Sweeney v Howard [2007] NSWSC 852

Reported Decision : (2007) NSW Conv R 56-192

New South Wales Supreme Court

CITATION : Sweeney v Howard [2007] NSWSC 852

HEARING DATE(S) : 20, 21, 22, 23, 25, 26, 27, 28, 30 March and 2, 3, 4 and 5 April 2007

JUDGMENT DATE : 8 August 2007

JURISDICTION : Equuity Division

JUDGMENT OF : Windeyer J at 1

DECISION : Held that:; 1) the first to third plaintiffs are not bound to pay to the defendant, nor do their interests in the mortgaged property secure, the principal sum above $7,910,000; and; 2) the fourth defendant is liable for the full principal sum under the mortgage and his interest in the mortgaged property secures this sum. ; Dismiss the statement of claim in relation to the $600,000. Judgment for possession for cross-claimant; balance of cross-claim dismissed.

CATCHWORDS : PRINCIPAL AND AGENT – Power of attorney – Strict construction of terms – Power to sell and mortgage does not include power to apply funds for benefit of agent - PRINCIPAL AND AGENT – Authority of agent – Scope of actual authority – Act of agent exclusively for benefit of agent not within scope of actual authority - EQUITY – Fiduciary duties – Recipient liability – Where recipient did not know of existence of fiduciary relationship – Knowledge of fiduciary relationship required for knowing receipt - CONTRACTS – Unjust contracts – Contracts Review Act – When contract "unjust" – Independent legal advice – Advice required to be independent of lender – Held not just to order relief against lender who did not know of solicitor's conflict of interest – Predatory conduct – Held not predatory conduct to know the borrower was at risk of default – Transaction for business purposes – Contracts Review Act not applicable

Contracts Review Act 1980; s6(2), s9(2)(h) Conveyancing Act 1919, s163B Pt 16 Dal Pont: Law of Agency 2001, paragraph 8.6 LEGISLATION CITED : Halsbury's Laws of Australia in Title 15 on Agency, Chapter 2 'Authority of the Agent' NSW Revised Professional Conduct Practice Rules (Solicitors Rules) Powers of Attorney Act 2003, s12 Real Property Act 1900 s57(2)(b)