Mattila v Gardner and Anor [2012] NTSC 76
PARTIES:MATTILA, Allan Michael Jorma
By his litigation guardian
TERESA LATZER
v
GARDNER, Kelvin
AND
GARDNER, Hydee Elanore
TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: SUPREME COURT OF THE NORTHERN TERRITORY EXERCISING TERRITORY JURISDICTION
FILE NO:106 of 2010 (21032189)
DELIVERED: 28 September 2012
HEARING DATES: 23 to 29 February and 1 & 2 March 2012
JUDGMENT OF: SOUTHWOOD J
CATCHWORDS:
BREACH OF TRUSTEE AND FIDUCIARY DUTIES – Power of attorney – plaintiff mentally retarded – first defendant sole signatory of cheque account – inadequate accounting – failure to keep records and provide proper accounts – order for account.
POWERS OF ATTORNEY ACT (NT) – Order for true and accurate records – plaintiff has right to an account – order for account.
LEASE AGREEMENT VOID FOR UNCERTAINTY AND IS UNENFORCEABLE – No term for payment or determination of rent – omission of essential term without any mechanism for determining the terms of the lease – essential terms of an agreement to lease usually are the parties, the premises, the term and the rent.
CLAIM OF UNDUE INFLUENCE IN SALE OF LAND – Relationship of trust and confidence – conflict of interest – plaintiff has cognitive difficulties – sum paid was manifestly inadequate consideration for the land – second defendant received very substantial benefit – failure to rebut presumption of undue influence – second defendant knew of relationship, plaintiff’s cognitive difficulties and sale manifestly to her advantage – no endeavour to ensure plaintiff received independent advice, second defendant fixed with notice of undue influence – claim of undue influence established – plaintiff did not exercise free will in transaction with second defendant.
NEGLIGENT SALE OF LAND – Plaintiff could not read or write, had no business experience and relied on first defendant for such dealings – defendant voluntarily assumed responsibility to sell the land – sale of land without valuation – reasonable standard of care would involve an analysis of recent comparative sales or obtaining advice from appropriately experienced and qualified real estate agent or valuer –negligence in sale of land resulting in loss sustained by plaintiff.
AGREEMENT TO LEASE UNENFORCEABLE – No evidence to establish the agreement to lease was partly written and partly oral – defendant indicated the written lease agreement contained all terms of the agreement – no evidence of oral discussions regarding repairs – as lease agreement void for uncertainty and is unenforceable, defendant’s claim for damages for future economic loss must fail.
CLAIM FOR QUANTUM MERUIT – Common ground between parties that work was undertaken and completed – work done at plaintiff’s request in anticipation of lease – no lease granted and lease agreement unenforceable – plaintiff benefitted as a result – defendant entitled to reasonable remuneration.
Powers of Attorney Act (NT) s 11
Booker Industries Pty Ltd v Wilson Park (Qld) Pty Ltd (1982) 149 CLR 600; Bridgewater v Leahy (1998) 194 CLR 457; Copperart Pty Ltd v Bayside Developments Pty Ltd (1996) 16…
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- AGLC
- Mattila v Gardner and Anor [2012] NTSC 76
- Case
- [2012] NTSC 76
- Decision Date
CaseChat Overview and Summary
The primary legal issues addressed by the court included whether Mr Gardner breached his fiduciary duties and whether the lease agreement was enforceable. Additionally, the court had to determine if Ms Hydee Gardner exerted undue influence over Mr Mattila in the sale of his land and whether Mr Gardner was negligent in the sale of the land. Another issue was whether Mr Gardner was entitled to quantum meruit for work done on Mr Mattila's property.
The court found that Mr Gardner did not adequately account for funds disbursed from a joint account, leading to an order for Mr Gardner to account to Mr Mattila for any misappropriated funds. The lease agreement was declared void for uncertainty because it lacked essential terms such as payment of rent and its determination. The court also ruled that Ms Hydee Gardner exerted undue influence over Mr Mattila in the sale of his land, as she knew of his cognitive difficulties and the manifestly inadequate consideration for the land. Furthermore, the court found Mr Gardner negligent in the sale of the land, resulting in a loss of $90,000 to Mr Mattila. Lastly, the court awarded Mr Gardner $124,000 for work done on Mr Mattila's property under a quantum meruit claim.
The court made several orders, including a judgment for Mr Mattila against Ms Hydee Gardner for the sum of $113,301.98 plus interest. Mr Mattila's claims for breach of trust and/or breach of fiduciary duty were dismissed. Mr Gardner was ordered to account to Mr Mattila for funds from the joint account. Judgment was entered in favour of Mr Mattila against Mr Gardner for $90,000 for the negligent sale of land. The lease agreement was declared void and unenforceable. Mr Gardner's claim for breach of contract was dismissed, and his claim for a constructive trust was also dismissed. Judgment was entered for Mr Gardner against Mr Mattila for $124,000 for quantum meruit. The court will hear further submissions regarding ancillary orders, interlocutory injunctions, caveats, and costs.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
I find that Mr Gardner was negligent in respect of the sale of the land at 60 Oxford Road and that his negligence resulted in Mr Mattila sustaining a loss of $90,000.00. Mr Gardner did not adequately review recent sales of equivalent blocks and he did not obtain appropriate advice about the value of the land.Mr Mattila’s claim for a declaration that the Lease Agreement was void for uncertainty In paragraph 21 of the Further Amended Statement of Claim Mr Mattila pleads that on or about 13 March 2006 Mr Mattila and Mr Gardner entered into a purported lease agreement in respect of the takeaway store and caravan park at 115 Oxford Road. He claims a declaration that the agreement is void for uncertainty in that it does not contain any term providing for payment of rent or for determining a rent. In paragraph 19 of his Further Amended Defence Mr Gardner admits that he and Mr Mattila entered into a lease agreement but says that the lease agreement is not void for uncertainty for the following reasons. (1) Mr Mattila entered the lease agreement with Mr Gardner. (2) Mr Mattila signed the lease agreement in the presence of an independent third party. (3) Mr Mattila had a full understanding of the document and rent was to be negotiated on opening of the shop and caravan park. (4) Mr Gardner did not have the power of attorney at the time the lease agreement was made. (5) Once Mr Mattila had completed the improvements and opened the shop and caravan park on the premises he would receive a constant stream of income from the rental and would retain the value of his expenditure in the unencumbered equity in the premises. (6) The agreement that rental payments would be calculated and made when the lease began and the premises were occupied, logically allowed for the rent to be properly quantified after the years of development, infrastructure and repairs had been completed, and the potential income from occupancy and shop trade could be properly assessed. The defence to this claim has no merit. The omission of an essential term, without any means of curing the omission except by the further agreement of the parties, will be fatal to the validity and enforceability of an agreement[6]. The essential terms that require the parties’ agreement will vary depending on the nature of the particular agreement.[7] In the case of a lease or an agreement to lease [emphasis added], the essential terms will usually be the parties, the premises, the term and the rent.[8] There is a well recognised exception to the requirement for an agreement on all essential terms. That is, where the agreement provides a mechanism for the determination of the omitted matter and the operation of that mechanism does not require the further agreement of the parties.[9] In this case there was neither an agreed rent nor an agreed mechanism for determining the rent. I have come to the conclusion that the Lease Agreement is void for uncertainty and is unenforceable. Mr Gardner’s counterclaims In his Amended Counterclaim Mr Gardner pleads seven causes of action or suits against Mr Mattila. First, there is a claim for breach of contract. Mr Gardner claims that Mr Mattila breached the Lease Agreement by abandoning the land at 115 Oxford Road, failing to complete the renovations and infrastructure to the property, and failing to provide a lease to Mr Gardner. Secondly, there is a claim for quantum meruit for the work that Mr Gardner performed exclusively for the betterment of Mr Mattila’s land at 115 Oxford Road from March 2006 to 30 June 2010. Thirdly, there is a claim for a constructive trust for money that Mr Gardner claims he spent on the works that were undertaken on the land at 115 Oxford Road, Berry Springs.Mr Gardner’s claim for breach of contract