in-chief, I am unable to accept his

version of the conversation of 4 September 2000. Forrest was an

untruthful witness.

167. .......... Anaconda through Forrest, induced Edensor and Gutnickto adopt that assumption or expectation by making the assurances he

did as to completion. The inducement in the circumstances was

sufficiently clear although with minimal detail. Forrest offered the

comfort that settlement would occur six months later. He gave

Gutnick the further comfort of immediately paying the balance of

moneys due on 4 September 2000. Forrest also gave Gutnick the

comfort that the delay in settlement, the establishment of the loanand the transfer of control of Centaur were to be effected to facilitate

negotiations with the U.S. bond holders. Gutnick, in turn, trusted

Forrest and told him so.

169. Anaconda through Forrest knew or intended Gutnick and

Edensor to act as they did in relation to the transfer of the board and

management control of Centaur

176. Ultimately, I conclude that the conduct of Anaconda through

Forrest on 4 September 2000 and subsequently was such that it was

unconscionable deal elsewhere. Forrest wanted to preserve the

transaction

190. I find that in making the representations Forrest did on 4

September 2000 together with the conduct of Anaconda thereafter,

the duty of good faith implied into the share sale deed and the


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variation agreement was breached.

195. On analysis under the statute the principle representations were

those made by Forrest on 4 September 2000. The representations

were misleading and deceptive at the time of their making because

he did not disclose the difficulties over due diligence or the matters

revealed in the Dennis memorandum; he did not disclose that there

was a risk or likelihood that Anaconda would not settle. The conduct

was also misleading and deceptive as to the future intentions of

Forrest and Anaconda: see Futuretronics International Pty Ltd v

Gadzhis (1992) VR 217; Miba Pty Ltd and Ors v Nescor Industries

Group Pty Ltd (1996) ATPR 41-534.(END OF EXCERPTS)

The last sentence by His Honour at point 148 is telling.

He Had Been Warned Not to Trust Forrest(1)

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