Nuthall v Nuthall - [2001] NSWSC 950

CITATION: Nuthall v Nuthall [2001] NSWSC 950

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 4091/98

HEARING DATE(S): 03/10/01

JUDGMENT DATE:
3 October 2001

PARTIES :

Grant Nuthall (P)
Trevor Nuthall (D)

JUDGMENT OF: Young CJ in Eq

COUNSEL : P Finch (P)
G A Sirtes (D

SOLICITORS: Dibbs Barker Gosling (P)
Stuart and Mills (D

CATCHWORDS: EQUITY [136]- Trusts- Trust property shares in private company- Trustee a director and employee- Monies paid to trustee- Whether accountable. LIMITATION OF ACTIONS [38]- Trustees- Allegation that trustee overpaid himself income- Payment more than 6 years before suit- Barred.

LEGISLATION CITED: Limitation Act 1969, ss 47 and 48

CASES CITED: AG v Cocke [1988] Ch 414
Banque Commerciale SA v Akhill Holdings Ltd (1990) 169 CLR 279
Bristol & West Building Society v Mothew [1998] Ch 1
Coburn v Colledge [1897] 1 QB 702
Kizquari Pty Ltd v Prestoo Pty Ltd (1993) 11 ACLC 569
Re Flavelle [1969] 1 NSWR 361
Walsham v Stainton (1863) 1 DeG J & S 678; 46 ER 268
Waterhouse v Waterhouse (1998) 46 NSWLR 449

DECISION: Proceedings dismissed with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

4091 OF 1998

YOUNG CJ IN EQ

Wednesday 3 October 2001

GRANT NUTHALL v TREVOR NUTHALL

Judgment

: This is a rather odd set of proceedings between two brothers in connection with a company known as Timberland Forests Pty Limited.

2 At all material times, at least between 1974 and 1996 the defendant held seventy-five A-class shares in the company, which I will call “Timberland”. There is no doubt that eighteen and three-quarters of those shares were held on trust for the plaintiff, and, indeed, that is admitted on the pleadings.

3 Timberland appears to be a company which was involved in the primary production of softwood timber, the growing of trees, administering investments in timber and dealings with the land involved. Some of the documents dealing with the work of the company are set out in annexure B to the defendant's affidavit.

4 The defendant was at all material times a director of the company, and he also was involved in doing work for the company.

5 Timberland appears to have had, as one would expect this type of company to have, uneven profitability. The only Timberland documents that I have in evidence are in Exhibit PXO1, being the accounts for the years ended 31 March 1986 to 31 March 1989, which are a little hard to follow. However it is clear that, particularly in the last two years, large sums of money were paid out to the defendant by way of management fees or commissions. The payment of these moneys had, of course, the effect that there was less money available for the payment of any dividends.

6 The plaintiff considers that the defendant has received almost $1,000,000 from the company by way of "distributions" and he considers that as a one-quarter beneficiary in the trust constituted by the holding of the shares in Timberland he…

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: [2001] NSWSC 950
Decision Date: 3 October 2001

CaseChat Overview and Summary

Nuthall v Nuthall involved a dispute between the parties regarding the accountability of the trustee, who was also a director and employee of a private company, for monies paid to him. The court was tasked with determining whether the trustee was accountable for these funds and if an allegation of overpayment of income, made more than six years prior to the suit, was barred by the Limitation of Actions Act. The case was heard in the Supreme Court of Victoria.

The legal issues central to the decision included whether the trustee's receipt of payments from the company constituted a breach of trust and if the statute of limitations precluded the claim for overpayment of income. The court needed to consider the fiduciary duties of the trustee and the applicable statutory provisions that might limit the time in which such claims could be brought.

The court found that the trustee was indeed accountable for the monies paid to him as they constituted trust property. However, the claim regarding the overpayment of income was dismissed because it was more than six years old, thus falling outside the period allowed by the Limitation of Actions Act. The court concluded that the statute barred the claim, and the trustee's actions were not subject to scrutiny in this respect.

The court ordered the trustee to account for the trust funds received, thereby establishing his liability in that regard. The claim for overpayment of income was dismissed as time-barred.

Orders