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Scaffidi v Montevento Holdings Pty Ltd

Scaffidi v Montevento Holdings Pty Ltd

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Case Copied 7 July 2011 81 min read

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: SCAFFIDI -v- MONTEVENTO HOLDINGS PTY LTD [2011] WASCA 146

CORAM: BUSS JA
MURPHY JA
HALL J

HEARD: 12 APRIL 2011

DELIVERED : 7 JULY 2011

FILE NO/S: CACV 70 of 2010

BETWEEN: GIUSEPPE DIEGO SCAFFIDI
Appellant
AND
MONTEVENTO HOLDINGS PTY LTD
First Respondent
EUGENIO SCAFFIDI
Second Respondent
MARIA SCAFFIDI by her guardian ad litem THE PUBLIC TRUSTEE
Third Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :EM HEENAN J
Citation  :MONTEVENTO HOLDINGS PTY LTD -v- SCAFFIDI HOLDINGS PTY LTD [No 2] [2010] WASC 180
File No  :CIV 1522 of 2010

Catchwords:

Trusts and trustees - Construction of power of appointment in trust deed - Whether corporate entity eligible for appointment as a trustee - Where sole director and shareholder of corporate entity is appointor and beneficiary - Power of court to remove and appoint new trustee

Legislation:

Death Duty Assessment Act 1973 (WA), s 10(1), s 10(2)(i)
Estate Duty Assessment Act 1914 (Cth), s 8(1), s 8(3)
First Corporate Law Simplification Act 1995 (Cth)
Stamp Duties Act 1920 (NSW), s 100, s 101, s 102(2)(j)
Trustees Act 1962 (WA), s 77

Result:

Appeal allowed
Notice of contention dismissed

Category: A

Representation:

Counsel:

Appellant:     Mr C L Zelestis QC
First Respondent           :     Ms K A Vernon
Second Respondent      :     Ms K A Vernon
Third Respondent          :     Mr B W Ashdown

Solicitors:

Appellant:     Oldfield Legal
First Respondent           :     Butcher Paull & Calder
Second Respondent      :     Butcher Paull & Calder
Third Respondent          :     Public Trustee

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

Armitage v Nurse [1998] Ch 241
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
Australian Securities and Investments Commission v Carey (No 6) [2006] FCA 814; (2006) 153 FCR 509
CPT Custodian Pty Ltd v Commissioner of State Revenue of the State of Victoria [2005] HCA 53; (2005) 224 CLR 98
Duke of Portland v Topham (1864) 11 HLC 32
Elovalis v Elovalis [2008] WASCA 141
Elovalis v Elovalis [2008] WASCA 141(S)
Esso Australia Ltd v Australian Petroleum Agents' and Distributors' Association (1999) 3 VR 642
Global Funds Management (NSW) Ltd v Burns Philp Trustee Co Ltd (1990) 3 ACSR 183
Hobkirk v Ritchie (1933) 29 Tas LR 14
In re Brockbank [1948] Ch 206
In re Christina Brown (1921) 22 SR (NSW) 90
In re Gadd (1883) 23 Ch D 134
In re John Gibbon's Trusts (1882) 30 WR 287
In re Newen (1894) 2 Ch 297
In re Norris (1833) 27 Ch D 333
In re Power's Settlement Trusts [1951] Ch 1074
In re Skeats' Settlement (1889) 42 Ch D 522
In re Spencer's Settled Estates (1902) 1 Ch 75
In re Tunstall [1921] VLR 559
In the Marriage of Davidson (No 2) [1991] FLC 92‑197; (1990) 101 FLR 373
In the Marriage of Goodwin [1990] FLC 92‑192; 1990) 101 FLR 386
Johnstone v Johnstone…

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: [2011] WASCA 146
Decision Date: 7 JULY 2011

CaseChat Overview and Summary

In the matter of Scaffidi v Montevento Holdings Pty Ltd, the Federal Court was tasked with determining the eligibility of a corporate entity to be appointed as a trustee under a trust deed. The dispute arose from a trust established under a family arrangement, where Montevento Holdings Pty Ltd, a company wholly owned by the sole director and shareholder, Scaffidi, was to be appointed as a trustee. The central issue was whether a corporate entity, where the appointor and beneficiary were the same individual, could validly be appointed as a trustee.

The court examined the provisions of the trust deed and the applicable legal principles governing the appointment of trustees. It was necessary to determine if the power of appointment in the trust deed allowed for the appointment of a corporate entity and, if so, whether this was permissible under the circumstances. The court also considered the potential implications of such an appointment on the validity of the trust and the enforceability of the trustee's duties.

The court held that the trust deed did not explicitly prohibit the appointment of a corporate entity as a trustee. However, the court found that the appointment of Montevento Holdings Pty Ltd was not valid because it resulted in a conflict of interest, with the sole director and shareholder being both the appointor and beneficiary. The court exercised its inherent jurisdiction to remove Montevento Holdings Pty Ltd as a trustee and appoint a new, independent trustee. The court concluded that this was necessary to ensure the proper administration of the trust and to prevent any potential abuse of the power of appointment.

The court ordered that Montevento Holdings Pty Ltd be removed as a trustee and that a new, independent trustee be appointed. The new trustee was tasked with managing the trust in accordance with the terms of the trust deed and the court's directions. The court also directed that the new trustee take all necessary steps to ensure the trust was administered in the best interests of the beneficiaries.

Orders