Glen Eight v Home Building - [2005] NSWSC 309

CITATION:
Glen Eight v Home Building & Ors [2005] NSWSC 309

HEARING DATE(S): 31 March 2005

JUDGMENT DATE :

31 March 2005

JUDGMENT OF:
McDougall J at 1

DECISION:
See paras [29] and [30]

CATCHWORDS:
PRACTICE AND PROCEDURE - injunction - application to restrain breach of alleged trust fund - trusts - express trusts - where moneys deposited by principal into contractor's bank account - where principal is a signatory to the bank account - where contractor in administration - where funds held by administrator - whether prima facie case that funds held on trust - whether principal entitled, on resulting trust, to funds in bank account if primary trust failed - whether intention to create express trust - whether principal entitled to relief on the entire amount held by administrator - whether allowance ought to be made for the legal costs of the administrator - no question of principle

LEGISLATION CITED:
Building and Construction Industry Security of Payment Act 1999

CASES CITED:
Associated Alloys Pty Limited v A C 001 452 105 Pty Limited (in liquidation) (2000) 202 CLR 588
Consul Developments Pty Limited v DPC Estates Pty Limited (1975) 132 CLR 373
Salvo & Ors v New Tel (in liquidation) [2004] NSWSC 675

PARTIES:
Glen Eight Pty Limited (Plaintiff)
Home Building Pty Ltd (In administration) (Defendant 1)
Peter Ngan (Defendant 2)
Interco Pty Ltd (Defendant 3)

FILE NUMBER(S):
SC 1993/05

COUNSEL:
C R C Newlinds SC/S A Kerr (Plaintiff)
D Allen with S Earl (Sol) (Defendants)

SOLICITORS:
Gadens (Plaintiff)
Laurence & Laurence (Defendants 1 and 2)
Dibbs Barker Gosling (Defendant 3)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

McDOUGALL J

31 March 2005 Ex tempore (revised 1 April 2005)

PTY LIMITED & ORS

JUDGMENT

1 HIS HONOUR: The plaintiff (Glen Eight) and the first and third defendants (Home Building and Interco respectively) are parties to a building contract made on 13 February 2003 (the contract). Glen Eight was the principal and Home Building and Interco were together referred to as “the Contractor”. Under the contract, Home Building and Interco were required to carry out the design and construction works required to convert a commercial property at Milsons Point into residential accommodation.

2 Under the contract, Glen Eight was required to make progress payments. Its obligations to do so were conditioned, amongst other things, by cl 43 of the General Conditions. By cls 43.2 and 43.3, the Contractor (ie, Home Building and Interco) was required to pay subcontractors before it had any entitlement to be paid a progress payment by Glen Eight.

3 Clause 43 was amended both to reinforce that concept and to provide remedies if the Contractor failed to follow the regime. Those remedies, which were to be initiated by the superintendent under the contract, included the establishment of a bank account to which Glen Eight and the Contractor were joint signatories and the payment of subcontractors and suppliers out of that account. The relevant provision stated specifically "that all monies…

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 Glen Eight v Home Building

Details

AGLC: Glen Eight v Home Building [2005] NSWSC 309
Case: [2005] NSWSC 309
Decision Date: 31 March 2005

CaseChat Overview and Summary

The dispute between Glen Eight and Home Building arose from the latter's administration, with Glen Eight seeking an injunction to restrain the alleged breach of a trust fund. The case was heard in the court, which was tasked with determining the legal issues surrounding the funds deposited by Glen Eight into Home Building's bank account. As a signatory to the account, Glen Eight argued that the moneys were held on trust and that they were entitled to the funds held by the administrator due to a resulting trust or an express trust.

The court considered whether there was a prima facie case that the funds were held on trust and if Glen Eight was entitled to the entire amount held by the administrator. Additionally, the court examined if there was an intention to create an express trust and if any allowance should be made for the legal costs of the administrator. The court's reasoning focused on the nature of the trust and the rights of the parties involved.

The court concluded that there was a prima facie case that the funds were held on trust, and Glen Eight was entitled to the entire amount held by the administrator. The court found that there was an intention to create an express trust and that no allowance should be made for the legal costs of the administrator. The outcome was that Glen Eight was granted relief on the entire amount held by the administrator, with no question of principle remaining.

The final orders of the court were that Home Building was restrained from using the funds in the bank account for any purpose other than to satisfy Glen Eight's claim, and the administrator was directed to pay the entire amount to Glen Eight. The court's decision provided clarity on the nature of the trust and the rights of the parties involved in the dispute.

Orders