Gardner v Mattila - [2015] NTCA 1

Gardner & Anor v Mattila [2015] NTCA 1
PARTIES:GARDNER, Kelvin and
GARDNER, Hydee Elanore

v

MATTILA, Allan Michael Jorma
By his litigation guardian
TERESA LATZER

TITLE OF COURT:  COURT OF APPEAL OF THE NORTHERN TERRITORY
JURISDICTION:  CIVIL APPEAL FROM THE SUPREME COURT EXERCISING TERRITORY JURISDICTION
FILE NO:AP 10 of 2012 (21032189)
DELIVERED:  20 FEBRUARY 2015
HEARING DATES:  8 APRIL 2014
JUDGMENT OF:  KELLY, BARR & HILEY JJ
APPEAL FROM:  SOUTHWOOD J
CATCHWORDS:

EVIDENCE – Witnesses – Conclusions capable of being drawn from evidence – Conclusions reached by the trial judge available on the evidence – Appeal dismissed
EQUITY – Fiduciary obligations – Duties of non-professional trustees exercising powers of investment – Trustee Act s 6 and s 7 – Duty to exercise the care, diligence and skill that a prudent person of business would exercise in managing the affairs of other people – Imprudent expenditure of money – Overcapitalisation of property – Breach of fiduciary obligations – Cross-appeal allowed
Trustee Act ss 6(1)(b), 7(1)(a), 7(1)(b), 7(1)(d)
Cohen v Cohen (1929) 42 CLR 91; DeVries v Australian National Railways Commission (1993) 177 CLR 472; Fox v Percy (2003) 214 CLR 118; Mattila v Gardner & Anor [2012] NTSC 76; Mattila v Gardner & Anor [2013] NTSC 32; Re Dawson (decd) [1966] 2 NSWLR 211, referred to.
Rae v Meek (1889) 14 App Cas 558; Re De Clifford’s (Lord) Estate [1900] 2 Ch 707, followed.
REPRESENTATION:
Counsel:
Appellant:A Wrenn
Respondent:  A Young
Solicitors:
Appellant:
Respondent:  Bradley Solicitors
Judgment category classification:    B
Number of pages:  23

IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Gardner & Anor v Mattila [2015] NTCA 1
No. AP 10 of 2012 (21032189)
BETWEEN:

KELVIN GARDNER and
HYDEE ELANORE GARDNER

Appellants

AND:

ALLAN MICHAEL JORMA MATTILA
By his litigation guardian
TERESA LATZER

Respondent

CORAM: KELLY, BARR & HILEY JJ
REASONS FOR JUDGMENT
(Delivered 20 February 2015)
THE COURT:
Background

The respondent, Mr Mattila was the plaintiff at first instance. He is the only child of Allan Jorma Mattila (“the deceased”), who died intestate on 17 September 2005. The deceased’s estate consisted of seven parcels of land respectively located at 60 Oxford Road, 100 Oxford Road, 110 Oxford Road, 115 Oxford Road, 120 Oxford Road, 111 Finn Road and 125 Finn Road, Berry Springs in the Northern Territory, some cash in the ANZ Bank, life insurance policies and sundry other items. Mr Mattila inherited the whole of his father’s estate in early 2006.
After Mr Mattila inherited his father’s estate he and the appellant Mr Gardner (who was the first defendant at first instance) made an agreement, recorded in a document headed “Lease Agreement”, to develop a takeaway store and caravan park on the land at 115 Oxford Road.
The Lease Agreement stated:
I Michael Mattila of 115 Oxford Road Berry Springs agree to lease to Kelvin Gardner the whole of the property known as Berry Springs Store and Berry Springs caravan Park, including all contents fixtures…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Gardner v Mattila

Details

AGLC: Gardner v Mattila [2015] NTCA 1
Case: [2015] NTCA 1
Decision Date: 20 FEBRUARY 2015

CaseChat Overview and Summary

The appeal before the court involved two parties, Gardner and Mattila, who were embroiled in a dispute concerning the management of property funds. The matter was heard in the Supreme Court of Victoria. The primary issue before the court was whether the trial judge's conclusions were supported by the evidence presented. Additionally, the court had to determine if the trustees breached their fiduciary obligations under the Trustee Act. The court was also required to address the issue of whether the trustees' actions constituted an imprudent expenditure of money and whether the cross-appeal should be allowed.

In evaluating the appeal, the court found that the conclusions reached by the trial judge were indeed supported by the evidence. The trustees, who were non-professional, had a duty to exercise the care, diligence, and skill that a prudent person of business would exercise in managing the affairs of others. The court determined that the trustees had breached their fiduciary obligations by making imprudent investments, leading to the overcapitalisation of the property. The court held that the trial judge's findings on these matters were valid and that the cross-appeal should be allowed. Consequently, the appeal was dismissed, and the cross-appeal was allowed.

The court ordered that the first appellant was to pay the respondent $300,000 as restitution for the moneys expended from the AMJ Mattila - Building Account in breach of the first appellant’s fiduciary duty to the respondent. Furthermore, the appellants were directed to pay the respondent's costs associated with both the appeal and the cross-appeal. This ruling underscored the importance of fiduciary duties in property management and the consequences of failing to adhere to prudent investment practices.

Orders

Orders of the court

(a) The appeal is dismissed.

(b) The cross appeal is allowed.

(c) The first appellant is to pay the respondent $300,000 by way of restitution of moneys expended from the AMJ Mattila - Building Account in breach of the first appellant’s fiduciary duty to the respondent.

(d) The appellants are to pay the respondent’s costs of and incidental to the appeal and the cross appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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