In the matter of Reserve Hotels Pty Limited [2021] NSWSC 376

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Reserve Hotels Pty Limited [2021] NSWSC 376 Hearing dates: 3, 4, 5, 10, 11 and 12 March 2021 Decision date: 14 April 2021 Jurisdiction: Equity - Corporations List Before: Black J Decision: Deed of Assignment set aside under the Contracts Review Act 1980 (NSW). Plaintiffs' claim for removal of the trustee or appointment of a new trustee dismissed. Second Defendant entitled to judgment against the Plaintiffs for the amounts specified with interest. Catchwords: CONTRACTS — Unjust contracts — Contracts Review Act 1980 (NSW) — Cross-claim to set aside Deed of Assignment CONTRACTS — Undue influence — Actual undue influence – Whether influence amounts to undue influence in the relevant sense – Overlapping application at equity and under Contracts Review Act 1980 (NSW) CONTRACTS — Unconscionable conduct — Special disadvantage — Whether Deed of Assignment procured by undue influence – Whether embarrassment amounted to special disadvantage EQUITY — Trusts and trustees — Court's supervision of — Appointment and removal of trustees — Whether exercise of powers of appointment and removal of trustee was improper — Whether expedient to appoint new trustee in the circumstances — Whether unpaid beneficiary entitlements amount to an interest in the trust property EQUITY — Equitable remedies — Restitution — Scope of company director's authority — Whether unauthorised transactions support equitable claim for restitution — Whether amounts paid to solicitors recoverable Legislation Cited: - Corporations Act 2001 (Cth), ss 249B, 588FP - Contracts Review Act 1980 (NSW), ss 7, 9 - Conveyancing Act 1919 (NSW), s 37A - Family Law Act 1975 (Cth), s 106B - Trustee Act 1925 (NSW), ss 6, 70, 92 Cases Cited: - Agip (Africa) Ltd v Jackson [1990] Ch 265; [1992] 4 All ER 385; [1989] 3 WLR 1367 - Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd [2015] VSCA 9 - Australian Conservation Services Pty Ltd v Liladel Holdings Pty Ltd (2017) 12 ACTLR 124; (2017) 319 FLR 401; [2017] ACTSC 162 - Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; (2014) 307 ALR 512; (2014) 88 ALJR 552; (2014) 98 ACSR 489; [2014] HCA 14 - Australian Securities and Investments Commission (ASIC) v Kobelt (2019) 267 CLR 1; (2019) 368 ALR 1; [2019] HCA 18 - Baba v Sheehan [2019] NSWSC 1281 - Black v S Freedman & Co (1910) 12 CLR 105; (1910) 17 ALR 541; [1910] HCA 58 - Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81 - Break Fast Investments Pty Ltd v Giannopoulos (No 5) [2011] NSWSC 1508 - Campbell v Campbell [2015] NSWSC 784 - Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; (1983) 46 ALR 402; (1983) 57 ALJR 358; [1983] HCA 14 - Crane Distribution Ltd v Yang [2016] NSWSC 620 Crowle Foundation v New South Wales Trustee and Guardian [2010] NSWSC 647 - El Sayed v El Hawach (2015) 88 NSWLR 214; (2015) 317 ALR 771; (2015) 15 ASTLR 446; [2015] NSWCA 26 - Fay v Moramba Services Pty Ltd [2009] NSWSC 1428 - Fistar v Riverwood Legion and Community Club Ltd (2016) 91 NSWLR 732; (2016) 18 BPR 35,799; [2016] NSWCA 81 - Hancock v Rinehart (2015) 13 ASTLR 1; (2015) 106 ACSR 207; [2015] NSWSC 646 - Heperu Pty Ltd v Belle (2009) 76 NSWLR 230; (2009) 258 ALR 727; [2009] NSWCA 252 - Johnson v Buttress (1936) 56 CLR 113; [1936] ALR 390; (1936) 10 ALJR 203 - Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205; (2008) 252 ALR 55; (2008) 229 FLR 4; (2008) 14 BPR 26,565; [2008] NSWCA 343 - Left Bank Investments Pty Ltd v Ngunya Jarjum Aboriginal Corp [2020] NSWCA 144 - Letterstedt v Broers (1884) 9 App Cas 371 - Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548; [1991] 3 WLR 10; [1992] 4 All ER 512 - Mercanti v Mercanti (2016) 50 WAR 495; (2016) 340 ALR 290; (2016) 117 ACSR 222; [2016] WASCA 206 - Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391 - Miller v Cameron (1936) 54 CLR 572; [1936] ALR 301; (1936) 10 ALJR 35a; [1936] HCA 13 - Montevento Holdings Pty Ltd v Scaffidi (2012) 246 CLR 325; (2012) 292 ALR 633; (2012) 87 ALJR 15; (2012) 6 ASTLR 480; [2012] HCA 48 - Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36 - Raupach v MacDonald [2010] NSWSC 1326 - Re Cooper Street Property Trust [2016] VSC 756; BC201610590 - Re Elsmore Resources Ltd (2016) 114 ACSR 297; [2016] NSWSC 856 - Re Kit Digital Australia Pty Ltd (in Liq) [2014] NSWSC 1547 - Rheem Australia Pty Ltd v McInnes [2020] NSWSC 1313 - Riverwood Legion & Community Club Ltd v Repaja & Co Pty Ltd [2015] NSWSC 383 - Scaffidi v Montevento Holdings Pty Ltd [2011] WASCA 146 - Spellson v George (1987) 11 NSWLR 300 - Spina v Permanent Custodians Ltd [2009] NSWCA 206 - Thorne v Kennedy (2017) 263 CLR 85; (2017) 350 ALR 1; (2017) 91 ALJR 1260; (2017) 56 Fam LR 559; [2017] HCA 49 - Turner v O'Bryan-Turner [2021] NSWSC 5 - Turner v Windever [2003] NSWSC 1147 - Vanguard Financial Planners Pty Ltd v Ale (2018) 354 ALR 711; (2018) 125 ACSR 1; [2018] NSWSC 314 - Wambo Coal Pty Ltd v Ariff & Anor (2007) 63 ACSR 429; (2007) 25 ACLC 809; [2007] NSWSC 589 - Watson v Foxman (1995) 49 NSWLR 315 - West v AGC (Advances) Ltd (1986) 5 NSWLR 610 - White v Wills [2014] NSWSC 1160 - Williams v Commonwealth Bank of Australia [2013] NSWSC 335 - Ying Mui Pty Ltd v Hoh (No 6) [2017] VSC 730 Texts Cited: - JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Butterworths, 8th ed, 2016) Category: Principal judgment Parties: Mary Balagiannis (First Plaintiff/First Cross-Defendant) Angeliki Balagiannis (also known as Angelique Balagiannis) (Second Plaintiff/Second Cross-Defendant) Nicolas Balagiannis (First Defendant/First Cross-Claimant) Reserve Hotels Pty Limited (Second Defendant/Second Cross-Claimant) Sydney Hotel Management Pty Limited (Third Defendant/Third Cross-Claimant) Dimitri Kentrotis (Third Cross-Defendant) Representation: Counsel: C D Wood SC/J I Parrish (Plaintiffs/Cross-Defendants) I Jackman SC/D Birch (Defendants/Cross-Claimants) A Russoniello (Third Cross-Defendant)