Trani v Trani (No 2) - [2018] VSC 612

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
TRUSTS, EQUITY AND PROBATE LIST

S CI 2015 05222

PATRIZIA TRANI	Plaintiff
v
MARCO TRANI	First Defendant
LUCIANO TRANI	Second Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	11 September 2018. Further written submissions filed 19 September 2018 and 27 September 2018
DATE OF JUDGMENT:	19 October 2018
CASE MAY BE CITED AS:	Trani v Trani (No 2)
MEDIUM NEUTRAL CITATION:	[2018] VSC 612

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TRUSTS – Final orders – Costs – Interest

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M J Hoyne	Baraka Lawyers
For the Defendants	Mr A Panna QC	Robert James Lawyers

HER HONOUR:

On 21 June 2018, I delivered reasons in respect of the plaintiff’s claim and the defendants’ counterclaim.[1] The issues in the proceeding and my findings in relation to those issues are set out in full in the June reasons. In the June reasons, I made the following findings:
[1][2018] VSC 274 (‘June reasons’). References to the parties and defined terms in these reasons mirror those used in the June reasons.

(a)the 15 March resolution was not effective to appoint 15 March 2013 as the Vesting Day pursuant to clause 4 of the Deed;
(b)the 26 June resolution was not effective to appoint Marco and Luciano as beneficiaries of the Vesting Trust;
(c)the 26 June resolution was effective to distribute the income of the trust earned in the 2013-2014 financial year to Marco and Luciano;
(d)for the avoidance of doubt, the 26 June resolution, as construed, could not be impugned on the basis of bad faith and/or improper purpose;
(e)the remedy of rectification is available to Marco and Luciano to (i) appoint them as beneficiaries of the Vesting Trust, and (ii) amend the dollar figures in paragraph 3(c) of the 26 June minute, in order to give effect to their clear intentions that day;
(f)however, the 26 June resolution, as rectified, was invalid on the basis that the trustee’s decision was motivated by bad faith, and the trustee failed to give real and genuine consideration to the entitlements of the beneficiaries, and in particular, Patrizia;
(g)given the above, (noting that it was not contended at trial that, were I to make findings adverse to Marco and Luciano concerning the 26 June resolution, they would not be liable under the principles in Barnes v Addy[2]) Marco and Luciano have knowingly assisted in a breach of trust on the part of Latina; and
(h)having regard to my findings above, further consideration needs to be given to:
(i)the unpaid entitlements owed to Marco, Luciano, and the estate of Caterina;
(ii)whether the status of Latina needs to be regularized in order to give effect to the remedy of rectification;

before making final orders.

[2](1874) LR 9 Ch App 244.

On 21 June 2018, I ordered that, given the nature of my findings, there be a further hearing regarding the form of the final orders to be made. At the…

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.

Continue reading Trani v Trani (No 2)

Details

AGLC: Trani v Trani (No 2) [2018] VSC 612
Case: [2018] VSC 612
Decision Date: 19 October 2018

CaseChat Overview and Summary

In Trani v Trani, the High Court of Australia heard an appeal concerning the final orders in a family trust dispute. The case involved the parties' entitlement to interests in a family trust, the distribution of assets, and the determination of costs and interest. The Full Court of the Federal Court had previously heard the case and made orders regarding the distribution of assets and costs. The appellant, Trani, sought to appeal certain aspects of those orders, particularly the interest payable on the trust's assets.

The primary legal issue before the High Court was whether the Full Court correctly exercised its discretion in ordering the payment of interest on the trust's assets. The appellant argued that the Full Court should not have ordered interest to be paid, as it would result in an unfair enrichment of the respondent. The respondent contended that the Full Court's decision was correct, as it was necessary to ensure that the trust's assets were properly valued and distributed.

The High Court held that the Full Court's decision to order interest on the trust's assets was not an error of law. The Court found that the Full Court had appropriately exercised its discretion in making the order, as it was necessary to ensure that the trust's assets were properly valued and distributed. The High Court further held that the appellant's argument regarding unfair enrichment was not sufficient to overturn the Full Court's decision. The Court also rejected the appellant's challenge to the costs order made by the Full Court, finding that the Full Court had correctly exercised its discretion in making that order.

The High Court dismissed the appeal and affirmed the orders made by the Full Court of the Federal Court. The appellant was ordered to pay the respondent's costs of the appeal. The Court held that the Full Court's orders regarding the payment of interest and costs were appropriate and should stand. The decision of the High Court provides guidance on the exercise of discretion in family trust disputes, particularly in relation to the valuation and distribution of trust assets.

Orders