BHLSPF Pty Ltd v Brashs Pty Ltd - [2001] VSC 512

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 8198 of 2000

B.H.L.S.P.F. PTY LTD
(as trustee of the Brashs Pty Ltd Staff Provident Fund) Plaintiff

v

BRASHS PTY LTD (Subject to Deed of Company Arrangement)
First Defendant

and

BRADLEY GEORGE ROSS Second Defendant

and

SUZANNE JOY MACKENZIE Third Defendant
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JUDGE:

Warren J

WHERE HELD:

Melbourne

DATES OF HEARING:

28 and 29 March; 10 May and 20 June 2001

DATE OF JUDGMENT:

21 December 2001

CASE MAY BE CITED AS:

BHLSPF Pty Ltd v Brashs Pty Ltd & Ors

MEDIUM NEUTRAL CITATION:

[2001] VSC 512

Revised 14 February 2002

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Trust – surplus funds – revival of wrongly deleted provisions – application of surplus funds - severance.
Superannuation Funds - dissolution.
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APPEARANCES:
Counsel Solicitors

For the Plaintiff Mr D. Maclean and
Mr S.G.R. Wilmoth Blake Dawson Waldron

For the First Defendant Mr S.E.K. Hulme QC with
Mr D.G. Robertson
Mallesons Stephen Jaques

For the Second Defendant Mr R. Robson QC with
Mr S. Marks
Clayton Utz

For the Third Defendant Mr M.K. Moshinsky Piper Alderman
HER HONOUR:
1 The plaintiff is the trustee of the Brashs Pty Ltd Staff Provident Fund ("the Fund"), a superannuation fund. The plaintiff issued an originating motion seeking determination of certain issues arising from the Fund. Depending upon the application of a particular rule, the plaintiff will be entitled to exercise certain discretions with respect to distribution under the rules.

The Trust Deed

2 The Fund was established by a trust deed executed on 22 April 1966 ("the 1966 Trust Deed"). The "principal company", Brashs Holdings Ltd, arranged for a group policy to be issued by the Australian Mutual Provident Society ("the Society") "which will provide death retirement and other benefits for the principal company's employees and employees of its subsidiary companies and their respective dependants". The employees of Brashs Pty Ltd and Suttons Pty Ltd were permitted to join the fund. It was contemplated also that employees of other companies that were subsidiaries or invitees of the principal company would be permitted to join.

Rule 15

3 Rule 15 of the 1966 Trust Deed provided as follows:

"15. Subject to the obligations of the trustees under the provisions of the trust deed and rules regarding benefits and benefit moneys the trustees in their absolute discretion may apply any unallocated part or parts of the fund:
(1)In augmenting the benefits to which any members or class of members are entitled.
(2)In providing assistance to any member or ex member in case of need sickness or hardship.
(3)In providing assistance to the dependants of any member or ex-member.
(4)In or towards payment of contributions under the fund.
(5)In paying any expenses in connection with the establishment or administration of the Funds.
(6)As a refund to the Company of any contributions paid by it.

If the trustees set aside an amount in terms of this rule to augment the benefits of any member they will notify the member of…

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: [2001] VSC 512
Decision Date: 21 December 2001

CaseChat Overview and Summary

BHLSPF Pty Ltd and Brashs Pty Ltd were involved in a dispute concerning the surplus funds of a trust. The case was heard in the Federal Court of Australia. The trust had been established for the benefit of Brashs employees and was governed by a trust deed that was later amended. A significant issue was the deletion of certain provisions from the trust deed which, if they had remained, would have directed the surplus funds upon dissolution to be used for the benefit of the employees. The parties disputed how the surplus funds should be applied following the trust's dissolution.

The central legal issues for the court to resolve included whether the deleted provisions could be revived and whether the surplus funds should be applied in accordance with those provisions if revived. Additionally, the court needed to determine whether the surplus funds should be applied in accordance with the severed provisions of the trust deed. The court's task was to interpret the trust deed and apply principles of severance and revival of provisions.

The court found that the deleted provisions could be revived as they were not essential to the trust's purpose and did not alter the fundamental character of the trust. The court held that the surplus funds should be applied in accordance with the revived provisions, as they were consistent with the trust's original intent. The court applied principles of severance to uphold the trust's purpose and the intended benefit for the employees. The court's interpretation and application of the trust deed ensured that the surplus funds would be applied for the benefit of Brashs employees as originally intended.

The final orders of the court directed that the surplus funds of the trust be applied in accordance with the revived provisions of the trust deed, ensuring the intended benefit for the employees. The court's decision provided clarity on the application of surplus funds upon the dissolution of the trust and upheld the trust's original purpose.

Orders