David & Ros Carr Holdings Pty Ltd v Ritossa

The appeal concerned a dispute between two couples, the Carrs and the Ritossas, who had established a unit trust for property investment. The trust deed provided for an equal division of units, equal board representation on the corporate trustee, and equal shareholdings in the trustee. Crucially, the deed contained a clause, based on s 3A(3B) of the *Land Tax Management Act 1956* (NSW), which deemed the trust to be a fixed trust and stipulated that unit holders could require the trustee to wind up the trust and distribute its property. The central question was whether an individual unit holder was entitled to demand the winding up of the trust.

The court was required to determine several legal issues. Firstly, it had to interpret the trust deed to ascertain whether the clause allowing unit holders to require the winding up of the trust conferred an individual right on each unit holder, or if it required a collective decision. Secondly, the court considered whether the principles established in *Sayden Pty Ltd v Chief Commissioner of State Revenue* were applicable, given that *Sayden* involved a unit trust where one person held all the units, unlike the present case with multiple unit holders. Thirdly, the court examined the applicability of the oppression provisions of the *Corporations Act 2001* (Cth) to members of the trustee company, and whether the ongoing disputes and deadlock regarding the trust's management constituted oppression. Finally, the court considered whether the principle in *Ebrahimi v Westbourne Galleries Ltd* could be invoked to appoint a receiver to wind up the trust.

The court reasoned that the clause in the trust deed, when read in its entirety and in light of the *Sayden* decision, did not grant an individual unit holder the unilateral right to wind up the trust. While *Sayden* established that a unit holder could require winding up in a single-holder scenario, this did not translate to a similar right for one of several unit holders. The court found that the oppression provisions of the *Corporations Act* were not applicable to the members of the trustee company in this context, as the disputes related to the management of the trust rather than the affairs of the company itself. Furthermore, the *Ebrahimi* principle, which applies to quasi-partnerships in companies, was deemed inappropriate for trusts, whose equitable nature is directed towards preservation.

The appeal was dismissed, and the appellants were ordered to pay the respondents' costs.