Colquhoun v Dronpane Pty Limited - [2011] NSWSC 1500

Supreme Court

New South Wales

Medium Neutral Citation: Colquhoun v Dronpane Pty Limited & Ors [2011] NSWSC 1500
Hearing dates: Friday, 4 November 2011
Decision date: 08 December 2011
Jurisdiction: Equity Division
Before: White J
Decision:
Refer to para [71] of judgment.

Catchwords:
EQUITY - trusts - rectification of trust deed - where trust deed contained no clause giving trustees discretion to appoint income or distribute capital prior to termination of trust - other clauses in trust deed indicate draftsman assumed power to appoint income or capital - affairs of trust conducted in way consistent with trustees believing they had power to appoint income and distribute capital without terminating trust - common intention that trustees have such powers - trust deed rectified in manner sought
EQUITY - trusts - rectification of trust deed - application for rectification of deed of resignation to provide for resignation of trustee - where deed of resignation purported to confirm resignation of trustee retrospectively - where trustee believed he retired as trustee by execution of previous deed of resignation - where previous deed of resignation expressly provided for trustee to continue - trustee did not intend that deed of resignation would effect his removal as trustee from date of deed - trustee intended to confirm mistaken belief that he retired as trustee by execution of previous deed of resignation - no disconformity between purported effect of deed and intention of plaintiff - rectification sought goes beyond jurisdiction to rectify instruments - claim for rectification of deed of resignation refused
Legislation Cited: Trustee Act 1925
Cases Cited: Commissioner of Stamp Duties (NSW) v Carlenka Pty Limited (1995) 41 NSWLR 329
Raftland Pty Ltd v Federal Commissioner of Taxation [2008] HCA 21; (2008) 238 CLR 516
Public Trustee v Smith [2008] NSWSC 397; (2008) 1 ASTLR 488
Bush v National Australia Bank Limited (1992) 35 NSWLR 390
Muriti v Prendergast [2005] NSWSC 281
Franklins Pty Limited v Metcash Trading Limited [2009] NSWCA 407; (2009) 76 NSWLR 603
MacKenzie v Coulson (1869) LR 8 Eq 368
Pukallus v Cameron [1982] HCA 63; (1982) 180 CLR 447
Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [1953] 2 QB 450
The Club Cape Schanck Resort Co Limited v Cape Country Club Pty Ltd [2001] VSCA 2; (2001) 3 VR 526
Texts Cited: George Farwell, A Concise Treatise on Powers, 2nd ed (1893) Stevens and Sons
Category: Principal judgment
Parties: Paul Julian Colquhoun (Plaintiff)
Dronpane Pty Limited (1st Defendant)
Alison Colquhoun (2nd Defendant)
Anne Alison Judge (3rd Defendant)
Lisa Jane Allan (4th Defendant)
Sarah Jane Paton (5th Defendant)
Richard Paul Colquhoun (6th Defendant)
Chief Commissioner of State Revenue (7th Defendant)
Representation: C J Bevan (Plaintiff)
Defendants filed submitting appearances
Gibney & Gunson (Plaintiff)

File Number(s): 2011/39609

Judgment

HIS HONOUR : This is a suit for rectification of a trust deed dated 19 February 1971 and a deed described as a deed of resignation dated 12 December 1997. The trust deed conferred…

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.

Continue reading Colquhoun v Dronpane Pty Limited

Details

AGLC: Colquhoun v Dronpane Pty Limited [2011] NSWSC 1500
Case: [2011] NSWSC 1500
Decision Date: 08 December 2011

CaseChat Overview and Summary

In Colquhoun v Dronpane Pty Limited, the dispute involved the interpretation and rectification of a trust deed, with Colquhoun seeking rectification to provide for the resignation of a trustee, while Dronpane Pty Limited opposed the claim. The matter was heard in the Federal Court of Australia.

The legal issues before the court were whether the trust deed could be rectified to allow for the resignation of a trustee and whether the deed of resignation could be altered to reflect the trustee's mistaken belief that he had retired. The court had to determine whether the trust deed could be rectified to provide for the resignation of a trustee, despite the deed of resignation purporting to confirm the resignation retrospectively. The court also needed to decide whether the deed of resignation could be altered to reflect the trustee's mistaken belief that he had retired by executing a previous deed of resignation.

The court found that the trust deed could be rectified to provide for the resignation of a trustee, as there was a common intention that the trustees had the power to appoint income and distribute capital without terminating the trust. The trust deed was rectified in the manner sought by the applicant. However, the court held that the deed of resignation could not be rectified to reflect the trustee's mistaken belief that he had retired. The court found that there was no disconformity between the purported effect of the deed of resignation and the intention of the plaintiff, and that the rectification sought went beyond the jurisdiction to rectify instruments.

The final orders of the court were that the trust deed be rectified as sought by the applicant, but the deed of resignation be left as it was, without any rectification.

Orders