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Curwen v Vanbreck Pty Ltd

Curwen v Vanbreck Pty Ltd

Case [2009] VSCA 284 9 December 2009

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

No 3862 of 2008

SANDRA STUART CURWEN & ORS
	Appellants
v
VANBRECK PTY LTD (AS TRUSTEE FOR THE W S AND N R HARVEY FAMILY TRUST)	Respondent

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JUDGES:	REDLICH and BONGIORNO JJA and HANSEN AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	3 August 2009
DATE OF JUDGMENT:	9 December 2009
MEDIUM NEUTRAL CITATION:	[2009] VSCA 284
JUDGMENT APPEALED FROM:	Sandra Stuart Curwen & Ors v Vanbreck Pty Ltd(as Trustee for the W S and N R Harvey Family Trust) [2008] VSC 338 (Mandie J)

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TRUST – Discretionary trust – Beneficiaries seeking access to trust documents – Appointment excluding beneficiaries – Whether exclusion for improper purpose – Trustee on notice that improper purpose alleged – Non-disclosure of trustee’s reasons – Whether adverse inference arises – No cross-examination of trustee as to its purpose – Whether trial judge found breach of rule in Browne v Dunn – Fraud on power – Purpose inferred from circumstantial evidence – Improper purpose need not be dominant purpose – Failure to establish actuating or operative improper purpose.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr S M Anderson SC Mr M I Borsky	Efron & Associates
For the Respondent	Mr M S Osborne	Madgwicks

REDLICH JA

BONGIORNO JA
HANSEN AJA:

This appeal concerns the validity of a deed of appointment that purported to exclude the third and fourth appellants as beneficiaries under a discretionary trust. Each appellant applied, by originating motion, for a declaration that they are entitled to the production and inspection of documents relating to the W S & N R Harvey Family Trust (‘the Trust’). The trial judge refused the application on the ground that each of the appellants had been validly excluded as beneficiaries and were consequentially unable to rely upon their right as a beneficiary to production and inspection of trust documents.

The appellants contend that the trial judge erred in not finding that the deed that purported to exclude the third and fourth appellants was void ab initio by reason of bad faith or, in the alternative, an ulterior motive or purpose on the part of the Trustee. The bad faith or improper purpose was that the exclusion was based wholly or in part on the desire of the Trustee to prevent the appellants from gaining access to certain documents of and relating to the Trust (‘the Trust Documents’).

The appellants submit that the events which occurred immediately before the Trustee executed the deed of appointment support the inference that Prudence Riddell, the sole Director of the trustee company (‘the Trustee’), acted with the intention of preventing the beneficiaries from gaining access to the Trust Documents. The trial judge was said to have erred in not drawing this inference by wrongly applying the rule of professional practice in Browne v Dunn[1] (Ground 1). The appellants further submit that his Honour’s finding was against the weight of evidence, particularly given his Honour’s legal conclusion that the deed of appointment would…

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 Curwen v Vanbreck Pty Ltd

Details

AGLC: Curwen v Vanbreck Pty Ltd [2009] VSCA 284
Case: [2009] VSCA 284
Decision Date: 9 December 2009

CaseChat Overview and Summary

The case of Curwen v Vanbreck Pty Ltd involved a dispute regarding a discretionary trust. The beneficiaries sought access to trust documents to understand the basis for their exclusion from the trust. Vanbreck Pty Ltd, the trustee, had excluded the beneficiaries under a clause in the trust deed, which allowed such exclusions if it was in the best interests of the beneficiaries. The court was required to decide whether the exclusion of the beneficiaries was for an improper purpose and whether the trustee was on notice of the allegation of improper purpose. Furthermore, the court needed to determine if the failure to disclose the trustee's reasons for the exclusion resulted in an adverse inference, and if the trial judge correctly applied the rule from Browne v Dunn.

The court found that the trustee was on notice of the allegation of an improper purpose because the beneficiaries had raised this issue in their proceedings. The court also held that the trustee's failure to provide reasons for the exclusion did not automatically result in an adverse inference, as the beneficiaries did not establish that they were unable to cross-examine the trustee on the issue. The court examined whether the trustee breached the rule from Browne v Dunn, which requires that a power must be exercised for the purpose for which it was conferred. The court found that the trustee's purpose could be inferred from circumstantial evidence and that an improper purpose need not be the dominant purpose, as long as it was an actuating or operative purpose. In this case, the beneficiaries failed to establish that an improper purpose actuated or operated in the trustee's decision to exclude them.

The court determined that the beneficiaries did not prove that the trustee's purpose in excluding them from the trust was improper. As a result, the court dismissed the beneficiaries' claim for access to the trust documents. The court did not make any specific orders regarding the trust documents but upheld the trustee's decision to exclude the beneficiaries. This case highlights the importance of trustees acting within the scope of their powers and the need for beneficiaries to provide sufficient evidence to establish an improper purpose when challenging a trustee's decision.

Orders