Legal Research
Cases
Yeshiva Properties No 1 Pty Ltd v Marshall

Yeshiva Properties No 1 Pty Ltd v Marshall

Link copied

Case Copied 17 February 2005 61 min read

Contents

On this page

CITATION:
YESHIVA PROPERTIES NO.1 PTY LIMITED & 6 ORS v JOAN MARSHALL [2005] NSWCA 23

HEARING DATE(S):
26/11/2004

JUDGMENT DATE:

17 February 2005

JUDGMENT OF:
Mason P at 1; Beazley JA at 2; Bryson JA at 3

DECISION:
Appeal dismissed with costs.

CATCHWORDS:
TRUSTS – Constructive trusts – accessary liability – to company of person dealing with directors of company – financier lent $520,000 to companies (which were trustees of college) on “caveat loan” short term at extremely high interest on unregistered mortgage with caveat over school lands – companies resisted repayment and claimed that lender incurred accessary liability for dishonest assistance to directors – companies arrested that many irregularities in steps leading to loan and informed direction of payment to another company also controlled by directors showed involvement of lender in knowledge of facts “…which themselves would to a reasonable man, tell of fraud or breach of trust…” (Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 at 412by Stephen J) – trial judge after review of facts found no accessary liability – held – findings confirmed, appeal dismissed.

LEGISLATION CITED:
Charitable Trusts Act 1993 s.6, s.27
Charities Act 1960 s.28
Charities Procedure Act 1812 (U.K)
Imperial Acts Application Act 1969 s.17
Supreme Court Rules 1970
Supreme Court Act 1970 s.60, 63

CASES CITED:
Baden Delvaux & Lecuit v Societe Generale pour Favoriser le Development du Commerce [1993] 1 WLR 509
Barnes v Addy (1874) LR9ChApp 244
Cadwallader v Bajco Pty Ltd [2002] NSWCA 328
Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373
Hauxwell v. Barton-Upon-Humber Urban District Council [1974] Ch 432
Royal Brunei Airlines Sdn Bhd v Tan Kok Ming [1995] 2 AC 378
Twinsectra Ltd v Yardley [2002] 2 AC 164
United States Surgical Corporation v Hospital Products International Pty Ltd [1983] 2 NSWLR 157
Uniting Church in Australia Property Trust (NSW) & Anor v. Monsen & Anor [1978] 1 NSWLR 575
Yeshiva Properties No 1 Pty Ltd v Lubavitch Mazal Pty Ltd [2003] NSWSC 615

PARTIES:
YESHIVA PROPERTIES NO.1 PTY LIMITED & 6 ORS – APPELLANTS
JOAN MARSHALL – RESPONDENT

FILE NUMBER(S):
CA 40889/2004

COUNSEL:
N.C. Hutley SC and A.P. Spencer - Appellants
C.E. Adamson SC and J.M. Miller - Respondent

SOLICITORS:
Arnold Bloch Leibler - Appellants
Duncan Scott, Solicitor – Respondent

LOWER COURT JURISDICTION:
Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):
3094/2004

LOWER COURT JUDICIAL OFFICER:
Gzell J

CA 40889/2004

MASON P
BEAZLEY JA
BRYSON JA
THURSDAY 17 FEBRUARY 2005

YESHIVA PROPERTIES NO.1 PTY LIMITED & 6 ORS v JOAN MARSHALL

Judgment

1 MASON P: I agree with Bryson JA.

2 BEAZLEY JA: I agree with Bryson JA.

3 BRYSON JA: The appellants (plaintiffs in the Equity Division) appeal against orders made by Gzell J on 14 October 2004, for reasons published on 8 October 2004, by which his Honour dismissed the plaintiffs’ claim and on the defendant’s cross-claim ordered payment of a mortgage debt of $520,000 plus interest, with further orders…

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.

Keep reading for free

Create a free CaseChat account to read Yeshiva Properties No 1 Pty Ltd v Marshall and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2005] NSWCA 23
Decision Date: 17 February 2005

CaseChat Overview and Summary

Yeshiva Properties No 1 Pty Ltd and others (the companies) appealed a decision of the trial judge concerning allegations of accessory liability against Marshall, the financier. The dispute arose from a $520,000 loan provided by Marshall to the companies, which were trustees of a college. The loan was a short-term "caveat loan" with a high interest rate, secured by an unregistered mortgage over school lands, accompanied by a caveat. The companies resisted repayment, alleging that Marshall incurred accessory liability for dishonest assistance to the directors of the companies. They contended that numerous irregularities in the loan's formation, including the direction of payments to another company controlled by the directors, indicated Marshall's knowledge of facts that "would to a reasonable man, tell of fraud or breach of trust."

The central legal issue before the Court of Appeal was whether the trial judge erred in finding that Marshall did not incur accessory liability for dishonest assistance. This required the court to determine if Marshall possessed the requisite knowledge of the directors' alleged fraud or breach of trust, such that their conduct amounted to dishonest assistance in that wrongdoing. The companies argued that the circumstances surrounding the loan were so irregular that Marshall must have been aware of, or wilfully blind to, the directors' improper actions.

The Court of Appeal, comprising Mason P, Beazley and Bryson JJA, confirmed the trial judge's findings. The court applied the principles of accessory liability for dishonest assistance, which require proof of dishonesty on the part of the accessory. While acknowledging the high interest rate and the nature of the loan, the court found that the evidence did not establish that Marshall acted dishonestly or had the requisite knowledge of any fraud or breach of trust by the directors. The irregularities identified by the companies were not, in the court's view, sufficient to demonstrate that Marshall was involved in or assisted in a dishonest manner. The appeal was accordingly dismissed.

The appeal was dismissed with costs.

Orders

Orders of the court

Appeal dismissed with costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	YESHIVA PROPERTIES NO.1 PTY LIMITED & 6 ORS v JOAN MARSHALL [2005] NSWCA 23
HEARING DATE(S):	26/11/2004
JUDGMENT DATE:	17 February 2005
JUDGMENT OF:	Mason P at 1; Beazley JA at 2; Bryson JA at 3
DECISION:	Appeal dismissed with costs.

CATCHWORDS:	TRUSTS – Constructive trusts – accessary liability – to company of person dealing with directors of company – financier lent $520,000 to companies (which were trustees of college) on “caveat loan” short term at extremely high interest on unregistered mortgage with caveat over school lands – companies resisted repayment and claimed that lender incurred accessary liability for dishonest assistance to directors – companies arrested that many irregularities in steps leading to loan and informed direction of payment to another company also controlled by directors showed involvement of lender in knowledge of facts “…which themselves would to a reasonable man, tell of fraud or breach of trust…” (Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 at 412by Stephen J) – trial judge after review of facts found no accessary liability – held – findings confirmed, appeal dismissed.
LEGISLATION CITED:	Charitable Trusts Act 1993 s.6, s.27 Charities Act 1960 s.28 Charities Procedure Act 1812 (U.K) Imperial Acts Application Act 1969 s.17 Supreme Court Rules 1970 Supreme Court Act 1970 s.60, 63
CASES CITED:	Baden Delvaux & Lecuit v Societe Generale pour Favoriser le Development du Commerce [1993] 1 WLR 509 Barnes v Addy (1874) LR9ChApp 244 Cadwallader v Bajco Pty Ltd [2002] NSWCA 328 Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 Hauxwell v. Barton-Upon-Humber Urban District Council [1974] Ch 432 Royal Brunei Airlines Sdn Bhd v Tan Kok Ming [1995] 2 AC 378 Twinsectra Ltd v Yardley [2002] 2 AC 164 United States Surgical Corporation v Hospital Products International Pty Ltd [1983] 2 NSWLR 157 Uniting Church in Australia Property Trust (NSW) & Anor v. Monsen & Anor [1978] 1 NSWLR 575 Yeshiva Properties No 1 Pty Ltd v Lubavitch Mazal Pty Ltd [2003] NSWSC 615
PARTIES:	YESHIVA PROPERTIES NO.1 PTY LIMITED & 6 ORS – APPELLANTS JOAN MARSHALL – RESPONDENT
FILE NUMBER(S):	CA 40889/2004
COUNSEL:	N.C. Hutley SC and A.P. Spencer - Appellants C.E. Adamson SC and J.M. Miller - Respondent
SOLICITORS:	Arnold Bloch Leibler - Appellants Duncan Scott, Solicitor – Respondent

LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	3094/2004
LOWER COURT JUDICIAL OFFICER:	Gzell J