Simpson v Donnybrook Properties Pty Ltd

Case [2010] NSWCA 229


NEW SOUTH WALES COURT OF APPEAL

CITATION:
Simpson v Donnybrook Properties Pty Ltd [2010] NSWCA 229

FILE NUMBER(S):
2006/256929

HEARING DATE(S):
11 August 2010

JUDGMENT DATE:
9 September 2010

PARTIES:
Gregory Lane Simpson (Appellant/ Cross Respondent)
Donnybrook Properties Pty Ltd (First Respondent/First Cross Appellant)
William Diarmid Slater (Second Respondent/Second Cross Appellant)

JUDGMENT OF:
Hodgson JA Macfarlan JA Young JA   

LOWER COURT JURISDICTION:
Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):
SC 3014/06

LOWER COURT JUDICIAL OFFICER:
Rein J

LOWER COURT DATE OF DECISION:
11 December 2009

LOWER COURT MEDIUM NEUTRAL CITATION:
Mathas v Slater;  Donnybrook Properties Pty Ltd v Simpson [2009] NSWSC 1397

COUNSEL:
D F Jackson QC and J A C Potts (Appellant/Cross Respondent)
G C Lindsay SC and A J Paterson (Respondents/Cross Appellants)

SOLICITORS:
Eakin McCaffery Cox (Appellant/Cross Respondent)
Bellantonio & Rees (Respondents/Cross Appellants)

CATCHWORDS:
Contract- Loan agreement- whether appellant personally liable to repay loan- whether personal guarantee.  Equitable Compensation- interest- date of calculation- non-application of limitation period from date of payment- whether consistency required that the interest be calculated from the later date of the plaintiff's discovery of its loss.  Equity- Fiduciary duties- whether appellant accountant undertook to act in the interests of the respondents as their investment advisor at the relevant time- appellant made investment suggestions or advice relating to a transaction he was involved in- relationship of friendship- primary judge erred in inferring provision of investment advice.  Equity- Defences- limitation of actions- Limitation Act 1969- whether against conscience and unjust to apply limitation period by analogy calculated from date of investment.  Statutory Interpretation- Real Estate and Business Agents Act 1978 (WA) ss 4, 60- whether appellant was carrying on a "business" in respect of a real estate transaction- isolated one off deal relating to two parcels of land not "carrying on a business" within s 4- whether s 60 disentitles appellant from receiving "any commission, reward, or other valuable consideration in respect of his services"- unlicensed appellant without appointment in writing signed by respondents.

LEGISLATION CITED:
Civil Liability Act 2002, s 5D
Limitation Act 1969
Real Estate and Business Agents Act 1978 (WA), ss 4, 60

CATEGORY:
Principal judgment

CASES CITED:
ASIC v Citigroup Global Markets Australia Pty Limited (No 4) [2007] FCA 963; 160 FCR 35
Brickenden v London Loan & Savings Co [1934] 3 DLR 465 (PC)
Daly v Sydney Stock Exchange [1986] HCA 25; 160 CLR 371
Farrell v Bannister (1952) 52 SR (NSW) 73
Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; 156 CLR 41
Huat v Rintag Pty Ltd [2000] ANZ Conv Rep 2
Pavan v Ratnam (1996) 23 ACSR 214
Pilmer v Duke Group Ltd [2001] HCA 31; 207 CLR 165
Re Griffin; Ex parte Board of Trade (1890) 60 LJQB 235
Suttor v Gundowda Pty Ltd [1950] HCA 35; 81 CLR 418
Townsend v Roussety & Co (WA) Pty Ltd [2007] WASCA 40; 33 WAR 321
White v Illawarra Mutual Building Society Ltd [2002] NSWCA 164

TEXTS CITED:

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Details
AGLC
Simpson v Donnybrook Properties Pty Ltd [2010] NSWCA 229
Case
[2010] NSWCA 229
Decision Date

CaseChat Overview and Summary

The appeal concerned a dispute arising from a loan agreement and related investment advice. The appellant, Mr. Simpson, was an accountant who had provided advice to the respondents, who were seeking to recover a loan and compensation for alleged breaches of fiduciary duty and breaches of the *Real Estate and Business Agents Act 1978* (WA). The primary judge had found Mr. Simpson personally liable to repay the loan and awarded equitable compensation.

The court was required to determine whether Mr. Simpson was personally liable for the loan, whether he owed fiduciary duties to the respondents as an investment advisor, and whether his actions constituted carrying on a business under the *Real Estate and Business Agents Act 1978* (WA) such that he was disentitled from receiving remuneration. The court also considered the application of limitation periods to the respondents' claims for equitable compensation and interest.

The Court of Appeal allowed the appeal, finding that the primary judge erred in inferring that Mr. Simpson had undertaken to act as an investment advisor to the respondents. The court held that the relationship was one of friendship and that Mr. Simpson's suggestions or advice related to a transaction in which he was involved, rather than a general undertaking of investment advice. Furthermore, the court found that the isolated transaction concerning two parcels of land did not amount to "carrying on a business" within the meaning of s 4 of the *Real Estate and Business Agents Act 1978* (WA), and therefore s 60 of that Act did not disentitle Mr. Simpson from receiving remuneration.

Consequently, the Court of Appeal set aside the orders made by the primary judge, dismissed the respondents' claim against Mr. Simpson, and dismissed the cross-appeal. The court ordered that the respondents pay Mr. Simpson's costs of the appeal and the cross-appeal.

Orders

Orders of the court

(1) Appeal allowed.

(2) Orders 1 and 5 made by Rein J on 15 December 2009 be set aside.

(3) Order that the plaintiff's claim against the first defendant be dismissed.

(4) Order that the cross appeal be dismissed.

(5) Order that the plaintiff/first cross defendant and the second cross defendant pay the first defendant's/cross claimant's costs below.

(6) Order that the respondents/cross appellants pay the appellant's/cross respondent's costs of the appeal and the cross appeal.

(7) Order that, if eligible, the respondents have a certificate under the Suitors' Fund Act 1951 in respect of the costs of the 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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