Golding v Primavera Holdings Pty Ltd
[2018] ACTSC 118
•4 May 2018
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Golding v Primavera Holdings Pty Ltd |
Citation: | [2018] ACTSC 118 |
Hearing Date: | 7 March 2018 |
DecisionDate: | 4 May 2018 |
Before: | McWilliam AsJ |
Decision: | See [77] |
Catchwords: | TRUSTS – express trust – where land was sold to a developer on the basis that once development of a larger parcel of land was complete, a unit in the development would be transferred back to the seller for nominal consideration – where developer carried out the development but failed to register a units plan so as to enable the transfer to the seller to occur – express trust established |
Legislation Cited: | Law Reform (Miscellaneous Provisions) Act 1955 (ACT) (repealed) s 51 Civil Law (Property) Act 2006 (ACT) s 201 Unit Titles Act 2001 (ACT) |
Cases Cited: | Bloch v Bloch (1981) 180 CLR 390 Byrnes v Kendle [2011] HCA 26; 243 CLR 253 White v Shortall [2006] NSWSC 1379; 68 NSWLR 650 |
Texts Cited: | H A J Ford and W A Lee, Principles of the Law of Trusts (The Law Book Company Limited, 2nd ed, 1990) J D Heydon and M J Leeming, Jacob’s Law of Trusts (LexisNexis Butterworths Australia, 8th ed, 2016) |
Parties: | Allan Jones Golding (First Plaintiff) Eveleen Golding (Second Plaintiff) Primavera Holding Pty Ltd ACN 080 185 244 (First Defendant) Registrar General (Second Defendant) |
Representation: | Counsel Mr R Arthur (Plaintiffs) Self-represented (First Defendant) |
| Solicitors Elringtons Lawyers (Plaintiffs) Self-represented (First Defendant) | |
File Number: | SC 220 of 2017 |
Introduction
The plaintiffs in these proceedings are husband and wife. They previously owned (through Crown leasehold) a parcel of land described as Block 12, Section 2 in the Division of Hall (Land), on which an office building was constructed. On 14 March 2003, they sold the Land to the first defendant for the purpose of development with the adjoining block (being Block 3, Section 2 in the Division of Hall), with the two blocks being consolidated under the one lease, and now described as Block 19, Section 2 in the Division of Hall (Consolidated Parcel).
These proceedings concern the arrangements made at the time the Land was sold. By way of broad overview, the plaintiffs claim that when the contract for sale was executed, an express trust was also created over a portion of land contained within the Consolidated Parcel, with the plaintiffs as beneficiaries in equal shares. This was done via a document entitled Declaration of Trust and signed on 14 March 2003 (Trust Deed), the terms of which are set out below.
Nature of the claim and counterclaim
Through proceedings commenced on 27 June 2017, and an amended originating application filed on 5 September 2017, the plaintiffs seek to enforce the condition of the Trust Deed that once the Consolidated Parcel had been developed and a units plan registered, one of the units in the plan (described in the Trust Deed) would then be transferred to the plaintiffs for the consideration of $1.
In order to achieve this, the plaintiffs seek declarations of an express trust and of the first defendant’s breach of such trust, accompanied by an order that the first defendant perform its obligations under the trust, by registering a units plan and then transferring the specified unit to the plaintiffs.
If that cannot be done, the plaintiffs seek the appointment of a receiver, or alternatively, the payment of a sum equivalent to the market value of any equitable interest in the Consolidated Parcel they are found to hold.
An amended defence and counterclaim was filed on 24 November 2017, with written submissions being filed on 1 March 2018. The first defendant disputes the creation of any trust and disputes that the plaintiffs have any equitable interest in the Consolidated Parcel, such as to found the caveat (no. 1410174) that has been lodged by the plaintiffs over the Consolidated Parcel.
The first defendant says further that the plaintiffs had obtained an unconditional bank guarantee in the sum of $250,000 from the first defendant. They could have claimed on the bank guarantee but elected not to do so, and have now forfeited that right.
The first defendant raises a counterclaim, alleging that the sale of the Land was conditional upon a development application being carried out, which did not include seeking approval for any unit title plan.
The first defendant contends there were matters unknown to it at the time the Land was purchased in relation to heritage concerns over the development and that it was misled by the plaintiffs in this regard. The first defendant expanded upon this in written submissions, asserting that the plaintiffs should have disclosed in the contract for sale that the building on the Land had been included in the interim Heritage Places Register in 2002, and that the first defendant ought to be compensated for the non-disclosure.
A second aspect of the counter claim relates to the tenanting of the building on the Land. The first defendant’s argument is that from approximately November 2004, there were three tenants occupying the building and paying rent to the plaintiffs, which the first defendant was not informed about until 24 October 2017. The first defendant pleads that this gave the plaintiffs a financial benefit. In written submissions, the first defendant submitted it should be compensated for the foregone rent as a result of these tenancies.
The third contention (not pleaded but raised as an issue in submissions) is for the return of a bank guarantee, which was increased to $350,000 in 2009 and which the first defendant submits was outside any agreement by the parties. Compensation is also sought for the maintenance of the bank guarantee from 2004.
The second defendant, the Registrar General, is a party to these proceedings solely because of the caveat that has been lodged by the plaintiffs over the Consolidated Parcel. The first defendant lodged a lapsing notice in respect of the said caveat, which precipitated the second defendant notifying the plaintiffs on 19 June 2017 of an intention to remove the caveat from the lease in respect of the Consolidated Parcel, unless an order extending the operation of the caveat was obtained from this Court and lodged with the office of the second defendant within 14 days.
On 27 June 2017, Elkaim J made an order extending the operation of the caveat until further order. On 17 July 2017, the second defendant filed a submitting appearance.
Issues for determination
The issues arising for determination, as far as I have been able to discern from the pleadings and submissions summarised above, are as follows:
(a)Whether an express trust was created over part of the Consolidated Parcel;
(b)Whether there has been a breach of trust (by failing to register a unit title plan);
(c)If there has been a breach of any trust, what consequences ought follow;
(d)Whether the plaintiffs misled the first defendant in respect of heritage matters when the contract for sale was entered into, and if so, whether the first defendant is entitled to any relief (Heritage Issue);
(e)Whether the plaintiffs misled the first defendant about the tenanting of the building on the Land, and if so, whether the first defendant is entitled to any relief (Tenant Issue); and
(f)Whether the bank guarantee should be returned, and whether the first defendant is entitled to any monies for maintaining a bank guarantee over the years the development was carried out (Bank Guarantee Issue).
Summary of findings
As explained in the following reasons, I have found that there was an express trust created in favour of the plaintiffs, which was breached by the first defendant. In the circumstances of this case, it is appropriate to grant relief by compelling performance of the obligations under the Trust Deed.
There is no legal basis for any compensation or damages payable to the first defendant on the counter claim.
Evidence
In support of its application, the plaintiffs relied upon affidavits of the first plaintiff sworn 27 June 2017, 15 July 2017 and 2 September 2017, and an affidavit of Mr Norman Napper sworn 29 November 2017. The first plaintiff was cross-examined and I found him to be a generally credible witness.
The first defendant obtained leave (with the plaintiffs’ consent) to be self-represented through the appearance of a director of the company, Ms Maria de Lurdes Martins, who was in the somewhat difficult position of representing the company without having been party to any of the negotiations that took place in respect of the transactions with the plaintiffs. At the time the sale of the Land occurred, her brother, the late Mr Agostinho Martins, was the person involved on behalf of the first defendant. In an email attached to the one of the first plaintiff’s affidavits, Ms Martins explained to the plaintiffs that she and her family members were attempting to tidy up the affairs of her brother as best as they can, following his death in October 2011.
The first defendant relied upon affidavits of Ms Martins, sworn 14 July 2017 and 4 August 2017, as well as the affidavit of her mother, Ms Maria Martins sworn 1 December 2017. Her evidence was directed mainly to recording the difficulties with the delays in completing the development over the Consolidated Parcel and the unsatisfactory state of the documentary evidence in terms of the contract for sale and the different versions of the Trust Deed that were in evidence. Ms Martins was not cross-examined and I have accepted her evidence.
The contract
The contract for sale that was in evidence was incomplete. It was dated 24 February 2003, had a completion dated of 7 March 2003 and was signed by the first defendant under its company seal, although not in the presence of any witness. Perhaps due to a historical oversight with copying the original document, only four pages of the eight page standard form for Crown Lease and Unit Title were able to be tendered, along with the special conditions.
No party was able to provide a complete copy of the contract that had been signed by either party, although a blank standard form contract was tendered for the purpose of the Court inferring what the missing clauses may have been.
Further, of the pages of the signed contract for sale that were in evidence, a number of the standard clauses were crossed out, but the amendments had not been initialled. This led to a concern that other clauses on the standard form may have also been crossed out, so that the precise terms of that contract were unclear.
However, having reviewed both the struck through clauses on the signed contract, and those clauses on the complete standard form template that are likely to also have formed part of the contract, it is of no moment to this case whether the standard clauses were included or crossed out in the document that was signed. This is because they all concerned matters to be attended to either prior to or at completion, and there is no dispute that the contract for sale was completed, as evidenced by the fact that the lease was transferred to the first defendant.
It is the special conditions to the contract that are important for the resolution of this case, and they were in evidence.
One of the standard terms included in the contract for sale was:
The Seller agrees to sell and the Buyer agrees to buy the Property for the Price on the following terms:
Clause 1 – Definition And Interpretation
…
1.5A reference to “this Contract” extends to the Schedule, Annexure Clauses, the special conditions, and attachments (if any) forming part of this Contract.
The Schedule on the first page of the contract for sale records that special conditions 1-8 were included in the contract.
Two of the special conditions are material to the issues between the parties. Special condition 2 relevantly provides:
The parties acknowledge and agree that this Contract for Sale and the Collateral Contract [being the contract signed with the owner of Block 3, Section 2 in the Division of Hall] are conditional upon:
(i)The Department of Urban Services (“PALM”) has the approval of Development Application 20010236 (“DA”) on the 29 [M]ay 2001, consented to the consolidation of Blocks 3 and 12 Section 2 Hall being the parcels the subject of this and the Collateral Contract – such DA approval and the conditions relating thereto hereafter referred to as “the Approval”. Copy of the Approval is annexed hereto and marked “A”.
(ii)…
Special condition 7 was in the following terms:
7. The Buyer shall at completion:
a.Execute and deliver to the Seller a stamped Declaration of Trust in the form annexed hereto and marked “C”, and
b.Provide to the Seller a Bank Guarantee in the sum of $250,000.00 in favour f the Seller which guarantee is intended shall secure the Buyer’s obligations under the Declaration of Trust.
Neither Annexure A not Annexure C were attached to the version of the contract that was in evidence.
The Trust Deed
The Trust Deed was seperately adduced through affidavit evidence. It was signed by all parties, including the first defendant under its company seal, and bears the date one week after the scheduled completion of the contract. The inference I have drawn from the timing, signatures and contents of that document is that it reflects Annexure C. Even if it did not, it was the document that was ultimately signed by the parties and to the extent that any of its terms differ from those in Annexure C, it would constitute an agreed variation or amendment.
The nature of the submissions discussed below makes it appropriate to set out the provisions of the Trust Deed in full:
DECLARATION OF TRUST
This Declaration of Trust made the 14th day of March 2003.
BETWEEN
[Allan] Jones Golding and Eveleen Golding
of 10 Victoria Street, Hall in the Australian Capital Territoryhereafter jointly and severally called “Golding” of the First Part.
AND
Primavera Holdings Pty Ltd
ACN 080 185 244
Care of Tigwell & Associates, Suite F6, 1st Floor, Lakeview Square, Benjamin Way, Belconnen in the Australian Capital Territoryhereafter called “Primavera” of the Second Part.
RECITALS
A.Golding is the registered proprietor of that piece and parcel of land being Block 12 Section 2 Division of Hall hereafter called “the Land” and on part of which is constructed an office building hereafter called “the Building” from which Golding conducts its business.
B.On this date Golding has entered into a contract to sell the Land to Primavera for a sum of $250,000.00 here after the “the contract”, conditional interalia, on Golding retaining the equitable interest in the Land pending legal transfer back to Golding of that part of the Land in the form of a parcel registered pursuant to the Unit Titles Act, representing land and Building containing in total approximately 300 square meters plus or minus 10% and being better described and delineated on the Plan Annexed hereto and marked with the letter “A” (hereafter called “the Trust Parcel”), such transaction hereafter referred to as the “Golding Buyback”.
C.Golding and Primavera agree that the consideration for the Golding Buyback shall be one dollar ($1.00) and that the Trust Parcel shall comprise one (1) unit in a plan registered pursuant to the Unit Titles Act 2001 hereafter called “the Units Plan” over a consolidated parcel comprising both the Land and the contiguous Block 3 Section 2 Hall hereafter called “the Consolidated Parcel”.
NOW THIS DEED WITNESSES
1.Primavera so as to bind its properly appointed personal representatives herby declares and affirms its status as Trustee of the Trust Parcel for and on behalf of Golding as Beneficiary.
2.Primavera shall use its best endeavours to complete the building development of the Consolidated Parcel and effect the registration of the Units Plan as is envisaged in recital C hereof as soon as possible after the date hereof.
3.Primavera shall cause the Trust Parcel to be registered as part of the Units Plan to the effect that the Trust Parcel shall as part of its Unit Entitlement:
(a)Be allocated at least three (3) car spaces as per Annexure A; and
(b)Be allocated at least seventy five (75) square metres of a use purpose defined in the Territory Plan as Business Agency and Shop.
4.Primavera shall promptly on demand by Golding after registration of the proposed Units Plan, transfer the unencumbered Trust Parcel to Golding in consideration of $1.00 to complete the Golding Buyback.
5.Primavera acknowledges that the within Trust shall entitle Golding to lodge a caveat over the Consolidated Parcel in order to protect Goldings’ existing and ongoing interest in the Trust Parcel, pending completion of the Golding Buyback.
6.Golding shall between completion of the Contract and completion of the Golding Buyback hereafter called the “Construction Period”:
(i)Permit Permavera unhindered access on to and over the Trust Parcel;
(ii)Permit Primavera to fence around the improvements on the Trust Parcel, provided always that emergency access out of the Building shall not be impeded;
(iii)Only access the Building through its Victoria Street entrance.
7.Golding shall be responsible for effecting its own insurances in relation to the Building. Primavera shall be responsible for effecting Builder’s All Risk insurance on the Consolidated Parcel.
8.Primavera shall during the Construction Period take all reasonable care and precaution to ensure Golding can continue to operate its business from the building with as little disruption as possible.
9.On transfer of the Trust Parcel by Primavera to Golding as envisaged herein, Golding shall return to Primavera the Bank Guarantee in the sum of $250,000.00 which Bank Guarantee Primavera has delivered to Golding on completion of the Contract.
10.Golding shall not during the Construction Period object to nor prevent Primavera’s necessary access to and/or construction work involving the services attaching to the Building or Trust Parcel.
Applicable legislation
As the Trust Deed was signed (on the face of the document) on 14 March 2003 and concerns dealings with real property, the Law Reform (Miscellaneous Provisions) Act 1955 (ACT) applies. Section 51 was the applicable provision to declarations of trust. The material parts of that provision are set out as follows:
Instruments to be in writing
(1) Subject to this division—
(a) an interest in land cannot be created or disposed of by a person except—
(i) by writing signed by the person, ...; or
...; and
(b) a declaration of trust by a person in respect of land or an interest in land must be—
(i) in writing signed by the person; or
...; and
(c) a disposition by a person of an equitable interest or trust subsisting at the time of the disposition must be—
(i) in writing signed by the person ...
...
(2) Subsection (1) does not affect the creation or operation of a resulting, implied or constructive trust.
Section 51 of that now repealed statute was re-enacted in substantially the same terms in s 201 of the Civil Law (Property) Act 2006 (ACT).
An express trust was created
The legal principles are uncontroversial on the facts of this case. A trust will be created where there is: (a) an identified trustee; (b) one or more beneficiaries (or a charitable purpose); (c) trust property; and (d) an equitable obligation that binds the trust property: Muschinski v Dodds (1985) 160 CLR 583 at 613-614; see also J D Heydon and M J Leeming, Jacob’s Law of Trusts (LexisNexis Butterworths Australia, 8th ed, 2016) at [1-04].
An express trust arises when (following Kauter v Hilton (1953) 90 CLR 86 at 97 per Dixon CJ, Williams and Fullagar JJ):
(a)The intention on the part of the settlor to create the trust is certain (to be assessed subjectively, albeit reference can be made to objective circumstances: Hyhonie Holdings Pty Ltd & Anor v Leroy & Anor [2004] NSWCA 72 at [43]; White v Shortall [2006] NSWSC 1379; 68 NSWLR 650 at [128]- [129]);
(b)The subject matter is certain, so that the trust property is clearly defined; and
(c)The object of the trust is certain; that is, the beneficiaries of the trust are clear.
The Court may infer intention, and may look to the nature of the transaction and the whole of the circumstances attending the relationship between the parties and known to them: Calverley v Green (1984) 155 CLR 242 at 262; Inland Revenue Commissioners v Raphael; Inland Revenue Commissioners v Ezra [1935] AC 96 at 142-143; Byrnes v Kendle [2011] HCA 26; 243 CLR 253 at [98], [102]-[114].
No particular form is necessary for the creation of an express trust. However, the intention of the settlor to create a trust must be explicit. In every case it is a question of fact for the Court to determine whether an intention to create a trust is sufficiently evidenced: Bloch v Bloch (1981) 180 CLR 390 at 396 per Wilson J (with whom Gibbs CJ, Murphy and Aickin JJ agreed).
The overall question is whether, on the true construction of what was said and written, the circumstances of the case manifest sufficient intention to create a trust: Walsh Bay Developments Pty Ltd v Federal Commissioner of Taxation (1995) 130 ALR 415 at 422.
As can be seen from the language of the Trust Deed set out above that was signed by the first defendant, it is expressly stated that the document is a ‘Declaration of Trust’. By the first clause of the Trust Deed, the first defendant declares and affirms its status as trustee of the ‘Trust Parcel’ for and on behalf of the plaintiffs as beneficiary ‘so as to bind its properly appointed personal representatives’. The intention of the first defendant to create a trust, including an obligation binding the trust property, is certain.
Similarly, the subject of the trust is certain, by the description of the Trust Parcel and the plan that is annexed to the Trust Deed.
The beneficiaries of the trust are recorded in the Trust Deed as the plaintiffs.
The evidence establishes that an express trust was created in the manner for which the plaintiffs contend.
The first defendant argued that that stamp duty was only paid in relation to the Trust Deed after the contract of sale was entered in to, as indicated by the ACT Revenue Office stamp on the original document bearing the date 1 February 2005. The first defendant appeared to have concerns about the authenticity of the document. It contended that this discrepancy meant that the Trust Deed was not validly entered in to, as special condition 7 of the contract required the first defendant to execute and deliver a stamped declaration of trust at completion. The first defendant further submitted that an inference could be drawn from the disprepancy the plaintiffs never intended to be bound by the Trust Deed until the project ran into difficulties.
It is apparent from the evidence that a caveat was only lodged in respect of the Consolidated Parcel on 22 February 2005. The plaintiffs were contractually entitled to lodge the caveat by clause 5 of the Trust Deed, set out above.
The timing of the payment of the stamp duty suggests that the plaintiffs considered it prudent to register the Trust Deed prior to lodging the caveat. It does not impact upon the finding that the Trust Deed was validly created on the date recorded on the document, being 14 March 2003.
The fact that the Trust Deed was stamped years after the document was signed does not invalidate the Trust Deed. As can be seen from the requirements of the Law Reform (Miscellaneous Provisions) Act 1955 (ACT) and the authorities referred to above, it is not a condition of creation of an express trust (or its enforceability) that stamp duty be paid in respect of the express trust document, either at the time the document was signed, or at all.
A breach of express trust has occurred
The first defendant accepted that it has not applied for registration of a units plan under the Unit Titles Act 2001 (ACT). The explanation proffered by the first defendant for failing to undertake that task was that it is a costly exercise, requiring further structural works to be done, such as separate water meters for each unit on the site, prior to the lodging of the documentation.
While the entire development has clearly been a far more costly exercise than the parties anticipated in 2003, contrary to the first defendant’s submissions, the first defendant remains obliged, through clauses 2 and 3 of the Trust Deed, to carry out the final and essential step necessary for the Trust Parcel, as defined in the Trust Deed, to be transferred to the plaintiffs.
On the evidence before the Court, this is not a case where the first defendant has used all reasonable endeavours to comply with its obligation in clause 2 of the Trust Deed but its efforts have been frustrated, in that a units plan has not been registered for reasons outside its control. It is simply that no attempt has yet been made because it has chosen not to spend the money required to comply with its obligations.
Such conduct constitutes a breach by the trustee of the obligations set out in the Trust Deed. What is required to remedy the breach will be addressed after consideration of the matters raised by the first defendant.
The Heritage Issue
The first defendant claimed that there were undisclosed heritage requirements that caused the delay and extra expense for the development of the Consolidated Parcel. As the matter is raised by way of defence and counter-claim, the onus shifts to the first defendant to substantiate its case.
I accept that the Land was part of the Hall Village Precinct, which in turn was part of a heritage listing that had been gazetted on 23 August 2001. However, special condition 2, the key parts of which have been set out above, expressly attached a development approval by the relevant regulatory body for development of the Consolidated Parcel.
Although that development approval was not in evidence, the parties both relied upon the history of the development set out in the decision of Primavera Holdings Pty Ltd and ACT Planning & Land Authority [2006] ACTAAT 28 (Tribunal), where the nature of the development that had been approved was described.
The then existing ACT Administrative Appeals Tribunal recorded (at [1]) that as at May 2001, there was approval for a development for the consolidation of two commercial blocks, being Blocks 3 and 12, Section 2 in the Division of Hall, and the erection on those blocks of four additional commercial units and eight residential dwellings, along with provision for vehicular ingress/egress from Victoria Street and associated landscaping. I have taken the Tribunal’s description of the nature of the development as an agreed fact.
The dispute before the Tribunal (recorded in its reasons at [5]) concerned two development applications in respect of the Consolidated Parcel seeking further minor variations to the existing development approval. The ACT Planning and Land Authority had refused to approve the variations sought, on the grounds that the amendments were inconsistent with the heritage listing, and the first defendant had sought to overturn that decision.
The applications to vary the development approval were made after the buildings had already been constructed.
For reasons given at [40]-[46] of its decision, the Tribunal refused to approve the applications.
The plaintiffs in the present case submitted that any difficulties for the first defendant in relation to the heritage listing of the site only arose due to the first defendant’s failure to adhere to the existing development approval by making variations to the buildings that were not in accordance with the heritage guidelines. Having regard to the Tribunal’s decision in respect of the development, I accept that submission.
There is nothing in the contract for sale or the affidavit evidence to indicate any warranty or representation by the plaintiffs that the Land being sold was fit for any future amendments to the development the first defendant may have had in contemplation.
Accordingly, the Heritage Issue does not affect any relief the Court may be minded to grant in respect of the breach of trust established by the plaintiffs.
The Tenant Issue
Again, the difficulty with this aspect of the first defendant’s claim is the lack of evidence.
As I understood the argument, the first defendant claims that there were three tenants in the building previously owned by the plaintiffs and that none of them paid rent to the first defendant after it became the registered Crown lessee. The only one it was able to identify was a business associated with the first plaintiff.
It could not be suggested that the plaintiffs were themselves obliged to pay rent, as they were not the alleged tenant; that is, the plaintiffs as individuals are separate legal personalities to the corporate entity identified by the first defendant as being the business of the plaintiffs occupying the relevant part of the Consolidated Parcel.
As to any ‘benefit’ received by the plaintiffs, clause 8 in the Trust Deed provides that the first defendant was to take all reasonable care and precaution to ensure the plaintiffs could continue to operate their business from the premises with as little disruption as possible. It says nothing about what that business was (for example, part of the business may have been to sub-lease the building to other tenants), nor does it contain any terms about what was to occur in terms of any rent payable by the business.
However, the bigger problem for the first defendant is that there was no document to establish that the plaintiffs themselves had actually received rent from other tenants, let alone that there was an obligation to pay the rent received over to the first defendant. For example, there was no document establishing any lease signed by the unnamed tenants with either the plaintiffs prior to the contract for sale being executed or with the first defendant after completion had occurred.
In the absence of such evidence, and absent any proven obligation on the plaintiffs to account to the first defendant for rent received by them once the Land had been transferred, the first defendant must seek recovery against those entities who occupied the Consolidated Parcel during the relevant period, rather than the plaintiffs.
Accordingly, the claim for foregone rent is not made out.
The Bank Guarantee Issue
As seen from clause 9 of the Trust Deed set out above, once the transfer of the Trust Parcel has been effected, the plaintiffs are obliged to return the bank guarantee to the first defendant. There was no evidence that the plaintiffs had any intention of continuing to hold the bank guarantee in breach of that clause. It is simply that the occasion to return it has not yet arisen.
As to any obligation for the plaintiffs to pay for the first defendant’s ‘maintenance of the bank guarantee’, which I have inferred to mean a claim for any bank fees payable to the bank for the ongoing facility, there is nothing in the terms of the Trust Deed or the contract for sale which gives rise to any obligation on the plaintiffs to make any payment in relation to the bank guarantee.
Accordingly, the fact that the plaintiffs continue to hold the bank guarantee as security is not a barrier to the grant of relief.
Consequence of breach
As submitted by the plaintiffs (referring to Ford and Lee’s Principles of the Law of Trusts at [1706]), they may directly compel the performance of the trustee’s duty under the express trust because the are the beneficiaries named in the trust. They are not mere volunteers, as the trust was created as part of the bargain reached between the parties, reflected in the original sale price of the Land.
Although an order requiring the performance of the trust obligations is not the only remedy available to the plaintiffs, it is the primary remedy sought and there is nothing before the Court on this issue to suggest that the obligation is either unduly complex or now impracticable to perform.
Caveat
As a separate issue, the plaintiffs sought orders in relation to the caveat that they had lodged in respect of the Consolidated Parcel many years ago.
The terms of the orders made by Elkaim J on 27 June 2017 were to extend the operation of Caveat no. 1410174 until further order, and in light of the fact that the plaintiffs have substantiated their claim, there is no reason to vary those terms. If the removal of the caveat is necessary for the units plan to be registered, the plaintiffs can agree an appropriate regime with the first defendant to enable that to occur.
Conclusion
The plaintiffs have established their entitlement to a declaration of an express trust and orders compelling the performance by the first defendant of its obligations under that trust to register a units plan and transfer the Trust Parcel to the plaintiffs.
As each of the bases on which the first defendant put its counter-claim has not been established, the counter-claim will be dismissed.
I make the following orders:
1. Declare that the first defendant holds the parcel of land delineated on the Plan annexed to the Deed of Trust dated 14 March 2003, and referred to in Recital B of that document (Trust Parcel), on trust for the plaintiffs.
2. Order that within 28 days of the making of these orders, the first defendant take all necessary steps to register a units plan over Block 19, Section 2 in the Division of Hall.
3. Order that within 14 days of the units plan referred to in order 2 above being registered, the first defendant execute a notice of transfer of the Trust Parcel in registrable form.
4. Order that the first defendant do all things reasonably necessary to ensure that the transfer be registered, including doing all things reasonably necessary on their part to cause the certificate of title to be produced to the Registrar General for the purpose of such registration.
5. The counter-claim is dismissed.
6. Order that the first defendant pay the plaintiffs’ costs of the proceedings.
| I certify that the preceding seventy-seven [77] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam. Associate: Date: |
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