Morningstar litigation battle re-ignited
By Craig Phillips
Morningstar and its former chief executive Graham Rich are one step closer to a potential courtroom showdown after the NSW Supreme Court rejected two claims by the research house to dismiss Rich’s ongoing case against it.
The matter between Rich and his former employer dates back to his acrimonious departure in late 2001, and has since seen Rich bring claims against the research house in the NSW Industrial Relations Commission (IRC), the Federal Court and the NSW Supreme Court.
The cases by Rich against his former employer were combined into a single law-suit in November 2003, and a recent interlocutory hearing on the matter in the NSW Supreme Court has brought the dispute closer to a full hearing.
In a 75-page document that followed the motions hearing in the NSW Supreme Court, Justice Austin (the now full-time appointed Judge in the case) dismissed two key claims brought by Morningstar.
These claims were that the part of the case stemming from the IRC hearing be struck out along with certain paragraphs in Rich’s NSW Supreme Court claim.
In that claim, Rich alleged Morningstar breached the shareholders’ agreement between the two parties and resulted in Rich terminating the agreement.
The matter can now proceed on two accounts — one through Rich as an individual and another through his two companies, Fiduciary and Fiduciary Consultants.
However, to proceed through his proprietary companies, Rich must first pay around $100,000 in costs for a failed attempt to extend an interim injunction against his dismissal in 2001. He also had to provide $924,536 in security by August 21 in order that the corporate case against Morningstar proceed.
It was unclear at the time of going to press whether Rich would continue with the corporate litigation, but he indicated he would at least continue his individual case.
Rich has eight principal claims against Morningstar in the NSW Supreme Court, commenced early in 2002.
These are for misleading and deceptive conduct, breach of contract, encouraged assumptions and estoppel, unconscionable conduct, economic duress, oppression, breach of director’s duties, and breach of fiduciary duties as a joint venture partner.
“All I want is a fair outcome from a totally unnecessary situation. I founded and at all times have remained a substantial shareholder of the business. Since leaving, I have been completely and unreasonably denied access and information to all matters concerning a business that I am part owner of,” Rich says.
AUTHOR
Craig Phillips
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