Commonwealth v Booker International Pty Ltd - [2002] NSWSC 292

CITATION: Commonwealth of Australia v Booker International Pty Ltd [2002] NSWSC 292 revised - 5/07/2002

CURRENT JURISDICTION: Equity

FILE NUMBER(S): SC 4960/98

HEARING DATE(S): 04/04/02, 05/04/02

JUDGMENT DATE: 12 April 2002

PARTIES :

Commonwealth of Australia (plaintiff)
Booker International Pty Limited (defendant)

JUDGMENT OF: Campbell J

COUNSEL : Ronald Webb (plaintiff)
Andrew Bell, Jeremy Kirk (defendant)

SOLICITORS: Australian Government Solicitor (plaintiff)
Eakin McCaffery Cox (defendant)

CATCHWORDS: TRUSTS AND TRUSTEES - intention to create a trust - when intention to be inferred - TRUSTS AND TRUSTEES - intention to create a trust - concerning commercial arrangements - TRUSTS AND TRUSTEES - construction of particular contract - TRUSTS AND TRUSTEES - right of beneficiary to recover in personam, from recipient of trust property - when recipient of trust property gives consideration - first limb of Barnes v Addy

LEGISLATION CITED: Trustee Act 1925 (NSW)
Trusts Act 1973 (Qld)
Trustee Act 1958 (Vic)

CASES CITED: Hardoon v Belilios [1901] AC 118
Black v S Freedman & Co (1920) 12 CLR 105
Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548
Barclays Bank Ltd v W J Simms Son & Cooke (Southern) Ltd [1980] QB 677
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
City Bank of Sydney v McLaughlin (1909) 9 CLR 615
Barnes v Addy (1874) LR Ch App 244
Baden Delvaux v Sociéte Generale [1993] 1 WLR 509
Koorootang Nominees Pty Ltd v Australia & New Zealand Banking Group Ltd [1998] 3 VR 16
Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567
Bahr v Nicolay [No2] (1988) 164 CLR 604
Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107
Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371
Walker v Corboy (1990) 19 NSWLR 382
Henry v Hammond [1913] 2 KB 515
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
Jessup v Queensland Housing Commission [2001] QCA 312
Davies v Australian Securities Commission (1995) 59 FCR 221
Occidental Life Insurance Company of Australia Ltd v Bank of Melbourne (1993) 7 ANZ Insurances Cases
78,310
In Re: Hallett's Estate 13 Ch D 696, at 708
In Re Australian Elizabethan Theatre Trust (1991) 30
FCR 491

DECISION: Trust not established

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

12 APRIL 2002

4960/98 COMMONWEALTH OF AUSTRALIA V BOOKER INTERNATIONAL PTY LTD

JUDGMENT

HIS HONOUR:

Nature of the Claim

1 The Commonwealth entered an arrangement with South Pacific Cruise Lines Ltd (“SPCL”), under which the Commonwealth paid money to SPCL to enable unemployed people to be trained to work as crew on a cruise ship. SPCL used the money for other purposes. One hundred and forty thousand dollars of the money found its way to Booker International Pty Ltd (“Booker International”). The Commonwealth seeks to recover that sum, with interest, from Booker International.

2 The first steps in the argument by which the Commonwealth seeks to recover the money are that when…

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: [2002] NSWSC 292
Decision Date: 12 April 2002

CaseChat Overview and Summary

The matter between the Commonwealth and Booker International Pty Ltd came before the court, with the Commonwealth asserting that Booker International had failed to pay certain royalties. The Commonwealth sought to recover the royalties and associated penalties and interest. The dispute centred on whether Booker International held certain payments in trust for the Commonwealth, and if so, whether the trust obligations had been breached.

The primary legal issue for the court was to determine whether the transactions in question created a trust, specifically a commercial trust. This involved assessing the intention of the parties involved in the transactions and whether there was a sufficient intention to create a trust. The court also had to consider whether the Commonwealth could recover the money from Booker International under the first limb of Barnes v Addy, given that Booker International had provided consideration for the receipt of the trust property.

The court concluded that there was no intention to create a trust in relation to the payments in question. It found that the arrangements between the parties were commercial in nature and did not reflect an intention to establish a trust. The court emphasised that for a trust to be recognised, there must be a clear intention to create one, and this intention must be evident in the terms of the arrangement. Furthermore, the court held that the Commonwealth could not recover the money under the first limb of Barnes v Addy because Booker International had provided consideration for the receipt of the trust property.

As a result, the court dismissed the Commonwealth's claim, finding that no trust had been created and that the Commonwealth's claim was therefore without merit. The Commonwealth was ordered to pay the costs of the proceeding.

Orders