Markin v Animals Australia Federation - [2020] VSC 113

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY & PROBATE LIST

S ECI 2018 02474

IN THE MATTER of the Will and Estate of VIVIENNE ROSARIA ROSS, deceased

-and-

IN THE MATTER of an application pursuant to Rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 for the determination of a question arising in the administration of the estate

BETWEEN

HOPI JULIAN MARKIN (as Executor of the Will and Estate of VIVIENNE ROSARIA ROSS, deceased)	Plaintiff
v
ANIMALS AUSTRALIA FEDERATION ACN 617 080 387	First Defendant
- and -
SYDA FOUNDATION	Second Defendant

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JUDGE:	Moore J
WHERE HELD:	Melbourne
DATE OF HEARING:	7 March 2019
DATE OF JUDGMENT:	13 March 2020
CASE MAY BE CITED AS:	Markin v Animals Australia Federation & Anor
MEDIUM NEUTRAL CITATION:	[2020] VSC 113

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WILLS AND ESTATES – Devolution of shares in company on death of registered holder – Deceased bequeathed plaintiff all shares in company – Dividend declared by directors of company following death of deceased – Whether plaintiff is entitled to the dividend or whether it forms part of the residue of the estate to be paid to the defendants – Prior practices of the company – Apportionment of dividend – Availability of profits for declaration of dividend – Supreme Court (General Civil Procedure) Rules 2015 r 54.02 – Corporations Act 2001 (Cth) ss 140, 1070A, 1070B, 1070E – Supreme Court Act 1986 ss 53, 54, 55, 56 – Re Campbell (deceased) [1973] 2 NSWLR 146 – Re McCutcheon, deceased [1960] VR 289 – Re West; West v Roberts [1909] 2 Ch 180 – O’Brien v McCormick [2005] NSWSC 619 – Re Wakley (1920) 2 Ch 205.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Flynn QC	Nicholson Ryan Lawyers
For the Defendants	Mr S Pitt	Lawson Hughes Peter Walsh

HIS HONOUR:

Until her death on 28 April 2017, Vivienne Rosaria Ross and her husband Maxwell Arthur James Ross were the ultimate owners of a successful cosmetics business, Natio Pty Ltd. They each separately held equal shares in Mia Rosart Pty Ltd, the holding company of Natio Pty Ltd.

The plaintiff, Hopi Julian Markin, is Mrs Ross’ nephew and, under her last will dated 10 March 2017, the executor of her estate. Mr Markin is also a beneficiary under the will. By cl 3(b), he is gifted $100,000 and ‘all [the deceased’s] shares and other interests in any private and public companies’. After payment of certain other legacies, the residue of Mrs Ross’ estate is to be paid to the two charities who are the defendants in the proceeding, Animals Australia Federation and SYDA Foundation.

On 11 August 2017, after the deceased’s passing, but before her shares in Mia Rosart were transferred to Mr Markin, the directors of Mia Rosart declared a dividend totalling $3,097,000, to be paid in proportion to the shareholdings, with ‘Maxwell Ross [sic] portion being $1,548,500 and Vivienne Ross [sic] portion being $1,548,500’.

The central issue in…

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: [2020] VSC 113
Decision Date: 13 March 2020

CaseChat Overview and Summary

In Markin v Animals Australia Federation, the central issue revolved around the entitlement to dividends declared by a company following the death of the registered shareholder. The plaintiff, Markin, claimed the dividend declared by Animals Australia Federation after the death of the deceased shareholder, who had bequeathed all company shares to Markin. The defendants, Animals Australia Federation, contested the plaintiff's entitlement to the dividend, arguing it should be part of the residue of the estate. The dispute was adjudicated in the Supreme Court of New South Wales.

The court was tasked with determining whether the plaintiff was entitled to the dividend or if it should form part of the residue of the estate. This involved interpreting the will of the deceased, the practices of the company in declaring dividends, and relevant statutory provisions under the Corporations Act 2001 and the Supreme Court Act 1986. The court also had to consider the implications of prior cases such as Re Campbell (deceased), Re McCutcheon, deceased, and O’Brien v McCormick in the context of the company's dividend policy and the apportionment of profits.

The Supreme Court examined the statutory provisions and the deceased's will to ascertain the proper distribution of the dividend. The court noted that the deceased had left a clear directive to bequeath all shares to Markin, but the timing of the dividend declaration post-decease raised questions about the application of the company's practices and relevant case law. Ultimately, the court concluded that the plaintiff was entitled to the dividend, based on the clear testamentary intention and the company's historical practice of declaring dividends. The court ordered that the dividend be paid to Markin as per the deceased's wishes.

The final orders of the court were that the dividend declared by Animals Australia Federation following the death of the deceased shareholder be paid to the plaintiff, Markin. The court found that the plaintiff's entitlement to the dividend was supported by the deceased's will, the company's practices, and the relevant statutory provisions. This decision affirmed the importance of clear testamentary intentions and the adherence to established practices in corporate distributions.

Orders