Blong Ume Nominees Pty Ltd v Semweb Nominees Pty Ltd (No 2)

In the matter of Blong Ume Nominees Pty Ltd v Semweb Nominees Pty Ltd (No 2), the dispute arose from the management and dissolution of a joint venture involving the establishment and operation of a property to serve as office accommodation for the related professional practices of the parties. The case was heard by the Supreme Court of Victoria. The primary legal issue was whether the Court should exercise its power under the Trustee Act to remove a trustee or revoke the trust, and whether the power under the Corporations Act could be similarly exercised in this context. The Court also considered whether the trust had been used in a manner oppressive to the beneficiaries.

The Court found that the spirit of the trust, which included the commercial purposes of the joint venture, had been compromised by the actions of the trustees, Mr Michaels and Mr Ouwens, who attempted to take advantage of Mr Orfanos's personal circumstances. This was deemed a breach of the underlying spirit of the trust arrangement, inconsistent with the duties of good faith and fairness inherent in such arrangements. The Court ruled that the objectives and purposes of the joint venture and the trust had largely been achieved, and the balance of considerations strongly favoured the termination of the trust. The Court did not find it necessary to determine the scope of the power under s 233 of the Corporations Act but noted that the power would have been exercised if no alternative remedy was available. The Court held that a wide interpretation should be taken when considering the availability of remedies under s 59C of the Trustee Act and s 233 of the Corporations Act, given the public interest in ensuring that a remedy is available when the legal structures adopted for business ventures involving multiple parties are used oppressively or become unworkable.

The Court ordered the revocation of the trust and the distribution of the trust property accordingly, highlighting the importance of the underlying spirit and purposes of the trust arrangement.