Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Agusta Pty Ltd v Provident Capital Ltd [2012] NSWCA 26 Hearing dates: 1 February 2012 Decision date: 08 March 2012 Before: Campbell JA at [1]; Barrett JA at [2]; Sackville AJA at [95] Decision: 1. Appeal allowed.
2. Orders 3, 4, 6 and 7 made on 27 April 2011 by the Court below be set aside.
3. Order that the respondent take such steps as are within its power to bring about removal of the following notation from folio identifier 29/263860:
"AF597049 NOTE: NO DEALINGS TO BE REGISTERED. REFER ALL INQUIRIES TO LEG2. SEE LM220100868"
4. Order that the respondent pay the appellants' costs in the proceedings below and of the appeal.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: REAL PROPERTY - conveyancing - voluntary alienation to defraud creditors - transfer of land by judgment debtor - whether intent to defraud creditors by making execution against land impossible - PROCEDURE - judgments and orders - enforcement of judgments and orders - whether writ of execution may be enforced in respect of judgment debt of trustee - EQUITY - trusts and trustees - money judgment against trustee - trustee's right of indemnity and preferred beneficial interest in trust assets - subrogated position of trust creditors - protection of preferred beneficial interest from destruction by levy of execution Legislation Cited: Bankruptcy Act 1966 (Cth), ss 5, 116
Civil Procedure Act 2005, Part 8
Conveyancing Act 1919, s 37A
Real Property Act 1900, ss 12(1)(f), 42, 46C, 74F, 74H, 82, 105(1), 105(2), 105(3), 105A(1)(a), 105A(2), 105A(6), 105A(7)(a), 105A(9), 105B(1), 105B(2)
Trustee Act 1925, ss 12(4), 59
Uniform Civil Procedure Rules 2005, rule 39.20Cases Cited: Agusta Pty Ltd v Official Trustee in Bankruptcy [2008] NSWSC 685
Agusta Pty Ltd v Official Trustee in Bankruptcy [2009] NSWCA 129
Belar Pty Ltd v Mahaffey [1999] QCA 2; [2000] 1 Qd R 477
Black v Garnock [2007] HCA 31; (2007) 230 CLR 438
Bofinger v Kingsway Group Ltd [2009] HCA 44
Boscawen v Bajwa [1996] 1 WLR 328
Cannane v J Cannane Pty Ltd [1998] HCA 26; (1998) 192 CLR 557
Chief Commissioner of Stamp Duties v Buckle [1998] HCA 4; (1998) 192 CLR 226
CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53; (2005) 224 CLR 98
Freeman v Pope (1870) 5 Ch App 538
Gatsios Holdings Pty Ltd v Nick Kritharas Holdings Pty Ltd [2002] NSWCA 29; (2002) ATPR 41-864
General Credits Ltd v Tawilla Pty Ltd [1984] 1 Qd R 388
JA Pty Ltd v Jonco Holdings Pty Ltd [2000] NSWSC 147
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- Case
- [2012] NSWCA 26
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the Court of Appeal were whether a writ of execution could be enforced against trust property for a judgment debt owed by a trustee personally, and whether a transfer of land by a judgment debtor with the intent to defraud creditors, by making execution against the land impossible, was void. The court also considered the nature of a trustee's right of indemnity and preferred beneficial interest in trust assets, and the subrogated position of trust creditors.
The Court of Appeal held that a trustee's right of indemnity over trust assets is a proprietary right that is paramount to the beneficial interest of the beneficiaries. It reasoned that a trust creditor, who is subrogated to the trustee's right of indemnity, can enforce that right against the trust property. The court further determined that a voluntary alienation of property with the intent to defraud creditors is voidable at the instance of the defrauded creditor, but this principle did not apply to the facts as presented, as the trustee's right of indemnity was not extinguished by the transfer.
The appeal was allowed. The orders made by the Supreme Court on 27 April 2011 were set aside. The Court of Appeal ordered that the respondent take steps to remove a notation from the relevant folio identifier of the land and ordered that the respondent pay the appellants' costs of the proceedings below and of the appeal.
Orders
Orders of the court
1. Appeal allowed.
2. Orders 3, 4, 6 and 7 made on 27 April 2011 by the Court below be set aside.
3. Order that the respondent take such steps as are within its power to bring about removal of the following notation from folio identifier 29/263860:
"AF597049 NOTE: NO DEALINGS TO BE REGISTERED. REFER ALL INQUIRIES TO LEG2. SEE LM220100868"
4. Order that the respondent pay the appellants' costs in the proceedings below and of the appeal.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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