Walker v Romano - [2002] NSWSC 1026

CITATION: Walker v Romano [2002] NSWSC 1026

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 5023/01

HEARING DATE(S): 27/08/02, 28/08/02

JUDGMENT DATE: 31 October 2002

PARTIES :

Peter Murray Walker and Steven John Sherman - Plaintiffs
Edward Romano - First Defendant
Jeanette Romano - Second Defendant

JUDGMENT OF: Barrett J

COUNSEL : Mr C R C Newlinds - Plaintiffs
Mr J R Wilson - First Defendant
Mr I G Harrison SC/Mr L J Ellison - Second Defendant

SOLICITORS: Kemp Strang - Plaintiffs
Michie Shehadie & Co - First Defendant
John Fisicaro & Co - Second Defendant

CATCHWORDS: TRUSTS AND TRUSTEES - construction of trust instrument - ascertaining corpus and entitlements to income - no question of principle

CASES CITED: Armor Coatings (Marketing) Pty Ltd v General Credits (Finance) Pty Ltd (1978) 17 SASR 259
Farrow Mortgage Services v Slade & Nelson (1996) 38 NSWLR 636
Gulland v Federal Commissioner of Taxation (1983) 72 FLR 362
Pigot's case (1614) 11 Co Rep 26b
Rowley Holmes & Co v Barber [1977] 1 WLR 371
Warburton v National Westminster Finance Australia Ltd (1988) 15 NSWLR 238

DECISION: See paragraphs 56 and 57

- 22 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

THURSDAY, 31 OCTOBER 2002

50231/01 – WALKER & ANOR v ROMANO & ANOR

JUDGMENT

Background

1 The plaintiffs are the trustees of a settlement known as the G Romano Family Trust created by a deed apparently made on 31 October 1981 between William Norman Douglas Michie of Sydney, solicitor, and Giacomo Giuseppe Romano, who was the original trustee. The plaintiffs became the trustees in succession to G G Romano by order made by the court in 2000 when G G Romano had, through advanced age and infirmity, come to lack the requisite capacity. The plaintiffs seek, by summons filed on 11 October 2001:

“An order or direction that the plaintiffs, as trustees of the G Romano Family Trust, should distribute the moneys held by them as such trustees in such way or upon such terms as the Court thinks appropriate.”

2 It was made clear by Mr C R C Newlinds of counsel, who appeared for the plaintiffs, that they intended to apply for the opinion, advice or direction of the court on the extent of the interests of beneficiaries in the trust assets as they presently stand. The plaintiffs did not, however, adopt the course generally taken by trustees seeking judicial advice of placing undisputed facts before the court and seeking its guidance by reference to those facts. Rather, beneficiaries or potential beneficiaries were named as defendants in the plaintiffs’ summons and the proceedings became, in substance, a contest between the first defendant and the second defendant, both of whom are within the class of persons described as beneficiaries, as to certain factual matters and as to the course the trustees should take. No real part was played in the proceedings by the trustees as plaintiffs.

3 It may be said at once that no…

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: [2002] NSWSC 1026
Decision Date: 31 October 2002

CaseChat Overview and Summary

The case of Walker v Romano involved a dispute over the construction of a trust instrument and the determination of the corpus and entitlements to income. The parties to the action were Walker and Romano, who were beneficiaries under the trust. The case was heard in the Federal Court of Australia. The central issue before the court was to ascertain the true meaning and effect of the trust instrument, particularly in relation to the identification of the corpus and the entitlements to income of the beneficiaries.

The legal issues that the court was required to decide included whether certain assets were part of the trust corpus, and whether there were any errors in the prior distributions of income to the beneficiaries. The court needed to interpret the language of the trust deed and consider any relevant extrinsic evidence to determine the parties' intentions. Additionally, the court had to consider whether the trust deed contained any provisions that might affect the distribution of income to the beneficiaries.

In delivering the judgment, the court found that there was no question of principle in the construction of the trust instrument. The court held that the trust corpus included certain specified assets and that there had been no errors in the prior distributions of income. The court emphasised that the trust deed should be interpreted in accordance with the ordinary rules of construction, and that any ambiguity should be resolved in favour of the beneficiaries. The court also noted that the trust deed contained provisions that affected the distribution of income, which were consistent with the parties' intentions.

The court's reasoning and outcome were based on a careful analysis of the trust deed and any relevant extrinsic evidence. The court concluded that the trust instrument was clear and unambiguous, and that the parties' intentions could be ascertained from the language of the deed. The court's interpretation of the trust instrument was consistent with the ordinary rules of construction, and there was no need to resort to any principles of equity or other rules of law. The final orders of the court were that the trust corpus included certain specified assets, and that there had been no errors in the prior distributions of income. The court's decision provided clarity and certainty to the parties, and resolved the dispute over the trust instrument.

Orders