Bayne v Blake [1906] HCA 54

Bayne v Blake [1906] HCA 54

The deed of indemnity could not be relied on by the sureties because, on the facts, a fiduciary (solicitor and client) relationship existed between the sureties and the beneficiaries, and there was no independent advice. Even if not, the direct relationship existed between the sureties and the administratrix, and the arrangement was made with the plaintiffs through her. Such a transaction, made without independent advice, cannot stand. The bond and the deed of indemnity were independent contracts, and impossibility of restoring the sureties to their original position does not prevent setting aside the indemnity. The indemnity is therefore void as against the plaintiffs and cannot be set...

Parties
Appellants/plaintiffs: Bayne and another; Respondents/defendants: Blake and another
Jurisdiction
Australia
Judgment Date
17 September 1906
Procedural Posture
Appeal / Judgment on Appeal From the Supreme Court of Victoria
Outcome
Judgment of the Supreme Court (Holroyd J.) reversed; deed of indemnity declared void as against the plaintiffs; action remitted for further hearing in the Supreme Court.
Legal Topics
Administration Bonds, Sureties, Indemnity, Fiduciary Relations, Solicitor and Client, Public Policy, Undue Influence
Equity Probate and Administration Administration Bonds Sureties Indemnity Fiduciary Relations Solicitor and Client Public Policy +1 more

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Parties

Bayne and another

Appellants/plaintiffs

Blake and another

Respondents/defendants

Procedural Posture

Appeal / Judgment on Appeal From the Supreme Court of Victoria

Legal Issues

  1. 1 Whether a deed of indemnity executed by beneficiaries in favour of sureties on an administration bond is void as against public policy or for want of independent advice under a fiduciary relationship between solicitor and client.
  2. 2 Whether the sureties can rely on the indemnity as a defence to liability under the administration bond.

Ratio Decidendi

The deed of indemnity could not be relied on by the sureties because, on the facts, a fiduciary (solicitor and client) relationship existed between the sureties and the beneficiaries, and there was no independent advice. Even if not, the direct relationship existed between the sureties and the administratrix, and the arrangement was made with the plaintiffs through her. Such a transaction, made without independent advice, cannot stand. The bond and the deed of indemnity were independent contracts, and impossibility of restoring the sureties to their original position does not prevent setting aside the indemnity. The indemnity is therefore void as against the plaintiffs and cannot be set...

Court Disposition

Judgment of the Supreme Court (Holroyd J.) reversed; deed of indemnity declared void as against the plaintiffs; action remitted for further hearing in the Supreme Court.

Orders

  • Declaration that the deed of indemnity of 20 May 1886 is void as against persons beneficially interested in the estate, except the administratrix; recovery on the bond limited to loss not consented to by those parties.
  • Defendants to pay costs of suit to hearing (excluding costs of the reference to the Full Court) and costs of appeal.