Kendell v Sweeney - [2005] QSC 64

SUPREME COURT OF QUEENSLAND

CITATION:

In Kendells (NSW) P/L (in liq)
Kendell v Sweeney & Ors [2005] QSC 064

PARTIES:

In the matter of KENDELLS (NSW) PTY LIMITED (in liquidation)
DAVID WARD KENDELL (as Trustee of the WGK Trust)
(applicant)
v
PAUL DESMOND SWEENEY and TERRY GRANT VAN DER DELDE (Liquidators)
(first respondents)
JENI KENDELL
(second respondent)
SUSAN DONE
(third respondent)
PENNY NELSON

(fourth respondent)

FILE NO/S:

S 8347 of 2002

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

17 March 2005

DELIVERED AT:

Brisbane

HEARING DATE:

9 and 10 February 2005

JUDGE:

Muir J

ORDER:

The application is dismissed

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – TRUSTEES- THEIR APPOINTMENT, DISMISSAL, ESTATE ETC – LIABILITY FOR ACTS OF CO-TRUSTEES – whether trustees were validly appointed in accordance with the trust deed – where power of trustees to release and discharge shareholders’ loan accounts challenged – where applicant contends loan accounts are “shams”

INTERPRETATION – DEEDS - where construction of settlement deed in dispute –whether “good faith” can be implied into the settlement deed requiring the parties to it to act reasonably

Trustee Act 1925 (NSW) 6
Trusts Act 1973 (Qld) s 12

Alcatel Australia v Scarcella [1998] 44 NSWLR 349
Asia Television Ltd v Yau’s Entertainment Pty Ltd [2000] 48 IPR 283
B P Refinery (Westernport) Pty Ltd v Hastings Shire (1977) 52 ALJR 20
Burger King Corp v Hungry Jacks Pty Ltd [2001] NSWCA 187
Butcher v Port (1985) 3 ANZ Ins Cases 60-638
Butt v M'Donald (1896) 7 QLJ 68
Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506
Central Exchange Ltd v Anaconda Nickel Ltd [2002] 26 WAR 33
Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Dean-Willcocks vSoluble Solution Hydroponics Pty Ltd (1997) 42 NSWLR 209
Edwards v The Hunter Co-op Dairy Co Ltd (1992) 7 ANZ Insurance Cases 61-113
Ferguson v O’Neill [1943] VLR 30
Hickman & Co v Roberts [1913] AC 229
Hospital Products Limited v United States Surgical Corporation (1984-1985) 156 CLR 40
Hughes Aircraft Systems International v Air Services Australia (1997) 76 FCR 151
Hughes Bros Pty Ltd v Trustees of the Roman Catholic Church[1993] 31 NSWLR 91
Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd (1958) 100 CLR 342
Mackay v Dick (1881) 6 App Cas 251
McArthur v Mercantile Mutual Life Assurance Co Ltd [2001] QCA 317
Panamena Europea Navigacion (Compania Limitada) v Frederick Leyland & Co Ltd (1947) AC 428
Popovic v Tanasijevic (No 5) [2000] 34 ACSR 1
Renard Constructions (ME) Pty Ltd v Minister for Public Works (1982) 26 NSWLR 234 (CA)
Retravision (NSW) Ltd v Copeland (8 October 1997, NSWSC unreported)
Richard Walter Pty Limited v Federal Commissioner of Taxation 95 ATC 4402
Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] 76 ALJR 436
Saxby Bridge Mortgages Pty Ltd v Saxby Bridge Pty Ltd [2000] NSWSC 433
Scandinavian Trading Tanker…

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.

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Details

Case: [2005] QSC 64
Decision Date: 17 March 2005

CaseChat Overview and Summary

Kendell and another sought to be appointed as executors of the estate of the deceased, contesting the appointment of Sweeney and another. The dispute centred on the validity of Sweeney's appointment and whether the trustees were validly appointed in accordance with the trust deed. The applicants also contested the trustees' power to release and discharge the shareholders' loan accounts, arguing that these accounts were "shams". The applicants sought to have the trustees' actions declared invalid and to compel them to account for the estate's assets.

The central legal issues before the court were whether the trustees were validly appointed and whether the trustees had the power to release and discharge the shareholders' loan accounts. Additionally, the court had to interpret the settlement deed to determine if the term "good faith" could be implied into it, requiring the parties to act reasonably. The applicants argued that the trustees' actions were not in good faith and that the loan accounts were not legitimate.

The court held that the trustees were validly appointed and that the power to release and discharge the shareholders' loan accounts was within their authority. The court also found that the term "good faith" could not be implied into the settlement deed, as it was not necessary to give business efficacy to the deed. The applicants' argument that the loan accounts were "shams" was rejected, as there was insufficient evidence to support this claim. Consequently, the court dismissed the application and upheld the trustees' actions.

Orders

Orders of the court

The application is dismissed

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	In Kendells (NSW) P/L (in liq) Kendell v Sweeney & Ors [2005] QSC 064
PARTIES:	In the matter of KENDELLS (NSW) PTY LIMITED (in liquidation) DAVID WARD KENDELL (as Trustee of the WGK Trust) (applicant) v PAUL DESMOND SWEENEY and TERRY GRANT VAN DER DELDE (Liquidators) (first respondents) JENI KENDELL (second respondent) SUSAN DONE (third respondent) PENNY NELSON (fourth respondent)
FILE NO/S:	S 8347 of 2002
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	17 March 2005
DELIVERED AT:	Brisbane
HEARING DATE:	9 and 10 February 2005
JUDGE:	Muir J
ORDER:	The application is dismissed
CATCHWORDS:	EQUITY – TRUSTS AND TRUSTEES – TRUSTEES- THEIR APPOINTMENT, DISMISSAL, ESTATE ETC – LIABILITY FOR ACTS OF CO-TRUSTEES – whether trustees were validly appointed in accordance with the trust deed – where power of trustees to release and discharge shareholders’ loan accounts challenged – where applicant contends loan accounts are “shams” INTERPRETATION – DEEDS - where construction of settlement deed in dispute –whether “good faith” can be implied into the settlement deed requiring the parties to it to act reasonably Trustee Act 1925 (NSW) 6 Trusts Act 1973 (Qld) s 12 Alcatel Australia v Scarcella [1998] 44 NSWLR 349 Asia Television Ltd v Yau’s Entertainment Pty Ltd [2000] 48 IPR 283 B P Refinery (Westernport) Pty Ltd v Hastings Shire (1977) 52 ALJR 20 Burger King Corp v Hungry Jacks Pty Ltd [2001] NSWCA 187 Butcher v Port (1985) 3 ANZ Ins Cases 60-638 Butt v M'Donald (1896) 7 QLJ 68 Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506 Central Exchange Ltd v Anaconda Nickel Ltd [2002] 26 WAR 33 Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 Dean-Willcocks vSoluble Solution Hydroponics Pty Ltd (1997) 42 NSWLR 209 Edwards v The Hunter Co-op Dairy Co Ltd (1992) 7 ANZ Insurance Cases 61-113 Ferguson v O’Neill [1943] VLR 30 Hickman & Co v Roberts [1913] AC 229 Hospital Products Limited v United States Surgical Corporation (1984-1985) 156 CLR 40 Hughes Aircraft Systems International v Air Services Australia (1997) 76 FCR 151 Hughes Bros Pty Ltd v Trustees of the Roman Catholic Church[1993] 31 NSWLR 91 Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd (1958) 100 CLR 342 Mackay v Dick (1881) 6 App Cas 251 McArthur v Mercantile Mutual Life Assurance Co Ltd [2001] QCA 317 Panamena Europea Navigacion (Compania Limitada) v Frederick Leyland & Co Ltd (1947) AC 428 Popovic v Tanasijevic (No 5) [2000] 34 ACSR 1 Renard Constructions (ME) Pty Ltd v Minister for Public Works (1982) 26 NSWLR 234 (CA) Retravision (NSW) Ltd v Copeland (8 October 1997, NSWSC unreported) Richard Walter Pty Limited v Federal Commissioner of Taxation 95 ATC 4402 Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] 76 ALJR 436 Saxby Bridge Mortgages Pty Ltd v Saxby Bridge Pty Ltd [2000] NSWSC 433 Scandinavian Trading Tanker…