Application by Gainer Associates Pty Ltd - [2024] NSWSC 1437

Supreme Court

New South Wales

Medium Neutral Citation: Application by Gainer Associates Pty Ltd [2024] NSWSC 1437
Hearing dates: 11 November 2024
Date of orders: 11 November 2024
Decision date: 12 November 2024
Jurisdiction: Equity
Before: Kunc J
Decision:
Judicial advice given that trustee justified in paying trust assets to estate of the late Gail Thelen

Catchwords:
EQUITY — Trusts and trustees — Judicial advice — Lost trust deed — Express trust fails for uncertainty — Assets held subject to resulting trust

Legislation Cited:
Trustee Act 1925 (NSW) s 63

Cases Cited:
Application of DEK Technologies Pty Ltd as trustee for DEK Technologies Unit Trust & Others [2023] NSWSC 544
Clarke v Hilton (1866) LR 2 Eq 810
In the application of Brailey Holdings Pty Ltd (ACN 001190441) [2018] NSWSC 1493
Vanta Pty Ltd v Mantovani (2023) 72 VR 19; [2023] VSCA 53

Category: Principal judgment
Parties: Gainer Associates Pty Ltd (Plaintiff)
Representation: Counsel: A Cheshire SC (Plaintiff)
Solicitors: Carroll & O’Dea (Plaintiff)

File Number(s): 2024/362510

JUDGMENT

Summary

This is an application for judicial advice pursuant to s 63 of the Trustee Act 1925 (NSW) (TA) by the plaintiff trustee Gainer Associates Pty Ltd.
The following facts are not in doubt:

Gainer is the trustee of the Werner Thelen Family Trust;

The late Werner Thelen and his late wife Gail Thelen were beneficiaries of the Trust (and to whom I shall refer without disrespect by their given names);

Gail survived Werner and was the sole beneficiary of Werner’s estate;

The trust deed constituting the Trust has been lost.

Gainer brings this application because while the TA and the general law may supply some terms of the Trust, there is no evidence to enable Gainer or the Court to be certain about who, other than Werner and Gail, are beneficiaries of the Trust, when the Court is satisfied the trust deed must have specified other beneficiaries. In these circumstances, the Court concluded that the Trust had failed for uncertainty and gave the judicial advice set out in [30] below about how Gainer would be justified in dealing with the Trust’s assets. These are the reasons for that advice.
The Court acknowledges the considerable assistance it has received from the written opinion of Mr A Cheshire of Senior Counsel, which was admitted into evidence, and from his submissions to the Court on behalf of Gainer.

Facts

Gainer was registered on 15 April 1982, its memorandum and articles of association having been executed on 10 March 1982. Gail and Werner were Gainer’s sole directors and shareholders.
The best evidence available about the formalities of the Trust appears from documents creating a fixed and floating charge in favour of the Bank of Western Australia by Gainer and executed by Werner and Gail on 23 April 2001. The charge is expressed to be given by Gainer “in its own capacity and as trustee of the Werner Thelen Family Trust” and includes these particulars:

“Date of deed creating trust (including variations): 1…

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.

Continue reading Application by Gainer Associates Pty Ltd

Details

AGLC: Application by Gainer Associates Pty Ltd [2024] NSWSC 1437
Case: [2024] NSWSC 1437
Decision Date: 12 November 2024

CaseChat Overview and Summary

The case involved Gainer Associates Pty Ltd, which sought judicial advice regarding the disposition of assets following the loss of a trust deed. The dispute centred on whether the assets were held under an express trust or if they should be treated as held under a resulting trust. The matter was heard in the Supreme Court of Queensland.

The primary legal issue was whether an express trust had been validly created, or if the failure to locate the trust deed meant that the assets should be held under a resulting trust. The court needed to determine if the terms of the trust were sufficiently certain to create an express trust, or if the lack of documentation necessitated the imposition of a resulting trust.

The court found that the trust deed could not be located, and thus the express trust failed due to uncertainty. The court held that the assets were held on resulting trust for Gainer Associates Pty Ltd. This was because the trust deed could not be found, and the parties' intentions could not be clearly ascertained from other evidence. The court concluded that the assets were held for Gainer Associates Pty Ltd as the legal owner, subject to a resulting trust in the absence of a validly expressed trust.

The court ordered that the assets be held on resulting trust for Gainer Associates Pty Ltd. This means that Gainer Associates Pty Ltd is the legal owner of the assets, but holds them subject to a resulting trust, which will be determined by the court in the future proceedings.

Orders