Hayes v Michael Leslie Hopper as executor of the estate of Peter George Morrison Ryan (Dec)
[1999] WASC 191
HAYES -v- MICHAEL LESLIE HOPPER as executor of the estate of PETER GEORGE MORRISON RYAN (DEC) & ORS [1999] WASC 191
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 191 | |
| Case No: | CIV:2132/1998 | 30 SEPTEMBER 1999 | |
| Coram: | WHITE J | 1/10/99 | |
| 17 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | COLIN ROBERT HAYES MICHAEL LESLIE HOPPER as executor of the estate of PETER GEORGE MORRISON RYAN (DEC) ALAN JOHN POWERS SHEILA MARY POWERS IMAGINATION ENTERPRISES PTY LTD as trustee for the DENMARK UNIT TRUST WALTER WIDMER LYDIA BRIGITTA DOCHERTY DAVID ROBERT PRICE WILLIAM JOHN HARMAN |
Catchwords: | Injunction Claim for interlocutory injunction against a trustee of a unit trust by an applicant claiming to be the beneficiary of a constructive trust whereby the unit holders of the unit trust hold their units upon a constructive trust for the benefit of the members of a "commune" Claim pleaded by the applicant (who is not a beneficiary under the will) that the bequest under a will in favour of the trustee of the unit trust is invalid Standing of the applicant |
Legislation: | Nil |
Case References: | Anglican Health and Welfare Services Inc v Bropho and Ors, unreported; SCt of WA; Library No 920556; 3 November 1992 Baumgartner v Baumgartner (1987) 164 CLR 137 Muschinski v Dodds (1985) 160 CLR 583 Saunders v Vautier (1841) 4 Beav. 115;49 ER 550 Beswicke v Alner [1926] VLR 72 Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 76 ALR 633 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 Connell v Bond Corporation Pty Ltd (1992) 8 WAR 352 Zorbory v Federal Commissioner of Taxation (1995) 95 ATC 4251 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
MICHAEL LESLIE HOPPER as executor of the estate of PETER GEORGE MORRISON RYAN (DEC)
First Defendant
ALAN JOHN POWERS
Second Defendant
SHEILA MARY POWERS
Third Defendant
IMAGINATION ENTERPRISES PTY LTD as trustee for the DENMARK UNIT TRUST
Fourth Defendant
WALTER WIDMER
Fifth Defendant
LYDIA BRIGITTA DOCHERTY
Sixth Defendant
(Page 2)
- DAVID ROBERT PRICE
Seventh Defendant
WILLIAM JOHN HARMAN
Eighth Defendant
(BY ORIGINAL ACTION)
WALTER WIDMER
Plaintiff
AND
COLIN ROBERT HAYES
First Defendant
ALAN JOHN POWERS
Second Defendant
SHEILA MARY POWERS
Third Defendant
IMAGINATION ENTERPRISES PTY LTD as trustee for the DENMARK UNIT TRUST
Fourth Defendant
MICHAEL LESLIE HOPPER as executor of the estate of PETER GEORGE MORRISON RYAN (DEC)
Fifth Defendant
(BY COUNTERCLAIM)
Catchwords:
Injunction - Claim for interlocutory injunction against a trustee of a unit trust by an applicant claiming to be the beneficiary of a constructive trust whereby the unit holders of the unit trust hold their units upon a constructive trust for the benefit of the members of a "commune"
(Page 3)
Claim pleaded by the applicant (who is not a beneficiary under the will) that the bequest under a will in favour of the trustee of the unit trust is invalid - Standing of the applicant
Legislation:
Nil
Result:
Application dismissed
Representation:
Original Action
Counsel:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : Mr C L Caine
Third Defendant : Mr C L Caine
Fourth Defendant : Mr C L Caine
Fifth Defendant : Mr G A Rabe
Sixth Defendant : No appearance
Seventh Defendant : No appearance
Eighth Defendant : No appearance
Solicitors:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : Corrin Caine
Third Defendant : Corrin Caine
Fourth Defendant : Corrin Caine
Fifth Defendant : Ahern & Associates
Sixth Defendant : No appearance
Seventh Defendant : No appearance
Eighth Defendant : No appearance
(Page 4)
Counterclaim
Counsel:
Plaintiff : Mr G A Rabe
First Defendant : No appearance
Second Defendant : Mr C L Caine
Third Defendant : Mr C L Caine
Fourth Defendant : Mr C L Caine
Fifth Defendant : No appearance
Solicitors:
Plaintiff : Ahern & Associates
First Defendant : No appearance
Second Defendant : Corrin Caine
Third Defendant : Corrin Caine
Fourth Defendant : Corrin Caine
Fifth Defendant : No appearance
Case(s) referred to in judgment(s):
Anglican Health and Welfare Services Inc v Bropho and Ors, unreported; SCt of WA; Library No 920556; 3 November 1992
Baumgartner v Baumgartner (1987) 164 CLR 137
Muschinski v Dodds (1985) 160 CLR 583
Saunders v Vautier (1841) 4 Beav. 115;49 ER 550
Case(s) also cited:
Beswicke v Alner [1926] VLR 72
Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 76 ALR 633
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148
Connell v Bond Corporation Pty Ltd (1992) 8 WAR 352
Zorbory v Federal Commissioner of Taxation (1995) 95 ATC 4251
(Page 5)
1 WHITE J: This action is one of several between the same or similar parties arising from the decision of a number of persons to live together in the Denmark area in this State in the circumstances recounted in the pleadings in these actions. I shall set out below those further facts necessary for an understanding of the present application by Mr Widmer for injunctive relief.
2 Mr Widmer's counterclaims in the action display an apparent state of uncertainty and confusion as to his legal position. He claims to have been a member of a "commune" (whatever such an entity may be) pursuing what is called a "Vision" of a communal, holistic and harmonious lifestyle, to which he subscribed.
3 He says that he contributed an amount of $115,000 towards the purchase price of a piece of land situate near Denmark in this State which was acquired by Imagination Enterprises Pty Ltd, to which I shall refer as "the Company". The Company is the trustee of a unit trust known as the "Denmark Trust" to which I shall refer as "the Trust". Mr Widmer is not a unit holder in the Trust. There is a Trust Deed relating to the Trust. At all material times the Company acted only in its capacity as Trustee of the Trust. There are three ordinary unit holders in the Trust.
4 Certain properties were acquired by the Company from time to time.
5 One of the members of the commune, one Ryan, died testate and in his will he bequeathed the residue of his estate to the Company as trustee of the Trust. Included in the residue of Ryan's estate are two properties situated in Cottesloe and registered in the name of the executor of Ryan's estate. Mr Widmer is anxious to obtain a share of the residue of Ryan's estate if he can or, if he cannot, he would like to ensure that the unit holders of the Trust do not gain the benefit of Ryan's bequest and he seeks, among other matters, a declaration that the bequest must fail for the reasons pleaded by him. Mr Widmer is not a direct beneficiary under Ryan's will and his alleged interest in the residue is said to arise in a way which I have found difficult to understand. I shall revert to this later in these reasons.
6 Mr Widmer placed a caveat over the Cottesloe lands, claiming to be the beneficiary of a resulting trust. He purported to charge his interest in the Cottesloe lands in favour of his solicitor who also placed a caveat on the Cottesloe lands in reliance upon the alleged claim by Mr Widmer, the subject of the latter's caveat.
(Page 6)
7 "A resulting trust is a trust which arises by presumption of law in favour of the settlor or his representatives" (Jacob's "Law of Trusts in Australia", 6th ed, par 1201). The learned authors give two examples of the circumstances in which an implied trust arises, namely:
" … where the settlor has transferred property to trustees but has not disposed of, or not wholly disposed of, the beneficial interest and, secondly, where a purchaser of property directs that it be transferred into the name of a third person and there is nothing to indicate that he intended that person to take the property beneficially. In these circumstances the law presumes that the settlor or purchaser, as the case may be, intended to retain the beneficial interest which he has not disposed of. The term 'resulting' applied to these trusts expresses the view that the property comes back to him after it has been given away, although in truth the beneficial interest may never have left him."
8 Mr Widmer has never owned nor has he ever purchased the Cottesloe land.
9 Subsequently, presumably realising that the facts could not establish the existence of a resulting trust in his favour, Mr Widmer, and his solicitor, withdrew their respective caveats. Mr Widmer then placed another caveat over the Cottesloe lands, this time purporting to be the beneficiary of a constructive trust. Now, presumably accepting that there is nothing which could support his allegation that the Cottesloe lands were held by the executor on a constructive trust, Mr Widmer has agreed to withdraw that caveat also. Nonetheless, on a basis which escapes me, he continues to maintain that he does have a proprietary interest in the Cottesloe lands, apparently in reliance on the rule in Saunders v Vautier (1841) 4 Beav. 115;49 ER 550 and pursuant to the alleged existence of a constructive trust of which he is the beneficiary.
10 The distinction between a resulting or implied trust and a constructive trust is described in the following passage from "Jacob's Law of Trusts in Australia"(supra) par 1301:
"The constructive trust differs in essential respects both from the express and the resulting or implied trust. . . .The constructive differs from the resulting or implied trust in that, although a resulting or implied trust also arises by operation of law, the courts imply that a trust was actually intended and in
(Page 7)
- the face of evidence to the contrary will discard the implication. In the case of a constructive trust, the inquiry is not as to the actual or presumed intentions of the parties, but as to whether, according to the principles of equity, it would be a fraud for the party in question to deny the trust. As Cardozo CJ put it, 'When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee.' The trust is constructive in the sense that equity construes the circumstances by explaining or interpreting them; equity does not construct the trust, it attaches legal consequences to the circumstances. Moreover, the constructive trust demands the staple ingredients of the express and resulting or implied trust: subject matter, trustee, beneficiary and personal obligation attaching to the trust property."
11 The alleged constructive trust is said to arise from the fact that the Cottesloe lands are the property of the deceased and form part of the residue of his estate, that the deceased left the residue of his estate to the Company as trustee of the Denmark Trust, that the first defendant wishes to maintain a claim that the identity of the Denmark Trust is not the trust of that name but is a body of "erstwhile members" of the commune who were entitled to reside upon certain land situate at Denmark in this State and who contributed to the "Vision" to which I have referred.
12 There is not, and cannot be, any suggestion that the Cottesloe lands were acquired by the deceased in circumstances of fraud on his part nor in other circumstances which might oblige him to have held the Cottesloe lands as a trustee. No foundation for the allegation that the Cottesloe lands are held on a constructive trust for the first defendant has been made out. At its highest, his claim is that, if he is successful in his counterclaim in action 2132 of 1998, he will be found to be one of the beneficiaries of the "Denmark Trust" (using that term to describe the members of the commune rather than the unit trust which bears that name) and entitled, therefore, to a share of the funds accruing from the deceased's bequest to the plaintiff as trustee of the Denmark Trust. Nothing that is alleged by Mr Widmer establishes that he has ever had any estate or interest whatsoever in the Cottesloe land. In his oral submissions, Mr Rabe, as counsel for Mr Widmer, put his client's alleged claim to a proprietary interest in the Cottesloe lands in the following discussion with me:
(Page 8)
- "WHITE J: Mr Rabe, let me ask you this: am I right in thinking that Mr Widmer does not now claim to have an interest in the property as such, the Cottesloe properties?
RABE, MR: That was the point that I was going to deal with on Tuesday, as to whether or not he had a caveatable interest, and in my submission he does have a proprietary interest.
WHITE J: How does he possibly have a proprietary interest in the property of the estate of Mr Ryan?
RABE, MR: Because if he is a member of a closed class of beneficiaries who can call for all the assets to be disposed of, transferred in accordance with the terms of any constructive trust, and in my submission there is a closed class on the evidence before your Honour, in those circumstances he, together with all of the other beneficiaries, could call on the proceeds of the trust to be transferred in accordance with the terms of any trust that is ordered by the court.
WHITE J: That's the proceeds once they're in the hands of the trustee.
RABE, MR: No. That's looking at the question as to whether or not he has a proprietary interest in the land itself, because if he's a member of a class and that class is closed, then under the rule in Saunders v Vautier, all of those members have a proprietary interest in how that land is to be dealt with and they can all come before the court, and that was the point that was made by his Honour Owen J in the Anglican Health v Aboriginal Affairs matter which was referred to in some of the earlier submissions.
The point of distinction in that case was that there was no closed class there. His Honour held that it was because you weren't able to close the class and because you weren't able to apply the rule in Saunders v Vautier that the only interest that any individual member of that class had was equivalent to the interest of a residuary legatee and that the point that was taken up by his Honour the Chief Justice in Connell v Bond Corporation, looking at whether or not - and that isn't a caveatable interest.
(Page 9)
- That's not in the nature of a proprietary interest. If all you have is the right as a residuary legatee, then you don't have a proprietary interest that is capable of supporting a caveat. We say the point of distinction in this case is that there is a closed class and if you apply the reasoning of his Honour Owen J in that case, there would then be a right under the rule in Saunders v Vautier to dispose of the assets and that would be a proprietary right that all of the members had as a class; and as a member of the class, in my submission, following both the logic of Bond v Connell and of the Anglican Health case,that would be a proprietary interest which would have supported the caveat in that case.
It was because you weren't able to close the class of members, because it referred to all future members as well, that the court wasn't able to find that there was a proprietary interest capable of supporting a caveat, so we say that in this case if there are a specified number of individuals who all made their contributions to the various items of property, including the bequest under Mr Ryan's will, all of those individuals did what they did do for the purposes of implementing the vision.
In order to do equity and justice between all of those parties, it would be appropriate for the court to say, 'Well, there is a closed class and there can be a constructive trust declared in relation to the members of that class; that gives them a proprietary interest,' just in answering the point that your Honour put to me, so for that reason, in my submission, there is a proprietary interest that he has as a member of that closed class, but I think the point as to whether it's a proprietary interest or an interest capable of supporting a caveat is no longer relevant in the sense that all that needs to be established now is that he has an interest which needs to be protected pending the determination of all the various issues in the trial.
WHITE J: I would like to be satisfied on this question: your submissions, as I understand them now, are that despite everything, Mr Widmer in his capacity as a member of a closed class of erstwhile members of a commune has a specific proprietary interest in the estate's property.
RABE, MR: Yes.
(Page 10)
- WHITE J: Can you support that proposition with any authority?
RABE, MR: Yes, I can, the case of Connell v Bond Corporation 8 WALR 367, your Honour. There are five steps there that are set out. I don't know if you have that before you. There his Honour the Chief Justice deals with the various criteria used for determining whether there is a proprietary interest and they are discussed as follows in Meagher, Gummow and Lehane and I quote here at line 40:
As a starting point, any system of proprietary interests may usefully be valued by reference to at least four criteria. These are: (a) the power to recover the property the subject of the interest or the income thereof (ie a 'property right') compared with the recovery of compensation from the defendant payable from no specific fund, (b) the power to transfer the benefit of the interest to another; (c) the persistence of remedies in respect of the interest against third parties who thus assume the burden thereof; and (d) the extent to which the interest may be displaced in favour of competing dealings by the grantor or others with interests in the subject matter (ie priorities). These characteristics are present in varying degrees in the hierarchy of equitable estates and interests and are to be considered when dealing with and evaluating the subject matter of this chapter. It is incorrect to assume that unless all these characteristics are present, there cannot be 'property'.
In my submission all four of those categories can be met by any individual member of such a closed class, but even if I'm wrong on that, in my submission that's a serious question itself that needs to be tried and I would be relying on this authority to support the proposition, using as well the dicta of Owen J in the Anglican Health Care case to support the contention that the nature of Mr Widmer's interest, assuming that any constructive trust which he now seeks to have impressed on those assets would be a proprietary interest which does make any damages an inadequate remedy in the circumstances.
WHITE J: In respect of what assets does he have a proprietary interest?
(Page 11)
- RABE, MR: He has got an interest in all of the assets that were contributed by the various members of the commune in their pursuit of the implementation of the vision and you will see that in the counterclaim; that there's reference made not only to the land that he bought, but the land that Mr Ryan and the Powers bought; the Powers sold their house in order to do that. Then further particulars will be supplied after discovery to see who did make contributions to Imagination Enterprises to enable it and the members of the commune down there to pursue their vision.
So if the court at the end of the day grants the remedy of a constructive trust so that all of these members are entitled to share in proportion of the moneys that they actually put in to buy the particular assets.
WHITE J: A share in what? A share in the assets held by the company as a trustee?
RABE, MR: Yes, that were purchased for the purpose of implementing the vision. So what would happen is there would then be a big pool of assets including not only the bequest but all of the properties registered in the name of Imagination Enterprises and the could (sic) would then have to say who gets what and a useful starting point in Baumgartner v Baumgartner and Muschinski v Dodds would be to see what the proportion was of each of the contributors and then, as your Honour rightfully pointed out, with respect, the other day, in Baumgartner any surplus would then be divided equally between all of the members, so we're not just talking about the Cottesloe land but for the purposes of the injunction that is the asset which is now primarily at risk and that is, of course, an assets worth between 2 and a half and $3,000,000, I understand.
WHITE J: But that asset will be sold within 6 to 8 weeks.
RABE, MR: Yes, and we don't have a problem with it being sold as long as the proceeds of sale are dealt with so as to take into account the rights which we - - -
WHITE J: The sale will defeat any interest that your client might have in the property as opposed to the proceeds of the property.
(Page 12)
- RABE, MR: No, not the property. We are quite happy for the property to be sold as long as the proceeds of the sale - but it's the way that they wish to deal with the proceeds and in that regard Mr Widmer's latest affidavit is important.
WHITE J: So when you say in paragraph 33 of the amended counterclaim:
Without regard to Widmer's claim to an interest in the Cottesloe land under the constructive trust in relation to which Widmer seeks declaratory relief in this action -
that should really read, I suppose, 'Without regard to Widmer's claim to an interest in the proceeds of the sale of the Cottesloe land.' Is that right?
RABE, MR: Yes, your Honour.
WHITE J: Then it goes on to say, 'in relation to which Widmer seeks declaratory relief,' and if one looks at that you then have to look at paragraph 2 on page 10 which says that the unit holders hold their units on a constructive trust, not the proceeds - not any kind of proceeds but their units on a constructive trust for the remaining members. So if there are three units held by three people, the allegation is that they hold those units in trust on a constructive trust for the benefit of all the members of the commune.
RABE, MR: Insofar as the assets which are impressed with that trust.
WHITE J: Then presumably any right that the unit holder might have to claim any part of the assets would equally be part of the constructive trust you're talking about.
RABE, MR: If they are members, which in this case they all are.
WHITE J: But you have told me there are three, I think, unit holders.
RABE, MR: Yes, your Honour, ordinary unit holders.
WHITE J: All right, ordinary unit holders. There is a trust deed of course which regulates the rights of the parties, isn't there?
(Page 13)
- RABE, MR: Yes.
WHITE J: There are three ordinary unit holders.
RABE, MR: That's correct.
WHITE J: And paragraph 2 of the claim says, 'Wish to have a declaration that those three people hold their units,' and I don't know how many they each have, on a constructive trust for the remaining members.? I suppose it should really be 'for themselves and the remaining members in equal shares,' or something, or in proportion to their - - -
RABE, MR: Yes, your Honour.
WHITE J: You see, the pleadings in this case are an absolute mess, with all due respect.
RABE, MR: But your Honour could depend on what - we do seek in paragraph 4 consequential orders for the distribution of the assets comprising all the assets acquired by Imagination Enterprises as referred to in 28.
WHITE J: That was referred to in paragraph 28 which doesn't include the bequest from - - -
RABE, MR: No, but then I say, 'and the bequest,' in paragraph 4.
WHITE J: And the bequest. Well - - -
RABE, MR: So really at the end of the day the court is going to have to - it's not a case of the pleadings being a mess, your Honour. At the end of the day the court is going to have to determine whether or not the remedy of a constructive trust is an appropriate remedy and then the court is going to have to mould some appropriate and practical orders as to how those assets should be dealt with in accordance - - -
WHITE J: That's an order as to what the ordinary unit holders are to do with the assets they have in the trust, pursuant to the alleged constructive trust.
RABE, MR: What will happen at the end of the trial, if there is a constructive trust, there will be an identification of what units
(Page 14)
- are comprised - or rather form the fund of that trust and there will then be declarations as to who has what interest in that pool of assets and there will then be, I assume, directions made as to who gets what.
Maybe this is an important point: there may well be assets that are held by Imagination Enterprises under the terms of the trust deed which are not affected by any constructive trust that is imposed by the court. For example, there may have been assets that were acquired long before there was any intention to use this land so as to implement the purposes of the vision and in that regard I understand that the initial parcel of land was in fact some land acquired by way of a gift to Mr Hayes and then Mr Price became involved really in the very early days when they were just looking at a form of investment and that's why they chose the vehicle of a unit trust at that time.
WHITE J: What has happened to the Widmer block?
RABE, MR: The Widmer block is still there. It's still in the name of Imagination Enterprises and as I understand part of the terms of the settlement that Mr Hayes has reached with the Powers is that Mr Hayes gets a million dollars and the Powers get the balance of the proceeds from the sale of the Cottesloe land and all of the Denmark land."
13 It seems apparent from counsel's submissions that Mr Widmer's claim to a proprietary interest in the Cottesloe lands cannot be maintained. The rule in Saunders v Vautier (supra) to which counsel referred may be described as the rule that "a beneficiary absolutely entitled and competent to give a discharge can put an end to the accumulation and claim immediate payment " (see Jacob's : "The Law of Trusts in Australia", 6th ed, par 955 and par 1082.) That rule has no application to the facts alleged by Mr Widmer. Counsel referred to the decision of Owen J in Anglican Health and Welfare Services Inc v Bropho and Ors, unreported; SCt of WA; Library No 920556; 3 November 1992. In my opinion, that decision does not assist Mr Widmer. Mr Widmer's claim is not that there is a trust of which he is a beneficiary to which a gift has been given on terms that its transfer to the beneficiaries is to be delayed for a period. His claim is that the bequest to the Company as trustee of the Trust has the effect that, if the three unit holders do not agree to share the benefit of that bequest with Mr Widmer either in proportion to the respective contributions made by each member of the commune to which
(Page 15)
- I have referred or on some other basis, those unit holders will be constructive trustees of their units for the benefit of all members of the commune, including Mr Widmer. The factual circumstances of the present case are entirely different from those in Anglican Health and Welfare Services Inc v Bropho and Ors, (supra) inBaumgartner v Baumgartner (1987) 164 CLR 137 and in Muschinski v Dodds (1985) 160 CLR 583, all of which cases are, therefore, distinguishable on their facts.
14 Mr Widmer now seeks an interlocutory injunction against the Company, in effect restraining it from distributing the proceeds of the sale of the Cottesloe lands and any rental derived therefrom. In addition, he seeks leave to amend his defence and counterclaim in the action.
15 The terms of the Injunction sought by him are:
"1. Until after judgment in this action, the 4th defendant by counterclaim, Imagination Enterprises Pty Ltd, is (sic) servants, offices or agents be restrained from transferring the proceeds, assigning the proceeds, disposing of the proceeds or dealing with the proceeds of any contract entered into by it for the sale of:
a. the property described as Lot 12 on Plan 3267 being the whole of the land comprised in Certificate of Title Volume 1248 Folio 715;
b. the property described as Lot 13 on Plan 3267 being the whole of the land comprised in Certificate of Title Volume 1671 Folio 170;
otherwise than for the purpose of depositing the proceeds of any such sale into a bank account in the sole name of Imagination Enterprises Pty Ltd for the purpose of retaining such funds in accordance with the terms of this order.
2. Until after judgment in this action, the 4th defendant by counterclaim, Imagination Enterprises Pty Ltd, its servants, offices or agents be restrained from transferring the proceeds, assigning the proceeds, disposing of the proceeds or dealing with the proceeds of any rental income received by it from the aforesaid properties otherwise than for the purpose of depositing such rental
(Page 16)
- income into a bank account in the sole name of Imagination Enterprises Pty Ltd for the purpose of retaining such funds in accordance with the terms of this order."
16 The basis of his claim for an injunction is his allegation in par 33 and par 34 of the minute of amended counterclaim, which are in these terms (omitting underlining):
33. Following the collapse of the Commune which had previously pursued the objectives of the Vision, Hayes and Alan Powers and Sheila Powers, in their capacities as directors of Imagination Enterprises have caused Imagination Enterprises to enter into contracts to sell the Cottesloe Land and have authorised Imagination Enterprises to deal with the proceeds of such sales to the benefit of the ordinary unit holders of the unit trust known as the Denmark Trust, namely Hayes and Alan and Sheila Powers and without regard to Widmer's claim to an interest in the Cottesloe Land under the constructive trust in relation to which Widmer seeks declaration relief in this action
34. Widmer says that the conduct of Imagination Enterprises as pleaded in the preceding paragraph is unconscionable in that:
a. it is thereby dissipating assets which it is not legally entitled to either because the gift comprised by the Bequest is invalid with the result that the proceeds thereof belong to Ryan's next of kin and not Imagination Enterprises or because the said proceeds are impressed with the constructive trust contended for by Widmer in paragraph 2 of the prayer for relief below with the result that the said proceeds are beneficially owned by the remaining members of the Commune and not by the ordinary unit holders of the unit trust known as the Denmark Trust.
b. in dealing with the assets as aforesaid, it is thereby depriving Widmer of the benefit of any remedy to which
(Page 17)
- this Honourable Court may adjudge him to be entitled after the hearing of the trial herein."
17 Mr Widmer refers to his claim to an interest in the Cottesloe lands but no such claim is made out or pursued, nor, in my judgment, could it be.
18 The constructive trust in relation to which Mr Widmer seeks declaratory relief is contained in the second prayer set out in his counterclaim, which reads:
"2. In the event of this Honourable Court making a declaration in terms of subparagraph 1(a) above, a declaration that the unit holders of the Denmark Trust hold their said units on a constructive trust for the remaining members of the Commune."
19 That constructive trust is sought to be imposed upon the unit holders of the Trust and the subject matter is the units held by them. No constructive trust is now alleged in relation to the Cottesloe lands and none is sought against the Company.
20 In fact, the only relief now sought against the Company, apart from the injunction, is consequential orders for the distribution of the assets acquired by the Company from the contributions of members of the commune.
21 It appeared to be Mr Rabe's contention that it does not really matter whether Mr Widmer seeks to have a constructive trust imposed on the unit holders or on the Company - practical justice requires that the injunctive relief sought be granted, whatever the basis of Mr Widmer's claim. I reject that proposition. Any relief afforded to Mr Widmer would, in my opinion, have to be based upon his pleadings and it is apparent that the only pleaded claim of a constructive trust set out in the minute of amended counterclaim is directed to the unit holders and not to the Company.
22 The interim injunction sought against the Company is misconceived and must be refused.
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