Bechara v Sotrip Pty Ltd - [2011] NSWSC 252

Supreme Court

New South Wales

Medium Neutral Citation: Bechara v Sotrip Pty Limited [2011] NSWSC 252
Hearing dates: 1 April 2011
Decision date: 01 April 2011
Jurisdiction: Equity Division - Corporations List
Before: Barrett J
Decision:
Declaratory relief (see paragraph 35)

Catchwords: TRUSTS AND TRUSTEES - whether company bought land as trustee - questions of fact - no matter of principle
Legislation Cited: Bankruptcy Act 1966 (Cth), s 58, s 154
Cases Cited: Farrar v Commissioner of Stamp Duties (1975) 5 ATR 364
Category: Interlocutory applications
Parties: Sotrip NSW Pty Limited - Applicant
Reliance Financial Services NSW Pty Ltd - Second Applicant
Sotrip Pty Limited - First Respondent
Stephen Baker as liquidator of Sotrip Pty Limited - Second Respondent
Buddy Bechara - Third Respondent
Robert Rafidi - Fourth Respondent
Representation: Counsel:
Mr R E Dubler SC/Mr D M Allen - First and Second Applicants
Mr K G Odgers - Fourth Respondent
Solicitors:
Proctor & Associates - First and Second Applicants
Wilkinson Building & Construction Lawyers - Fourth Respondent

File Number(s): 2006/254920

Judgment

The question in this case is whether a property in Queensland, sufficiently described for present purposes as "the Railway Street property", was at the time of its sale by Sotrip Pty Limited in 2008 part of the trust property subject to a deed of settlement of which Sotrip Pty Limited claims to have become the trustee in November 1998.

The present application is brought by Sotrip NSW Pty Limited and Reliance Financial Services Pty Limited. Their contention is that the Railway Street property was purchased by Sotrip Pty Limited as trustee of the settlement to which I have referred and that Sotrip NSW Pty Limited became trustee of the settlement in August 2009 in succession to Australian Currency Barter Exchange Pty Limited which had in turn replaced Sotrip Pty Limited as trustee in March 2006. The applicants seek declaratory relief accordingly.

The applicants say that each appointment of new trustee (first, Australian Currency Barter Exchange Pty Limited and later Sotrip NSW Pty Limited) was made in exercise of a power to appoint given by the trust instrument, which also provided that the replaced trustee must vest the trust property in the new trustee.

The applicants rely on a number of documents to which I shall come, together with the evidence of Sam Peter Cassaniti who was, at the time of the alleged establishment of the trust in 1998, an accountant practising in Liverpool. The trust ostensibly created by the deed of November 1998 was in the nature of a family discretionary trust for the benefit of Sam Peter Cassaniti and his family.

The contentions of the applicants are challenged by the fourth respondent, Mr Rafidi. Although he has not taken any positive step (by way of interlocutory process in the nature of cross claim) to claim an interest of his own in the Railway Street property, Mr Rafidi maintains that an oral arrangement to which he became party at the time of the purchase of the property caused…

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.

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Details

Case: [2011] NSWSC 252
Decision Date: 01 April 2011

CaseChat Overview and Summary

The case of Bechara v Sotrip Pty Ltd involved a dispute over whether a company, Sotrip Pty Ltd, had purchased land as a trustee for the benefit of another party, Bechara. The matter was heard in the Supreme Court of Victoria. The central issue before the court was whether Sotrip Pty Ltd had acted as a trustee for Bechara in relation to the purchase of certain land, and if so, whether this was a question of principle or a matter of fact.

The court had to determine whether the relationship between Sotrip Pty Ltd and Bechara amounted to a trust, particularly whether the company held the land on trust for Bechara's benefit. The court considered the evidence and arguments presented by both parties concerning the nature of their relationship and the circumstances surrounding the purchase of the land. It was necessary to discern whether the company's actions in purchasing the land were governed by principles of trust law, or if the determination of such a trust relationship was purely factual.

The court concluded that the existence of a trust, and the extent of the company's obligations as a trustee, was a question of fact rather than a matter of principle. This meant that the determination of whether a trust existed would depend on the specific facts and circumstances of the case. The court found that the evidence did not conclusively establish that Sotrip Pty Ltd had acted as a trustee for Bechara in relation to the land. As a result, the court ruled in favour of Sotrip Pty Ltd, finding that no trust relationship was established.

As a result of the court's decision, Bechara's claim for the land to be held on trust for his benefit was dismissed. The final order of the court was that Sotrip Pty Ltd was not required to hold the land on trust for Bechara.

Orders