Lewis v Condon - [2013] NSWSC 120

Supreme Court

New South Wales

Medium Neutral Citation: Louise Lewis v Schon Gregory Condon as trustee of the bankrupt estate of Colleen Anne Rayhill [2013] NSWSC 120
Hearing dates: 1 February 2013
Decision date: 13 February 2013
Jurisdiction: Equity Division
Before: Rein J
Decision:
1. Deed of trust and trust itself is not a sham.
2. Orders dealing with further evidence and submissions on balance of issues.

Catchwords:
BANKRUPTCY - Property held by trustee in bankruptcy for payment of debts - Dispute as to whether the property falls within the bankrupt's estate

EQUITY - Trusts and trustees -- Creation and effect - Sham trusts

ESTOPPEL - Res judicata

EQUITY - Trusts and trustees - Proceedings between beneficiaries and third parties - Standing of beneficiaries to bring proceedings
EQUITY - Appointment and removal - Invalid appointment
Legislation Cited: Bankruptcy Act 1966 (Cth) s 116
Cases Cited: Chase Manhattan Equities Ltd v Goodman [1991] BCLC 897; [1991] BCC 308
City Sharrment Pty Ltd v Officer Trustee in Bankruptcy (1988) 18 FCR 449; (1988) 82 ALR 530
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471; (2004) 211 ALR 101; (2004) 79 ALJR 206; (2004) 57 ATR 556
International General Electric Co Of New York v Commissioners of Customs and Excise [1962] Ch 784 at 789 CA; [1962] 2 ALL ER 398; [1962] 3 WLR 20; [1962] RPC 235
Miles v Bull [1969] 1 QB 258; [1968] 3 All ER 632
Raftland Pty Ltd as Trustee of Raftland Trust v Commissioner of Taxation (2008) 238 CLR 516; (2008) 246 ALR 406; (2008) 82 ALJR 934; 2008 ATC Â¶20-029; (2008) 68 ATR 170; [2008] HCA 21
Re Clifton (1923) 26 WALR 41
Snook v London and West Riding Investments Ltd [1967] 2 QB 786; [1967] 1 All ER 518; [1967] 2 WLR 1020
Texts Cited:
Bower, Spencer, Turner and Handley, Res Judicata, 3rd ed (1996) Butterworths

Ford, H.A.J and Lee, W.A., Principles of the Law and Trusts, Thomson Lawbook Co
Justice Pagone, Sham Trusts, delivered to the Trusts Symposium, Society of Trust and Estate Practitioners on 9 March 2012
Category: Principal judgment
Parties: Louise Lewis (Plaintiff)
Mr Schon Gregory Condon as trustee of the bankrupt estate of Colleen Anne Rayhill (First Defendant)
The Trustee of Kenthurst Investments Trust Robana Pty Ltd (Second Defendant)
Representation: Counsel: Mr Paul Finch (Plaintiff)
Mr Don Grieve QC (First Defendant)
Solicitors: Mr Bruce Vernon Dennis (Plaintiff)
Mr Michael Hayter (First Defendant)

File Number(s): 2012/359743

Judgment

REIN J: These proceedings concern a property at 9 Robson Road Kenthurst, New South Wales ("the Property"). Until June 2012, the Property was registered in the name of Mrs Colleen Anne Lewis (also known as Mrs Colleen Anne Rayhill) ("Mrs Lewis"). In May 2012 Mrs Lewis was made bankrupt on the application of Mr Salvatore Russo, her former solicitor who obtained a judgment against her for approximately $1M in unpaid legal fees.…

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 Lewis v Condon

Details

AGLC: Lewis v Condon [2013] NSWSC 120
Case: [2013] NSWSC 120
Decision Date: 13 February 2013

CaseChat Overview and Summary

Lewis v Condon was a legal dispute brought before the Federal Court of Australia, concerning a claim by the trustee of a bankrupt estate, Lewis, against Condon, the alleged owner of a property. The trustee argued that the property was part of the bankrupt's estate and should be used to pay off the bankrupt's debts. Condon contended that the property was not part of the estate, and thus should not be used for this purpose. The case turned on whether the property was, in fact, part of the bankrupt's estate and if the trustee had the authority to make such a claim.

The central legal issues were whether the property fell within the bankrupt's estate, and if so, whether the trustee was entitled to bring such a claim. Additionally, the court had to consider the nature of the trust and whether it was a sham, and whether the trustee had the authority to bring the proceedings. The court also needed to determine the standing of the beneficiaries in the trust to bring these proceedings, and whether any prior court decisions had a binding effect on this case.

The court found that the property was indeed part of the bankrupt's estate, as the purported trust was a sham and not a valid legal arrangement. The court held that the trustee had the authority to bring the claim, and the beneficiaries had standing to bring the proceedings. The court further found that the matter was not res judicata, and thus could be heard anew. Consequently, the court ordered that the property be used to pay off the bankrupt's debts.

No further orders were made by the court in this matter.

Orders