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Olsen v Mentink

Olsen v Mentink

Case [2019] NSWSC 1299 27 September 2019

Unconscionable Conduct

Fiduciary Duty

Breach of Trust

Trusts & Equity

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Supreme Court

New South Wales

Medium Neutral Citation: Olsen v Mentink [2019] NSWSC 1299
Hearing dates: 29, 30, 31 July 2019, 1 August, 29 and 30 August, further submissions 4 September 2019
Decision date: 27 September 2019
Jurisdiction: Equity - Expedition List
Before: Sackar J
Decision:
See [373]-[375]; [377]-[378]; [380]-[381]

Catchwords:
EQUITY- unconscionable conduct – special disadvantage- whether unconscientious advantage taken- undue influence
EQUITY- fiduciary duties- breach- rule in Barnes v Addy
Cases Cited: Barnes v Addy (1874) LR 9 Ch App 244
Blomley v Ryan (1956) 99 CLR 362
Bridgewater v Leahy (1998) 194 CLR 457
Farah Constructions v Say-Dee (2007) 230 CLR 89
Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25
Louth v Diprose (1992) 175 CLR 621
National Westminster Bank plc v Morgan [1985] AC 686
The Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447
Thorne v Kennedy (2017) 91 ALJR 1260; [2017] HCA 49
Texts Cited: JD Heydon, Heydon on Contracts (2019, Thomson Reuters)
Category: Principal judgment
Parties: John Henry Olsen (plaintiff)
Karen Howard Mentink (defendant)
Representation:
Counsel:
M T McCulloch SC, J Brown (plaintiff)
R Wilson SC (defendant)
Solicitors:
ClickLaw (plaintiff)
Bedson Legal (defendant)

File Number(s): 2019/118366

Judgement

In this matter the plaintiff (John Olsen), seeks a number of orders and declarations against the defendant (Karen Mentink), primarily concerning the alleged unconscionable procurement of monies of the estate of the late Katharine Howard-Olsen (the deceased).

Procedural background

The matter first came before me in the Expedition list in April 2019. The matter was granted expedition due to the plaintiff’s health and advanced years.
By statement of claim filed 16 April 2019 the plaintiff seeks judgement in the amount of $2,203,328.67 ($2.2 million) which was withdrawn by the deceased on 11 October 2016 and given to the defendant. The plaintiff claims that in the circumstances the defendant received the money by reason of undue influence or unconscionability over the deceased. In the alternative the plaintiff claimed that the deceased lacked capacity to transfer the funds.
The plaintiff makes an alternative claim that the $2.2 million was an asset of the partnership that operated as between the plaintiff and the deceased. It is claimed that the deceased breached her fiduciary duties by transferring the money, and the defendant knew of this breach and therefore holds the money on trust for the partnership. It later became apparent over the course of the hearing, that the plaintiff wished to make a claim under the second limb of Barnes v Addy (1874) LR 9 Ch App 244, that is that the defendant knowingly participated in the deceased’s breach of her fiduciary obligations (T450/16-23).
The plaintiff also further sought judgement in the amount of $130,390 which was comprised of a series of cheques drawn upon the A Casa Botanica Account in 2017. The plaintiff claims that the A Casa Botanica Account was a partnership asset, and the defendant was therefore required to account for monies misappropriated.
The…

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 Olsen v Mentink

Details

AGLC: Olsen v Mentink [2019] NSWSC 1299
Case: [2019] NSWSC 1299
Decision Date: 27 September 2019

CaseChat Overview and Summary

Olsen v Mentink is a case before the Australian courts, where the plaintiff, Olsen, sued Mentink, the defendant, for unconscionable conduct and breach of fiduciary duties. The plaintiff sought relief for an alleged unconscientious advantage taken by the defendant, citing a special disadvantage that the defendant exploited. The case was also concerned with whether the defendant breached fiduciary duties in a manner that could be addressed under the rule in Barnes v Addy.

The primary legal issues in this case were whether the defendant's actions constituted unconscionable conduct and whether there was a breach of fiduciary duties. The court had to determine if the defendant took unconscientious advantage of the plaintiff's special disadvantage and if this amounted to unconscionable conduct. Additionally, the court needed to decide whether the defendant's actions could be considered a breach of fiduciary duties under the rule in Barnes v Addy.

The court found that the defendant did not act unconscientiously, as there was no evidence of special disadvantage that the defendant exploited. Furthermore, the court held that the defendant did not breach any fiduciary duties, as there was no involvement in a breach of trust or knowing receipt of trust property. Consequently, the plaintiff's claims were dismissed. The court emphasised the need for clear evidence of special disadvantage and unconscientious conduct to establish a case for unconscionable conduct and held that the defendant's actions did not meet these criteria.

The court ordered that the plaintiff's claims be dismissed and that each party bear their own costs of the proceedings. This decision reinforces the importance of demonstrating special disadvantage and unconscientious conduct in cases of alleged unconscionable conduct, as well as the necessity of establishing a breach of fiduciary duties under the rule in Barnes v Addy.

Orders