Blair v Nunis

[2020] WADC 126

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   BLAIR -v- NUNIS [2020] WADC 126

CORAM:   REGISTRAR KINGSLEY

HEARD:   20 AUGUST 2020

DELIVERED          :   22 SEPTEMBER 2020

FILE NO/S:   CIV 3891 of 2019

BETWEEN:   LORRETTA HELENE BLAIR

Plaintiff

AND

RALPH MARCEL NUNIS

First Defendant

ROSEWAY INVESTMENT PTY LTD (in liq)

Second Defendant

RALPH MARCEL NUNIS

Plaintiff by counterclaim

LORRETTA HELENE BLAIR

Defendant by counterclaim

Catchwords:

Practice - Application by defendant to counterclaim to strike the statement of claim - Turns on own facts

Legislation:

Corporations Act 2001

Result:

Application allowed

Representation:

Counsel:

Plaintiff	:	Mr  W C Tay
First Defendant	:	In person
Second Defendant	:	No appearance
Plaintiff by counterclaim	:	In person
Defendant by counterclaim	:	Mr W C Tay

Solicitors:

Plaintiff	:	Robertson Hayles Lawyers
First Defendant	:	Not applicable
Second Defendant	:	Not applicable
Plaintiff by counterclaim	:	Not applicable
Defendant by counterclaim	:	Robertson Hayles Lawyers

Case(s) referred to in decision(s):

Alexander v Perpetual Trustees WA Ltd (2003) 216 CLR 109

Ramage v Waclaw (1988) 12 NSWLR 84

Tobin v Dodd [2004] WASCA 288

Wentworth v Rogers (No 5) (1986) 6 NSWLR 534

REGISTRAR KINGSLEY:

1. The plaintiff by counterclaim (Nunis) has brought an action against the defendant by counterclaim (Blair) and Blair seeks to strike out that counterclaim by chamber summons dated 20 July 2020.  Relevantly, Blair has filed an affidavit sworn 20 July 2020 (Blair affidavit) in support, and Nunis has filed an affidavit sworn 10 August 2020 in opposition.

2. Nunis is a litigant in person and I am mindful that a court must be astute to ensure that, in a poorly expressed or unstructured document setting out the claim, there is no reliable cause of action which, by appropriate amendment and permissible assistance from the court, could be put into proper form: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534; Tobin v Dodd [2004] WASCA 288.

Background

1. Roseway is the registered proprietor of land and premises at Denston Way, Girrawheen.  Blair resided at Denston Way under an undated tenancy agreement between herself and Roseway (Blair affidavit, page 51).

2. Pursuant to a trust deed dated 14 February 2014 Roseway was appointed trustee.  The beneficiaries under the trust are Nunis and Blair.  The guardian and appointor named in the trust document is Nunis.

3. Roseway went into liquidation and the liquidators of Roseway entered into negotiations with Blair in relation to outstanding rental monies and other charges under the tenancy agreement.  On 21 August 2019 Blair entered into a settlement agreement with the liquidators of Roseway to resolve the dispute.  By the settlement agreement the rental and other charges for Denston Way to 12 July 2019 were compromised by payment of a sum of money to the liquidators.

4. The claim by Nunis against Blair is a personal claim based on the undated tenancy agreement between Blair and Roseway to pay rent and other charges arising out of Denston Way, Girrawheen.  The claim seeks payment of rent and other charges from 5 May 2014 to 25 June 2020.

Blair's submissions

1. Blair submits that Roseway is not pursuing her for any unpaid amounts. Roseway is in liquidation and ceased to be the trustee of the Denston Way Trust.  Blair submits that any right to bring a counterclaim rests in the hands of the liquidator of Roseway.  Further, in the course of winding up Roseway, the liquidators pursuant to their powers under s 477 and s 506 Corporations Act 2001 have compromised the claim as between Roseway and Blair.

2. Thus, Blair submits Nunis has no standing and in any event there is no existing cause of action as the purported claim by Nunis against Blair has been compromised.

Nunis' submissions

1. Nunis submits that the Denston trust is a bare trust and there is a valid guardian and appointor.  Nunis submits that the guardian may perform the duties of the trust.  Further the appointor has been appointed power of attorney until a new trustee is in place.  It is common ground there is no trustee in place.

2. Nunis submits that Roseway is a trustee company.  By the fact it is a trustee company the provisions of the Corporations Act do not necessarily apply.

3. Nunis also submits that a beneficiary may commence legal proceedings in their own name, joining trustees and any other beneficiaries as defendants.  A beneficiary has a cause of action where there are exceptional or special circumstances, particularly where the trustee company is insolvent and unable to fund any litigation.

Discussion

1. There are two issues that need to be determined:

   1.The legal standing of Nunis to bring the counterclaim.

   2.The cause of action that Nunis seeks to promote.

2. The legal authorities are clear in most circumstances trustees are the proper plaintiffs in any claim involving rights or property of the trust.  If a trustee fails to take steps to enforce the rights of the trust, then the beneficiaries can bring proceedings against them for failure to carry out their duties.  The authorities indicate that the right of action available to a beneficiary is a direct right personal to the beneficiary and that the beneficiary sues in right of the trust.

3. Again the authorities indicate that a beneficiary may sue in their own name only where the relief sought is in the equitable jurisdiction of the court and even then only where circumstances are exceptional or special: Equity and Trusts, 3^rd ed, Michael Evans, LexisNexis 2012.

4. In Alexander v Perpetual Trustees WA Ltd (2003) 216 CLR 109 the requirement for exceptional or special circumstances is to avoid the vexation of a third party by multiple suits. Whilst exceptional or special circumstances have not been defined, the authorities have provided examples: see Alexander and Ramage v Waclaw (1988) 12 NSWLR 84. The examples show a beneficiary has no cause of action against a third party without these being a failure, excusable or inexcusable, by the trustee in the performance of their duty to the beneficiary to protect the trust estate or to protect the interests of the beneficiary in the trust estate.

5. In this case there is no current trustee as the appointor has not appointed a new trustee.  The evidence does not disclose any sufficient ground to conclude that exceptional or special circumstances exist.

6. In any event it would appear that the tenancy agreement was between Blair and Roseway, not Blair and Roseway as trustee (Blair affidavit, page 51).

7. Nunis sought to distinguish a trustee company for the purposes of the Corporations Act.  This distinction meant that the trustee still retained rights, in this case, as against Blair.

8. In my opinion there is no difference between a company acting as trustee and any other corporation.  A corporation is established pursuant to the Corporations Act and is subject to that Act.  Where liquidators are appointed, the liquidators have power under the Corporations Act to compromise or settle claims by the liquidated company against third parties.

9. In my opinion Nunis has no legal standing to bring this claim.

10. The claim by Nunis against Blair arises from the occupation of Denston Way.  That occupation was pursuant to an agreement made between Blair and Roseway.  There is no privity of contract between Nunis and Blair in relation to that occupation.  It is only Roseway, through its liquidators, who had any rights as against Blair.

11. The liquidators contended there was an undated tenancy agreement between Roseway and Blair pursuant to which Blair owed Roseway monies.  The liquidators, through their solicitors, negotiated with Blair, through her solicitors, a settlement of that claim which was incorporated in a deed.  All this was done pursuant to the powers of the liquidator under the Corporations Act.

12. By exercising their powers the liquidators for Roseway compromised whatever monies were owing by Blair to Roseway in the form of a deed of settlement.  Accordingly, there is no cause open to Nunis for unpaid rental and charges to 12 July 2019.

13. There is an open question as to the ongoing rental and other charges from 13 July 2019.  However Nunis has no personal right as between himself and Blair which he can enforce.

14. For these reasons I am of the opinion that Nunis has no standing to bring the counterclaim.  Further, there is no cause of action available to Nunis in his personal capacity against Blair.  The counterclaim must therefore be struck.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

DH
Court Officer

22 SEPTEMBER 2020