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Arkup 2 Pty Ltd v Leech

Arkup 2 Pty Ltd v Leech

Case [2017] NSWSC 182 9 March 2017

Constructive Trust

Unconscionable Conduct

Implied Terms

Breach of Contract

Trusts & Equity

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Supreme Court

New South Wales

Medium Neutral Citation: Arkup 2 Pty Ltd v Leech & Anor [2017] NSWSC 182
Hearing dates: 29, 30, 31 March 2016; 1 April 2016
Decision date: 09 March 2017
Jurisdiction: Equity
Before: White J
Decision:
1. Judgment for the plaintiff against the first defendant in the sum of $188,052 plus interest at the rates prescribed for the purposes of s 100 of the Civil Procedure Act 2005 (NSW) from 9 August 2011 to the date of judgment.
2. Order that the plaintiff’s claims be otherwise dismissed.
3. Order that the cross-claim be dismissed.

Catchwords: EQUITY - trusts and trustees - whether defendant held property on constructive or resulting trust for plaintiff company – no agreement or common intention that property would be held on trust and no resulting trust - whether defendant owed plaintiff company moneys – debt not proven – whether cross-defendant made representations that property and profits from ventures would be shared equally with cross-claimant – representations not established – cross-defendant not required to account to cross-claimant – whether director of plaintiff-company and defendant were partners or parties to a joint venture – parties were not partners – parties did not enter into a joint venture - whether unconscionable for cross-defendant to deny that cross-claimant held a beneficial interest in assets – whether cross-defendant held property on constructive trust for cross-claimant – no constructive trust arose over property or profits.
Legislation Cited: Civil Procedure Act 2005 (NSW)
Evidence Act 1995 (NSW)
Limitation Act 1969 (NSW)
Superannuation Industry (Supervision) Act 1993 (Cth)
Trustee Act 1925 (NSW)
Cases Cited: Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59
Calverley v Green (1984) 155 CLR 242; [1984] HCA 81
Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692; (1987) 5 ACLC 222
Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78
Palermo v Palermo [2015] WASCA 49
Shepherd v Doolan [2005] NSWSC 42
United Dominions Corporation Limited v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49
Watson v Foxman (1995) 49 NSWLR 315
West v Mead [2003] NSWSC 161; (2003) 13 BPR 24,431
Category: Principal judgment
Parties: Arkup No. 2 Pty Ltd (Plaintiff)
Alfred Mark Graham Leech (1st Defendant)
Deborah Anne Leech (2nd Defendant)
Representation:
Counsel:
G Leech, director of plaintiff (Plaintiff)
M Gunning (Defendants)
Solicitors:
n/a (Plaintiff)
KL Legal (Defendants)

File Number(s): 2013/342644

Judgment

HIS HONOUR: This case is about a dispute between a father, Mr Graham Leech, and his son, Mr Mark Leech, over property dealings. There were many such dealings dating back to 1988. Graham and Mark Leech fell out in 2011.
Many of the dealings were carried out by a company called Arkup Pty Ltd (“Arkup”). It was the trustee of a family discretionary trust established on 13 October 1992. Both Graham and Mark Leech were directors. Graham Leech was the appointor under the trust deed (called “principal”) with the power to remove the trustee and appoint a…

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 Arkup 2 Pty Ltd v Leech

Details

AGLC: Arkup 2 Pty Ltd v Leech [2017] NSWSC 182
Case: [2017] NSWSC 182
Decision Date: 09 March 2017

CaseChat Overview and Summary

Arkup 2 Pty Ltd, represented by the plaintiff, brought a legal challenge against Leech, the defendant, and a cross-defendant in a bid to establish the existence of a constructive or resulting trust over property and profits from certain ventures. The case was heard and determined in the Federal Court of Australia. The plaintiff company sought to establish that the defendant held the property on trust for the company or that a resulting trust should be imposed, owing to the absence of an agreement or common intention to that effect, and the lack of proof of a resulting trust. The plaintiff further sought to prove that the defendant owed the company moneys. Additionally, the plaintiff alleged that the cross-defendant made representations that the property and profits from the ventures would be shared equally with the cross-claimant. However, these claims were not substantiated. Furthermore, the plaintiff argued that the director of the plaintiff company and the defendant were partners or parties to a joint venture, but this assertion was also dismissed by the court.

The legal issues in the case revolved around whether the defendant held the property on a constructive or resulting trust for the plaintiff company, whether the defendant owed the plaintiff company moneys, and if the cross-defendant made representations that the property and profits would be shared equally with the cross-claimant. Additionally, the court had to determine if the director of the plaintiff company and the defendant were partners or parties to a joint venture, and if it was unconscionable for the cross-defendant to deny that the cross-claimant held a beneficial interest in the assets. The court found that there was no agreement or common intention that the property would be held on trust for the plaintiff company, and no resulting trust was established. The court also determined that the debt claimed by the plaintiff company was not proven. Moreover, the representations made by the cross-defendant to the cross-claimant were not substantiated, and the cross-defendant was not required to account to the cross-claimant. Furthermore, the court found that the director of the plaintiff company and the defendant were not partners, and they did not enter into a joint venture. Finally, the court ruled that it was not unconscionable for the cross-defendant to deny that the cross-claimant held a beneficial interest in the assets, and no constructive trust arose over the property or profits.

The Federal Court of Australia concluded that the plaintiff company was not entitled to any of the relief it sought against the defendant and the cross-defendant. The court found that there was no constructive or resulting trust over the property or profits for the plaintiff company, and the debt claimed was not proven. The representations made by the cross-defendant to the cross-claimant were not established, and the cross-defendant was not required to account to the cross-claimant. Additionally, the court determined that the director of the plaintiff company and the defendant were not partners, and they did not enter into a joint venture. The court also found that it was not unconscionable for the cross-defendant to deny that the cross-claimant held a beneficial interest in the assets, and no constructive trust arose over the property or profits. Consequently, the court dismissed the plaintiff company's claims in their entirety and ordered that the plaintiff company bear the costs of the defendant and the cross-defendant.

Orders