Pedersen v Larcombe & Anor [2008] NSWSC 1362

Pedersen v Larcombe & Anor [2008] NSWSC 1362

Mr Larcombe breached his fiduciary duty by failing to properly market the property, actively concealing its availability, preferring his own interest, offering purchase at an artificially low price, and misleading both the plaintiff and his own employer. Varinya Pty Ltd, controlled by Mr Larcombe, knowingly benefited from the breach and is liable to account for profits and equitable compensation. The plaintiff did not give fully informed consent. Compensation is measured by the difference between market value ($1.5M) and sale price ($880,200).

Parties
Plaintiff: Melville Roy Pedersen; First Defendant: Markus Edward Larcombe; Second Defendant: Varinya Pty Ltd
Jurisdiction
Australia
Judgment Date
18 December 2008
Procedural Posture
Civil / Principal Judgment
Outcome
Plaintiff entitled to declarations as sought, accounting of profits and equitable compensation; further orders to be made upon provision of short minutes.
Legal Topics
Fiduciary Duties, Self Dealing, Conflict of Interest, Real Estate Agents, Account of Profits, Equitable Compensation
Equity Property Law Fiduciary Duties Self Dealing Conflict of Interest Real Estate Agents Account of Profits Equitable Compensation

Case Brief

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Parties

Melville Roy Pedersen

Plaintiff

Markus Edward Larcombe

First Defendant

Varinya Pty Ltd

Second Defendant

Procedural Posture

Civil / Principal Judgment

Legal Issues

  1. 1 Whether Mr Larcombe breached his fiduciary duty as managing agent and agent for sale of Mr Pedersen's property
  2. 2 Whether Varinya Pty Ltd knowingly participated in the breach and is liable to account for profits and make equitable compensation
  3. 3 Whether the plaintiff gave informed consent to the agent's conduct

Ratio Decidendi

Mr Larcombe breached his fiduciary duty by failing to properly market the property, actively concealing its availability, preferring his own interest, offering purchase at an artificially low price, and misleading both the plaintiff and his own employer. Varinya Pty Ltd, controlled by Mr Larcombe, knowingly benefited from the breach and is liable to account for profits and equitable compensation. The plaintiff did not give fully informed consent. Compensation is measured by the difference between market value ($1.5M) and sale price ($880,200).

Court Disposition

Plaintiff entitled to declarations as sought, accounting of profits and equitable compensation; further orders to be made upon provision of short minutes.

Orders

  • Declarations that Mr Larcombe breached his fiduciary duty and Varinya knowingly assisted.
  • Order for account of profits in hands of Varinya Pty Ltd.