SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2012 0008
| PAUL HENRY HARPUR (who is sued as the Trustee of the PETER RAND TRUST (also known as THE CLAIBORNE TRUST)) | Appellant |
| V | |
| FRANCIS ERNEST WILLIAM LEVY (as the Executor of the Estate of PETER THOMAS EVAN RAND, deceased) | First Respondent |
| and | |
| LEON MOSCOVITCH (as the Executor of the Estate of PETER THOMAS EVAN RAND, deceased) | Second Respondent |
| and | |
| ANGELO TESORIERO (as the Executor of the Estate of PETER THOMAS EVAN RAND, deceased) | Third Respondent |
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| JUDGES | NEAVE, WHELAN JJA and VICKERY AJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 4 March 2013 |
| DATE OF JUDGMENT | 15 August 2013 |
| MEDIUM NEUTRAL CITATION | [2013] VSCA 209 (2nd revision, 22 August 2013, page 33, [79]) |
| JUDGMENT APPEALED FROM | Harpur v Levy & Ors [2011] VSC 653 |
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EQUITY — Owner of properties established discretionary trust of properties subject to mortgages — trustee was object of discretionary trust during lifetime — whether successor trustee entitled to claim indemnity on behalf of beneficiaries for loan repayments from estate of deceased original trustee — importance of intention of original trustee — whether appropriate to apply recoupment principles — whether Waring v Ward (1802) 7 Ves Jun 332 applies to a voluntary transfer of property subject to a mortgage — Simpson v Forrester (1975) 132 CLR 499 — Gadsen v Commissioner for Probate Duties[1978] VR 653 — Appeal dismissed.
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| Appearances: | Counsel | Solicitors |
| For the Appellant | Mr J D Merralls QC with Mr S Wotherspoon | Mills Oakley |
| For the Respondent | Mr D A Klempfner with Mr S T Pitt | Sackville Wilks Pty Ltd |
NEAVE JA:
Introduction
The issue which arises in this appeal is whether Paul Henry Harpur, (‘Harpur’) who issued proceedings in his capacity as trustee of the Claiborne Trust,[1] is entitled to be indemnified from the estate of Mr Peter Rand, (‘Rand’)[2] for amounts paid out of trust property to discharge loans which were made to Rand. The loans were secured on five apartment properties in Hawaii which Rand (and later Harpur) held on trust for various beneficiaries. Harpur also claims the expenses of sales of three of the apartments and the expenses of foreclosure proceedings relating to two of the apartments, following default in the repayment of the loans.[3]
[1]Previously the Peter Rand Trust.
[2]No disrespect is intended by describing the parties in this way.
[3]His Honour also held that there had been an incomplete gift of a condominium property in Thailand to Mr Harpur. No order was made for the transfer of that property (which had in any case been lost by adverse possession). The appeal against that aspect of the judgment was abandoned.
Harpur appeals from the decision of a trial division judge that Harpur was not entitled to such an indemnity.[4] The respondents to the appeal are the executors of Rand’s will and administrators of his estate.
[4]Harpur v Levy [2011] VSC 653 (‘Reasons’).
Facts
Over a period of about 12 months, beginning in January 1989, Rand purchased long…
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- AGLC
- Harpur v Levy [2013] VSCA 209
- Case
- [2013] VSCA 209
- Decision Date
CaseChat Overview and Summary
The legal issues in Harpur v Levy revolved around the intention of the original trustee and the applicability of Waring v Ward (1802) 7 Ves Jun 332 to a voluntary transfer of property subject to a mortgage. The court also needed to consider Simpson v Forrester (1975) 132 CLR 499 and Gadsen v Commissioner for Probate Duties[1978] VR 653 in determining the outcome. The central question was whether the successor trustee was entitled to claim an indemnity for loan repayments from the estate of the deceased original trustee on behalf of the beneficiaries.
In delivering the judgment, the court held that the intention of the original trustee was of paramount importance in determining whether the successor trustee could claim an indemnity for loan repayments from the estate of the deceased original trustee on behalf of the beneficiaries. The court found that the principles of recoupment did not apply in this situation, as it was a voluntary transfer of property subject to a mortgage, rather than a compulsory sale or execution. The court ultimately dismissed the appeal, finding that the successor trustee was not entitled to claim an indemnity for loan repayments from the estate of the deceased original trustee on behalf of the beneficiaries.
The final orders of the court were that the appeal was dismissed, and the successor trustee was not entitled to claim an indemnity for loan repayments from the estate of the deceased original trustee on behalf of the beneficiaries. The court's decision in Harpur v Levy highlights the importance of considering the intention of the original trustee and the specific circumstances of the case when determining whether a successor trustee can claim an indemnity for loan repayments from the estate of the deceased original trustee on behalf of the beneficiaries.
Orders
Orders of the court
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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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