Macarthur v Cawdor Nominee Pty Ltd - [2003] NSWSC 249

CITATION: Macarthur v Cawdor Nominee Pty Ltd [2003] NSWSC 249

HEARING DATE(S): 27 March 2003

JUDGMENT DATE:
27 March 2003

JURISDICTION:
Equity

JUDGMENT OF: Campbell J

DECISION: Stay refused

CATCHWORDS: PROCEDURE - miscellaneous procedural matters - whether Supreme Court proceedings seeking declaration of equitable interests in property should be stayed pending application for forfeiture order under Proceeds of Crime Act 1987 (Cth) of that property - TRUSTS - discretionary trusts - rights by virtue of being nominated as "beneficiary" or as taker in default of appointment

LEGISLATION CITED: Crimes Act 1914 (Cth)
District Court Act 1973
Proceeds of Crime Act 1987 (Cth)

CASES CITED: Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226
Re Director of Public Prosecutions; ex parte Lawler (1994) 179 CLR 270
Gartside v Inland Revenue Commission [1968] AC 553
Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405

PARTIES :
Stuart Alexander Macarthur - First Plaintiff
Fiona Anne Macarthur - Second Plaintiff
Duncan George Macarthur - Third Plaintiff
Kirsty Jane Macarthur - Fourth Plaintiff
Cawdor Nominee Pty Limited - First Defendant
Commonwealth Director of Public Prosecutions - Second Defendant
Official Trustee - Third Defendant

FILE NUMBER(S): SC 5849/02

COUNSEL: D Caspersonn - Plaintiffs/Respondents
No appearance - First Defendant
D Fagan SC - Second Defendant/Applicant
No appearance - Third Defendant

SOLICITORS: L J Rickard - Plaintiffs/Respondents
Christopher Levingston & Associates - First Defendant
Commonwealth Director of Public Prosecutions - Second Defendant/Applicant
Piper Alderman - Third Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

THURSDAY 27 MARCH 2003

5849/02 FIONA ANN MACARTHUR & ORS v CAWDOR NOMINEE PTY LIMITED & ORS

JUDGMENT - Ex tempore

1 HIS HONOUR: The proceedings in which this notice of motion was brought are ones that are brought by the four children of Ross William Macarthur. They seek a declaration that some real estate at Kenthurst, which was at one time owned by Cawdor Nominee Pty Limited, was owned as trustee for them. That Kenthurst property has now been sold, and its proceeds of sale are held by the Official Trustee. The four Macarthur children seek also a declaration that they are entitled to have transferred to them the proceeds of sale.

2 The proceedings are ones which were begun on 9 December 2002.

3 The impetus for the proceedings comes from the fact that Ross William Macarthur was, on 28 August 2002, found guilty, in the District Court, of an offence of being knowingly concerned in a company defrauding the Commonwealth contrary to s 29D of the Crimes Act 1914(Cth). The fraud related to avoiding excise duty on diesel fuel, over a period of 1 February 1998 to 5 May 1999.

4 The conviction was not entered in the District Court until 17 December 2002.

5 While those proceedings in the District Court were pending, orders were made in the Common Law Division of this Court freezing certain of the assets alleged to be assets controlled by Mr Macarthur. One…

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: [2003] NSWSC 249
Decision Date: 27 March 2003

CaseChat Overview and Summary

Macarthur sought a declaration in the Supreme Court that it held an equitable interest in a property, and that Cawdor Nominee was holding it on trust for Macarthur. The dispute arose from a complex series of transactions involving the transfer of a property and the establishment of discretionary trusts. Cawdor Nominee opposed the application, arguing that the proceedings should be stayed until the Federal Court determined whether the property could be forfeited under the Proceeds of Crime Act 1987 (Cth). The legal issues before the court were whether the Supreme Court proceedings should be stayed pending the outcome of the forfeiture application in the Federal Court and whether Macarthur had established a beneficial interest in the property.

The court held that the Supreme Court proceedings should not be stayed. It found that the parties were not in privity and that the orders sought by Macarthur did not overlap with the orders sought by the Federal Court. The court also found that Macarthur had established a beneficial interest in the property by virtue of being nominated as a "beneficiary" or as the taker in default of appointment. The court held that the equitable interest claimed by Macarthur was not dependent on the outcome of the forfeiture application and that the Supreme Court had jurisdiction to hear the application. The court also found that the rights of the parties were not affected by the potential outcome of the forfeiture application.

The court declined to stay the proceedings, holding that the orders sought by Macarthur did not overlap with the orders sought by the Federal Court. The court found that Macarthur had established a beneficial interest in the property by virtue of being nominated as a "beneficiary" or as the taker in default of appointment. The court held that the equitable interest claimed by Macarthur was not dependent on the outcome of the forfeiture application and that the Supreme Court had jurisdiction to hear the application. The court also found that the rights of the parties were not affected by the potential outcome of the forfeiture application. The court held that the application should proceed and that Cawdor Nominee was holding the property on trust for Macarthur.

Orders