AKHIL HOLDINGS LTD v BANQUE COMMERCIALE SA (IN LIQ) [1988] NSWCA 4

AKHIL HOLDINGS LTD v BANQUE COMMERCIALE SA (IN LIQ)

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

KirBy P, Hope and CLARKE JJA 22, 23 and 24 August 1988, 15 November 1988

[1988] NSWCA 4

TRUSTS — express trust — resulting trust — purchase of mining rights in Fiji — consideration includes allotment of shares to bank in Switzerland — vendor of rights alleges allotment suggested by accountant/adviser — shares duly allotted to bank — bank disclaims beneficial interest in shares — asserts shares held for non residents who are non Australian — subsequently shares transferred to family company of accountant/adviser — later further transferred to third parties — action against bank, family company and accountant/adviser for damages for conversion of trust property or breach of trust — beneficiary ignorant of unauthorised transfers by accountant/adviser who does not give evidence — trial judge dismisses claim on the basis that plaintiff has not discharged onus of proof — Held: (1) Whether or not an express trust was established, a resulting trust was established by the evidence (2) Such trust was sufficiently established in the plaintiff's case but the conclusion reached was reinforced by the absence of evidence from the bank or the accountant/adviser or his family company. Jones v Dunkel (1958-59) 101 CLR 298, 302; Clayton Robard Management Ltd v Siu (1988) 6 ACLC 57, 64 applied; (3) Other defences rejected (see below) — held accordingly (allowing the appeal from Cohen J) Plaintiff entitled to damages from bank, accountant/adviser and family company.

TRUST — breach of trust — breach by trustees — whether person who assists in carrying out a dishonest and fraudulent breach of trust by a trustee is personally liable — whether a mere agent — held: Person who with knowledge of the existence of a trust assists in the carrying out of a dishonest and fraudulent design by a trustee is personally liable. Barnes v Addy (1874) 9 LR Ch App 244, 751 applied.