Macdermott & Grant

In *Macdermott & Grant*, Ms Macdermott (the applicant) sought orders for the sale of farming lands and other property held within trusts, against Mr Grant (the first respondent) and others. The dispute arose in the context of significant and increasing debt secured against the properties, a Notice of Demand having been issued by the bank, and the first respondent's bankruptcy. The applicant's ultimate aim was to preserve any remaining property for the parties.

The court was required to determine whether the trusts constituted the alter ego of the parties, particularly the first respondent, and whether the parties had sufficient control over the trusts to treat the assets as their own. Additionally, the court needed to consider the appointment of a trustee for the B Trust, given the respondent's bankruptcy and the subsequent invalidity of the appointed trustee and appointor. The court also had to address the applicant's request for an injunction to restrain the first respondent from dealing with certain property.

Berman J reasoned that the parties, and particularly the first respondent, had treated the farming lands held within the B Trust as their own, and that the first respondent had effective control over the trust. Consequently, the court declared the farming land to be property of the parties. The court found no impediment to appointing the applicant as the sole trustee of the B Trust, given the respondent's bankruptcy and the resulting absence of a validly appointed trustee. The court also found that the D Family Trust was effectively controlled by the applicant as the sole trustee.

The court ordered the appointment of the applicant as the trustee of the B Trust and authorised the sale of specified farming lands. The applicant was granted powers to sell these properties, with proceeds to be applied first to secured mortgage amounts, then sale costs, and any surplus to be held in trust pending further order. The applicant was also declared the sole trustee of the D Family Trust with power to sell remaining plant and equipment, with proceeds to be applied similarly. The first respondent was ordered to facilitate these sales and was restrained from dealing with certain personal chattels and D Family Trust assets.