Britroc Investments Pty Limited ACN 089 125 315 as trustee for the Nicholson Family Superannuation Fund v PT Limited ACN 004 454 666

Britroc Investments Pty Limited, as trustee for the Nicholson Family Superannuation Fund, filed an application against PT Limited, seeking to address irregularities in a mortgage over real property held by the fund. The property, managed by a custodian as a bare trustee, was fraudulently encumbered with a mortgage by a third party. Subsequently, the lender assigned its interest in the mortgage to the corporate trustee of the fund, who held the position of both lender and borrower. The primary legal issues were whether a new bare trustee should be appointed and if the irregularity could be rectified under the relevant statutes.

The court considered the need to ensure the integrity of the fund's property management and to prevent the corporate trustee from simultaneously holding conflicting roles of lender and borrower. It was determined that appointing a new bare trustee would resolve the conflict of interest and restore proper management of the fund's assets. Additionally, the court found that the irregularities could be cured under the provisions of the Trustee Act and the Real Estate Act, specifically by vesting the property in the new trustee and cancelling the fraudulent mortgage.

The court ruled in favour of Britroc Investments, ordering the appointment of a new bare trustee for the Nicholson Family Superannuation Fund and directing the vesting of the subject property in the new trustee under the Trustee Act. Furthermore, the fraudulent mortgage was cancelled under the Real Estate Act. This decision ensures that the fund's assets are managed by a neutral party, free from conflicts of interest, and restores the property to its rightful status.