Blythe v Northwood

[2005] NSWCA 221

Reported Decision: 63 NSWLR 531

Court of Appeal

CITATION:	BLYTHE v NORTHWOOD [2005] NSWCA 221
HEARING DATE(S):	14, 15 December 2004
JUDGMENT DATE:	8 July 2005
JUDGMENT OF:	Mason P at 1; Giles JA at 208; Bryson JA at 209
DECISION:	Appeal dismissed with costs

CATCHWORDS:	EQUITY - fiduciary duty of solicitor - execution of mortgage - conflict of interest - duty of disclosure - benefit from transaction - liability to account for unauthorised benefit - knowledge of circumstances giving rise to conflict. (D)
LEGISLATION CITED:	Fair Trading Act 1997
CASES CITED:	Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1 Bendigo Central Freezing and Fertiliser Co v Cunningham [1919] VLR 387 Birtchnell v Equity Trustees Executors and Agency Co Ltd (1929) 42 CLR 384 Boston Deep Sea Fishing and Ice Co v Ansell (1888) 39 Ch D 389 Breen v Williams (1996) 186 CLR 71 Chan v Zachariah (1984) 154 CLR 178 Clark Boyce v Mouat [1994] 1 AC 428 Eden v Ridsdales Railway Lamp and Lighting Co (1889) 23 QBD 368 Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 Keech v Sandford (1726) Sel Cas Ch 61; 25 ER 223 Maguire v Makaronis (1997) 188 CLR 449 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Phipps v Boardman [1967] AC 46 Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 Reading v Attorney General [1951] AC 507 Swindle v Harrison [1997] 4 All ER 705 Triffitt Nurseries v Salads Etectera Ltd [2000] 2 Lloyds Rep 74 Warman International Ltd v Dwyer (1995) 182 CLR 544 Wendt v Northwood [2004] NSWSC 23 Youyang Pty Ltd v Minter Ellison (2003) 212 CLR 484
PARTIES:	Hetty BLYTHE Kenneth Edward NORTHWOOD
FILE NUMBER(S):	CA 40284/04
COUNSEL:	Appellant: J C Kelly SC/ S A Benson Respondent: S D Robb QC
SOLICITORS:	Appellant: Kenneally & Co, Oatlands Respondent: Acuiti Legal

LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S):	SC 20172/00
LOWER COURT JUDICIAL OFFICER:	Shaw J

CA 40284/2004
SC 20172/2000

MASON P
GILES JA
BRYSON JA

Friday 8 July 2005

Hetty BLYTHE v Kenneth Edward NORTHWOOD

BACKGROUND

The appellant is the executrix of the estate of Roy Wendt (the deceased). The deceased executed a mortgage over his property, in relation to which the defendant/respondent acted as the deceased’s solicitor. The deceased on-lent the proceeds of the mortgage to a company in which the defendant held certain positions (ACG). This money was partly used to repay debts owed by the company to the defendant. The company subsequently went into liquidation. The plaintiff alleged that the defendant had knowingly profited from his retainer and claimed a breach of s42 Fair Trading Act 1997.

At trial, the defendant was acquitted of the allegations of knowingly profiting from his retainer and the Fair Trading Act claim was dismissed. The trial judge also dismissed the deceased’s claim for equitable compensation and/or an account of profits based on breach of fiduciary obligation by…