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Harpur v Levy

Harpur v Levy

Case [2007] VSCA 128 22 June 2007

Construction of Trust Deed

Summary Judgment

Costs

Trusts & Equity

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

No 6796 of 1999

PAUL HENRY HARPUR & ORS
	v
FRANK ERNEST WILLIAM LEVY (& ORS IN THEIR CAPACITY AS THE EXECUTORS OF THE ESTATE OF PETER THOMAS EVAN RAND DECEASED) & ANOR

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JUDGES:	MAXWELL P, NEAVE JA and REDLICH JA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	26 JUNE 2006
DATE OF JUDGMENT:	22 JUNE 2007
MEDIUM NEUTRAL CITATION:	[2007] VSCA 128

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TRUSTS – Construction of trust deed – Whether the deed expressed an intention to create a trust in the future, or whether it was an immediate declaration of trust with the enjoyment of the beneficial interests postponed – Clear words of deed not affected by the recitals – Appeal dismissed.

PRACTICE AND PROCEDURE – Summary judgment - Test for striking out a defence under Supreme Court (General Civil Procedure) Rules, r 23.01(2).

COSTS – Whether certain plaintiffs were proper parties to the proceeding so that it was appropriate to award costs against them – Appeal against costs dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr J D Merralls QC, with Mr M N Wise	Mills Oakley Lawyers
For the First, Second and Third Respondents	Mr A J Myers QC, with Mr R I Rosenberg	Sackville Wilks & Co
For the Fourth Respondent	Mr D Weinberger (Solicitor)	Nathan Kuperholz

MAXWELL P:

Neave JA has set out the circumstances giving rise to this appeal. I gratefully adopt her Honour’s summary. For the reasons which follow, however, I have reached a different conclusion on the question of construction. I would therefore allow the appeal on the principal issue. As mine is a minority view, I say nothing about the other issues.

In my opinion, the deed was effective as an immediate declaration of trust, with the properties to be transferred in the future. I consider that the operative provisions of the deed clearly evince an intention on the part of Mr Rand that he become trustee then and there. At worst for the appellants, the operative provisions are ambiguous, and reference to the recitals – justified in a case of ambiguity – confirms that Mr Rand intended to create a trust immediately.

The search for intention

In deciding whether a trust has been created, the court of equity looks to the intent rather than the form.[1] At the same time, the “equitable partiality for intention over form” has its limits.[2] In Heartley v Nicholson, Bacon VC said:

“All such questions are, from their very nature, of difficulty, and sometimes of very great nicety. The difficulty is occasioned by the desire which the court must feel to give full effect to the intention of the party or parties to the transaction, and by the duty which the court is under of preserving unimpaired those rules which have been established and which form the law, even though they should frustrate the plain intention. The nicety often arises from the attending circumstances, because they require the closest consideration in order to arrive…

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 Harpur v Levy

Details

AGLC: Harpur v Levy [2007] VSCA 128
Case: [2007] VSCA 128
Decision Date: 22 June 2007

CaseChat Overview and Summary

Harpur v Levy involved a dispute between the plaintiffs and the defendant regarding the construction of a trust deed. The plaintiffs sought a declaration that a trust had been created by the deed, while the defendant argued that the deed did not create a trust but was instead an immediate declaration of trust with the enjoyment of the beneficial interests postponed. The case was heard in the Supreme Court of Queensland. The plaintiffs subsequently applied for summary judgment against the defendant, and the defendant applied for the plaintiffs' defence to be struck out. The defendant also applied to set aside the summary judgment order.

The legal issues in the case included whether the trust deed created an immediate declaration of trust with the enjoyment of the beneficial interests postponed, rather than a future trust, and whether the court should strike out the defendant's defence. Additionally, the court had to determine whether the plaintiffs were proper parties to the proceeding, and if it was appropriate to award costs against them. The court held that the trust deed expressed an intention to create a trust in the future and not an immediate declaration of trust with the enjoyment of the beneficial interests postponed. The court also found that the defendant's defence was not frivolous or vexatious, and therefore the application to strike out the defence should be dismissed. Finally, the court held that the plaintiffs were proper parties to the proceeding and it was appropriate to award costs against them.

The appeal against the primary judge's decision was dismissed, and the orders made by the primary judge were affirmed. The court held that the trust deed expressed an intention to create a trust in the future, and the recitals did not affect the clear words of the deed. The court also held that the defendant's defence was not frivolous or vexatious, and therefore the application to strike out the defence should be dismissed. Finally, the court held that the plaintiffs were proper parties to the proceeding and it was appropriate to award costs against them. The appeal against the costs order was also dismissed.

Orders