Puddick v Dyamond Developments Pty Ltd (No 2)

In this case, Puddick v Dyamond Developments Pty Ltd (No 2), the plaintiff sought various declarations and orders in relation to the transfer of shares in a company, Dyamond Developments Pty Ltd, from the first defendant to the third defendant. The court was asked to determine whether the third defendant holds the shares on a resulting trust for the first defendant and to make consequential orders regarding the transfer. The case was heard in the Supreme Court of New South Wales.

The central legal issue before the court was whether a declaration should be made that the transfer of shares from the first defendant to the third defendant was for no consideration and that the third defendant holds the shares on a resulting trust for the first defendant. The court had to consider the extent to which the issue of resulting trust had been sufficiently litigated to justify a declaration and whether it was appropriate to make such a declaration in the circumstances. The court also needed to determine the appropriate basis for assessing costs, considering whether the ordinary or indemnity basis was applicable.

The court found that the issue of whether the third defendant holds the shares on a resulting trust for the first defendant was sufficiently litigated to justify a declaration that the transfer of shares was for no consideration. However, since this issue was not contested by the parties, the court declined to make a declaration regarding a resulting trust. The court reasoned that while the defendants' conduct was the subject of the proceedings, it did not in itself establish an entitlement to indemnity costs. The defence was not conducted with the requisite degree of delinquency to justify indemnity costs, and thus, the ordinary basis was deemed appropriate for assessing costs.

The court made a declaration that the transfer of shares from the first defendant to the third defendant was for no consideration. No declaration was made regarding the resulting trust. Costs were assessed on the ordinary basis.