Wicks v Bennett

The case of *Wicks v Bennett* involved an appeal to the High Court of Australia from the Supreme Court of New South Wales. The dispute concerned the sale of leasehold property that was subject to an unregistered agreement for a lease held by a partnership. One partner, Johnson, secretly purchased the freehold of this property and subsequently transferred it to another partner, Bennett, who then became the registered proprietor. Bennett later sold the property to Diplock. The original partnership, represented by Wicks and Nicholls, sought to enforce their unregistered interest in the leasehold property against Diplock and Bennett.

The primary legal issues before the High Court were whether the sale from Bennett to Diplock constituted fraud within the meaning of sections 42 and 43 of the *Real Property Act 1900* (NSW), thereby depriving Diplock of his status as a registered proprietor free from unregistered interests. Additionally, the court considered whether relief could be granted against Bennett for profits made from the sale, given his position as a partner and the alleged breach of fiduciary duty.

The majority of the High Court, comprising Knox C.J. and Rich J., held that the sale from Bennett to Diplock was not a sham and that Diplock's conduct did not amount to fraud under the *Real Property Act*. They reasoned that the evidence did not establish that the transaction was colourable, and Diplock's knowledge of the partnership's unregistered interest, while noted, was insufficient to constitute fraud as defined by section 43, which explicitly states that such knowledge alone does not amount to fraud. Higgins J. concurred on these points but dissented regarding relief against Bennett.

While the court found no grounds for relief against Diplock's executrix, Higgins J. concluded that Bennett, as a partner who had secretly purchased the partnership's leasehold land and profited from its sale, should be ordered to account for those profits to the partnership. However, the majority held that no such order should be made in the current proceedings, as the claim for relief against Bennett for an account of profits had not been properly raised or argued in the lower court, and they dismissed the appeal with costs, without prejudice to any further proceedings the plaintiffs might take against Bennett and Johnson.