Medium Neutral Citation: KRNJULAC v LINCU [2015] NSWCA 367
Hearing dates: 15 October 2015
Date of orders: 02 December 2015
Decision date: 02 December 2015
Before: Bathurst CJ at [1]; Leeming JA at [26]; Emmett AJA at [27]
Decision:
(1) To the extent necessary, grant the appellants leave to appeal from the orders made by Lindsay J on 30 May 2014 and 16 December 2014.
(2) Grant leave to the appellants to file an amended notice of appeal, adding Mr Laza Krnjulac as the fifth respondent.
(3) Appeal allowed.
(4) Set aside Orders 5 to 14 inclusive of the orders made by the primary judge on 30 May 2014 and Orders 10 to 14 of the orders made by him on 16 December 2014 and, in lieu thereof, make the following orders:
(a) Declare that the appellants and the fifth respondent hold their respective interests in the land contained in Folio Identifier 32/1823 (the church land) on trust for the trustees, for the time being, of the Nazarene Church trust (the trustees).
(b) Order that the appellants and the fifth respondent execute and deliver transfers of their respective interests in the church land to the trustees.
(c) Order that the appellants and the fifth respondent deliver up possession of the church land to the trustees.
(d) Order that the fifth respondent account to the trustees for the use of title to the church land.
(e) Order that the fifth respondent indemnify the trustees against all claims that may be made against them in relation to the church land by Community First Credit Union Ltd as mortgagee in respect of mortgage AA852414 over the church land (the mortgage).
(f) Order (in aid of Order (e)) that judgment be entered against the fifth respondent in favour of the first, second and fourth respondents, as trustees of the church land, in the sum of $467,134.37, the amount outstanding under the mortgage as at 12 December 2014.
(g) Order that until further order, the fifth respondent, by himself, his servants or his agents, be restrained from removing from Australia or in any way disposing of or dealing with or diminishing, the value of his assets in Australia, up to an unencumbered value of $700,000.
(h) Order that the fifth respondent pay the first, second and fourth respondents’ costs of the proceedings in the court below on an indemnity basis and those of the third respondent on an ordinary basis.
(5) Order that the first, second and fourth respondents pay the appellants’ costs of the appeal and have a certificate under the Suitor’s Fund Act 1951 (NSW) if eligible.
Catchwords:
ADMINISTRATIVE LAW – natural justice – where findings of trial judge went beyond the case pleaded at trial
EQUITY – trusts – breach of trust – constructive trust – the liability of volunteers to account for trust property obtained in breach of trust
Legislation Cited: Suitor’s Fund Act 1951 (NSW)
Cases Cited: Banque Commerciale SA…

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 Krnjulac v Lincu

Details

AGLC: Krnjulac v Lincu [2015] NSWCA 367
Case: [2015] NSWCA 367
Decision Date: 02 December 2015

CaseChat Overview and Summary

The case of *Krnjulac v Lincu* involved an appeal to the New South Wales Court of Appeal concerning findings made by a primary judge regarding a breach of trust and the liability of volunteers. The dispute centred on interests in land identified as "church land," where the appellants were found to hold their interests on trust for the trustees of the Nazarene Church.

The Court of Appeal was required to determine whether the primary judge's findings had gone beyond the case pleaded at trial, thereby potentially infringing the rules of natural justice. Additionally, the court considered the equitable principles relating to the liability of volunteers to account for trust property acquired in breach of trust.

The Court of Appeal allowed the appeal, setting aside certain orders of the primary judge. It declared that the appellants and a fifth respondent held their interests in the church land on trust for the trustees of the Nazarene Church. The court ordered the appellants and the fifth respondent to execute transfers of their interests to the trustees, deliver up possession of the land, and for the fifth respondent to account for the use of the title and indemnify the trustees against claims by the mortgagee. Judgment was entered against the fifth respondent for the outstanding mortgage amount, and he was restrained from dealing with assets in Australia. The court also made orders regarding the costs of the proceedings.

Orders

Orders of the court

(1) To the extent necessary, grant the appellants leave to appeal from the orders made by Lindsay J on 30 May 2014 and 16 December 2014.

(2) Grant leave to the appellants to file an amended notice of appeal, adding Mr Laza Krnjulac as the fifth respondent.

(3) Appeal allowed.

(4) Set aside Orders 5 to 14 inclusive of the orders made by the primary judge on 30 May 2014 and Orders 10 to 14 of the orders made by him on 16 December 2014 and, in lieu thereof, make the following orders:

(a) Declare that the appellants and the fifth respondent hold their respective interests in the land contained in Folio Identifier 32/1823 (the church land) on trust for the trustees, for the time being, of the Nazarene Church trust (the trustees).

(b) Order that the appellants and the fifth respondent execute and deliver transfers of their respective interests in the church land to the trustees.

(d) Order that the fifth respondent account to the trustees for the use of title to the church land.

(e) Order that the fifth respondent indemnify the trustees against all claims that may be made against them in relation to the church land by Community First Credit Union Ltd as mortgagee in respect of mortgage AA852414 over the church land (the mortgage).

(f) Order (in aid of Order (e)) that judgment be entered against the fifth respondent in favour of the first, second and fourth respondents, as trustees of the church land, in the sum of $467,134.37, the amount outstanding under the mortgage as at 12 December 2014.

(g) Order that until further order, the fifth respondent, by himself, his servants or his agents, be restrained from removing from Australia or in any way disposing of or dealing with or diminishing, the value of his assets in Australia, up to an unencumbered value of $700,000.

(h) Order that the fifth respondent pay the first, second and fourth respondents’ costs of the proceedings in the court below on an indemnity basis and those of the third respondent on an ordinary basis.

(5) Order that the first, second and fourth respondents pay the appellants’ costs of the appeal and have a certificate under the Suitor’s Fund Act 1951 (NSW) if eligible.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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Citations

AGLC Citation

Krnjulac v Lincu [2015] NSWCA 367

Most Recent Citation

Lincu v Registrar-General [2019] NSWSC 568

Cases citing this decision · 6 of 6 shown

Ashell Homes Constructions Pty Ltd v Kobus
[2024] ACTCA 32

…ercy [2003] HCA 22; 214 CLR 118 International Finance Trust Company Ltd v New South Wales Crime Commission [2009] HCA 49; 240 CLR 319 Kmjulac v Lincu [2015] NSWCA 367 Kostas v HIA Insurance Services Ltd [2010] HCA 32; 241 CLR 390 Manny v David Lardner Lawyers (No 4) [2024] ACTCA 12 McColley v Commonwealth [2014] AC…
Roberts v Goodwin Street Developments Pty Ltd
[2023] NSWCA 5 Para 71

…of procedural fairness (see Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 ( Farah ) at [132]-[133]; Krnjulac v Lincu [2015] NSWCA 367 at [12]-[23] per Bathurst CJ (Leeming JA and Emmett AJA agreeing). Indeed, in Farah , the Court held at [132] that:…
Stephenson v Santos
[2020] NSWCA 262 Para 13

…t involve a further working out, and perhaps a further contest, between the parties; in that respect they resemble what was noted in Krnjulac v Lincu [2015] NSWCA 367 at [8] as to the possibility of a requirement of leave. It may also, perhaps, not be clear how the requirement of leave imposed by s 101(2)(r) of the…
Lincu v Registrar-General
[2019] NSWSC 568 Para 37

…December 2015, the Court of Appeal upheld an appeal from Lindsay J’s judgment in the 2011 Proceedings by Steve and Simon Krnjulac: Krnjulac v Lincu [2015] NSWCA 367. The Court of Appeal ordered, inter alia , that:…
South Western Sydney Local Health District v Gould
[2018] NSWCA 69

…merciale SA en Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 Kelly v The Queen (2004) 218 CLR 216; [2004] HCA 12 Krnjulac v Lincu [2015] NSWCA 367 Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR; [2011] HCA 11 Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 Makita (Australia) v S…
Capital Securities XV Pty Ltd (formerly known as Prime Capital Securities Pty Ltd) v Calleja
[2018] NSWCA 26 Para 153

…osen to disregard the pleadings and to fight the case on issues chosen at the trial: see the authorities mentioned by Bathurst CJ in Krnjulac v Lincu [2015] NSWCA 367 at [15]. In circumstances where written documents were provided by way of opening, which made it plain that Ms Calleja was relying, in part, upon wha…

View all 6 citing cases →

Cases cited in this decision · 12 of 12 shown

Sze Tu v Lowe
[2014] NSWCA 462 Para 19

…reedman & Co [1910] HCA 58; 12 CLR 105 at 109; Heperu Pty Ltd v Belle [2009] NSWCA 252; 76 NSWLR 230 ( Heperu ) at [139], [154], [163]; Sze Tu v Lowe [2014] NSWCA 462 ( Sze Tu ) at [142]-[145].…
Lincu v Krnjulac
[2014] NSWSC 532

…le Number(s): 2014/375254 Decision under appeal Court or tribunal: Supreme Court of NSW Jurisdiction: Equity Division Citation: [2014] NSWSC 532 Date of Decision: 28 May 2014, 30 May 2014, 16 December 2014 Before: Lindsay J File Number(s): 2011/00406044…
Forrest v Australian Securities and Investment Commission
[2012] HCA 39

…Co [1910] HCA 58; 12 CLR 105 Dare v Pulham [1982] HCA 70; 148 CLR 658 Forrest v Australian Securities and Investments Commission [2012] HCA 39; 247 CLR 486 Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; 209 CLR 478 Heperu Pty Ltd v Belle [2009] NSWCA 252; 76 NSWLR 230 Ministry of Health v Simpson [1951] AC 251…
Heperu Pty Ltd v Belle
[2009] NSWCA 252

…as volunteers in receipt of trust property according to the principles enunciated in Heperu Pty Limited v Bell [2009] NSWCA 252; (2009) 76 NSWLR 230 at 267-268 [163] rather than by reference to Barnes v Addy (1874) LR 9 Ch App 244 at 251-252. [92] It is not necessary, I apprehend, to explore this territory. It is, fo…
Gerlach v Clifton Bricks Pty Ltd
[2002] HCA 22 Para 8

…It is by no means clear that this is correct as the orders were essentially interlocutory orders having regard to Gerlach v Clifton Bricks Pty Ltd [2002] HCA 22; 209 CLR 478 at [6]-[8]. Further, on one view of the matter, the orders made on 16 December 2014 did not finally dispose of the proceedings, so those or…
Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd
[1990] HCA 11 Para 15

…ontext was emphasised in the well-known passage in the judgment of Mason CJ and Gaudron J in Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd [1990] HCA 11; 169 CLR 279 at 286-287:…
Dare v Pulham
[1982] HCA 70 Para 15

…and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings”: Dare v Pulham [1982] HCA 70; 148 CLR 658 at 664. The importance of the pleadings in this context was emphasised in the well-known passage in the judgment of Mason CJ and Gaudron J i…
Jones v Dunkel
[1959] HCA 8

…ined absence from the witness box; they could have contradicted it, by giving evidence, but they chose not to do so: Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 at 308, 312 and 320-321. … [91] Their counsel invites the Court to find that, if they have any liability (otherwise than as guarantors of the Credi…
Black v S Freedman & Co
[1910] HCA 58 Para 19

…as remained in their hands at the time they acquired knowledge of the breach or the traceable proceeds of the trust property: Black v S Freedman & Co [1910] HCA 58; 12 CLR 105 at 109; Heperu Pty Ltd v Belle [2009] NSWCA 252; 76 NSWLR 230 ( Heperu ) at [139], [154], [163]; Sze Tu v Lowe [2014] NSWCA 462 ( Sze Tu…
Barnes v Addy
9 Ch App 244

…eru Pty Limited v Bell [2009] NSWCA 252; (2009) 76 NSWLR 230 at 267-268 [163] rather than by reference to Barnes v Addy (1874) LR 9 Ch App 244 at 251-252. [92] It is not necessary, I apprehend, to explore this territory. It is, for present purposes, sufficient to record that, as I have found, the sons were awar…
[1951] AC 251
[1951] AC 251 Para 21

…s no submission by them that what was said by this Court in Heperu or Sze Tu was incorrect (cf Re Diplock [1948] Ch 465; Ministry of Health v Simpson [1951] AC 251) or that, contrary to the evidence of Mr Laza Krnjulac, the appellants derived a traceable benefit from the proceeds of the mortgage.…
Browne v Dunn
113 ER 1206

…“The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In liq.) (1916) 22 C.L.R. 490, at p. 517, per Isaacs and Rich JJ. In this way, pleadings serve to ensure the basic requirement of procedural fairness that …

Legislation cited in this decision · 2

Charitable Trusts Act 1993 (NSW)
1 mention
Suitors’ Fund Act 1951 (NSW)
1 mention (from Para 5)

Medium Neutral Citation:	KRNJULAC v LINCU [2015] NSWCA 367
Hearing dates:	15 October 2015
Date of orders:	02 December 2015
Decision date:	02 December 2015
Before:	Bathurst CJ at [1]; Leeming JA at [26]; Emmett AJA at [27]
Decision:	(1) To the extent necessary, grant the appellants leave to appeal from the orders made by Lindsay J on 30 May 2014 and 16 December 2014. (2) Grant leave to the appellants to file an amended notice of appeal, adding Mr Laza Krnjulac as the fifth respondent. (3) Appeal allowed. (4) Set aside Orders 5 to 14 inclusive of the orders made by the primary judge on 30 May 2014 and Orders 10 to 14 of the orders made by him on 16 December 2014 and, in lieu thereof, make the following orders: (a) Declare that the appellants and the fifth respondent hold their respective interests in the land contained in Folio Identifier 32/1823 (the church land) on trust for the trustees, for the time being, of the Nazarene Church trust (the trustees). (b) Order that the appellants and the fifth respondent execute and deliver transfers of their respective interests in the church land to the trustees. (c) Order that the appellants and the fifth respondent deliver up possession of the church land to the trustees. (d) Order that the fifth respondent account to the trustees for the use of title to the church land. (e) Order that the fifth respondent indemnify the trustees against all claims that may be made against them in relation to the church land by Community First Credit Union Ltd as mortgagee in respect of mortgage AA852414 over the church land (the mortgage). (f) Order (in aid of Order (e)) that judgment be entered against the fifth respondent in favour of the first, second and fourth respondents, as trustees of the church land, in the sum of $467,134.37, the amount outstanding under the mortgage as at 12 December 2014. (g) Order that until further order, the fifth respondent, by himself, his servants or his agents, be restrained from removing from Australia or in any way disposing of or dealing with or diminishing, the value of his assets in Australia, up to an unencumbered value of $700,000. (h) Order that the fifth respondent pay the first, second and fourth respondents’ costs of the proceedings in the court below on an indemnity basis and those of the third respondent on an ordinary basis. (5) Order that the first, second and fourth respondents pay the appellants’ costs of the appeal and have a certificate under the Suitor’s Fund Act 1951 (NSW) if eligible.
Catchwords:	ADMINISTRATIVE LAW – natural justice – where findings of trial judge went beyond the case pleaded at trial EQUITY – trusts – breach of trust – constructive trust – the liability of volunteers to account for trust property obtained in breach of trust
Legislation Cited:	Suitor’s Fund Act 1951 (NSW)
Cases Cited:	Banque Commerciale SA…