Menkens v Wintour - [2011] QCA 201

SUPREME COURT OF QUEENSLAND

CITATION:

Menkens & Anor v Wintour [2011] QCA 201

PARTIES:

LEO IGNATIUS GEORGE MENKENS
(first appellant)
REID MATTHEW MENKENS
(second appellant)
v
SHARON MARY-ELLEN WINTOUR as trustee for the RDP WINTOUR DISCRETIONARY TRUST
(respondent)

FILE NO/S:

Appeal No 2454 of 2011
SC No 1975 of 2006

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

19 August 2011

DELIVERED AT:

Brisbane

HEARING DATE:

26 July 2011

JUDGES:

Fraser JA and Boddice and Dalton JJ
Separate reasons for judgment of each member of the Court, each concurring as to the order made

ORDER:

Appeal dismissed with costs

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES RIGHTS AND LIABILITIES OF TRUSTEES – where a business was acquired and carried on by a unit trust – where there was an arrangement to pay the previous owner of the business a sum of money known as the “Preferential Draw” – where one of the trustees of the unit trust was removed and the appellants exercised an option to acquire that trustee’s units – where the units to be acquired by the appellants had to be valued according to the Trust Deed – where at the time the option was exercised the “Preferential Draw” was in “deficit” – where the appellants contended that the unpaid amount had to be taken into account in valuing the units – where the trial judge found that the parties intended the “Preferential Draw” to be an agreement for the distribution of net profits of the business rather than a liability which was due – whether the trial judge erred in finding that the unpaid amount was not a liability of the trustees in respect of the Trust and should not be taken into account in valuing the units

Hawkins v Bank of China (1992) 26 NSWLR 562, cited
Lemon v Austin Friars Investment Trust Ltd [1926] Ch 1, distinguished
Menkens & Anor v Wintour & Anor [2011] QSC 7, affirmed

COUNSEL:

S S W Couper QC, with M R Hodge, for the appellants
C Wilson for the respondent

SOLICITORS:

Hawthorn Cuppaidge & Badgery for the appellants
Herbert Geer for the respondent

FRASER JA: The Menkens and Associates Unit Trust (“the Trust”) was created by a Trust Deed dated 11 September 2001. The trustees were the appellants, Mr Leo Menkens and Mr Reid Menkens, and Mr Wintour. (Wintour was originally the respondent to the appeal. By an order made by consent at the hearing of the appeal, Sharon Mary-Ellen Wintour as trustee for the RDP Wintour Discretionary Trust was substituted as the respondent. She had replaced Wintour as the trustee of that trust.) Each of the three trustees held ten of the 30 units in the Trust. During the relevant period the “Unitholders Deed”, dated 12 December 2001, gave Leo Menkens control of the Trust’s business, including power to dismiss a trustee. He exercised that power by dismissing Wintour on 24 October 2005. In that situation,…

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 Menkens v Wintour

Details

AGLC: Menkens v Wintour [2011] QCA 201
Case: [2011] QCA 201
Decision Date: 19 August 2011

CaseChat Overview and Summary

The case of Menkens v Wintour involved a dispute between the appellants, Menkens, and the respondents, Wintour, regarding the valuation of units in a unit trust. The respondents had previously owned a business which was acquired and continued by the unit trust. The dispute centred around a sum of money referred to as the "Preferential Draw," which was intended to be paid to the previous owner of the business. The appellants exercised an option to acquire the units of one of the trustees, and the units were to be valued according to the terms of the Trust Deed. The key issue was whether the unpaid amount of the "Preferential Draw" should be considered a liability of the trustees and factored into the unit valuation.

The central legal issue was whether the unpaid amount of the "Preferential Draw" constituted a liability of the trustees under the Trust Deed, and thus should be considered when valuing the units acquired by the appellants. The trial judge had ruled that the "Preferential Draw" was intended as an agreement for the distribution of net profits rather than a debt due to the previous owner. The appellants argued that the unpaid amount should be taken into account in the valuation of the units, as it was a liability of the trustees. The court needed to determine whether the trial judge's interpretation of the "Preferential Draw" was correct and whether the unpaid amount was indeed a liability that should be factored into the unit valuation.

The court examined the terms of the Trust Deed and the intentions of the parties involved in establishing the "Preferential Draw." It found that the trial judge's interpretation of the "Preferential Draw" as an agreement for the distribution of net profits rather than a debt was consistent with the language and context of the Trust Deed. The court held that there was no error in the trial judge's finding that the unpaid amount was not a liability of the trustees. Consequently, the unpaid amount of the "Preferential Draw" should not be considered in valuing the units acquired by the appellants. The appeal was dismissed with costs to the respondents.

Orders

Orders of the court

Appeal dismissed with costs

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Menkens & Anor v Wintour [2011] QCA 201
PARTIES:	LEO IGNATIUS GEORGE MENKENS (first appellant) REID MATTHEW MENKENS (second appellant) v SHARON MARY-ELLEN WINTOUR as trustee for the RDP WINTOUR DISCRETIONARY TRUST (respondent)
FILE NO/S:	Appeal No 2454 of 2011 SC No 1975 of 2006
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	19 August 2011
DELIVERED AT:	Brisbane
HEARING DATE:	26 July 2011
JUDGES:	Fraser JA and Boddice and Dalton JJ Separate reasons for judgment of each member of the Court, each concurring as to the order made
ORDER:	Appeal dismissed with costs
CATCHWORDS:	EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES RIGHTS AND LIABILITIES OF TRUSTEES – where a business was acquired and carried on by a unit trust – where there was an arrangement to pay the previous owner of the business a sum of money known as the “Preferential Draw” – where one of the trustees of the unit trust was removed and the appellants exercised an option to acquire that trustee’s units – where the units to be acquired by the appellants had to be valued according to the Trust Deed – where at the time the option was exercised the “Preferential Draw” was in “deficit” – where the appellants contended that the unpaid amount had to be taken into account in valuing the units – where the trial judge found that the parties intended the “Preferential Draw” to be an agreement for the distribution of net profits of the business rather than a liability which was due – whether the trial judge erred in finding that the unpaid amount was not a liability of the trustees in respect of the Trust and should not be taken into account in valuing the units Hawkins v Bank of China (1992) 26 NSWLR 562, cited Lemon v Austin Friars Investment Trust Ltd [1926] Ch 1, distinguished Menkens & Anor v Wintour & Anor [2011] QSC 7, affirmed
COUNSEL:	S S W Couper QC, with M R Hodge, for the appellants C Wilson for the respondent
SOLICITORS:	Hawthorn Cuppaidge & Badgery for the appellants Herbert Geer for the respondent