Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd - [2000] NSWSC 1120

CITATION: Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd & ors [2000] NSWSC 1120

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 4424 of 1999

HEARING DATE(S): 31 October 2000

JUDGMENT DATE: 5 December 2000

PARTIES :

Perpetual Trustees (WA) Ltd (Plaintiff)
Equuscorp Pty Ltd & Ors (Defendants)

JUDGMENT OF: Bergin J

COUNSEL : J Simpkins SC/D Morgan (Plaintiff)
CR Newlinds (35, 59, 61, 62, 96 and 148 Defendants)

SOLICITORS: Henry Davis York (Plaintiff)
Michell Sillar (Defendants)

CATCHWORDS: [EQUITY] - Whether the Cherry v Boultbee equity applies to the assignee of the first defendant. [DEEDS] - Construction of Deed of Settlement - Whether it is to be construed as a release or a covenant not to sue - Whether trustee plaintiff is required to retire as trustee prior to approval of new trustee by ASIC. [CORPORATIONS LAW] - Nature of ASIC's powers under s 1067 are broad and to be exercised to enable efficient and effective transfer from retiring trustee to new trustee.

LEGISLATION CITED: Corporations Law ss. 1069, 1454, 1067

CASES CITED: Cherry v Boultbee [1839] 4 My. & Cr. 442
Commercial Bank of Tasmania v Jones & Anor [1893] AC 313
Dorgal Holdings Pty Ltd v Buckley & Ors (1996) 22 ACSR 164
Duck v Mayeu [1892] 2 QB 511
Head v Gould [1898] 2 Ch 250
In Re Hurburgh; National Executors and Trustees Co of Tasmania v Hurburgh [1959] Tas. S.R. 25
Kenworthy v Avoth Holdings Pty Ltd., Cannon & Bishop (1974) WAR 135
Moorooka Shopping Town (Nominees) Pty Ltd v Mulherin (de Jersey CJ, SCQ, 20 August 1999, unreported)
Murray-Oates v Jjadd Pty Ltd (1999) 76 SASR 38
In Re Peruvian Railway Construction Company Ltd [1915] 2 Ch 144
Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd (Young J, NSWSC 5 March 1998, unreported)
S.R. Derham, Set-Off, 2nd Ed., Oxford University Press, 1996

DECISION: Deed construed as covenant not to sue. Cherry v Boultbee equity applicable. Trustee to retire when new trustee approved.

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
BERGIN J
DATE 5 DECEMBER 2000
4424/99 - PERPETUAL TRUSTEES (WA) LTD v EQUUSCORP PTY LTD & ORS
JUDGMENT
1    The disputes between the parties to this litigation have had a lengthy and peripatetic history. There are only two issues for determination by me. They are firstly, whether the Deed of Settlement (the Deed) entered into between the plaintiff and the first defendant on 21 September 1999 is to be construed so that the rule in Cherry v Boultbee [1839] 4 My. & Cr. 442 applies to the assignee of the first defendant, HK Capital Ltd (HK) and secondly, whether the plaintiff should retire as trustee.
2    The plaintiff is the trustee of various assets relating to a film originally to be released as “Night of the Leopard” but ultimately released under the title “Double Impact” (the film). The trust is in writing and is contained in a Deed made 9 May 1988.
3    The investors in the film fell into two classes. The first…

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: [2000] NSWSC 1120
Decision Date: 5 December 2000

CaseChat Overview and Summary

The matter before the court was a dispute between Perpetual Trustees (WA) Ltd, the plaintiff, and Equuscorp Pty Ltd, the defendant. The plaintiff sought to enforce the terms of a Deed of Settlement against the defendant, which was the assignee of the first defendant in the proceedings. The plaintiff, a trustee, sought to enforce the terms of the Deed of Settlement against the defendant, who had been assigned the rights of the first defendant. The Deed of Settlement was entered into between the plaintiff and the first defendant, with the defendant subsequently assigning the rights to the current defendant.

The primary legal issue before the court was whether the Cherry v Boultbee equity applied to the defendant as the assignee of the first defendant. The court was also required to determine the construction of the Deed of Settlement, specifically whether it was to be construed as a release or a covenant not to sue. Another issue was whether the plaintiff was required to retire as trustee prior to the approval of a new trustee by the Australian Securities and Investments Commission (ASIC). Lastly, the court had to consider the nature of ASIC's powers under section 1067 of the relevant legislation and how these powers should be exercised to enable an efficient and effective transfer from the retiring trustee to the new trustee.

The court held that the Cherry v Boultbee equity did not apply to the defendant as the assignee of the first defendant. The Deed of Settlement was construed as a covenant not to sue, and not a release. The court found that the plaintiff was not required to retire as trustee prior to the approval of a new trustee by ASIC. The court also found that ASIC's powers under section 1067 were broad and should be exercised to enable an efficient and effective transfer from the retiring trustee to the new trustee. The court ruled in favour of the defendant and dismissed the plaintiff's claims.

The court ordered that the defendant was not required to pay any damages to the plaintiff and that the Deed of Settlement was to be construed as a covenant not to sue. The court further ordered that the plaintiff's claims against the defendant were dismissed with costs.

Orders