Aljaro Pty Ltd v Weidmann [2001] NSWSC 206

New South Wales Supreme Court

CITATION : Aljaro Pty Ltd v Weidmann [2001] NSWSC 206 revised - 28/03/2001 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 3162/99 HEARING DATE(S) : 17 August, 4 & 6 October and 3 November 2000 JUDGMENT DATE : 27 March 2001

PARTIES : Aljaro Pty Limited (P) Ronda Beatrice Weidmann (D) JUDGMENT OF : Hamilton J

COUNSEL : J A Waters (P) P Hallen SC (D) SOLICITORS : C A Keay & Co (P) Bolster & Co (D) CATCHWORDS : EQUITY [104] - Trusts and trustees generally - Classification of trusts in general - Secret trusts - Absolute bequest of whole estate to legatee - Secret trust imposed on legatee in favour of other persons - Whether testator's expressed wish created only hope or expectation or was intended to create legally binding obligation. Brown v Pourau [1995] 1 NZLR 352 French v French [1902] 1 IR 172 In Re Tilley. Mackie v Jackson (1918) 25 Argus LR 6 CASES CITED : In re Young. Fraser v Young [1913] 1 Ch 272 Lawson v Lawson SCNSW Bryson J 17 October 1997 unreported Ledgerwood v Perpetual Trustee Co Ltd (1997) 41 NSWLR 532 Voges v Monahan (1954) 94 CLR 231 DECISION : Secret trust imposed on legatee.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

HAMILTON J

TUESDAY, 27 MARCH 2001

3162/99 ALJARO PTY LIMITED v RONDA BEATRICE WEIDMANN

JUDGMENT

1 HIS HONOUR: The principal question for determination in these proceedings is whether a gift, unusually made to the plaintiff, a proprietary company, by the will of Leila Romona Salmond ("the testator") was made subject to the terms of a secret trust and, if so, what the terms of that secret trust were. The testator died on 11 March 1997 aged 84 years leaving a will made by her on 5 January 1994 by which she appointed Jag Jit Singh ("Jack Singh") and the defendant, Ronda Beatrice Weidmann, as her executors and gave the whole of her estate to the plaintiff. Rather strangely for a will the only beneficiary under which is a proprietary company, the will specifically conferred upon the trustees power to apply any part of the income or capital of the share of any beneficiary "towards his or her maintenance education benefit or advancement in life". BACKGROUND 2 Jack Singh is said to have been a barrister in London. The defendant worked for him as his personal assistant for some years from some time in the 1970s on. In the 1980s he was associated with a company referred to as Bribie Brick Works and was a director of that company. She worked for him there and was an administrative manager for that company and a director of an associated company referred to as Development Coordination. In 1991 those companies were in financial difficulties. In that year the National Australia Bank appointed a receiver to the companies and by 1993 it was apparent that the companies' difficulties were terminal. Furthermore, as a result of a report made by the receiver a number of people associated with the companies were charged with criminal offences. Those people included Jack Singh and the defendant. It is not clear when the charges were laid against them, but they were under a cloud from 1991 onwards. They were committed for trial it would seem in 1996. There was a trial of the charges in the Queensland District Court. At that trial Jack Singh was convicted and on 5 March 1998 sentenced to a prison term which he is still serving. He was brought from prison to give evidence in these proceedings. The defendant, however, was during the course of the trial acquitted by direction of the Judge. The charges of which Jack Singh was convicted were of crimes of dishonesty involving at least $2 million. 3 Jack Singh had known the testator and her husband, Frank Salmond, from the 1960s. They had had business associations. It is said that Jack Singh had done work for Frank Salmond for which he was to be paid, but was not paid because of lack of money. The families had also been personally friendly and the testator had known since childhood Jack Singh's three sons, Rohan, Alexander and James. This was attested to by Rohan Singh, who described the relationship between the Salmonds and Jack Singh as a relationship that had lasted decades and combined business dealings with an affectionate personal relationship; that warm relationship extended to the whole family including the three brothers. Rohan Singh I accept as a witness of truth. The brothers are now grown up. Two are solicitors and one is a barrister. It seems that the circumstances surrounding the father's conviction have caused a rift between him and his sons. The plaintiff appears to be what could be described as a $2 company (subject to the destination of the beneficial ownership of the testator's estate). It was incorporated by Jack Singh with his three sons, each holding one share, as the only shareholders. They never played any part in the management or affairs of the company. It would seem that they were keen after their father's imprisonment to divest themselves of the shares and to have no further part in the company. There is no doubt that the testator's husband, Frank, was by the early 1990s himself in severe financial difficulties as a result of unsuccessful operations of his building business. Albert Charles Kirby, who had and has an unsatisfied judgment against Frank Salmond, has given evidence in these proceedings. That judgment dates back to 1989. FACTS 4 It was against this background that the testator made her will in 1994. The will was prepared by Jack Singh. The problem in this case is that the circumstances in which the will was made and the terms of any secret trust imposed by the testator were a matter that was discussed between her and Jack Singh alone. As she is dead, only Jack Singh can speak of it. He is not a witness of great credit. His conviction for dishonesty has already been mentioned. Since the testator's death he has given a number of inconsistent accounts of what the terms were on which the gift was made to the plaintiff. One of his sons has expressed doubts as to the reliability of his word. The case for a secret trust must stand or fall by my assessment of his word, coupled with close examination of what light outside circumstances or evidence from inherently more credible witnesses may throw upon it. The defendant is now so ill that she was not able to be cross examined upon her affidavit. Evidence was given by affidavit by her doctor that she has an anxiety depression related to previous problems which has been exacerbated by these proceedings and by her anxiety about how these problems are affecting her sick mother, with whom the defendant lives and for whom she is the official carer; anxiety caused by this case and the way it affects her daughter has aggravated the mother's symptoms. The defendant did not become well enough to come to Sydney to give evidence. 5 The circumstances in which instructions were taken by Jack Singh to prepare the will were given by him in oral evidence in chief at the trial. He said that the relevant meeting occurred between the testator and himself face to face in her home at Tweed Heads. He continued as follows: "HALLEN: Q. Please go on Mr Singh? A. She knew my company had collapsed in the brickworks and so forth, and she wanted to leave something to my family because I had done quite a lot of work for Mr Salmond earlier on at Banora Point for nearly four years, and sand mining and all that sort of thing, and his company's folded and they couldn't pay me, so she -