Universal Holidays Pty Ltd v Tseng

Case [2008] FCA 1011

FEDERAL COURT OF AUSTRALIA

Universal Holidays Pty Limited v Tseng [2008] FCA 1011

UNIVERSAL HOLIDAYS PTY LIMITED v SHU MU TSENG, EVAJADE PTY LIMITED AND ANDREW MORTON GARRETT IN THEIR CAPACITIES AS TRUSTEES OF THE ANDREW GARRETT FAMILY TRUST NO 2, STEPHEN DUNCAN IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF AVERIL GAY GARRETT, PETER IVAN MACKS IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF ANDREW MORTON GARRETT, BERINGER BLASS WINE ESTATES LIMITED, ANDREW MORTON GARRETT AND JOSEPH NICOLAZZO IN THEIR CAPACITIES AS TRUSTEES OF THE ANDREW GARRETT FAMILY TRUST NO 3, ANDREW MORTON GARRETT, MARGARET JOYCE BAKER, MICHAEL COWAN GARRETT AND FRANCES JANE WILDE, ANDREW KENNETH SANDOW and ANDREW MORTON GARRETT IN HIS CAPACITY AS TRUSTEE FOR THE ANDREW GARRETT FAMILY TRUST

SAD 5 OF 2006

LANDER J
3 JULY 2008
ADELAIDE


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 5 OF 2006

BETWEEN:

UNIVERSAL HOLIDAYS PTY LIMITED
Applicant

AND:

SHU MU TSENG
First Respondent

EVAJADE PTY LIMITED AND ANDREW MORTON GARRETT IN THEIR CAPACITIES AS TRUSTEES OF THE ANDREW GARRETT FAMILY TRUST NO 2
Second Respondent/First Cross-Respondent

STEPHEN DUNCAN IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF AVERIL GAY GARRETT
Third Respondent/Second Cross-Respondent

PETER IVAN MACKS IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF ANDREW MORTON GARRETT
Fourth Respondent/Cross-Claimant

BERINGER BLASS WINE ESTATES LIMITED
Fifth Respondent/Third Cross-Respondent

ANDREW MORTON GARRETT AND JOSEPH NICOLAZZO IN THEIR CAPACITIES AS TRUSTEES OF THE ANDREW GARRETT FAMILY TRUST NO 3
Fourth Cross-Respondent

ANDREW MORTON GARRETT
Fifth Cross-Respondent

MARGARET JOYCE BAKER
Sixth Cross-Respondent

MICHAEL COWAN GARRETT AND FRANCES JANE WILDE
Seventh Cross-Respondent

ANDREW KENNETH SANDOW
Eighth Cross-Respondent

ANDREW MORTON GARRETT IN HIS CAPACITY AS TRUSTEE FOR THE ANDREW GARRETT FAMILY TRUST
Sixth Respondent/Ninth Cross-Respondent

JUDGE:

LANDER J

DATE OF ORDER:

3 JULY 2008

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:

1.Andrew Morton Garrett’s application to be joined as a party to this action in his capacity as the sole trustee of the Garrett Family Trust be dismissed.

2.Paragraphs 3, 6 and 7 of the notice of motion of 11 February 2008 be dismissed.

3.Andrew Morton Garrett pay the cross-claimants’ costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 5 OF 2006

BETWEEN:

UNIVERSAL HOLIDAYS PTY LIMITED
Applicant

AND:

SHU MU TSENG
First Respondent

EVAJADE PTY LIMITED AND ANDREW MORTON GARRETT IN THEIR CAPACITIES AS TRUSTEES OF THE ANDREW GARRETT FAMILY TRUST NO 2
Second Respondent/First Cross-Respondent

STEPHEN DUNCAN IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF AVERIL GAY GARRETT
Third Respondent/Second Cross-Respondent

PETER IVAN MACKS IN HIS CAPACITY AS TRUSTEE OF THE BANKRUPT ESTATE OF ANDREW MORTON GARRETT
Fourth Respondent/Cross-Claimant

BERINGER BLASS WINE ESTATES LIMITED
Fifth Respondent/Third Cross-Respondent

ANDREW MORTON GARRETT AND JOSEPH NICOLAZZO IN THEIR CAPACITIES AS TRUSTEES OF THE ANDREW GARRETT FAMILY TRUST NO 3
Fourth Cross-Respondent

ANDREW MORTON GARRETT
Fifth Cross-Respondent

MARGARET JOYCE BAKER
Sixth Cross-Respondent

MICHAEL…

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Details
AGLC
Universal Holidays Pty Ltd v Tseng [2008] FCA 1011
Case
[2008] FCA 1011
Decision Date

CaseChat Overview and Summary

Universal Holidays Pty Ltd v Tseng is a case where the primary legal issue was whether there was sufficient evidence to support the existence of a separate trust, the Garrett Family Trust, as claimed by Andrew Morton Garrett. The cross-claimants argued that the documents provided by Mr Garrett were ambiguous and did not provide enough evidence to support the claim of a separate trust existing independently of the Andrew Garrett Family Trust. The case was heard in the Supreme Court of South Australia.

The court had to decide whether the Garrett Family Trust existed as an independent entity separate from the Andrew Garrett Family Trust. The court also had to consider whether there was sufficient evidence to support the existence of the Garrett Family Trust, and whether the absence of evidence from Mr Garrett could be used against him. The court had to examine the transactional documents and determine whether they were sufficient to infer the existence of the Garrett Family Trust.

The court found that there was not enough evidence to support the existence of the Garrett Family Trust as an independent entity. The court held that while the transactional documents did refer to the Garrett Family Trust, they also recognised the existence of the Andrew Garrett Family Trust. The court found that there was insufficient evidence in the documents themselves, in the absence of any further evidence, for the Court to infer that the Garrett Family Trust existed independently of the Andrew Garrett Family Trust. The court also held that it was not prepared to draw the inference that Mr Garrett's absence from the proceeding meant that his evidence would not have supported the application. The court found that there was an explanation as to why he did not give evidence.

The court dismissed Mr Garrett's application to be joined as trustee of the Garrett Family Trust and ordered that he pay the cross-claimants' costs. The court found that there was not, and never had been, a separate entity called the Garrett Family Trust of which Mr Garrett or Mr and Mrs Garrett was or were the trustees. The court held that where the expression the Garrett Family Trust is used in the transactional documents, it is a reference to the Andrew Garrett Family Trust which was then the only relevant trust in existence.

Orders

Orders of the court

1. Andrew Morton Garrett’s application to be joined as a party to this action in his capacity as the sole trustee of the Garrett Family Trust be dismissed.

2. Paragraphs 3, 6 and 7 of the notice of motion of 11 February 2008 be dismissed.

3. Andrew Morton Garrett pay the cross-claimants’ costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

The cross-claimants argued that, contrary to the submission made by Mr Garrett, the documents upon which he relied were ambiguous. Whilst from time to time they did refer to the Garrett Family Trust, they did so in circumstances where the documents also recognised the existence of the Andrew Garrett Family Trust. The cross-claimants contended that there was insufficient evidence in the documents themselves, in the absence of any further evidence, for the Court to infer that the Garrett Family Trust existed independently of the Andrew Garrett Family Trust.Absence of evidence For reasons already mentioned, Mr Garrett did not give evidence on the application. He did not thereby claim on this proceeding, by way of evidence, that the Garrett Family Trust existed independently of the Andrew Garrett Family Trust. No evidence has been adduced from him or, indeed, from anyone else who might have known when the Trust was created. I was asked to infer that because Mr Garrett was not called that his evidence would not have supported the application: Jones v Dunkel (1959) 101 CLR 298. I am not prepared to draw that inference in relation to Mr Garrett’s evidence. There is evidence before me which I accept: that Mr Garrett did not have the funds to travel to South Australia to give evidence or the funds to put in place a video-link to be cross-examined on any affidavit in support of this application. In those circumstances, there is an explanation as to why he did not give evidence. For that reason, I am not prepared to draw the type of inference that was drawn in Jones v Dunkel 101 CLR 298. His solicitors have made vigorous attempts to obtain evidence in support of this application which is evidenced by two of the affidavits which were admitted in support of this application. In an affidavit sworn on 30 May 2008, Kazmer Ujvari, an employee of Mr Garrett’s solicitors, has deposed to the number of enquiries he has made with the four legal firms who were involved in the transactions to which I have referred. He has also approached patent attorneys. DLA Phillips Fox, who prepared the Tatachilla Agreement, advised him that all the files prior to 2000 had been destroyed. O’Loughlins, who acted for parties apart from Mr and Mrs Garrett in relation to the Deed of Consent and Release, the Sale of Share Agreement and two Redundancy Agreements, advised Mr Ujvari that as they had not acted for either Mr or Mrs Garrett, it was doubtful they would have a copy of the Garrett Family Trust Deed, if it in fact existed. Mr Garrett’s solicitors, Messrs Finlaysons, who acted in the Supreme Court proceeding Action No 2244 of 1996 advised they had not been able to locate any deed for the Garrett Family Trust. Mallesons Stephen Jacques, lawyers who acted for Mildara, said that their files had been transferred to Corrs Chambers Westgarth, an officer of which told Mr Ujvari they would not produce any document without an order of the Court requiring them to make discovery. No order was sought or obtained.

Decision

Reasons for decision

LANDER J
As mentioned earlier, the trustees of the Andrew Garrett Family Trust purported on 15 July 2003 to assign to the trustees of the Andrew Garrett Family Trust No 2 the debt owed by Beringer Blass to the Andrew Garrett Family Trust pursuant to the Deed of Settlement dated 26 July 2000. Although neither of the cross-claimants are prepared to accept that the transaction was otherwise than a sham, they rely upon the purport of the transaction as further evidence of Mr Garrett acting inconsistently with his claim that the Garrett Family Trust was the party which entered into the transactions as contained in the documents between 1993 and 2000.Conclusion I am satisfied, as the cross-claimants contend, that Mr Garrett has made a number of representations inconsistent with the existence of the Garrett Family Trust and has conducted his affairs inconsistently with the existence of that Trust. It was not until some two years into the litigation between the cross-claimants and Mr Garrett that he first asserted, as he has now, that in fact the Garrett Family Trust was entitled to the debt owed or income stream owing by Beringer Blass pursuant to clause 9 of the Deed of Settlement of 26 July 2000. In my opinion, notwithstanding the occasional reference to the Garrett Family Trust in some of the transactional documents prior to 2000, there is not, and never has been, a separate entity called the Garrett Family Trust of which Mr Garrett or Mr and Mrs Garrett was or were the trustees. Where the expression the Garrett Family Trust is used in the transactional documents, in my opinion, it is a reference to the Andrew Garrett Family Trust which was then the only relevant trust in existence. The application that Mr Garrett be joined as trustee of the Garrett Family Trust is dismissed. Mr Garrett must pay the cross-claimants’ costs.

Ratio Decidendi

Legal Principle Established

Established by: LANDER J

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