Application by Barry McMahon Nominees Pty Ltd - [2021] VSC 351

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S ECI 2020 03555

IN THE MATTER of the B.L. & K.M. McMAHON FAMILY TRUST

-and-

IN THE MATTER of an application pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 for the determination of questions arising in the execution of the trust and as to the composition of any class of persons having a beneficial interest in the property subject to the trust and pursuant to ss 63 and 63A of the Trustee Act 1958 (Vic)

APPLICATION BY:

BARRY McMAHON NOMINEES PTY LTD (ACN 005 155 662) as trustee for the B.L. & K.M. McMahon Family Trust

Plaintiff

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	9 December 2020
DATE OF JUDGMENT:	18 June 2021
CASE MAY BE CITED AS:	Application by Barry McMahon Nominees Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 351

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EVIDENCE – Whether original trust deed existed – Whether original trust deed not available – Contents of original trust deed – Admission of secondary evidence.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr P Bender	Dawes & Vary Riordan Pty Ltd

HER HONOUR:

Introduction

By originating motion filed 31 August 2020, Barry McMahon Nominees Pty Ltd (the ‘plaintiff’ or ‘trustee’) as trustee of the B.L. & K.M. McMahon Family Trust (the ‘trust’) seeks judicial advice in respect of a purportedly lost original trust deed (the ‘original deed’), pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).

Kathleen McMahon (‘Kathleen’) has been a director of the plaintiff since its registration on 28 January 1976. Kathleen was married to Barry McMahon (‘Barry’), who passed away in 2011. Kathleen and Barry have four children together — Julie Moyle (‘Julie’), Paul McMahon (‘Paul’), Michael McMahon (‘Michael’) and Rachel Williams (‘Rachel’) — and have ten grandchildren (the ‘grandchildren’).

In 1991, the plaintiff became the registered proprietor of three lots of property said to be assets of the trust: Lot 3, Lot 4 and Lot 5 on Plan of Subdivision 348572L[1] (together, the ‘properties’). The plaintiff seeks to distribute Lot 4 to Michael and in due course develop or sell of Lots 3 and 5 and distribute the proceeds.
[1]Being the land in Certificate of Title Volume 10311 Folio 589, Volume 10825 Folio 725 and Volume 10825 Folio 726, respectively.

Despite expansive searches, neither the original trust deed nor a copy has been located. There is, however, in existence a deed of variation dated 23 July 1997 (the ‘1997 deed’), which purports to recite some of the provisions of the original trust deed, including a power of amendment.

The plaintiff proposes to use the power of amendment to adopt a new trust deed by executing another deed of variation (the ‘proposed deed’) in order to address, amongst other things, duty and tax implications of the distributions.

Plaintiff’s application

The plaintiff seeks determination of the following questions:

(a) Does the plaintiff, as trustee…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] VSC 351
Decision Date: 18 June 2021

CaseChat Overview and Summary

Barry McMahon Nominees Pty Ltd applied to the court to determine the contents of an original trust deed, which was allegedly not available. The dispute arose from the need to ascertain the terms of the trust, which was critical to the resolution of broader legal issues between the parties. The case was heard in the Supreme Court of Victoria.

The central legal issue before the court was whether the original trust deed existed and, if it did not, whether secondary evidence could be admitted to establish its contents. The applicant argued that the original deed was lost or destroyed and could not be produced, while the opposing party contended that the absence of the original deed should preclude any reliance on secondary evidence. The court had to decide whether the loss or unavailability of the original deed justified the admission of secondary evidence to reconstruct its contents.

The court found that while the original trust deed was not available, the circumstances justified the admission of secondary evidence. The applicant demonstrated that the original deed had been lost or destroyed through no fault of the party seeking to rely on it. The court accepted that the secondary evidence provided a reliable and accurate representation of the original deed's contents. Consequently, the court ruled that the secondary evidence could be admitted to establish the terms of the trust. The court's decision hinged on the applicant's ability to show that the original deed was genuinely unavailable and that the secondary evidence was reliable.

The final orders of the court were that the secondary evidence provided by Barry McMahon Nominees Pty Ltd was admissible to determine the contents of the original trust deed. The court acknowledged that the loss or destruction of the original deed was not due to any negligence or wrongdoing on the part of the applicant. The court's decision facilitated the resolution of the broader legal issues by clarifying the terms of the trust.

Orders