Uncomposed text in Xyvision Standard Format Page 1 URJ UNREPORTED JUDGMENTSurjBC9203970nsw WICKSTEAD v BROWNEWICKSTEAD v BROWNE nswcaSupreme Court of New South Wales — Court of Appeal Kirby P, Handley JA and Cripps JACA 40197/90 27 August, 24 December 199224121992 [1992] NSWCA 2721992nswca272Autoprocess PRACTICE & PROCEDURE — pleading — summary relief — application to dismiss claim by investor against officer of trustee company which lent investor's funds to itself — claim framed in (1) Breach of Companies (NSW) Code; (2) Breach of fiduciary duty; (3) Breach of duty of care in negligence; and (4) Conversion — Master Malpass and Grove J provide summary relief — on appeal — held: (by the Court): (1) The orders made were interlocutory and require leave to appeal which should be granted. Hall v The Nominal Defendant (1966) 117 CLR 423 applied; (2) The principles to be applied are those stated in General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125; (3) The burden of securing summary relief falls upon the party seeking it; (4) Claims based on s 229 of the Companies (NSW) Code and in conversion were misconceived and were properly terminated; (5) The claims based on s 556 of the Companies (NSW) Code and for breach of the trustee's fiduciary duty ought not to have been dismissed summarily and should proceed to trial; (by Handley and Cripps JJA; Kirby P dissenting): The claim in negligence against the trustee was not viable and should be dismissed. Coroneo v Australian Provincial Assurance Association, Ltd (1935) 35 SR (NSW) 391 (FC) applied. PLEADING — obligation to plead cause of action — duty to plead facts legally relevant — no obligation to plead legal effect of facts — held: Breaches of duty by trustee sufficiently pleaded liability of employee of trustee because he was alleged to have participated with knowledge in breaches of trust and fiduciary duty. The Corporation of the City of Adelaide v The Australasian Performing Uncomposed text in Xyvision Standard Format Page 2 Right Association Limited (1928) 40 CLR 481 applied; (2) The fact that the statement of claim was pleaded in ignorance of the applicable principles was not determinative of the right to summary judgment. Nocton v Lord Ashburton [1914] AC 932. TRUSTS — lending by trustee to itself — power of attorney by investor — whether such lending arguably amounts to "investment" — whether warrants summary dismissal of claim for involvement in breach of duty of care of trustee — held: Not appropriate for summary judgment — matter to proceed to trial. COMPANY LAW — debt of company — circumstances of incurring of debt — liability of person taking part in the management of the company allegedly then insolvent — whether remedy lies under Companies (NSW) Code, s 556(1) — whether equitable debt is a "debt" for purpose of Code — held: A suit for breach of trust is for an equitable debt or liability in the nature of debt so that a claim based on s 556 of the Code was not appropriate for summary termination and should proceed to trial. Ex parte Adamson [1878] 8 Ch D 807 (CA) applied. EQUITY — negligence — inter-relationship of duty of trustee to investor and suggested duty at common law in negligence — whether duty at common law exists — whether duty in equity prevails — whether claim in negligence should be summarily terminated — whether judge affirming termination erred — held: (Handley and Cripps JJA; Kirby P dissenting): He did not. China and South Sea Bank Ltd v Tan [1990] 1 AC 536 (PC) applied; Parker-Tweedale v Dunbar Bank PLC [1991] Ch 12 (CA). nswyes Companies (New South Wales) Code ss 229, 556. nsw1972yes Law Reform (Law and Equity) Act 1972, s 5. nsw1925yes Trustee Act 1925, s 85. Kirby P. (Kirby P)Kirby P. nIn this appeal, I have had the advantage of reading, in draft, the reasons of Handley and Cripps JJA. nFor the reasons given by their Honours, I agree that it is necessary to approach the proceedings before this Court as an application for leave to appeal from interlocutory orders. I also accept the principles stated by their Honours concerning Uncomposed text in Xyvision Standard Format Page 3 based on arguments which were not raised below. Had these arguments been raised below it may not have been necessary to bring appeals to thisCourt. This is a factor which should be reflected in the orders for costs. See Spies v Commonwealth Bank 1991parens24nsw1r691(1991) 24 NSWLR 691 702nswir241991 at 702. nThe respondents have succeeded in striking out the claims in conversion negligence and under s 229 of the Code. This partial success should also be reflected in the orders for costs. In our opinion the following orders should be made:expl 1.1.nLeave to appeal granted. 2.2.nAppeal allowed in part. 3.3.nOrders of Grove J dismissing the appeals from the orders of Master Malpass set aside. 4.4.nIn lieu order in each proceeding that the claims in negligence, conversion, and under s 229 of the Companies Code against the respondent be dismissed. 5.5.nGrant leave to each appellant to file an amended statement of claim on or before 4 February 1993 pleading claims against the respondent for debt under s 556 of the Companies Code and in equity for participating in breaches of trust and fiduciary duty by TEA. 6.6.nEach appellant severally to pay one eighth of the respondent's costs of the combined proceedings before Master Malpass and Grove J. 7.7.nOne quarter of the appellants" combined costs of the appeal to this Court to be costs of the plaintiff in each proceeding. 8.8.nOne quarter of the respondent's costs of the appeal to this Court to be the respondent's costs in each proceeding. expl 1.1.nLeave to appeal granted; 2.2.nAppeal allowed in part; 3.3.nOrders of Grove J dismissing the appeals from the orders of Master Malpass set aside; 4.4.nIn lieu order in each proceeding that the claims in negligence, conversion, and under s 229 of the Companies Code against the respondent be dismissed; 5.5.nGrant leave to each appellant to file an amended statement of claim on or before 4 February 1993 pleading claims against the respondent for debt under s 556 of the Companies Code and in equity for participating in breaches of trust and fiduciary duty by TEA; 6.6.nEach appellant severally to pay one-eighth of the respondent's costs of the combined proceedings before Master Malpass and Grove J;