Complaining that fellow investor Peter Murphy held a pistol to their heads to extract an extra four million dollars on sale of their Queensland tourism business was to no avail. It is not unlawful for private individuals to act in their own self-interest, refusing to sign a contract, the Court of Appeal ruled.
Refusals to deal are a matter for competition law, governed by statute, the court said. Competition law governs misuse of market power, to the detriment of consumers; not private contract law disputes.
Roger Dold’s dispute with Peter Murphy was about sale of their joint Queensland tourism business. Their relationship went back nearly three decades, starting with operation of Fullers Cruises in Northland. Nearing the end of their business careers, they were looking to sell their company Cruise Whitsundays Pty Ltd for some $A75 million. Dold and fellow investor Chris Jacobs each held a 46.9 per cent stake; Murphy 6.2 per cent. They were astonished to find a buyer offering $A112 million. Clinching the deal required all three to sign. Murphy refused. He demanded a bigger slice of the pie; compensation for the extra work he had done in recent years, particularly during Mr Jacob’s illness, he said. The court was told Dold and Jacobs grudgingly agreed to Murphy receiving an extra four million dollars; in economic terms raising his interest in Cruise Whitsundays to 9.8 per cent. Dold then sued Murphy alleging economic duress, demanding back his two million dollar contribution.
Mr Murphy’s opportunistic behaviour in withholding his signature at the eleventh hour was not unlawful, the Court of Appeal said. At law, he was entitled to act in his own self-interest, even if his actions were both unexpected and ungenerous, it said.
Dold v. Murphy – Court of Appeal (31.07.20)
20.129