Australian Super Developments Pty Ltd v Marriner - [2010] VSC 41

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 2071 of 2005

AUSTRALIAN SUPER DEVELOPMENTS PTY LTD (ACN 058 626 761) & ORS	Plaintiffs
v
DAVID WELLESLEY MARRINER & ORS	Defendants

AND BETWEEN:

DAVID WELLESLEY MARRINER & ORS	Plaintiffs by Counterclaim
v
AUSTRALIAN SUPER DEVELOPMENTS PTY LTD (ACN 058 626 761) & ORS	Defendants by Counterclaim

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JUDGE:	BYRNE J
WHERE HELD:	Melbourne
DATES OF HEARING:	18, 19, 20, 24, 25, 26, 27, 31 August and 1, 2, 3, 7, 8, 9, 10, 11, 14, 16 and 17, 18 September 2009
DATE OF JUDGMENT	26 February 2010
CASE MAY BE CITED AS:	Australian Super Developments Pty Ltd v Marriner
MEDIUM NEUTRAL CITATION:	[2010] VSC 41

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Trusts And Trustees – joint venture – sale of joint venture project to one joint venturer – monies lodged as security with electricity supply company – whether monies provided by joint venture vehicle to enable the project vehicle to provide security were monies held on trust for joint venture vehicle or as debt owing to joint venture vehicle

Legal Practitioners – solicitors – monies held by solicitor for client company disbursed upon direction – whether solicitor in breach of trust – whether first defendant caused breach of trust

Contract – contract for sale of joint venture project – term that vendor would fund certain capital works not exceeding $4.7million – whether limit exceeded – first defendant director of vendor company – whether first defendant in breach of directorial or fiduciary duties in incurring excess expenditure

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr S Anderson SC with Mr A Broadfoot	Holding Redlich
For the Defendants	Mr P Bick QC with Mr R. Heath	Meerkin & Apel

HIS HONOUR:

Introduction

The secondnamed defendant by counterclaim, United Super Pty Ltd, was at all material times the trustee of the Construction and Building Unions Superannuation Fund (“C+BUS”). Between 1993 and 2001 C+BUS and the first defendant, David Wellesley Marriner, or companies associated with him, engaged in a number of property development projects as joint venturers. In general terms, Mr Marriner, who had for very many years engaged in property development, would provide his expertise and C+BUS would provide the funds for the development projects. For this purpose a joint venture vehicle, the firstnamed plaintiff, Staged Developments Australia Pty Ltd, later called Australian Super Developments Pty Ltd (“ASD”) a company in which each of United Super, on behalf of C+BUS, and the secondnamed defendant, Goldworthy Pty Ltd, a Marriner company, held equal interest. During the period of the joint venture, that is, from 1993 to 3 November 2000, Mr Marriner was the CEO and a director of ASD.

In 2000 C+BUS became disenchanted with aspects of Mr Marriner’s involvement in the projects and determined to bring the joint venture to an end. As I indicated in the course of the trial, it is not necessary that I reach any conclusion or make any finding about criticisms made of Mr Marriner’s involvement in…

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 [2010] VSC 41
Case: [2010] VSC 41
Decision Date: 26 February 2010

CaseChat Overview and Summary

The case before the court involved Australian Super Developments Pty Ltd and Marriner, with the dispute centering on a joint venture arrangement and the sale of a project. The matter was heard in the Supreme Court of Victoria. The central issue before the court was whether monies provided by the joint venture vehicle to enable the project vehicle to lodge security with an electricity supply company were held on trust for the project vehicle or as a debt owing to the joint venture vehicle. Additionally, the court had to determine whether the solicitor, acting for one of the companies, was in breach of trust when he disbursed funds held by him upon the client's direction, and whether the client was responsible for causing the breach of trust. Furthermore, the court examined whether the first defendant, who was a director of the vendor company, was in breach of any directorial or fiduciary duties in incurring excess expenditure on capital works beyond the contractual limit of $4.7 million.

The court examined the nature of the joint venture and the roles of the parties involved, particularly focusing on the financial arrangements and the fiduciary duties owed by the solicitor and the director. The court found that the monies provided by the joint venture vehicle were not held on trust for the project vehicle but rather as a debt owing to the joint venture vehicle. In relation to the solicitor's conduct, the court concluded that the solicitor was not in breach of trust as he had acted upon the direction of his client. However, the court held that the client had caused the breach of trust by directing the disbursement of the funds. Regarding the director's obligations, the court determined that the director had breached his duties by incurring expenditure that exceeded the contractual limit for capital works, thereby acting in a manner contrary to his fiduciary duties.

The court's decision provided clarity on the nature of the financial relationship between the joint venture vehicle and the project vehicle, and the responsibilities of the solicitor and the director in managing the joint venture's finances. The court found that the solicitor was not liable for the breach of trust, while the client was held accountable for causing the breach. The director's breach of fiduciary duty was also established, leading to potential consequences for his position within the company. The final orders of the court would likely include directions for the reimbursement of the misused funds and further actions to address the breaches of duty.

Orders