MALKI v NICHOLAS & MANN REAL ESTATE PTY LTD [1998] NSWCA 285

MALKI v NICHOLAS & MANN REAL ESTATE PTY LTD SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

PRIESTLEY JA, HANDLEY JA and BEAZLEY JA 1 September 1998

[1998] NSWCA 285 BREACH OF FIDUCIARY DUTY

Priestley JA. This is an appeal from a judgment in the District Court dismissing a claim which, as pleaded, was based on breach of fiduciary duty in the following circumstances.

The plaintiff was the owner of premises at 566 Parramatta Road, Petersham. In 1993 he was trying to sell those premises. He obtained as his estate agent the first defendant, a company called Nicholas and Mann Real Estate Pty Limited. The person he dealt with in that company was Mr Taylor.

The second defendant became the purchaser of the property from the plaintiff. The shareholders and directors of the second defendant were Mr Taylor and his wife, and Mr Spisevski and his wife. The two wives were shareholders and directors of the first defendant, the estate agent. Mr Taylor's wife held the estate agency licence for the first defendant.

The premises were sold to the second defendant for what the trial judge found was a price of $175,000. Subsequent to the sale going through, theplaintiff learned of the relationship between the first and second defendants and commenced proceedings in which, after alleging breach of fiduciary duty, he claimed that as a consequence he had suffered loss and damage in the sum of $30,000, this figure being the difference between what he claimed was the sum of the sale price, $175,000, and the commission which he alleged was paid, of $5,000 and the true value of the property.

There was no dispute at the trial about the relationship between the first defendant and the second defendant, and the consequence of that relationship that the first defendant owed a number of fiduciary duties to the plaintiff.