Baba v Sheehan

Case [2021] NSWCA 58

Court of Appeal


Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: Baba v Sheehan [2021] NSWCA 58
Hearing dates: 20 November 2020
Date of orders: 15 April 2021
Decision date: 15 April 2021
Before: Brereton JA at [1];
Emmett AJA at [20];
Simpson AJA at [58]
Decision:

Order that the appeal be dismissed with costs.

Catchwords:

EQUITY — trusts and trustees — trust powers — powers of appointment — powers of removal — fraud on a power — intention — whether power exercised for a foreign or extraneous purpose

Legislation Cited:

Corporations Act 2001 (Cth), s 601AB

Cases Cited:

Austec Wagga Wagga Pty Ltd v Rarebreed Wagga Pty Ltd [2012] NSWSC 343

Australian Conservation Services Pty Ltd v Liladel Holdings Pty Ltd (2017) 12 ACTLR 124; [2017] ACTSC 162

Australian Securities and Investments Commission v Carey (No 6) (2006) 153 FCR 509; [2006] FCA 814

Baba v Sheehan [2020] NSWCA 361

Berger v Lysteron Pty Ltd [2012] VSC 95

Davidson v Davidson (1991) 8 Leg Rep SL 1

Duke of Portland v Topham (1864) 11 HLC 32; 11 ER 1242

El Sayed v El Hawach (2015) 88 NSWLR 214; [2015] NSWCA 26

Fitzwood Pty Ltd v Unique Goal Pty Ltd (in liq) [2001] FCA 1628; 188 ALR 566

Fitzwood Pty Ltd v Unique Goal Pty Ltd (in liq) [2002] FCAFC 285

Hancock v Rinehart [2015] NSWSC 646; 106 ACSR 207

Hillcrest (Ilford) Pty Ltd v Kingsford (Ilford) Pty Ltd (No 2) [2010] NSWSC 285; 4 ASTLR 233

In the Marriage of Ashton (1986) 11 Fam LR 457; FLC 91-777

In the Marriage of Goodwin (1990) 101 FLR 386; FLC 92-192

In the Marriage of K R and M I Davidson (No 2) (1990) 14 Fam LR 817; (1991) FLC ¶92-197

Mercanti v Mercanti [2015] WASC 297

Mercanti v Mercanti (2016) 50 WAR 495; [2016] WASCA 206

Mills v Mills (1938) 60 CLR 150; [1938] HCA 4

Montefiore v Guedalla (No 3) [1903] 2 Ch 723

Montevento Holdings Pty Ltd v Scaffidi (2012) 246 CLR 325; [2012] HCA 48

Pope v DRP Nominees Pty Ltd (1999) 74 SASR 78; [1999] SASC 337

Public Trustee v Smith [2008] NSWSC 397; 1 ASTLR 48

Rayner v NJ Sheaffe Pty Ltd [2010] NSWSC 810

Re Burton [1994] FCA 1146; 126 ALR 557

Re Christina Brown (1921) 22 SR (NSW) 90

Re Newen [1894] 2 Ch 297

Re Power’s Settlement Trusts [1951] Ch 1074

Re Skeats’ Settlement (1889) 42 Ch D 522

Scaffidi v Montevento Holdings Pty Ltd [2011] WASCA 146; 6 ASTLR 446

Schuhmacher v Emmerson [2013] QSC 205

Vatcher v Paull [1915] AC 372

Texts Cited:

PD Finn, Fiduciary Obligations (1977, Law Book Company Ltd)

Category:Principal judgment
Parties: Anna Monica Baba (First Appellant)
Mustafa Sedat Baba (Second Appellant)
Paul Sheehan (First Respondent)
Rijalu Pty Limited (Second Respondent)
ACN 121 894 479 Pty Limited (formerly Smart Street Optical Pty Limited) (Third Respondent) (Submitting Appearance)
Silktote Pty Limited (Fourth…

Continue reading Baba v Sheehan

Sign in free to access the full text

Details
AGLC
Baba v Sheehan [2021] NSWCA 58
Case
[2021] NSWCA 58
Decision Date

CaseChat Overview and Summary

The appeal concerned a dispute between the beneficiaries of a discretionary trust and the trustee, Mr. Sheehan. The beneficiaries, represented by Ms. Baba, alleged that Mr. Sheehan had acted in fraud of his powers as trustee by exercising a power of appointment for an improper purpose. The matter came before the Court of Appeal of New South Wales.

The central legal issue before the Court of Appeal was whether Mr. Sheehan's exercise of the power of appointment constituted a fraud on the power. This required the court to determine if the power had been exercised with an intention to achieve a purpose foreign to or outside the scope of the power conferred upon the trustee.

The Court of Appeal, in dismissing the appeal, found that the evidence did not establish that Mr. Sheehan had exercised the power of appointment for an improper or extraneous purpose. The judges applied the principles relating to fraud on a power, which require a demonstrable intention to benefit oneself or a third party in a manner not contemplated by the power, or to frustrate the purpose for which the power was granted. In this instance, the court was not satisfied that such an intention had been proven.

Consequently, the Court of Appeal ordered that the appeal be dismissed with costs.

Orders

Orders of the court

Order that the appeal be dismissed with costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.