Adamson v Ede - [2008] NSWSC 1143

No judgment structure available for this case.

CITATION: Adamson v Ede [2008] NSWSC 1143

HEARING DATE(S): 20, 21 and 22 October 2008

JUDGMENT DATE :
31 October 2008

JUDGMENT OF: Harrison J

DECISION: Parties to bring in short minutes to reflect the orders proposed at par [75].

CATCHWORDS: LEASES – claim by tenant for injunction to restrain landlord from proceeding to recover possession of rural residential premises – relationship of solicitor and client between tenant and landlord - cross claim by landlord to set aside lease as unjust under the Contracts Review Act 1980 or as procured through breach of fiduciary duty or undue influence – special conditions prepared by tenant purporting to give ownership of part of property to him and otherwise rendering the obligation to pay rent illusory – special conditions unjust within s 7(1) of the Act – balance of lease enforceable according to its terms.

LEGISLATION CITED: Contracts Review Act 1980

CATEGORY: Principal judgment

PARTIES: Christopher Michael Adamson (Plaintiff)
Kenneth John Ede (Defendant)

FILE NUMBER(S): SC 11862 of 2008

COUNSEL: G A Sirtes SC (Defendant)

SOLICITORS: In person (Plaintiff)
Horowitz & Bilinksy (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HARRISON J

31 October 2008

11862 of 2008 Christopher Michael Adamson v Kenneth John Ede
JUDGMENT

1 HIS HONOUR: These proceedings arise out of the breakdown of a relationship between the plaintiff and the defendant. There have been other proceedings between them: see Adamson v Ede [2007] NSWSC 829 and ACN097 590 817 Pty Ltd as Trustee of the ACN Trust v Ede; Adamson v Ede [2007] NSWSC 1384. The facts and circumstances in those cases partly inform the present dispute between the plaintiff and the defendant and the development and continuance of enmity between them.

2 The plaintiff is a solicitor. On 31 July 2001 the defendant signed a Residential Tenancy Agreement prepared by the plaintiff, which on its face granted a lease of the defendant's property at Nabiac to the plaintiff for a term of three years commencing on 30 June 2003 with two options to renew for further terms of three years each. The lease contained a series of Special Conditions to which it will be necessary to refer in more detail shortly. The defendant denies that he signed the lease in its present form, insisting that it was blank when he did so, but that he signed it in anticipation of his former wife and co-owner of the property being granted a tenancy for a short term pending resolution of then current matrimonial proceedings between them. The plaintiff acted as the defendant's solicitor in those proceedings. However the defendant's wife left the property in about August 2001 when she was paid $80,000 in accordance with the terms of a property settlement. The plaintiff caused that sum to be lent to the defendant from his family trust. The plaintiff subsequently went into possession of the property in or about April 2003 and has remained there ever since. The first option to renew the lease was purportedly exercised prior to the expiration of the first term on 30 July 2006.

3 If the lease is valid and enforceable by the plaintiff it follows that he is entitled to remain in possession and occupation of the property, subject to any right that the defendant may have or acquire to terminate the tenancy for breach and recover possession. The plaintiff has never paid rent to the defendant as the result of his insistence that, in the events that have occurred, the Special Conditions of the lease have operated to relieve him of the obligation to do so. At all events, the present proceedings are more closely concerned with the defendant's contentions that arise on his cross claim than with an assessment of the precise position of the plaintiff under the lease. This is explained in more detail below.

The proceedings

4 By his summons filed on 23 April 2008 the plaintiff seeks the following relief:

"1. A permanent injunction restraining the defendant from taking or attempting to retake possession of the premises at Lot 106 Trapyard Road Nabiac . . . being the property described in the Residential Tenancy Agreement dated 31 July 2001 between the plaintiff and another and the defendant except in accordance with a judgment, warrant or order of a court."

5 At the hearing on 20 October 2008 the defendant was granted leave to file an amended cross summons. The amendments were all related to the application to join ACN 097 590 817 Pty Ltd ("the company"), which is the trustee of the plaintiff's family trust. The plaintiff is the sole director and shareholder of the company. It is named as a tenant of the property on the lease along with the plaintiff. Its joinder was expressed to be for no purpose other than to avoid the possibility that the cross claim might fail for want of a party.

6 The orders sought by the defendant in his cross summons are therefore presently as follows:

"1. A declaration that the Residential Tenancy Agreement dated 31 July 2001 ("the Lease") not be enforced pursuant to s 7(1) of the Contracts Review Act 1980 (NSW);

2. A declaration that the Lease was procured by the First Cross Defendant ("Adamson") through the exertion of undue influence on the Cross Claimant ("Ede");

3. In the alternative, a declaration that the Lease was procured by Adamson through unconscionable conduct and breach of fiduciary duty;

4. A declaration that the Lease was void as and from the date of its execution;

5. A declaration that the Lease was procured by Adamson by misleading and deceptive conduct in contravention of s 42 of the Fair Trading Act 1987 (NSW);

6. An order that Adamson and the Second Cross Defendant ("ACN Trust") pay Ede mesne profits for his occupation of the land at Lot 106 Trapyard Road, Nabiac since Adamson and the ACN Trust's occupation;

7. An order, in the alternative, that the Lease be set aside pursuant to s 7 of the Contracts Review Act 1980 (NSW);

8. An order that the lease be set aside pursuant to s 72 of the Fair Trading Act 1987;

9. Damages under s 68 of the Fair Trading Act 1987 (NSW);

10. An order that Adamson and the ACN Trust pay interest on damages pursuant to s 100 of the Civil Procedure Act 2005 (NSW);

Background

7 The evidence in the proceedings was by way of affidavit. The plaintiff's only affidavit in chief was very parsimonious. It annexed a copy of the lease. The plaintiff said that he had duly exercised the option to renew and that he was in possession of the property, which he also uses as his office. The plaintiff also annexed a copy of a letter to him dated 21 April 2008 from the solicitor for the defendant. That letter would appear to have inspired the commencement of these proceedings and is in the following relevant terms:

" Re: Lot 106 TRAPYARD ROAD, VIA NABIAC

As you are aware, you have no right to occupy the property and effectively you are a trespasser on those premises.

In the proceedings before Mr Justice Windeyer, the evidence of our client was that you were a trespasser and that the document that you rely on was, on our client's instructions, signed as a residential tenancy agreement for the benefit of his wife, Parmilla Ede.

Our client when signing the document, has given evidence that the document was largely in blank and that the details that are handwritten, apparently in your handwriting, were not on the document when he signed it.

In the circumstances we give you notice that you must vacate the premises forthwith and in the event that the premises are not vacated by 28 April 2008, our client shall retake possession of the premises.

If any of your possessions are left in the premises, they will be put into storage and you will be provided with particulars of the storage.

There is no basis for you and your company occupying these premises.

8 The lease is in a printed form with spaces for the insertion of relevant particulars. In the present case, the spaces have been completed in the handwriting of the plaintiff and are identified in the extracts that follow in italics. The agreement is dated 31 July 2001. It is described as having been made at Sydney. The landlord is Kenneth John Ede whose address is Lot 106 Trapyard Road, Nabiac. The tenant is Christopher Michael Adamson and the ACN Trust. The premises are described as "part lot 106 Trapyard Road via Nabiac comprising all buildings and dwelling and surrounding grounds within existing fences and gates including front entry and driveway as per annexed plan".

9 The rent is "$150 pw payable every 6 months starting on 01/02/04. The tenant must pay in advance on the 1st day of every 6 month period". The lease also says "The rent must be paid . . . to the landlord, or the landlord's agent, at direction of landlord see also special conditions hereto with respect to rental". The term of the lease is "3 years beginning on 30/06/03 and ending on 30/06/06 plus 2 options of 3 years each".

10 The most significant handwritten additions to the printed standard form of lease are the special conditions. There are 13 of them and it is necessary to set them out in full:

"1. Ken Ede acknowledges that the ACN Trust is beneficially entitled to 2/3 of the rent and benefit of this tenancy and that the tenant will account direct to the ACN Trust for such sum.

2. Ken Ede also acknowledges that the ACN Trust will be sole owner of Lot 1063 upon subdivision of Lot 106 and thereupon the ACN Trust will be sole landlord and all reference herein to Lot 106 shall be deemed to be references to Lot 1063.

3. Chris Adamson or his nominee shall be entitled to be caretaker/manager of Lot 106 from the date hereof and shall be entitled to a rebate of rent of $16 ph net plus disbursements for such work including attendances to payment of accounts, arrangement and supervision of agistments, repairs, replacement and maintenance of fences, dams & roads and all other work usually done by a caretaker/manager of a rural property.

4. Chris Adamson shall have the handling and carriage of the subdivision of Lot 106 and shall be entitled to a rebate of rental of $60 ph net plus disbursements for such related work from the date hereof.

5. The tenant shall have the right from the date hereof to all manner of building work on the premises and the grounds including demolitions, alteration, additions and new buildings and structures and also any landscaping work or fencing work including the replacement of the fences & gates around the buildings let hereunder. Such work to be at the sole discretion of the tenant. The tenant shall as against the ACN Trust be entitled to a rental rebate of $50,000 for the cost of such work including an allowance for the tenants own time. Provided that the tenant shall not incur any debts in respect of same on behalf of Ken Ede and shall keep Ken Ede indemnified against any claims in respect thereof and shall be responsible for all insurances and other charges in respect thereof.

6. Chris Adamson shall also be entitled to a rent rebate as against Ken Ede for all unpaid legal fees owed to Chris Adamson whether past or future.

7. For the purposes of this tenancy and the above clauses where necessary or convenient to do so in order to further the interest of Ken Ede, Chris Adamson or the ACN Trust, Ken Ede grants Chris Adamson his fullest Power of Attorney to do all things and to sign all documents as if he stood in the shoes of Ken Ede. This power shall include power to operate an account for the purposes of payment of accounts and charges in respect of the management and subdivision of Lot 106 and incidental thereto, such account to be nominated by and opened by Ken Ede and Chris Adamson or in the name of either person as is most convenient to Ken Ede and Chris Adamson and the ACN Trust.

8. The tenant shall be entitled to sub-let or assign this tenancy without the consent of Ken Ede by giving written notice to the landlord.

9. The tenant shall be entitled to keep animals within the premises and grounds and also to agist 2 horses on Lot 106 and to enter upon and use Lot 106 for casual recreational purposes as well as business purposes.

10. Ken Ede shall be entitled to keep his personal property on the premises free of charge until the tenant gives reasonable notice in writing for him to remove his property and thereupon Ken Ede shall remove all of his property at his own expense.

11. The rental for the 1st year of each further term shall be increased in accordance with any increases which have occurred in CPI for the previous 3 years and the rental for the second and third years shall be the same as the rental for the first year of such further term.

12. In the event that this tenancy ceases for any reason prior to the end of any term, the tenant shall be entitled to recover as a debt due and payable the value of any work done or disbursements under clauses 3, 4 or 5 and the tenant shall have a caveatable interest over Lot 106 to secure the recovery of same.

11 In his affidavit in response, the defendant denied "that there was any lease, at any time, given by [him] to the plaintiff and the ACN Company in relation to any property". He continued to assert that the plaintiff and the company were trespassers with no rights to occupy the property. He said that in about May 2001 the plaintiff went to see him at the defendant's home in Currumbin where the plaintiff then stayed for a couple of days. During that time the defendant said that they discussed the need for the defendant to finalise his divorce. The plaintiff said to the defendant, "You can come down to Sydney and stay with me at my place and whilst I am doing your property settlement, you can do some work for me. I have got lots of work to be done such as moving furniture, sorting files and cleaning up".

12 On about 18 July 2001 the plaintiff and the defendant went to Forster together and the family law matters between the defendant and his wife "were resolved by agreement". Terms of settlement were signed which gave the defendant's wife the right to occupy the property until the defendant paid her $80,000 as part of the settlement.

13 On 31 July 2001 the defendant was working in the plaintiff's garage in Kings Cross when the plaintiff said to him, "You have got to come with me straight away to see a JP and sign some documents for the Family Court settlement". They went across the road to the Kingsgate Building where there was a tobacconist whose name was Faddoul Faddoul. He was a justice of the peace. The defendant said that the plaintiff put some documents on the counter and said, "You'll have to sign these papers". The defendant said, "I haven't got my glasses with me". The plaintiff said, "Don't worry, you just sign where I point". The plaintiff held his finger on the documents and the defendant signed in the vicinity of where the plaintiff pointed his finger. He then saw Mr Faddoul sign some documents. Mr Faddoul in fact signed the lease and there is no issue in these proceedings that his signature appears on the lease as a witness to its signature by the defendant. There is no corresponding signature by Mr Faddoul or indeed anyone at all that bears witness to the plaintiff's signature on the lease on behalf of himself or the company. The evidence is silent about this. Mr Faddoul did not give evidence before me for either the plaintiff or the defendant.

14 The defendant said that he could not make out what the writing on the documents was without his glasses because he is long sighted. He recalled signing "about four documents". There is no evidence before me as to what the other documents were although they are referred to in the judgment of Windeyer J. The defendant said that the plaintiff said to him, "All these documents are relevant to your property settlement. One of the documents is a mortgage which will be unregistered for $80,000. I'm lending the money to you". The plaintiff and the defendant then left the shop and went to the St George Bank at Kings Cross. The plaintiff produced $36,000, which was then banked into the defendant's account together with a cheque.

15 The defendant said that despite his poor eyesight he could read the words "Residential Tenancy Agreement" because that was in large print. He could not see any handwriting on the form "because there was none". He said that the form "did not include any special conditions". It should be noted that the lease in evidence signed by the defendant and witnessed by Mr Faddoul contains the words "Residential Tenancy Agreement" in large print on page 2 of the printed form but not on any page that bears the defendant's signature. The last two or three handwritten special conditions appear on the top of the same page as the defendant's signature. The largest words on that page are in bold upper case saying "PLEASE READ THIS AGREEMENT THROUGH CAREFULLY BEFORE AND AFTER SIGNATURE".

16 The defendant said that the only legal advice that he was given in relation to the documents that he signed on 31 July 2001 was the advice from the plaintiff. He said that the plaintiff did not tell him to obtain any other legal advice from anyone else in relation to the documents. The plaintiff was his solicitor at the time and the defendant said that he believed that the plaintiff was protecting his interests. The defendant said that it did not occur to him to obtain independent legal advice because he did not realise that he was contracting with the plaintiff. He said that at no time did he agree to give the plaintiff or the company a lease of the property. He also said that at the time that he signed the documents he thought that the plaintiff was his friend and that he was acting for him as his solicitor. The defendant said, "I had every reason to trust, and believe what the plaintiff told me".

17 The defendant said that he was not a lawyer and did not have legal training. He was a builder by occupation. He said that he did not at any time negotiate any of the matters contained in the lease with the plaintiff and the company. He said that he did not have any discussion with the plaintiff about the handwritten additions to the lease. He said, "there was no handwriting on the document when I signed it". He also said that he "believed at all times, that the lease was prepared by the plaintiff to protect [his] interests in relation to [his wife] and that the lease would allow her to stay at the property until she had paid" the $80,000 for which the terms of settlement provided.

18 In response to this material the plaintiff relied upon a very long affidavit made on 19 June 2008. Much of it was irrelevant and was rejected by me or not pressed by the plaintiff in the face of objections by the defendant. So much of it that did survive put in issue the fact that the lease was intended to be for the defendant's property settlement with his wife. This was an awkward statement having regard to the plaintiff's case and the obvious terms of the lease on its face.

19 With respect to the execution of the lease the plaintiff said that he gave a draft of the tenancy agreement to the defendant a day or so before the matrimonial settlement orders were made at Forster and said to the defendant, "Here is the draft Tenancy Agreement and special terms which we have agreed on. Take them back to the Gold Coast and go over it with your solicitor there and let me know if there is anything that you do not understand or want changed or altered". According to the plaintiff, the defendant returned to stay with the plaintiff at Woolloomooloo and said, "I have seen a solicitor who has explained the effect of the terms and I am happy to sign the tenancy agreement".

20 The plaintiff then said that he told the defendant, who was about to fly back to the Gold Coast, to "have the tenancy agreement executed before a JP before you go". He said that he then gave the defendant the original of the tenancy agreement on which he had placed two flags indicating that the defendant and the JP were to initial the first page and sign the page provided for execution after the "special terms". The plaintiff said to the defendant, "You know where the Justice of the Peace is in the Westfield Building, would you mind going over there yourself to get it executed before the JP without me as I have some urgent matters to attend to elsewhere today". When the plaintiff returned home later that day the defendant handed him the executed lease.

21 The plaintiff also deposed to the extent of his professional relationship with the defendant. Paragraph 29 of his affidavit of 19 June 2008 was as follows:

"29. I acted for the [defendant] continually from 1995 to June 2003 prior to about September 2003 I had never received or become aware of any complaints from the [defendant] or his wife with respect to any matter".

The earlier proceedings

22 The versions set forth above concerning the execution of the lease are less detailed than would appear to have been the case in the proceedings before Windeyer J in [2007] NSWSC 1384. His Honour's reasons for judgment for presently relevant purposes contain some interesting historical material and a reference to the lease and other documents said to have been executed on 31 July 2001. Those paragraphs are instructive and bear repetition here:

"[8] Adamson and Ede were friends. From time to time during the course of the events described here they have lived together. Ede was involved in difficult litigation with Esanda and Adamson offered to assist with that. They entered into a deed dated 4 October 1995. So that the matter can be understood I think it necessary to set out the deed in full and a copy is annexed to this judgment.

[9] Prior to this deed being entered into Mr and Mrs Ede had entered into a deed with Adamson dated 10 September 1995, which looks like an employment contract, but which was probably a retainer agreement under which Adamson was to perform legal work for Mr and Mrs Ede for up to five hours per week for a retainer of $50 net of tax per week and thereafter at $10 per hour after tax for time spent over the five hours. This was the charge which was to apply other than in contentious matters, where the appropriate scale was to be charged instead. The deed included an extraordinary clause excluding any liability in Adamson for any act, omission, wrong advice, recklessness or negligence. There is no application in these proceedings to set it aside. It could, in any event, have been terminated by either side on notice.

[10] In 1998 Adamson lodged a caveat number 5388466 claiming a one half share over the property pursuant to a deed dated 10 September 1995. There is no evidence of any deed of that date apart from the one just mentioned. That deed gave no interest in the property. Adamson signed the declaration required for the caveat on 10 September 1998. He also purported to sign for the registered proprietors under power of attorney said to be dated 5 October 1995. There was no power of attorney of that date, although Ede gave an unlimited power of attorney to Adamson on 16 January 1996 and Mrs Ede signed a similar document on 14 January 1996. The result of the registered proprietors' consent being on the caveat document was that no notice was given of the caveat to the registered proprietors by the Registrar-General: Real Property Act 1900 s74F. It might have been possible to claim an interest under clause 3 of the deed of 4 October 1995, but the fact is that was not done.

[11] On 30 January 2000 Adamson purported to assign his interest under the deed of 4 October 1995 to the Oz 1 Trust. The consideration was stated to be the market value or $10,000, whichever was the greater, with interest at 10 percent per annum. The consideration under the deed was to be paid in ten years or from the net proceeds of any sale of the interest in the property whichever occurred first. The assignment was signed by Adamson as assignor and as trustee of the Oz 1 Trust. He was one of three trustees. It is not clear the assignment was effective as there is nothing in the trust instrument which would have given the necessary power to one trustee. In any event the property the subject of the assignment was acquired while Adamson was an undischarged bankrupt. It is therefore 'after-acquired property' vesting in the trustee in bankruptcy under s58 (1)(b) of the Bankruptcy Act 1966 (Cth) and thus is property devisable among creditors. Discharge from bankruptcy on 23 December 1995 did not affect that position. The limited protection of s126 of the Bankruptcy Act does not in my view apply.

[12] On 28 July 2001 Adamson, as appointor under the Oz 1 Trust deed, removed the then trustees, namely himself, Phillip Jackson and Oz 1 Pty Limited and appointed A.C.N. as trustee. It was also resolved at the same time to change the name of the trust from Oz 1 Trust to the A.C.N. Trust.

[13] Mr and Mrs Ede were involved in 2001, and perhaps earlier, in negotiations to settle their matrimonial affairs. On 19 July 2001 orders were made under the Family Law Act 1975 (Cth) in the Local Court at Forster, the effect of which was that in consideration of being released from any mortgage liability over the property and in consideration of receipt of $80,000 from Ede, Mrs Ede agreed to transfer her interest in the property to her husband. There was a note attached to the approved consent terms of settlement that the property was subject to a first mortgage to secure $80,000 and to an equitable charge in favour of Adamson for legal costs. The application for consent orders signed by Mr and Mrs Ede does show $30,000 due to Paclaw solicitors, Adamson's then firm, although Ede says that his initials against this addition are not his.

[14] For the Family Law orders to be implemented Ede had to obtain $80,000 to pay out Mrs Ede, and in order to pay out the existing mortgage he had to organise a new mortgage loan through Suncorp Metway of about $82,000. The A.C.N. Trust agreed to lend Ede $80,000 or, it claims, $82,000 under a deed of loan dated 31 July 2001, which sum was to be secured on the property but subject to a first mortgage to Suncorp Metway for $82,000. On the same day and time as the deed of loan was signed three other documents were signed. There is a contest as to whether they were complete when signed. The first is a transfer in Real Property Act form, although not in registrable form. Under that as it now is Ede acknowledges receipt of the consideration of "deed dated 4 October 1995 and the forgiving of $80,000 loan" and transfers to the plaintiff company as trustee for the A.C.N. Trust "a two-thirds share and Kenneth John Ede as a one-third share as tenant in common A.C.N. Trust sole proprietor proposed Lot 1063 and tenant in common with Kenneth Ede as Lots 1061 and 1062 in equal shares". It is obvious enough that this document could not be registered as there was no plan of sub-division so far as the proposed lots were concerned. The third document signed on that date was a residential tenancy agreement from Ede to Adamson and the A.C.N. Trust for part of the property being the house and surrounding sheds and surrounding ground. This lease was for a term of three years. It purports to have two options each for a period of a further three years. It says nothing of the terms on which any option could be exercised. A notice to quit was served on both Adamson and the A.C.N. Trust in December 2004 with no result. Adamson remains in occupation. Whether the company does or not does not really matter. Adamson as solicitor lodged caveat AA 88405 against the title based on the transfer document apparently with the consent of Ede endorsed, although there may be some problem about that signature. The caveat is dated 22 October 2003.

[15] The fourth document dated 31 July 2001 is a charge stated to be imposed upon Ede's one-third share of the property "for the purpose of securing the payment of past and future legal fees for the benefit of Adamson, the payments to be made upon issue of accounts and thirty days." There was no underlying agreement for this document of charge.

23 His Honour's judgment on the issues joined between the same parties is instructive and reference to it is both contextually necessary and was endorsed by both the plaintiff and the defendant. His Honour was not asked to make a determination about the lease. Under the sub-heading "Claim for possession" his Honour referred to it as follows:

"[51] The claim of Ede is that Adamson is a trespasser. The answer to that claim is the residential lease. There is no claim made in the cross-claim or by reply to the defence to the cross-claim to have the lease declared void or have it set aside under the Contracts Review Act. While I might have had considerable doubts about the document, the state in which it existed when it was signed by Ede, and the statements which were made to him about it, these are not matters which can be determined in a way fair to the parties on the issues put forward for decision."

24 During the course of the proceedings before me the plaintiff made references from time to time to the principles of res judicata, issue estoppel and Anshun estoppel, presumably upon the basis that the decision of his Honour somehow determined or foreclosed upon the defendant's contentions raised in his present cross claim. However, there is no decision that determines the defendant's claims to set aside the lease and as his Honour's reasons reveal, no such claim was made in any event. With respect to the question of whether the defendant ought now to be permitted to argue the validity of the lease when he could or should have done so in the earlier proceedings, it is clear enough that even though framed as a cross claim, the defendant's contentions in response to the commencement of the proceedings by the plaintiff and to his claim to be entitled to an injunction restraining the recovery of possession, are effectively defensive. The plaintiff ought not now be permitted to assert in fresh proceedings brought by him that the defendant is somehow estopped from challenging the validity of the lease on which he relies when the plaintiff himself could also have sought the injunction that he now seeks in those earlier proceedings.

25 The court retains an overriding discretion to permit the proceedings (in this case, the cross claim) to continue unless satisfied that they constitute an abuse of process in all of the circumstances. Part of those circumstances includes the fact that the parties are clearly motivated by energies and emotions that transcend the bare commerciality of their dealings over time. Undivided attention to all of the manifold issues that arise between them has not obviously been a priority for either of them. A final resolution of the status of the lease, and of the respective remaining and enforceable rights of the parties to it, should not in my view be frustrated by a contention that the issue should reasonably have been agitated beforehand. I am encouraged in this view as well by the need to bear in mind the overriding purpose and the fundamental judicial obligation to administer justice according to law and to proceed by expeditious determination of the real issues in dispute between the parties.

26 The form of the lease and the circumstances of its execution remain to be determined. Several issues arise. These are dealt with in turn.

Where was the lease signed and who was present?

27 This issue is in part the least controversial of the issues that arise. There appears to be agreement between the parties, and evidence in the form of an undisputed signature by Mr Faddoul, that the lease was executed by the defendant at Mr Faddoul's shop in the Kingsgate Building. What is curious is that neither the defendant nor the plaintiff sought to call Mr Faddoul to support his case in any other respect. There is no evidence that Mr Faddoul is presently unavailable or that his circumstances prevent him from giving evidence about what occurred. He has not even been given the opportunity to say that he has no recollection of what occurred.

28 The inferences that arise from his absence would appear to be evenly balanced. The plaintiff says that the defendant did not sign the documents in his presence. The defendant asserts that the plaintiff was present and actually directed him with his pointed finger to the place to sign. It is not possible to form a view that the failure by both parties to call Mr Faddoul leads to an inference that his evidence would not have assisted only one of them. It may be that his evidence would have assisted neither party for reasons that are unexplained. However, no inference that arises from his absence permits such a conclusion to be drawn.

29 In my opinion it is more likely that the defendant's version is correct. The lease did not give rise to any special benefit to the defendant. Indeed, subject to what is said below, it seems that the lease conferred no net benefit on the defendant at all but instead subjected him to a series of one-sided and enigmatic burdens with no corresponding benefits. Any practical enthusiasm for the lease to come into effect would have originated with the plaintiff. The defendant's family law settlement had been concluded 12 days earlier and the defendant was anticipating his wife's departure from the property following the payment of $80,000 to her that the plaintiff was providing. The collateral documents at face value secured the repayment of that money to the plaintiff and created of an interest in the property in his favour. The decision reached by Windeyer J that declared the charge executed on that day void and of no effect and that ordered that the caveats be withdrawn was a long way off on 31 July 2001 and clearly, or at least presumably, not in the contemplation of the plaintiff at the time.

30 There is another reason why I have formed this view. The plaintiff struck me during the course of these proceedings, both during his evidence in the witness box and in the course of appearing for himself as he presented his case, to be a man of considerable passion for the task at hand. His approach to all matters was to my observation punctuated with a concern for detail that I would only with slight reluctance decline to describe as obsession. By no means the only or best example of this is his concern that the defendant had not been required to plead what he described as allegations of fraud, which was articulated by him both before Johnson J on 13 June 2008, and before me. He regularly expressed concern that his reputation as a solicitor would be placed in jeopardy if the allegations were aired and he regularly sought to have them formulated in a statement of claim or similar even though the defendant's position was arguably clearly and adequately described in his affidavit.

31 Furthermore the plaintiff's cross examination of the defendant, whilst often ill planned and discursive, agitated matters of often minute but apparently insignificant detail. For example, exhibit K was a Collins diary that contained what were said to be records of moneys paid by the plaintiff to the defendant for work done by the defendant to assist the plaintiff to move to, or to carry out work upon, the property. The plaintiff even tendered a notice to admit facts that referred to these matters. He also tendered photographs of the property that were said to support a contention that the plaintiff expended money renovating the house. The plaintiff even tendered a photograph of the defendant seated passively in a room at the plaintiff's then rented premises in Darling Point. Other than in the most minor way, none of these matters was relevant to the case in hand.

32 I find that the plaintiff would not have been able to rest content until all of the documents, and for present purposes the lease in particular, had been finally executed. I find that the plaintiff attended the shop of Mr Faddoul the tobacconist with the defendant to execute the lease in front of Mr Faddoul as a witness and that the plaintiff was present with him in the way described by the defendant when he signed it.

What did the lease contain when it was signed?

33 The defendant contended that the lease was blank. The plaintiff contended that it was in the form of the completed document in evidence before me. I did not have the benefit of seeing the original, which I was informed became an exhibit in the proceedings before Windeyer J where it remains. Neither party sought to retrieve it for these proceedings. The defendant said that he could see no handwriting on the form (i.e. the lease) "because there was none". The defendant says so notwithstanding his assertion that he was unable to read any portion of the lease without his glasses apart from the words Residential Tenancy Agreement. These words are to be found on a page where no signature appears and where there is no other handwriting. The defendant's version is consistent with the plaintiff having pointed only to the first and last pages for his initials and signature respectively and in circumstances where no other page of the lease was put before him. It is unlikely that the defendant would have seen the words "Residential Tenancy Agreement" if the plaintiff had been attempting to direct the defendant only to the places where he was required to sign as the defendant asserts.

34 Moreover, despite his avowed problems with his eyesight, the defendant's initials on the first page and his signature on the last page are perfectly placed having regard to the printed words on the form. It is not entirely apparent to me why there are initials on the first page at all. However, they appear in a margin adjacent to a printed border and do not fall in an apparently random or awkward location. More particularly, the signature on the last page is in the appropriate position perfectly placed above the printed words "Signature of Landlord". Neither gives the impression that it was placed on the page by a person with eyesight that was incapable of reading it. Nor has the defendant suggested that the physical appearance of his signature informs this debate in any way.

35 The defendant does draw attention to the fact that there are no initials appearing in the margin of the document attesting to the amendments to it that are effected by the handwritten additions. The initials on the first page are, as I have said, curiously and somewhat irrelevantly located at the foot of the page. The importance of this submission lies in the fact that if the plaintiff went to the trouble of requiring the defendant to initial anything at all, it is odd that he did not insist that the defendant also initial every handwritten addition in what might be considered to be the ordinary course of the execution of a document supervised by a solicitor. The defendant insists that this is more consistent with an attempt to deceive the defendant into signing a lease with critical portions blank than with any other available explanation.

36 The defendant's submission is nothing less than that he was defrauded by the plaintiff who masterminded a scheme to have the defendant execute a lease that was blank. The defendant bears the particular onus of establishing that he did so in such a case. There are factors that point in both directions but none that in my view tips the balance in favour of the defendant. I cannot be satisfied that the plaintiff prepared the lease with any of the handwritten portions of it added later than the time when the defendant executed it. The defendant's contention that this is what occurred seems to me to be more a latter day recognition of the potentially awkward significance of the special conditions if they survive than a genuine recollection of the true state of the document in which they are to be found.

Did the plaintiff explain the Special Conditions in the lease to the defendant?

37 The plaintiff did not give evidence that he explained the special conditions to the defendant in either of his affidavits. He ultimately gave evidence about this following some questions that I directed to him during his cross-examination. He returned to the witness box on the third day of the hearing and gave evidence about these matters.

38 It was the plaintiff's case that even though he was the defendant's solicitor for the purposes of his family law dispute, he was not the defendant's solicitor on 31 July 2001 or around that time for any other purpose. To that extent, the plaintiff asserted that he told the defendant to have the lease explained to him by his solicitor Mr Radich on the Gold Coast. I reject that evidence. The lease was in almost all respects a tortuous document. It was neither easily understood nor explicable. I consider that the plaintiff knew this well. The last thing that the plaintiff would have been prepared to confront was the independent scrutiny by another solicitor of the lease that he prepared. I find that the plaintiff never suggested to the defendant that he seek independent advice about it.

39 The plaintiff's evidence of the explanation he said he gave to the defendant is also both wholly unsatisfactory and in my view incredible. I do not have any confidence at all in the plaintiff's evidence that he explained the special conditions to the defendant. There are a number of reasons for this.

40 First, the plaintiff's evidence on this issue is contradictory and confusing and gives the impression of a recent invention. The following extract from the proceedings bears this out:

"Q. Did you explain to him if you spent a little bit short of one hour on the subdivision in any week he would have no entitlement to rent?
A. I don't recall saying that to him. I thought it was obvious.

41 This evidence gave me the impression that the plaintiff was constructing his version of an explanation as he went. The answer to the first question is at odds with the second. The problem with the first answer is the obvious reason for the second answer.

42 Secondly, what explanation might one expect to have been given by the plaintiff to the defendant about the fact that the defendant was apparently granting a power of attorney in wide terms to one of his tenants? The plaintiff was asked about his explanation of special condition 7 and gave the following evidence:

43 I am not confident that the plaintiff could have conveyed any explanation to the defendant that was adequate if he said no more than what is contained in that summary. The implications of the grant of a power of attorney in the context of this lease were potentially very wide and the plaintiff certainly knew this. His view that the defendant was "happy" begs the important question of precisely what it was he could have been happy about. I consider that the plaintiff's statement that the defendant trusted him is completely accurate and that the plaintiff's failure to explain special condition 7 more fully was a result of that trust. The fact that the defendant had placed his family law settlement in the plaintiff's professional care itself bespeaks the existence of a relationship of trust and the need to explain the special conditions was greater because of it. The fact that the lease contained an unnecessary grant of a power of attorney to the plaintiff, a most extraordinary detail in any case, only adds to the importance of a full and detailed explanation.

44 Thirdly, there are portions of the special conditions that are to my observation incapable of explanation. One of them is the interrelationship between special conditions 5 and 12. The plaintiff asserted that he explained these conditions to the defendant in apparent ignorance of the tension between them. I drew this to the plaintiff's attention in the course of the following questions and answers:

"Q. Did you explain to him the relationship between clause 5 and so much of clause 12 as relates to clause 5?
A. Yes, your Honour.

Q. What words did you use in explaining that relationship?
A. Yes, your Honour. I said to him that there wouldn't be an issue in relation to 1063 because that would be registered in the name of ACN Trust and if any sale of that property wouldn't, he would no longer have any liability whatsoever under these conditions because the ACN Trust was the proprietor and it was a matter between myself and the ACN Trust at settlement of the sale of 1063, it had no longer any bearing upon his interest in the property which is an interest in lots 1061 and 1062.

Q. I will tell you what is just troubling me, it strikes me clause 5 gives the ACN Trust a rental rebate entitlement to $50,000 for work on the property. Clause 12 appears to suggest that the tenant, which must include ACN Trust, as we know, was entitled to get $50,000 for the work that it's done.
A. That's $50,000--

Q. That just seems to me to be a double counting, you get a rebate, plus you get the money back?
A. Look your Honour, if it failed, if its uncertain and it failed in that respect, that is my own fault.

Q. It is not uncertain?
A. But your Honour, I thought when I read that and when I explained it to him it was clear that it was only as against the ACN Trust.

45 There are other examples of how the plaintiff said that he explained the special conditions to the defendant elsewhere in the transcript. It is unnecessary to refer to them all. The defendant denied that the plaintiff gave him any explanation of the special conditions. I accept that evidence. The plaintiff was far too ready to resort to so-called explanations that commenced "this is what we had agreed" in circumstances where the very creation of the agreement could only have occurred following an explanation in detailed terms. The special conditions, whether taken separately or together, are incapable of an explanation in many cases. They would not have left an informed landlord happy with the result and any apparent happiness on the defendant's part was, in my view, the result of blissful ignorance or trust or a combination of both.

What did the defendant think he was signing?

46 The defendant's evidence was that he knew he was signing a lease. He said that he thought that it was a lease of the property, which was at that time still occupied by his wife, to her as a formal matter associated with their family law settlement. The terms of that settlement, finalised in the Forster Local Court on 18 July 2001, included provisions as follows:

" TRANSFER OF MATRIMONIAL HOME

3. That within 28 days from the date of approval of these orders the wife shall do all things and execute all documents necessary to transfer to the husband at the expense of the husband the whole of her right title and interest in the land.

PAYMENT OF THE SUM OF $80,000.00 TO THE WIFE

4. That upon and subject to the Memorandum of Transfer of the home being duly executed and delivered to the husband or as he might direct in writing, the husband shall forthwith pay to the wife the sum of $80,000.

TENANCY UNTIL PAYMENT OF $80,000.00 AND VACATION OF THE HOME BY THE WIFE

5. That the wife shall vacate the land when the wife receives the sum of $80,000.00 as aforesaid.

47 The most obvious conflict between these terms and the defendant's version of what he thought he was signing is that the settlement was effected at court on 18 July 2001 and the lease was not signed until 13 days later. The defendant did not give evidence that he did not read or did not understand the terms of the family law settlement. There were minor (and presently inconsequential) amendments to clauses 3 and 5 of those terms adjacent to which the defendant and his wife placed their initials. The defendant said that he did not at any time negotiate any of the matters contained in the lease with the plaintiff. That evidence was presumably a reference to the lease for which the plaintiff contends and not some lease that he thought he was signing in favour of his wife. The defendant said he believed at all times that the lease was to protect his interests "in relation to [his wife] and that the lease would allow her to stay at the property until she had been paid by [him]". Why he thought he would be required to execute a lease when the settlement had already been concluded, when his wife had in any event been in occupation for some time, and when she was clearly enough unlikely to frustrate any payment to her of what amounted to 50 per cent of the available value of the property, by remaining in some form of contentious occupation of the land, is not explained. It also leaves unexplained the defendant's failure to complain about the plaintiff's subsequent occupation of the land in a formalised and apparently fairly permanent fashion over some years. The evidence reveals that the defendant actually assisted the plaintiff to move to the property and was (somewhat oddly in the circumstances of the relationship) paid small sums by the plaintiff for doing so. The defendant did not dispute that these activities took place and they are to my mind consistent with the grant of some form of interest to the plaintiff that permitted him to be there. That outcome is also more credible, in my view, than the defendant's assertion that the lease was intended to be for his wife.

48 In these circumstances I find that the lease was executed by the defendant in the presence of the plaintiff and Mr Faddoul. It contained all of the handwriting that is present in the copy of the document that is annexed to the plaintiff's affidavit. The plaintiff did not explain the special conditions of the lease to the defendant at any time. The defendant did not think that the lease was a lease to his wife but in fact understood it to be a lease of the property to the plaintiff.

The cross claim

49 Apart from the assertion that the lease upon which the plaintiff sues never came into existence at all, the defendant has sought to challenge it on a number of alternative bases. For reasons that will emerge, it seems to be preferable to deal first with the defendant's challenge to the special conditions. The form of the relief sought by the plaintiff does not by itself give a clear indication of the precise nature of his case. However the plaintiff recognised in the course of his submissions that his entitlement to the specific relief that he seeks is not dependant upon the validity or enforceability of any of the special conditions. In other words, the special conditions could hypothetically be struck down but the lease could nevertheless remain on foot.

50 The defendant's principal challenge to the special conditions is that they are unjust within the meaning of the Contracts Review Act 1980 ("the Act"). Sections 7 and 9 of that Act provide as follows:

" 7 Principal relief

(a) it may decide to refuse to enforce any or all of the provisions of the contract,

(b) it may make an order declaring the contract void, in whole or in part,

(i) varies, or has the effect of varying, the provisions of the land instrument, or

(2) Where the Court makes an order under subsection (1) (b) or (c), the declaration or variation shall have effect as from the time when the contract was made or (as to the whole or any part or parts of the contract) from some other time or times as specified in the order.

(3) The operation of this section is subject to the provisions of section 19.

9 Matters to be considered by Court

(a) compliance with any or all of the provisions of the contract, or

(a) whether or not there was any material inequality in bargaining power between the parties to the contract,

(b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation,

(c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract,

(d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract,

(i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or

(i) the parties to the contract (other than a corporation), and

(g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed,

(h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act,

(i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect,

(i) by any other party to the contract,

(ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or

(k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and

(3) For the purposes of subsection (2), a person shall be deemed to have represented a party to a contract if the person represented the party, or assisted the party to a significant degree, in negotiations prior to or at the time the contract was made.

(4) In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made.

51 The defendant submitted that the lease was unjust in the circumstances relating to it at the time it was made and that it should be declared void, at least in part, or varied to the extent of the special conditions. That contention was supported by the following propositions, which relate to the terms of individual special conditions and how they operate adversely to affect the defendant in ways wholly removed from what might ordinarily be considered to be his obligations as a lessor.

52 First, special condition 1 is an unfettered and apparently unrestricted acknowledgment by the defendant that the second cross defendant is beneficially entitled to two-thirds of the rent. Precisely why this should be so or where it comes from is completely unexplained. Standing alone, a special condition that substantially reduces the effective rent payable to the defendant is unjust. Not only is the special condition not reasonably necessary for the protection of the legitimate interests of the plaintiff, it operates in derogation of the true nature of the transaction and fundamentally alters the relationship of lessor and lessee that it was intended to create. It would undoubtedly be possible to describe it and its apparent purpose in terms considerably more critical of the plaintiff for whose naked advantage it was created.

53 Special condition 2 is no less extraordinary. It is predicated upon the subdivision of the property in some way and at some time that is not specified. Even so, the special condition appears in an unexplained way to assign to the ACN Trust the ownership of portion of the land when the subdivision comes into effect at an equally unspecified time in the future. The special condition is so curious that it is difficult to know how the plaintiff could ever have explained it to the defendant had he chosen to do so.

54 The terms of special condition 3 are not as difficult to understand as much as its place in the scheme of a residential tenancy. It operates as a mechanism by which the plaintiff can reduce or eliminate his obligation to pay rent by performance of work for the defendant at the property as a caretaker/manager. In one sense the condition is unexceptionable standing alone. Its significance appears to derive more from its place in what amounts to a suite of special conditions that provides several bases to the plaintiff for practical purposes to avoid the payment of rent.

55 Special condition 4 is as silent about the proposed subdivision as special condition 2. It assumes some agreement or arrangement that the property will be subdivided but gives no detail of it. It purports to provide just another way in which the plaintiff can perform unspecified work at an hourly rate that again allows him to avoid the payment of rent.

56 Special condition 5 is almost incomprehensible. It is probably so vague and uncertain as to be unenforceable. It is difficult, if not impossible, to comprehend what is meant by a "right . . . to all manner of building work on the premises and the grounds". It appears to assume an entitlement to demolish structures upon the property but does not say so in terms. It seems to contemplate the construction of "additions and new buildings and structures" but gives no indication of how or by whom or at whose cost these works will be performed, even though they are "to be at the sole discretion" of the plaintiff. The sentence that says that the tenant shall "as against the ACN Trust be entitled to a rental rebate of $50,000 for the cost of such work" is nothing less than nonsensical. The balance of the special condition is no better. It is also in direct conflict with the terms of printed clause 14 of the lease.

57 Special condition 6 is no more or less than a further provision aimed at reducing or eliminating the real obligation of the plaintiff ever to pay rent.

58 I have already referred to special condition 7. It is most unusual to find the grant of a power of attorney by a lessor to his tenant in any circumstances, but especially one expressed to be "for the purposes of [the] tenancy and the above clauses where necessary or convenient". I consider that its inclusion in the lease was just another attempt by the plaintiff to wrest control of the property from the defendant in a way that effectively neutralised the performance by the plaintiff of the only onerous obligation imposed on him by the lease.

59 Special condition 8 is also most unusual. It is in direct conflict with the terms of printed clause 21 of the lease. It is also in conflict with an unnumbered clause of the lease that provides that additional terms may be included in the lease if they do not conflict, among other things, with its standard terms. No attention to this inconsistency is evident elsewhere in the lease.

60 Special conditions 9 and 10 are also probably in conflict with clauses of the printed lease but are inconsequential in the scheme of things and require no further attention. Special condition 11 is not in conflict with the printed lease but is clear enough and is not unjust.

61 Special condition 12 is in a completely different category. To start with, the condition is uncertain and probably unenforceable for that reason alone. Significantly, however, the special condition would appear to give to the plaintiff the right to claim from the defendant the cost of work performed by the plaintiff in accordance with special conditions 3, 4 and 5 "as a debt due and payable" even though the plaintiff had the right under those special conditions to a rebate for the value of such work. There is no provision that regulates the relationship between the circumstances when the rebate is payable and when the cost of the work is recoverable. There is no definition of the expression "the value of any work done" and there is no mechanism for determining what that value might be. There is a potential for what is in effect a double counting to the significant disadvantage of the defendant. The special condition is definitively unjust.

62 Special condition 13 requires no comment.

63 The evidence before me has revealed that for whatever reason the plaintiff has never paid rent to the defendant. There has never been any proper reconciliation or accounting by the plaintiff to the defendant for the purposes of calculating any claim for a rebate of rent for work done or services provided. These are matters to which I am permitted to have regard in accordance with s 9(5) of the Act.

64 There is in my view no doubt in any event that the special conditions of the lease impose conditions that are unreasonably difficult to comply with and are not reasonably necessary for the protection of the legitimate interests of either party to the contract. The special conditions and their practical legal effect were also never explained to the defendant. In my view some of them were in any event inexplicable and the defendant could not have been expected to understand them even if they had been "explained". The defendant had no independent legal or other advice about the special conditions. The commercial setting of the contract as a lease of residential premises was in contrast to the unnecessarily extensive and wide ranging nature of most of the special conditions.

65 In my opinion all of the special conditions apart from special conditions 9, 10, 11 and 13 amount to provisions of a contract that were unjust in the circumstances relating to the lease at the time it was made. The defendant is entitled to an order pursuant to s 7(1) of the Act. I shall hear the parties on the question of whether the appropriate order to be made in the circumstances is an order under s 7(1)(a), (b) or (c).

The printed form lease

66 The balance of the lease terms consist in the standard Residential Tenancy Agreement printed form together with the handwritten additions to which earlier reference has been made. Only some of those terms require consideration in the context of whether or not the contract was unjust.

67 The defendant denies that he knew that the ACN Trust had been added by the plaintiff as a tenant under the lease. Whether he did or not, there appears to be nothing of consequence that flows from that fact, particularly when the special conditions are disregarded. The addition of the extra tenant did not create any disadvantageous practical or legal effect or result for the defendant and can be put aside for present purposes.

68 The rent clause provided for postponement of the payment of rent for a period of seven months from commencement. This was on the face of the lease in contradiction of the plaintiff's obligation to pay rent in advance on the first day of every six-month period. On one view, those provisions operated together to create an obligation upon the plaintiff to pay rent in arrears having regard to the commencement of the term of the lease on 30 June 2003 but in full for the relevant period once payments commenced. In the events that occurred, no rent was ever paid so that whatever unfairness the clause may have produced in theory was overtaken by practical considerations of another order. When one has regard to the terms of s 9(1) of the Act it is clear that, having regard to all the circumstances of the case, including the plaintiff's non-compliance with – indeed, his total disregard for – his obligation to pay rent, the curious wording of the rent clause in the lease has inflicted no particular injustice upon the defendant at all.

69 The only other matter requiring consideration is the fact that there is no clause describing the way in which any renewal of the lease by the plaintiff is or was to be effected. There is evidence that the plaintiff sent a letter during the currency of the first three-year term of the lease purporting to renew it for a further three-year term. The defendant never took any action to terminate the lease upon the basis that the plaintiff's renewal was ineffective and the issue has achieved no particular significance in the proceedings before me. There is no injustice that is apparent from these circumstances. The same can be said of the fact that the term of the lease was expressed to commence at a date well after the date it was executed.

70 In all of these circumstances it is my opinion that the lease, severed from the operation or effect of the nine special conditions to which I have earlier referred, was not unjust in the circumstances relating to it at the time it was made.

The balance of the cross claim

71 Having regard to the terms of the defendant's written submissions, only two other propositions were advanced. First, that the plaintiff was in breach of his fiduciary obligations to the defendant as his solicitor and that he acted in breach of those obligations in preferring his own interests to those of his client. Having regard to the view that I have formed with respect to the enforceability of the lease, however, there is no discernible loss that has been occasioned to the defendant as a consequence of any breach of fiduciary duty by the plaintiff that is not otherwise met by the defendant's ability to enforce the provisions of the lease according to its terms. In other words, if the lease were wholly set aside the plaintiff would presumably be left to enforce a remedy for mesne profits or possibly damages for use and occupation, with some potentially attendant uncertainties. In contrast, if the lease remains on foot the defendant's entitlement to rent, which the plaintiff acknowledges has never been paid and which is uncontroversially calculable, is unarguable. Moreover, if the plaintiff fails to pay the rent that is due he will likely be in fundamental breach of that lease, if he has not otherwise repudiated it by his conduct. These matters may be important considerations in any claim for possession that the defendant may commence.

72 Secondly, the defendant contends that the plaintiff was guilty of undue influence and that the plaintiff has not rebutted the presumption in favour of such a contention, having regard to the then existing relationship of solicitor and client. In my opinion, having regard to the unfortunate history of litigation between the plaintiff and the defendant and the matters to which I have just referred, I would decline to make orders consequent upon a finding of undue influence. The defendant would in my opinion be in no better position, and in all likelihood would be in a worse position, if the lease were set aside than if it were left to be performed according to its now reduced terms. This approach is also strongly suggested when one has regard to the overriding purpose.

Miscellaneous

73 I have earlier referred to the fact that the plaintiff and the defendant had been in a relationship at times and from time to time from about 1995. The evidence before me did not describe that relationship in detail or the periods when it was amicable or the times when it was not. In most cases the existence of such a relationship or the particulars of it would be and should be irrelevant and unimportant. There is not, and should not be, anything remarkable about this. However, the parties for their own reasons would appear to have chosen to quarantine or to limit the amount of information that I was given about the relationship. This would ordinarily be of little importance but in the particular circumstances of this case it had the collateral result that considerable evidence of potential benefit to me in reaching a decision in this case was unavailable. For example, the level of trust and reliance or mistrust and suspicion that may have existed at the time of the important events in these proceedings might have been to some extent informed by such material. Accordingly, in the events that have occurred, in coming to my decision I have made no assumptions and I have drawn no inferences in favour of or against either party based upon the existence or the state of their relationship at any particular time.

Conclusions

74 It follows that I find that the lease remains on foot subject to its modification to account for the offending special conditions. I would not in the circumstances of the case be prepared to grant the plaintiff an injunction in the terms that he seeks but would instead leave the parties to their respective rights under the lease. The parties should have an opportunity to consider these reasons and to take such steps as they may be advised having regard to the conclusions I have formed. To that end I propose to stand this matter over to some suitable date approximately four weeks hence with an expectation that the parties may give effect to the practical realities of my decision without the need for further contested litigation. I will hear the parties on the question of costs in those circumstances at the same time when I will also invite them to bring in short minutes of order to reflect my decision.

75 Accordingly, I would propose the following orders:

1. Summons dismissed.

2. Declare that the lease dated 31 July 2001 made between the plaintiff and the defendant is in part unjust within the meaning of s 7(1) Contracts Review Act 1980 .

3. Direct the parties to bring in short minutes of order.

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Citations

Adamson v Ede [2008] NSWSC 1143

Most Recent Citation

Adamson v Ede [2009] NSWCA 403

Cases Citing This Decision

1

Adamson v Ede [2009] NSWCA 403

Cases Cited

2

Statutory Material Cited

1

Adamson v Ede [2007] NSWSC 829

ACN 097 590 817 Pty Ltd as Trustee of the ACN Trust v Ede;Adamson v Ede [2007] NSWSC 1384

CITATION:	Adamson v Ede [2008] NSWSC 1143
HEARING DATE(S):	20, 21 and 22 October 2008
JUDGMENT DATE :	31 October 2008
JUDGMENT OF:	Harrison J
DECISION:	Parties to bring in short minutes to reflect the orders proposed at par [75].
CATCHWORDS:	LEASES – claim by tenant for injunction to restrain landlord from proceeding to recover possession of rural residential premises – relationship of solicitor and client between tenant and landlord - cross claim by landlord to set aside lease as unjust under the Contracts Review Act 1980 or as procured through breach of fiduciary duty or undue influence – special conditions prepared by tenant purporting to give ownership of part of property to him and otherwise rendering the obligation to pay rent illusory – special conditions unjust within s 7(1) of the Act – balance of lease enforceable according to its terms.
LEGISLATION CITED:	Contracts Review Act 1980
CATEGORY:	Principal judgment
PARTIES:	Christopher Michael Adamson (Plaintiff) Kenneth John Ede (Defendant)
FILE NUMBER(S):	SC 11862 of 2008
COUNSEL:	G A Sirtes SC (Defendant)
SOLICITORS:	In person (Plaintiff) Horowitz & Bilinksy (Defendant)