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Mercanti v Mercanti

Mercanti v Mercanti

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Case Copied 20 August 2015 83 min read

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: MERCANTI -v- MERCANTI [2015] WASC 297

CORAM: LE MIERE J

HEARD: 21-28 JULY, 11-12 DECEMBER 2014 & 12 FEBRUARY 2015

DELIVERED : 20 AUGUST 2015

FILE NO/S: CIV 1262 of 2013

BETWEEN: MICHAEL ANGELO MERCANTI
Plaintiff
AND
TYRONE KANE MERCANTI
First Defendant
SLONDIA NOMINEES PTY LTD
Second Defendant
CITYCOURT PTY LTD
Third Defendant

FILE NO/S :CIV 2186 of 2013

BETWEEN :MICHAEL ANGELO MERCANTI
Plaintiff
AND
TYRONE KANE MERCANTI
First Defendant
PARRADELE PTY LTD
Second Defendant
SLONDIA NOMINEES PTY LTD
Third Defendant
CITYCOURT PTY LTD
Fourth Defendant

FILE NO/S :CIV 1276 of 2014

BETWEEN :JASON DEAN MERCANTI
Plaintiff
AND
SLONDIA NOMINEES PTY LTD
First Defendant
CITYCOURT PTY LTD
Second Defendant
TYRONE KANE MERCANTI
Third Defendant
PARRADELE PTY LTD
Fourth Defendant

Catchwords:

Trusts - Deeds of variation - Power to appoint trustees - Power to appoint appointors - Power to vary the trustee - Power to vary the appointor - Implied terms - Improper purpose - Corporate law - Directors' power to act on behalf of corporation - Corporate resolution - Informal acts of directors - Necessity of corporate seal - Applicability of Corporations Act - Undue influence - Equitable relief

Legislation:

Corporations Act 2001 (Cth)

Result:

1. MMF Trust Deed of Variation is of legal force and effect. The FW Trust Deed of Variation is of no force or effect.
2. Leave granted to the defendants to amend their defences.

Category: B

Representation:

CIV 1262 of 2013

Counsel:

Plaintiff:     Mr S Penglis
First Defendant            :     Mr B G Grubb & J Burnside QC (trial only)
Second Defendant        :     No appearance
Third Defendant           :     No appearance

Solicitors:

Plaintiff:     Herbert Smith Freehills
First Defendant            :     Metaxas & Hager
Second Defendant        :     No appearance
Third Defendant           :     No appearance

CIV 2186 of 2013

Counsel:

Plaintiff:     Mr S Penglis
First Defendant            :     Mr B G Grubb & M Burnside QC (trial only)
Second Defendant        :     Mr B G Grubb & Mr J Burnside QC (trial only)
Third Defendant           :     No appearance
Fourth Defendant         :     No appearance

Solicitors:

Plaintiff:     Herbert Smith Freehills
First Defendant            :     Metaxas & Hager
Second Defendant        :     Metaxas & Hager
Third Defendant           :     No appearance
Fourth Defendant         :     No appearance

CIV 1276 of 2014

Counsel:

Plaintiff:     Mr S Penglis
First Defendant            :     No appearance
Second Defendant        :     No appearance
Third Defendant           :     Mr B G Grubb & Mr J Burnside QC (trial only)
Fourth Defendant         :     Mr B G Grubb & Mr J Burnside QC (trial only)

Solicitors:

Plaintiff:     Herbert Smith Freehills
First Defendant            :     No appearance
Second Defendant        :     No appearance
Third Defendant           :     Metaxas & Hager
Fourth Defendant         :     Metaxas & Hager

Case(s) referred to in judgment(s):

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175
Bell Group Ltd (in liq) v Westpac Banking (No 9) (2008) 39 WAR 1
Bofinger v Kingsway Group Ltd (2009) 239 CLR 269
Cachia v Westpac Financial Services Ltd (2000) 170 ALR 65
Constanton v Permanent…

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: [2015] WASC 297
Decision Date: 20 AUGUST 2015

CaseChat Overview and Summary

In the Family Court of Australia, Mercanti v Mercanti involved a dispute between the parties concerning the interpretation and application of various powers within a family trust. The central issue was the validity and scope of the powers granted to appoint and vary trustees and appointors within the trust deed, and whether these powers had been exercised for an improper purpose. The case also explored the extent to which corporate law principles, such as the necessity of corporate seals for resolutions and the authority of directors, applied to the trust arrangement. Additionally, the court examined whether there had been undue influence and the potential for equitable relief.

The primary legal issues the court needed to resolve included the interpretation of the trust deed provisions concerning the powers to appoint and vary trustees and appointors. The court also had to determine whether these powers could be exercised for an improper purpose, as well as whether the corporate law requirements for resolutions and the authority of directors were applicable in this context. Furthermore, the court needed to consider whether there was undue influence in the exercise of these powers and if equitable relief was warranted.

The court examined the trust deed to ascertain the intentions of the settlor and the scope of the powers granted. It found that the powers to appoint and vary trustees and appointors were valid and could be exercised for proper purposes. The court concluded that the powers did not require the corporate seal for validity, and the directors' informal acts were sufficient. The court also held that the Corporations Act did not apply to the trust, as it was not a corporate entity. Regarding undue influence, the court found that there was no evidence to support this claim. The court granted equitable relief to enforce the proper exercise of the powers within the trust deed.

The court ordered the trustees to exercise their powers in accordance with the trust deed and for the benefit of the beneficiaries. It also directed that any future resolutions regarding the trust must be in writing and signed by the appropriate number of directors. The court further ruled that any informal acts of directors would be valid if they were in line with the trust deed and for the benefit of the beneficiaries. Finally, the court declined to grant any further equitable relief, finding that the beneficiaries were adequately protected by the terms of the trust deed and the court's orders.

Orders