1. Direct entry of judgment for the plaintiff against the first defendant in the sum of $553,152.73 plus interest at the rates prescribed for the purposes of s 100 of the Civil Procedure Act 2005 from 21 August 2009.
2. Order that the plaintiff's claims be otherwise dismissed.
Catchwords:
GIFTS - gifts inter vivos - gifts made under power of attorney - construction of s 163B of the Conveyancing Act 1919 - whether donee of power of attorney able to make gift to self - fiduciary obligations of attorney - meaning of attorney acting "on behalf of" donor of power - relationship between scope of attorney's authority and whether acts constitute a breach of attorney's obligations
GIFTS - gifts inter vivos - capacity of donor to make gift - effect of lack of capacity to make gift where donee unaware of lack of capacity
EQUITY - trusts and trustees - presumption of resulting trust where co-owners of property contribute to purchase price in proportions different from that in which legal title held - rebuttal of presumption
BANKING AND FINANCE - instruments - cheques - conversion of cheque
[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.
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AGLC
Perochinsky v Kirschner [2013] NSWSC 400
Case
[2013] NSWSC 400
Decision Date
CaseChat Overview and Summary
Perochinsky v Kirschner is a case concerning the construction of section 163B of the Conveyancing Act 1919 and its application to gifts made by a person acting under a power of attorney. The dispute was heard in the Supreme Court of New South Wales. The case involved the interpretation of the scope of the authority granted to an attorney under a power of attorney and the fiduciary obligations of the attorney in relation to gifts made by the donor. The central issue was whether the donee of a power of attorney could validly make a gift to themselves while acting under that power, and whether such an act would constitute a breach of the attorney's fiduciary obligations.
The court had to determine whether the attorney acted "on behalf of" the donor when making the gift to themselves, and if the scope of the attorney's authority included the power to make gifts to themselves. The court also examined the effect of the donor's lack of capacity to make the gift, particularly where the donee was unaware of the donor's incapacity. Additionally, the court considered the presumption of a resulting trust where co-owners of property contribute to the purchase price in different proportions than that in which legal title is held, and whether this presumption could be rebutted in the circumstances of the case.
The court found that the donee of a power of attorney could not validly make a gift to themselves while acting under that power, as it would constitute a breach of the attorney's fiduciary obligations. The court held that for an act to be considered as being made "on behalf of" the donor, the attorney must act in the best interests of the donor, and that making a gift to oneself is inherently contrary to this principle. The court also found that the presumption of a resulting trust could be rebutted if there was evidence of an intention to create a different proprietary interest. In this case, the court determined that there was no such evidence, and the presumption of a resulting trust applied. The final orders of the court were that the gift made by the attorney to themselves was invalid, and the property in question was held on resulting trust for the donor.