McCarthy v Wheeler & Wongan Hotels P/L - [1998] VSC 67

SUPREME COURT OF VICTORIA

CAUSES JURISDICTION

Not Restricted

No. 10354 of 1993

HAYDN McCARTHY	Plaintiff
v.
JOHN ALBERT WHEELER AND WONGAN HOTELS PTY. LTD.

Defendants

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JUDGE:	HEDIGAN, J.
WHERE HELD:	Melbourne
DATES OF HEARING:	17-21, 24 and 25 August 1998
DATE OF JUDGMENT:	16 September 1998
MEDIA NEUTRAL CITATION:	[1998] VSC 67

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FRAUD - Whether transfer of units in property trust fraudulently obtained - Claim made at common law and under Trade Practices Act and Fair Trading Act - Misleading and deceptive conduct.

CORPORATIONS LAW - Defendant procuring alteration of date on minute of alleged meeting prior to lodgment with A.S.C. - Effect of ss.1274(4B) and (4C) of Corporations Law - Whether defendant could rely on date other than that on the document when it was party procuring false dating.

CAVEAT - Claim for removal of - Whether unit holder in trust has sufficient proprietary interest in trust property to support caveat.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. I.R. Jones	Meerkin & Apel
For the Defendant	Mr. D.J. Connell	Mr. K. Steele and Giammario

HIS HONOUR:

The plaintiff Haydn Robert McCarthy (hereinafter called "Haydn" or McCarthy" or both) (for whom Mr. I. Jones of counsel appeared) sues John Albert Wheeler ("Wheeler") and Wongan Hotels Pty. Ltd. ("Wongan" or "the trustee" respectively) (for both of whom Mr. D. Connell of counsel appeared) seeking to have the purported transfer by McCarthy of units standing to his name in a Trust ("the River Street Property Trust" or "the Trust") declared to be void and of no effect on the grounds that the transfers were fraudulently obtained, alternatively a declaration that the purported entry of the transferee of the units (Wheeler) in the Register of Units in the Trust was of no effect because no valid meeting of the directors of the trustee was ever held to approve and consent to the transfer of the units from Haydn McCarthy to Wheeler.
I propose first to describe in a general way the background facts and circumstances which have given rise to the claim; second, to refer to the pleadings and third to articulate the relevant evidence and my findings of fact (including my evaluation of the witnesses) and finally the conclusions arrived at.
The plaintiff Haydn Robert McCarthy is now aged 24. He is the son of the now Kim Johnson who was by her first marriage married to one McCarthy. There were two children of that marriage: Nikki, a daughter, some three years older than Haydn, and Haydn. That marriage was dissolved. Subsequently, Kim married Adrian Lindsay Gallagher (hereinafter called "Adrian Gallagher" or "Adrian", to distinguish him from his brother Graham Gallagher and his nephew Andrew Gallagher, to both of whom reference will have to be made). Adrian Gallagher is not a party to this proceeding, although he may well have been added as a defendant. The reason that he was not made a party was because, as I find, the plaintiff's legal advisers were not aware prior to the…

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: [1998] VSC 67
Decision Date: 16 September 1998

CaseChat Overview and Summary

The matter before the court involved a dispute between the plaintiff, McCarthy, and the defendants, Wheeler and Wongan Hotels P/L. The plaintiff sought to have certain units in a property trust declared as the result of fraudulent conduct, alleging that the defendants had engaged in misleading and deceptive conduct under both common law and statutory provisions. Additionally, the plaintiff argued that the defendant had unlawfully procured an alteration of the date on the minutes of an alleged meeting, which was then lodged with the Australian Securities Commission (ASC). The plaintiff also claimed that the defendants had placed a caveat on the trust property without a sufficient proprietary interest.

The primary legal issues before the court were whether the transfer of units in the property trust was obtained through fraudulent means, and if so, what remedies were available under the relevant statutes. The court also had to determine whether the defendant could rely on a date other than that which appeared on the document, given that the defendant was the party who procured the false dating. Additionally, the court considered whether the plaintiff, as a unit holder in the trust, had a sufficient proprietary interest to support the placement of a caveat over the trust property.

In addressing these issues, the court found that the transfer of units in the property trust was indeed the result of fraudulent conduct, and that the defendants had engaged in misleading and deceptive conduct. The court held that the defendant could not rely on a date other than that which appeared on the document, as they were the party who procured the false dating. Furthermore, the court determined that the plaintiff, as a unit holder in the trust, did have a sufficient proprietary interest in the trust property to support the placement of a caveat. The court granted the plaintiff's application for the removal of the caveat and awarded damages for the fraudulent conduct.

As a result of the court's findings, the final orders included the declaration that the transfer of units in the property trust was fraudulent, the removal of the caveat placed by the defendants, and an award of damages to the plaintiff for the misleading and deceptive conduct. The court also ordered the defendants to pay the plaintiff's costs associated with the proceedings.

Orders