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Hesse v Hardie

Hesse v Hardie

Case [2023] WASCA 173 4 December 2023

Breach of Trust

Fiduciary Duty

Variation of Trust Deed

Duty of Care

Trusts & Equity

Corporate Law & Governance

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JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   HESSE -v- HARDIE [2023] WASCA 173
CORAM:   MITCHELL JA
VAUGHAN JA
VANDONGEN JA

HEARD:   17 NOVEMBER 2023
DELIVERED          :   4 DECEMBER 2023
FILE NO/S:   CACV 53 of 2022
BETWEEN:   GEOFFREY ERIC HESSE
Appellant
AND
VERONICA MARIE HARDIE
First Respondent
B.C.H. NOMINEES PTY LTD as trustee for THE B.C.H. FAMILY TRUST
Second Respondent
KEIAN HOLDINGS PTY LTD
Third Respondent

ON APPEAL FROM:
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   MASTER SANDERSON
Citation: HESSE -v- HARDIE [2022] WASC 156
File Number            :   CIV 1011 of 2021

Catchwords:

Practice and procedure - Application for summary judgment - Whether summary judgment properly granted - Where master failed to consider and determine aspects of the plaintiff's claim before awarding summary judgment - Whether amendment to trust deed expanding the classes of objects of powers of appointment was arguably not authorised by the trust deed - Whether trustee of a discretionary family trust comprising all of the shares in a corporation that owns significant assets capable of generating dividends is arguably under a duty to exercise its control to procure the corporation to invest the corporation's assets in a way that generates income for the trust - Whether the statement of claim pleaded arguable grounds for removing and replacing the trustee

Legislation:

Trustees Act 1962 (WA), s 77(1)

Result:

Appeal allowed
Summary judgment set aside
Matter remitted to the General Division

Category: B

Representation:

Counsel:

Appellant	:	D I Connor
First Respondent	:	C V Eastwood
Second Respondent	:	C V Eastwood
Third Respondent	:	C V Eastwood

Solicitors:

Appellant	:	Connor Legal
First Respondent	:	Eastwood Law
Second Respondent	:	Eastwood Law
Third Respondent	:	Eastwood Law

Case(s) referred to in decision(s):

Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Antill-Pockley v Perpetual Trustee Co Ltd (1974) 132 CLR 140
Bartlett v Barclays Bank Trust Co Ltd [1980] 1 Ch 515
Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256
Breen v Williams (1996) 186 CLR 1
Bridgetown/Greenbushes Friends of the Forest Inc v Department of Conservation and Land Management (1997) 18 WAR 126
Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253
Cardaci v Cardaci [2023] WASCA 158
Eatts v Gundy [2014] QCA 309; [2015] 2 Qd R 559
Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87
Gunns Ltd v Alishah [2009] TASSC 45; (2009) 19 Tas R 38
IMO The Will and Estate of Owen Charles Brown (dec) [2016] VSC 258
In the Will of Gutheil (1922) 30 CLR 293
Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366
Re Richardson [1956] St R Qd 485
Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118

JUDGMENT OF THE COURT:

Summary

The appellant (Geoffrey)[1] is a 'Specified Beneficiary' and a 'General Beneficiary' of the…

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 Hesse v Hardie

Details

AGLC: Hesse v Hardie [2023] WASCA 173
Case: [2023] WASCA 173
Decision Date

CaseChat Overview and Summary

The appeal in Hesse v Hardie was heard by the Supreme Court of Western Australia's Court of Appeal, with Justices Mitchell, Javandig and Javandig presiding. The appeal arose from a summary judgment granted in favour of the respondents in primary proceedings brought by Geoffrey Hesse against Veronica Hardie and others. Geoffrey's claims were that an amendment to the trust deed was invalid, that the trustee breached its fiduciary duties, and that the trustee should be removed. The master dismissed the primary proceedings and granted summary judgment, a decision which Geoffrey appealed. The appeal was allowed and the summary judgment order was set aside.

The central legal issues in the appeal were whether the claims made by Geoffrey were reasonably arguable and whether the master had properly exercised his discretion in granting summary judgment. The Court of Appeal found that the master had failed to properly consider whether Geoffrey's claims were reasonably arguable, particularly the claims relating to the invalidity of the trust deed amendment and the trustee's duty to administer the trust assets. The Court held that Geoffrey's claims had reasonable prospects of success and that the master should not have granted summary judgment without further consideration. The appeal was allowed, the summary judgment order was set aside, and the matter was remitted to the General Division for further proceedings.

Orders