Doma ACT Pty Ltd v LN Sydney Pty Ltd - [2024] ACTSC 270

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Doma ACT Pty Ltd v LN Sydney Pty Ltd
Citation:	[2024] ACTSC 270
Hearing Date:	26 August 2024
Decision Date:	30 August 2024
Before:	McWilliam J
Decision:	(1) The resolution made on 30 June 2022 by the directors of Doma ACT Pty Limited ACN 116 939 916 as trustee of the Doma Finance Trust is rectified so that, in the second and third bullet points in paragraph 3 under the heading “Allocation of Trust Income for the Year”, it is taken to always have read as follows: (i) (a) Delete the words “LN Sydney” where they appear; and (ii) (b) Insert in their place “Little National Sydney Pty Limited”.
Catchwords:	EQUITY – RECTIFICATION – mistake in recording name of corporate entity in unilateral instrument – company resolution to distribute ordinary income to corporate entity – where clear and convincing proof of makers’ intentions corroborated by contemporaneous documents – where resolution does not give effect to makers’ intention – where mistake clearly identifiable – resolution rectified
Cases Cited:	Commissioner of Stamp Duties (NSW) v Carlenka Pty Limited (1995) 41 NSWLR 329 Cherry Tree Investments Ltd v Landmain Ltd [2013] Ch 305 Craddock Brothers v Hunt [1923] 2 Ch 136 Domazet v Jure Investments Pty Ltd [2016] ACTSC 33 Energy World Corporation v Maurice Hayes and Associates Pty Limited [2007] FCAFC 34; 239 ALR 457 GE Capital Finance Australasia Pty Limited v Commissioner of Taxation [2011] FCA 849; 219 FCR 420 Osborne v Smith (1960) 105 CLR 153 Re Canavan [2017] HCA 45; 263 CLR 284 Re Butlin’s Settlement Trusts [1976] Ch 251 Simic v New South Wales Land and Housing Corp [2016] HCA 47; 260 CLR 85 SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2017] NSWCA 132
Parties:	Doma ACT Pty Limited as trustee for the Doma Finance Trust ( Plaintiff) LN Sydney Pty Limited as trustee for the LN Sydney Discretionary Trust (First Defendant) Little National Sydney Pty Limited (Second Defendant)
Representation:	Counsel M J O’Meara SC ( Plaintiff & Defendants)
Solicitors Clayton Utz ( Plaintiff & Defendants)
File Number:	SC 110 of 2024

McWILLIAM J:

Overview of the application

1․By this proceeding, the plaintiff, Doma ACT Pty Ltd (Doma ACT), seeks equitable relief for mistake, in the form of rectification. The type of mistake involved is the mis-recording of the name of a corporate entity in a resolution passed by Doma ACT.
2․Doma ACT is a corporate trustee for the Doma Finance Trust (Finance Trust). It is part of a corporate group of over 120 entities, collectively described as the Doma Group. The Doma Group also includes the first defendant, LN Sydney Pty Limited (LN Sydney), and the second defendant, Little National Sydney Pty Limited (Little National Sydney).
3․The instrument for which rectification is sought is a company resolution made on 30 June 2022 by the two directors of Doma ACT, Ivan Domazet, and his…

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: [2024] ACTSC 270
Decision Date: 30 August 2024

CaseChat Overview and Summary

Doma ACT Pty Ltd, as trustee of the Doma Finance Trust, sought rectification of a resolution made by its directors, which incorrectly named a corporate entity. The resolution in question was a distribution of ordinary income to what was mistakenly identified as LN Sydney Pty Ltd, when in fact the intended recipient was Little National Sydney Pty Limited. The case was heard and determined by the Supreme Court of the Australian Capital Territory.

The central legal issue before the court was whether the resolution could be rectified due to a clear and convincing proof of the makers' true intentions, which were not accurately reflected in the resolution. The court was required to determine if the mistake was identifiable and if the resolution failed to give effect to the makers' intentions. The court also had to consider if the resolution could be rectified under equity to correct the error and reflect the true intentions of the parties involved.

The court found that there was clear and convincing evidence of the directors' true intentions, corroborated by contemporaneous documents. The mistake was identifiable, and the resolution did not give effect to these intentions. Therefore, the court exercised its equitable jurisdiction to rectify the resolution. The resolution was altered to reflect the correct corporate entity, Little National Sydney Pty Limited, instead of LN Sydney Pty Ltd. This rectification ensured that the resolution accurately represented the intentions of the parties involved.

The court made an order to rectify the resolution such that the words "LN Sydney" were deleted and replaced with "Little National Sydney Pty Limited" in the specified sections of the resolution. This rectification ensured that the resolution properly reflected the intentions of the parties involved and accurately distributed the ordinary income to the correct corporate entity.

Orders

Orders of the court

(1) The resolution made on 30 June 2022 by the directors of Doma ACT Pty Limited ACN 116 939 916 as trustee of the Doma Finance Trust is rectified so that, in the second and third bullet points in paragraph 3 under the heading “Allocation of Trust Income for the Year”, it is taken to always have read as follows:

(i) (a) Delete the words “LN Sydney” where they appear; and

(ii) (b) Insert in their place “Little National Sydney Pty Limited”.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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