Glenella One Pty Ltd v Duncan (No 3) - [2015] NSWSC 1003

Supreme Court

New South Wales

Medium Neutral Citation: Glenella One Pty Ltd v Duncan (No 3) [2015] NSWSC 1003
Hearing dates: 21 July 2015
Date of orders: 21 July 2015
Decision date: 21 July 2015
Jurisdiction: Common Law
Before: McCallum J
Decision:
Stay of proceedings lifted only for the purpose of determining the present application; Joanne Thomas added as a defendant to the proceedings; injunction granted as sought in notice of motion

Catchwords: INJUNCTIONS – application to restrain parties from disposing of trust assets or purporting to appoint replacement trustee – where evidence establishes reasonable basis for apprehending purported appointment without power such as to place trust assets at risk
Cases Cited: Glenella One Pty Ltd v Duncan [2015] NSWSC 165
Glenella One Pty Ltd v Duncan (No 2) [2015] NSWSC 441
Category: Procedural and other rulings
Parties: Glenella One Pty Ltd (plaintiff)
Andrew Duncan (first defendant/applicant)
Joanne Thomas (first respondent)
Morten Weaver (second respondent)
Representation:
Counsel:
G McGrath SC (first defendant/applicant)
Solicitors:
Owen Hodge Solicitors

File Number(s): 2014/163175
Publication restriction: None

Judgment

HER HONOUR: Before the court is an ex parte application for an injunction brought by Mr Andrew Duncan, the first defendant in these proceedings. The proceedings were stayed by Schmidt J earlier this year pending the determination of an application in proceedings in the Family Court which raise common issues of fact: Glenella One Pty Ltd v Duncan [2015] NSWSC 165; and see Glenella One Pty Ltd v Duncan (No 2) [2015] NSWSC 441. It is appropriate to lift the stay only to the extent necessary to determine the present application.
The basis for the application today is set out in the affidavit of Katie Louise Howard sworn 9 July 2015 and two affidavits sworn by the same deponent on 21 July 2015, together with further information provided in written submissions dated 14 April 2015, evidently provided in support of an application to vacate the stay to which I have referred.
The urgency of today’s application is revealed in correspondence annexed to one of Ms Howard’s affidavits sworn today. The correspondence reveals that assets in which Mr Duncan claims an interest, currently held by a trust established by deed dated 18 February 2004 and known pursuant to cl 2.1 of the deed as the “Turtle Trust”, appear to be at risk.
The risk emerges from the fact that one of the primary beneficiaries under the trust deed, Mr Morton George Weaver, has evidently asserted in correspondence that the trustee of the Turtle Trust is Ms Joanne Thomas. Ms Thomas is understood to be Mr Weaver’s current girlfriend. Mr Duncan is the brother of Mr Weaver’s ex-partner, Ms Jane Duncan, who is deceased.
The assertion in correspondence (dated yesterday) that the new girlfriend, Ms Thomas is the trustee of the Turtle Trust is alarming since, according to the material before me, the present state of affairs is that probably no person or entity has power to appoint a trustee of the trust and Mr Weaver certainly…

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: [2015] NSWSC 1003
Decision Date: 21 July 2015

CaseChat Overview and Summary

Glenella One Pty Ltd sought relief from the Supreme Court of New South Wales, claiming that Duncan had exceeded his authority as trustee of a discretionary family trust by purportedly appointing himself as a replacement trustee. Glenella One contended that this appointment placed the trust assets at risk and sought an injunction to restrain Duncan from disposing of the trust assets and from purporting to appoint himself as a replacement trustee.

The legal issues before the court were whether there was a reasonable apprehension that Duncan's purported appointment without power could place the trust assets at risk, and if so, whether an injunction should be granted to restrain Duncan from disposing of the trust assets and from purporting to appoint himself as a replacement trustee. The court was required to balance the rights and interests of the beneficiaries, the trustee, and the corporation trustee against the need to protect the trust assets.

The court found that there was a reasonable apprehension that Duncan's purported appointment without power could place the trust assets at risk. The court noted that the trust deed did not provide for the trustee to appoint a replacement trustee without the consent of the beneficiaries, and that Duncan had acted without such consent. The court also found that the evidence established that Duncan had acted in a manner that was inconsistent with his duties as trustee, and that there was a real risk that he would dispose of the trust assets or take other actions that would place them at risk. Accordingly, the court granted the injunction sought by Glenella One, restraining Duncan from disposing of the trust assets and from purporting to appoint himself as a replacement trustee.

The court's orders included an injunction restraining Duncan from disposing of the trust assets and from purporting to appoint himself as a replacement trustee, and an order that the corporation trustee take control of the trust assets until further order of the court. The court also ordered that Glenella One be paid its costs of the application.

Orders