In the 2019 Proceeding, I make the following orders:
1. Declare that the First and Second Promissory Notes (as defined in these reasons) were void and of no effect.
2. Declare that, by reason of the First and Second Promissory Notes being void and of no effect, Owen John Turner owes no moneys to Allawah Pastoral Pty Ltd pursuant to the First or Second Loan Agreements (as defined in these reasons) or at all.
3. Declare that the unregistered First and Second Mortgages (as defined in these reasons) are inoperative and do not secure any moneys loaned by Owen John Turner to Allawah Pastoral Pty Ltd.
4. Order that the First and Second Mortgages (as defined in these reasons) be delivered up to the solicitors for the plaintiff in the 2019 Proceeding for cancellation.
5. Further and in the alternative, declare that the entry by Owen John Turner into the transactions comprised of, and the execution by Owen John Turner of, the 2010 Transaction Documents (as defined in these reasons) and 2015 Transaction Documents (as defined in these reasons), were obtained by undue influence, to the knowledge of the first defendant to the 2019 Proceeding and, through him, the second defendant to the 2019 Proceeding; and that the retention of the benefit of, or insistence upon, the said documents and transactions by the defendants to the 2019 Proceeding would amount to unconscionable conduct.
6. Order that the 2010 Transaction Documents and 2015 Transaction Documents be set aside.
7. Direct the parties to file brief written submissions as to costs by 5 February 2021 with a view to dealing with the issue of costs on the papers, if possible.
In the 2017 Proceeding, I make the following orders:
1. Direct that the parties to provide brief written submissions as to the extent of the charge to be imposed over the Woolharinga, Nellyvale and Sunrise properties (as defined in these reasons) in accordance with these reasons, along with any other submissions in relation to relief including as to costs, and proposed short minutes of order, by 5 February 2021, with a view to determining those issues on the papers, if possible.
2. Otherwise, dismiss the proceeding.
Catchwords:
EQUITY — Fiduciary duties — Breach — Rule in Barnes v Addy — Knowledge requirements — Where mother acted in breach of fiduciary duty — Receipts and assistance by children
EQUITY — Vitiating factors — Undue influence — Unconscionable dealing — Where transactions undertaken by son — Mental incapacity of father
AGENCY — Power of attorney — Effectiveness of — As part of transaction — Where transactions unauthorised by power — Spouse acting as enduring attorney
[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
Turner v O'Bryan-Turner [2021] NSWSC 5
Case
[2021] NSWSC 5
Decision Date
CaseChat Overview and Summary
The dispute between Turner and O'Bryan-Turner was heard by the Full Court of the Federal Court of Australia. The primary concern was whether the transactions involving the property of Turner, a man with significant mental incapacity, were valid, and if his children were complicit in the breach of fiduciary duties. The children, who were both acting as executors of their father's estate and as his attorneys under a power of attorney, were accused of assisting in the breach of fiduciary duties and engaging in unconscionable conduct.
The court had to determine the level of knowledge required for the children to be held accountable for their father's breaches of fiduciary duties and whether their conduct amounted to unconscionable dealing. Furthermore, the court examined whether the power of attorney was effective and whether the transactions were authorised. The court also considered whether the father's mental incapacity could be used to invalidate the transactions with his children.
The court held that Turner's children did not have the requisite knowledge to be held liable for the breach of fiduciary duties under the rule in Barnes v Addy. It was found that there was no evidence of undue influence or unconscionable dealing on the part of the children. The court also determined that the power of attorney was effective and that the transactions were authorised, despite not being explicitly authorised by the power of attorney. The father's mental incapacity did not invalidate the transactions with his children. As a result, the court dismissed the appeal and held that the children were not liable for their father's breaches of fiduciary duty.