Kent v SS “Maria Luisa” (No 2)

The case of Kent v SS “Maria Luisa” (No 2) involved a dispute regarding the ownership and equitable interest of the Maria Luisa Unit Trust, specifically concerning the ship named “Maria Luisa”. The primary issue was whether AFE, the sole unit-holder of the trust, had an equitable interest in the ship as of 24 April 2001. The case was heard in the Australian court system, with the decision eventually reaching the appellate court. The appellant argued that AFE, as the sole unit-holder, held the beneficial ownership or equitable title of the ship. The respondent contended that AFE’s interest was limited to the trust fund as a whole, without a specific interest in the ship or any other asset. The court had to determine the correct interpretation of the trust deed and the equitable interest of AFE in the ship.

The court examined the terms of the trust deed, particularly Clause 2(c), and referred to previous cases such as MSP Nominees Pty Ltd v Commissioner of Stamps (SA) and Commissioner of Stamp Duties(Qld) v Livingston, to clarify the nature of interests in unit trusts. The court found that while AFE had an equitable interest in the trust fund, this did not necessarily translate to an equitable interest in each specific asset of the trust, including the ship. The court upheld the primary judge’s finding that AFE’s rights under the trust deed did not confer upon it equitable ownership in the individual assets of the trust.

After considering the arguments and relevant authorities, the court concluded that the trust deed’s provisions, coupled with the High Court’s decision in MSP Nominees, supported the interpretation that AFE’s interest was in the trust fund as a whole rather than in specific assets. Therefore, the appeal was dismissed, and AFE did not hold the equitable ownership of the ship “Maria Luisa” as contended. The court’s decision emphasised the importance of the terms of the trust deed in determining the nature of interests in a unit trust.