Adkins v Adkins (No 2)

[2009] TASSC 49

[2009] TASSC 49

CITATION:            Adkins v Adkins  (No 2) [2009] TASSC 49

PARTIES:  ADKINS, Mary Helen
  v
  ADKINS, Colin Jeffrey

TITLE OF COURT:  SUPREME COURT OF TASMANIA
FILE NO:  268/2009
DELIVERED ON:  2 July 2009
DELIVERED AT:  Hobart
HEARING DATES:  2 & 3 June & 2 July 2009
JUDGMENT OF:  Holt AsJ

CATCHWORDS:

Real Property – Torrens Title – Caveats Against Dealings – Removal – Particular cases – Purchase contract unenforceable because of breach of fiduciary duty – Pointless to sustain the caveat.

Land Titles Act 1980 (Tas)

Aust Dig Real Property [1312]

REPRESENTATION:

Counsel:
           Applicant:  Mr T J Williams
           Respondent:  In person
Solicitors:
           Applicant:  Gunson Williams
           Respondent:  In person

Judgment Number:  [2009] TASSC 49
Number of paragraphs:  9

Serial No 49/2009
  File No 268/2009

MARY HELEN ADKINS v COLIN JEFFREY ADKINS

REASONS FOR JUDGMENT  HOLT AsJ
  2 July 2009

1. This is an application for an order removing a caveat.  Although the hearing proceeded over three days the total court time occupied was only about 3½ hours.  After the evidence had been presented on 3 June the hearing was adjourned to 2 July for submissions.  The respondent was forewarned that he would need to consider the rules of equity relating to fiduciary duties and the consequences of breach.  When the hearing resumed on 2 July the respondent, having heard the applicant's argument, requested a further adjournment for about two weeks to enable him to obtain legal assistance.  The adjournment application was opposed.  It was refused on the grounds that the respondent had had ample notice of the point to be raised and ample opportunity to obtain legal assistance.  It was pointed out that if the respondent's enquiries revealed that the claim the subject of the caveat might be viable he could issue proceedings and in the course of those proceedings apply for an interlocutory injunction if he thought that he might be able to persuade the Court that there was a serious question to be tried and that the balance of convenience warranted the grant of such relief.

1. The facts are these:

·Charles Adkins was the registered proprietor of the house and land at 6 Barton Avenue, Triabunna, comprised in Certificate of Title Volume 57352 Folio 3.

·By his Will made 9 June 1980 he bequeathed a life interest in the house to his wife, who is the applicant, with the residue to be divided equally between his three sons, one of whom is the respondent.

·On 6 June 2006 a document purporting to be an enduring Power of Attorney was registered with the Recorder of Titles.  The document named Charles Adkins as the donor of the power and the respondent as the donee. 

·On 12 June 2006 a contract for the sale of the Triabunna house was executed by the respondent on behalf of Charles Adkins.  The contract named the respondent and his wife, as the trustees of the Adkins Family Trust, as the purchaser and the respondent signed the contract as purchaser.

·The contract provided for a completion date in 2017 with a deposit of $600 to be paid by annual instalments of $100 each.

·On 7 July 2006 Charles Adkins died. 

·On 28 November 2007 the 1980 Will was admitted to Probate with the grant being given to his widow, the applicant.

·The applicant, as the personal representative of the estate, has been registered as the proprietor of the Triabunna house.

·On 4 March 2009 the respondent's caveat was registered.  In it the respondent claims on behalf of the Adkins Family Trust an interest as the purchaser under the contract of 12 June 2006.

1. There is no doubt that the respondent, as the agent of Charles Adkins under the Power of Attorney, had fiduciary obligations.  In Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41, Gibbs CJ said at 68:

"The archetype of a fiduciary is of course the trustee, but it is recognised by the decisions of the courts that there are other classes of persons who normally stand in a fiduciary relationship to one another – eg, … principal and agent …"

1. A breach of fiduciary duty will occur where, without informed consent, the fiduciary places himself or herself in a position of conflict.  In Breen v Williams (1996) 186 CLR 71, Gaudron and McHugh JJ said at 113:

"In this country, fiduciary obligations arise because a person has come under an obligation to act in another's interests.  As a result, equity imposes on the fiduciary proscriptive obligations – not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict."

1. Generally, a transaction entered into in breach of fiduciary duty will be unenforceable.  In Maguire v Makaronis (1997) 188 CLR 449, Brennan CJ, Gaudron J, McHugh J and Gummow J said at 467:

"This equity to a decree of rescission is immediately generated by the preceding breach of fiduciary duty. … The fiduciary duty forbade, in the circumstances of the case, entry by the appellants into the transaction of which the giving of the Mortgage was a central part.  There was no response by the appellants which showed, in the necessary sense, a fully informed consent.  Subject to the need for restitution, the Mortgage was liable to be set aside at the suit of the respondents."

1. There was no suggestion by the respondent that the transaction was entered into with the informed consent of Charles Adkins.  In fact, the respondent admitted, in the course of argument, that at the time of the contract, it was his belief that Charles Adkins lacked the mental capacity to enter into it himself.  It is clear that the applicant does not wish to proceed with the contract.  No basis upon which equity might deny her relief has been put forward. 

1. The position is as stated in Greater Pacific Investments v Australian National Industries (1996) 39 NSWLR 143. There McLelland A-JA, with whom Priestley JA and Meagher JA agreed, said at 153:

"In general, where there is a contract for the sale of property by A to B made in breach of a fiduciary duty owed to A by B (or by C in whose breach B knowingly participated), pursuant to which the legal title to the property has been transferred from A to B, the transaction is in equity voidable at the instance of A, who may (if necessary) obtain an order for rescission setting it aside."

1. There being no reason whatsoever to think that the contract on which the caveat is based might be enforceable, it is pointless to sustain the caveat.  Accordingly, there is no need for me to deal with other arguments which were put forward in support of the application.

1. There will be an order that Caveat C889497 registered on Certificate of Title Volume 57352  Folio 3 be removed.