Settlement Agents Supervisory Board v Property Settlement Services Pty Ltd

The case before the court involved Settlement Agents Supervisory Board and Property Settlement Services Pty Ltd. The dispute centred on the conduct of a settlement agent acting for both a buyer and a seller in a real estate transaction within a retirement village. Directors of the settlement agent were also partners of a law firm that acted for the company managing the retirement village, which was in dispute with the sellers. The primary issues were whether the settlement agent owed any duty to the company managing the retirement village, whether there was a conflict between the duties owed to the company and those owed to the buyer and seller, and whether the tribunal's finding that the settlement agent ceased to act for the sellers in certain periods was unreasonable.

The court found that the relationship between a settlement agent and its principal(s) is a fiduciary one, requiring the settlement agent to avoid conflicts of interest and duty and to refrain from making unauthorised profits. The court emphasised that a conflict of interest and duty can arise from personal interests, whether pecuniary or non-pecuniary, direct or indirect. The court noted that the existence of a conflict does not require proof of the fiduciary acting with intent to advance personal interests. The court also determined that the conscious awareness of a conflict is not a necessary condition for a breach of the conflict rule, aligning with the broader interpretation of conflict of interest in fiduciary relationships.

The court held that the settlement agent did owe a duty to the company managing the retirement village, and there was a conflict between the duties owed to the company and those owed to the buyer and seller. The court found that the tribunal's conclusion that the settlement agent ceased to act for the sellers in certain periods was unreasonable, and thus granted leave to appeal and upheld the appeal.