Ong v Lottwo Pty Ltd (in liq)

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SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Civil)

ONG & ORS v LOTTWO PTY LTD (IN LIQ)

[2013] SASCFC 57

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Stanley and The Honourable Justice Nicholson)

27 June 2013

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW - PARTICULAR CASES - CONTROL OVER PROCEEDINGS - OTHER CASES

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PARTIES - JOINDER OF PARTIES

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PLEADINGS - GENERALLY

EQUITY - TRUSTS AND TRUSTEES - IMPLIED TRUSTS - RESULTING TRUSTS - WHEN ARISING - PURCHASE IN ANOTHER'S NAME

CORPORATIONS - WINDING UP - CONDUCT AND INCIDENTS OF WINDING UP - PROCEEDINGS BY OR AGAINST THE COMPANY - LEAVE TO PROCEED - WHEN LEAVE GRANTED

Purchasers defaulted on loans used to purchase several properties – bank exercised mortgagee’s powers of sale – surplus remained after borrowers’ liabilities discharged – surplus paid into Court in actions relating to the different properties – the appellants applied to a Master to be joined as plaintiffs to the action – Master granted the application but following an appeal a single Judge refused the application for joinder – further appeal against the Judge’s order refusing the joinder.

Whether each of the appellants has an arguable claim to a proprietary interest in the money in Court – whether each of the appellants has sufficiently pleaded a claim to a resulting trust on the basis of contributions provided to the purchase price.

Held:  Appeal allowed.  With respect to the joinder of both appellants the orders of the Master restored.  Each appellant has sufficiently pleaded a claim to a proprietary interest based on a resulting trust.

Corporations Act 2001 s471B; Trustee Act 1936 (SA) s47; Supreme Court Rules 6R 74, 6R 190; Jacobs’ Law of Trusts in Australia 7th ed, 2006 LexisNexis Butterworths Australia, JD Heydon and MJ Leeming at 240 and 241; Bullen & Leake & Jacob’s Precedents of Pleadings Sweet and Maxwell, Thompson Reuters 17th ed, 2012, vol 2 at paragraph 91-Y5; Corporations Legislation 2012 Lawbook Co, 2012, Baxt, Finnane and Harris, at p622, referred to.
Lottwo Pty Ltd (in liq) v Tudo & Ors [2012] SASC 172; Muschinski v Dodds (1985) 160 CLR 583; Nelson v Nelson (1995) 184 CLR 538; Calverley v Green (1984) 155 CLR 242; Atilgan v Atilgan [1999] NSWSC 324; Dyer v Dyer (1788) 2 Cox 92, 30 ER 42; The Venture [1908] P 218; Dewar v Dewar [1975] 1 WLR 1532; Vajpeyi v Yusuf [2003] EWHC 2788 (Ch); Tinsley v Milligan [1994] 1 AC 340; Ryall v Ryall (1739) 1 Atk 59, 26 ER 39; Equuscorp Pty Ltd v Jimenez [2002] SASC 225; Martech Energy Systems Pty Ltd (in liq) v Bell [2005] VSC 198; Napier v Public Trustee (WA) (1980) 55 ALJR…

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Details
Case
[2013] SASCFC 57
Decision Date

CaseChat Overview and Summary

The appeal concerned an application by the appellants to be joined as plaintiffs in actions where surplus funds, remaining after the exercise of a bank's mortgagee's powers of sale over properties, had been paid into court. The original purchasers had defaulted on loans used to acquire these properties. A Master had granted the appellants' application for joinder, but a single Judge subsequently refused it. The appeal to the Full Court of the Supreme Court of South Australia was against this refusal.

The central legal issues before the Full Court were whether each of the appellants possessed an arguable claim to a proprietary interest in the money held in court, and whether their pleadings sufficiently articulated a claim to a resulting trust arising from their alleged contributions to the purchase price of the properties.

The Full Court allowed the appeal, restoring the Master's orders for joinder. The Court reasoned that each appellant had sufficiently pleaded a claim to a proprietary interest based on a resulting trust. This conclusion was reached by assessing the pleadings and finding that they disclosed an arguable case for the existence of such a trust, thereby justifying their joinder as plaintiffs in the proceedings to determine their entitlement to the surplus funds.

Orders

Orders of the court

Held: Appeal allowed. With respect to the joinder of both appellants the orders of the Master restored. Each appellant has sufficiently pleaded a claim to a proprietary interest based on a resulting trust.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

KOURAKIS CJ NICHOLSON J

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Ratio Decidendi

Legal Principle Established

Established by: KOURAKIS CJ, NICHOLSON J

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