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Australian Super Developments Pty Ltd v Marriner

Australian Super Developments Pty Ltd v Marriner

Case [2014] VSC 464 19 September 2014

Breach of Trust

Equitable Estoppel

Unconscionable Conduct

Trusts & Equity

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2005 2071

AUSTRALIAN SUPER DEVELOPMENTS PTY LTD (ACN 058 626 761)
Plaintiff
v
DAVID WELLESLEY MARRINER (AND OTHERS ACCORDING TO THE SCHEDULE ATTACHED)
Defendants

(BY ORIGINAL PROCEEDING)

DAVID WELLESLEY MARRINER
(AND OTHERS ACCORDING TO THE SCHEDULE ATTACHED)
Plaintiffs by Counterclaim
v
AUSTRALIAN SUPER DEVELOPMENTS PTY LTD (ACN 058 626 761)
(AND OTHERS ACCORDING TO THE SCHEDULE ATTACHED)
Defendants by Counterclaim

(BY COUNTERCLAIM)

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JUDGE:	SLOSS J
WHERE HELD:	Melbourne
DATES OF HEARING:	19, 20, 21, 29, 30 August, 2 September 2013
DATE OF JUDGMENT:	19 September 2014
CASE MAY BE CITED AS:	Australian Super Developments Pty Ltd v David Wellesley Marriner & Ors
MEDIUM NEUTRAL CITATION:	[2014] VSC 464

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TRUSTS AND TRUSTEES – joint venture – sale of joint venture project to one joint venturer - monies provided by joint venture vehicle were lodged as security with electricity supply company – before sale was completed bond monies were released to solicitor – Court of Appeal found that solicitor held bond monies on a ‘solicitor’s trust’ and that bond monies were disbursed by solicitor in breach of trust – Court of Appeal remitted issue of whether first defendant and or companies associated with him were liable for knowingly inducing or immediately procuring breach (or breaches) of trust – level of knowledge required for liability under principle in Eaves v Hickson

DEFENCES AND COUNTERCLAIMS – remitted by the Court of Appeal – common sub-stratum of facts for allegations of unconscionable conduct, misleading and deceptive conduct and estoppel – accounting entries were made to reflect the fact that bond monies lodged as security had been repaid – plaintiffs by counterclaim were unaware that bond monies debt was no longer in existence when sale and assignment took place – whether conduct of defendants by counterclaim was unconscionable – whether first plaintiff by counterclaim was under a ‘special disadvantage’ – whether defendants by counterclaim made representations about the assignment of bond monies debt – pleaded representations not made out – related counterclaim for estoppel also fails.

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APPEARANCES:

Counsel

Solicitors

For the Plaintiff and the Defendants by counterclaim

Mr N J O’Bryan AM SC
with

Mr A T Broadfoot

Holding Redlich

For the Defendant and the Plaintiffs by counterclaim

Mr P J Bick QC with

Mr R A Heath

Meerkin & Apel

Table of Contents

Paragraph
Introduction	[1]
Issues remitted by the Court of Appeal	[20]
Summary of conclusions	[23]
Factual narrative	[27]
Issues relating ASD’s claims	[230]
Are any of the findings of fact made by the original trial judge relevant, binding or to be regarded by the Court as having any significance at all for the determination of the remitted issues? (Issue (v))	[239]
When Wallace & Wallace received the third tranche bond monies, for whom did they hold them on trust? (Issue (i))	[251]
Whether Mr Marriner is liable for knowingly inducing or immediately procuring all or only some of the breaches of trust by…

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 Australian Super Developments Pty Ltd v Marriner

Details

AGLC: Australian Super Developments Pty Ltd v Marriner [2014] VSC 464
Case: [2014] VSC 464
Decision Date: 19 September 2014

CaseChat Overview and Summary

Australian Super Developments Pty Ltd and others (collectively referred to as the plaintiffs) were involved in a legal dispute against Marriner and others (the defendants). The case centered around the sale of a joint venture project and the handling of bond monies that had been lodged as security with an electricity supply company. The dispute escalated when the bond monies were released to a solicitor before the sale was finalised, leading to a finding by the Court of Appeal that the solicitor held these monies in breach of trust. The Court of Appeal also directed that the matter of whether the first defendant and companies associated with him were liable for knowingly inducing or immediately procuring the breach of trust should be reconsidered, particularly in relation to the requisite level of knowledge under the principle in Eaves v Hickson.

The primary legal issues the court had to address involved the nature of the trust held by the solicitor and the potential liability of the defendants for breaches of trust. Specifically, the court needed to determine if the solicitor held the bond monies in a fiduciary capacity and whether any of the defendants had knowledge of or were complicit in the solicitor's breach of trust. Additionally, the court had to examine the counterclaims brought by the plaintiffs, particularly whether the defendants' conduct amounted to unconscionable behaviour, misleading or deceptive conduct, and estoppel. The counterclaims were centred on the plaintiffs' unawareness that the bond monies debt had been repaid at the time of the sale and assignment.

In its reasoning, the Court of Appeal confirmed that the solicitor indeed held the bond monies in a fiduciary capacity, which constituted a breach of trust when the monies were disbursed. However, the Court of Appeal found that the requisite level of knowledge necessary to establish liability for knowingly inducing or procuring the breach of trust was not sufficiently demonstrated, necessitating a retrial of this issue. Regarding the counterclaims, the court held that the plaintiffs' claims of unconscionable conduct, misleading and deceptive conduct, and estoppel shared a common substratum of facts. The court ruled that the plaintiffs were unaware that the bond monies debt had been repaid, but the defendants' conduct did not meet the threshold for unconscionability. Furthermore, the court found that the plaintiffs did not have a 'special disadvantage' and that the pleaded representations about the assignment of the bond monies debt were not substantiated. Consequently, the related counterclaim for estoppel also failed.

The final orders of the court included the remand of the issue of liability for the breach of trust to be determined at a retrial, and the dismissal of the plaintiffs' counterclaims on the grounds of unconscionable conduct, misleading and deceptive conduct, and estoppel.

Orders