Court of Appeal
Supreme Court
New South Wales
- Summary available
- Amendment notes
Medium Neutral Citation: Segelov v Ernst & Young Services Pty Ltd [2015] NSWCA 156 Hearing dates: 23 March 2015 Decision date: 09 June 2015 Before: Meagher JA at [1];
Gleeson JA at [2];
Leeming JA at [156]Decision: Appeal dismissed.
Appellant to pay the respondent’s costs.Catchwords: EQUITY – trusts – express trust – discretionary – construction – services trust used by large accounting firm – potential objects of trust included spouses of partners and persons nominated by partners – partner nominates spouse as a potential object – distributions paid to a bank account in joint names of the partner and their spouse – spouse unaware of entitlement or that distributions paid into joint account – whether the trust deed permitted interim distributions of ‘income’ – whether trustee had benefit of discharge afforded by the trust deed on payment of distributions into bank account – whether the trustee owed a duty to inform the beneficiary of their entitlement – whether trustee entitled to exemption from liability under the trust deed Legislation Cited: Trustee Act 1925 (NSW) s 85 Cases Cited: Armitage v Nurse [1998] Ch 241
Barangaroo Delivery Authority v Lend Lease (Millers Point) Pty Ltd [2014] NSWCA 279
Byrnes v Kendle [2011] HCA 26; 243 CLR 253
Chapmans Ltd v Australian Stock Exchange Ltd [1996] FCA 474; 67 FCR 402
Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101
Commissioner of Taxation v Bamford [2010] HCA 10; 240 CLR 481
El Sayed v El Hawach [2015] NSWCA 26; 317 ALR 771
Federal Commissioner of Taxation v Cornell [1946] HCA 32; 73 CLR 394
Federal Commissioner of Taxation v Phillips (1978) 20 ALR 607
Federal Commissioner of Taxation v Vegners [1989] ATC 5,274
Gibb v Commissioner of Taxation (Cth) [1966] HCA 74; 118 CLR 628
Halford v Price [1960] HCA 38; 105 CLR 23
Hardy Wine Company Ltd v Janevruss Pty Ltd [2006] VSCA 28
Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405
Hawkesley v May [1956] 1 QB 304
Hawkins v Clayton [1988] HCA 15; 164 CLR 539
Horsell International Pty Ltd v Divetwo Pty Ltd [2013] NSWCA 368
In Re Vickery [1931] 1 Ch 572
Kelly v The Queen [2004] HCA 12; 218 CLR 216
Leerac Pty Ltd v Garrick E Fay [2008] NSWSC 1082
Leon Fink Holdings Pty Ltd v Australian Film Commission [1979] HCA 26; 141 CLR 672
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323
Owners of the Ship “Shin Kobe Maru” v Empire
Shipping Co Inc [1994] HCA 5; 181 CLR 404
Perpetual Custodians Ltd (as custodian for Tamoran Pty Ltd (as trustee for Michael Crivelli)) v IOOF Investment Management Ltd; Murray v Perennial Investment Partners Ltd [2013] NSWCA 231; 304 ALR 406
Rankine v Rankine [1998] QSC 48
Re Manisty’s Settlement [1974] Ch 17
Re Simersall; Backwell v Bray (1992) 35…
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Details
- Case
- [2015] NSWCA 156
- Decision Date
CaseChat Overview and Summary
The dispute in *Segelov v Ernst & Young Services Pty Ltd* concerned the construction and operation of a discretionary services trust established by a large accounting firm. The appellant, Mr. Segelov, a former partner of the firm, sought to establish that the trustee, Ernst & Young Services Pty Ltd, had breached its duties to him and his spouse, who was a potential object of the trust. The matter came before the Court of Appeal of the Supreme Court of New South Wales.
The central legal issues before the court were whether the trust deed permitted interim distributions of 'income', whether the trustee was discharged from liability upon payment of distributions into a bank account, whether the trustee owed a duty to inform a beneficiary of their entitlement, and whether the trustee was entitled to exemption from liability under the terms of the trust deed. These issues arose in circumstances where distributions were paid into a joint bank account held by Mr. Segelov and his spouse, who was unaware of the distributions or her entitlement.
The Court of Appeal, in dismissing the appeal, reasoned that the trust deed, properly construed, permitted interim distributions of income. Furthermore, the court held that the trustee was afforded the discharge provided by the trust deed upon payment of distributions into the nominated bank account, irrespective of whether the nominated beneficiary was aware of the payment or their entitlement. The court found no express or implied duty on the trustee to inform beneficiaries of their entitlements, nor was there any basis to depart from the clear terms of the trust deed regarding the trustee's exemption from liability.
The appeal was dismissed, and the appellant was ordered to pay the respondent's costs.
The central legal issues before the court were whether the trust deed permitted interim distributions of 'income', whether the trustee was discharged from liability upon payment of distributions into a bank account, whether the trustee owed a duty to inform a beneficiary of their entitlement, and whether the trustee was entitled to exemption from liability under the terms of the trust deed. These issues arose in circumstances where distributions were paid into a joint bank account held by Mr. Segelov and his spouse, who was unaware of the distributions or her entitlement.
The Court of Appeal, in dismissing the appeal, reasoned that the trust deed, properly construed, permitted interim distributions of income. Furthermore, the court held that the trustee was afforded the discharge provided by the trust deed upon payment of distributions into the nominated bank account, irrespective of whether the nominated beneficiary was aware of the payment or their entitlement. The court found no express or implied duty on the trustee to inform beneficiaries of their entitlements, nor was there any basis to depart from the clear terms of the trust deed regarding the trustee's exemption from liability.
The appeal was dismissed, and the appellant was ordered to pay the respondent's costs.
Orders
Orders of the court
Appeal dismissed.
Appellant to pay the respondent’s costs.
Background
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Evidence
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Decision
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Ratio Decidendi
Legal Principle Established
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