Rectification for common mistake succeeds in the Court of Appeal
The Victorian Court of Appeal’s decision in Queenfield provides an uncommon example of success for a party who sought rectification of a contract for common mistake.
Category: Equity
Formulating a remedy for proprietary estoppel
In assessing whether the trial judge’s decision to declare a promisee’s entitlement to inherit the land was disproportionate in satisfying the requirements of conscientious conduct, the Court of Appeal in Harris v Harris identified and applied a number of key principles guiding the award of remedies for proprietary estoppel.
The power of appointment and removal of a trustee, and the high hurdle of invalidity
In dismissing a claim that the exercise of a power to remove and appoint a trustee was for a foreign or extraneous purpose, the New South Wales Court of Appeal has provided guidance on the scope of trust powers and the importance of intention and good faith when ascertaining the validity of the exercise of a power.
Supreme Court rectifies, but says no to conventional estoppel based on pre-contractual dealings
A rare case of rectification which arose because, two years after the sale of a half share in a motel business, the parties realised that their sale agreement had left $6m of debts ‘up in the air’.
Distributing co-mingled funds in insolvency: tackling the conundrum
The New South Wales Court of Appeal has allowed an appeal against orders for distribution from a co-mingled fund held by insolvent entities and, in doing so, has provided guidance for liquidators and creditors alike on the various methods for distribution and the principles of tracing.
Victorian Court of Appeal considers doctrine of marshalling
Mortgagees should be aware of the recent Court of Appeal decision in Burness v Hill [2019] VSCA 94, which considered the doctrine of marshalling.
High Court revisits causation and quantification in knowing assistance claims
The High Court has enshrined the ‘but for’ causation threshold in Barnes v Addy claims for knowing assistance of breaches of fiduciary duty.
Insolvent corporate trustees: some questions finally answered
The Victorian Court of Appeal and a Full Court of the Federal Court have each recently held that the statutory priority regime applies to the winding up of companies that act as trustees of trading trusts, confirming that employee claims and a liquidator’s remuneration and costs are priority debts. Special leave to appeal the Court of Appeal’s decision has been sought.
The Court of Appeal on penalties – orthodoxy strikes back?
By a 2-1 majority the Court of Appeal held that a loan establishment fee of $26,625 was a penalty, arguably bucking the trend of decisions since the High Court’s judgment in Paciocco.
Bankruptcy: Unfair preferences, third party payments and the ‘Quistclose’ trust
Can you prefer one creditor by arranging a third party loan, the proceeds of which are paid directly to that creditor, without the arrangement being void against your trustee in bankruptcy? “Yes” says the Full Federal Court – thus confirming an important distinction between personal and corporate insolvency.
Actions for recovery of land: the Court of Appeal on constructive trusts and limitation periods
Where seeking to recover land on the basis of a constructive trust arising from proprietary estoppel, when does that constructive trust arise? Does it arise when a court makes a declaration to its effect, or when the relevant cause of action accrues? And when should the court consider a lesser remedy instead of declaring a trust?
Fiduciary relationships in corporate groups – Full Federal Court extends equity’s reach
The Full Federal Court held that an employee owed fiduciary obligations not only to his employer (an established category of fiduciary relationship), but also to a subsidiary of his employer. The Court considered when fiduciary obligations will be found outside the established categories.
Distributions from a Mixed Trust Fund
What is the appropriate method of distribution to competing trust beneficiaries whose funds have been mixed? This short article considers this question following the decision in Hannan v Zindilis [2016] VSC 723.
The Lost Trust Deed
What should a trustee do if the trust deed governing the trust cannot be found? On what terms does the trustee hold the property? This short article considers these questions in the Victorian context.