Sino Iron Pty Ltd v Palmer (No 3)

In the case of Sino Iron Pty Ltd v Palmer (No 3), the plaintiffs sought a declaration that funds held in a bank account by Mineralogy, a company controlled by the first defendant, were held on trust for the plaintiffs. The plaintiffs argued that the Funds, which were contributed to under the terms of Facilities Deeds, were held for a specific purpose and should not be used for other purposes without the plaintiffs' consent. The defendants denied the allegations and raised an unclean hands defence. The court was required to determine whether the Funds were held on trust for the plaintiffs and, if so, whether the defendants were liable for the breach of trust.

The court examined the terms of the Facilities Deeds and found that the Funds were indeed held on trust for the plaintiffs. However, the court also considered whether the defendants were liable for the breach of trust. The court held that the defendants were not liable for the breach of trust because they did not have knowledge of the trust and did not intentionally procure or induce the breach of trust. The court further held that the defendants' unclean hands defence was not sufficiently arguable and should be struck out.

The court dismissed the plaintiffs' claim and ordered that any application for costs be made by submissions in writing not exceeding seven pages in length. Any responsive submission was to be made in writing not exceeding seven pages in length on or before 10 days from receipt of the applicants' submissions. The court also struck out paragraphs 50 to 100 of the amended defence as not sufficiently arguable.

The orders of the court reflect the court's findings that the Funds were held on trust for the plaintiffs but that the defendants were not liable for the breach of trust. The court's decision highlights the importance of knowledge and intentionality in determining liability for breaches of trust. The court's orders also demonstrate the court's willingness to manage costs and streamline the litigation process.