Deauville Nominees Pty Limited & Anor v Akhil Holdings Limited; Banque Commerciale SA v Akhil Holdings Limited

Deauville Nominees Pty Limited and Massara, and Banque Commerciale SA, sought special leave to appeal to the High Court of Australia from decisions of the courts below concerning Akhil Holdings Limited. The dispute originated from the allotment of 600,000 shares in Great Southland Mining Company in 1969. Mr. Akhil gave evidence that these shares were allotted to the Bank as a nominee, pursuant to arrangements with Mr. Messara. Subsequently, the shares moved from the Bank to Deauville Nominees and then to third parties.

The applicants' case rested on three main contentions: first, that the courts below erred in finding that a trust existed; secondly, that even if a trust was found and Deauville Nominees breached it, Mr. Messara could not be held liable for procuring that breach; and thirdly, that Mr. Messara was entitled to rely on a release. The applicants argued that errors of principle, both procedural and evidentiary, were committed in relation to each of these points.

A key issue raised was the appropriate test for an appellate court to apply when reviewing a trial judge's findings, particularly where the case for one party relied solely on the evidence of a single witness whose testimony was not accepted by the trial judge, and the other party did not give evidence. The applicants submitted that an appellate court should not interfere with a trial judge's conclusions unless the judge had abused their position of advantage or palpably failed to make proper use of it. The High Court noted that the trial judge did not start from the presumption of a trust in favour of the entity that supplied the consideration, which was a point of contention.