Arakella v Paton [2004] NSWSC 13

Reported Decision : 60 NSWLR 334

New South Wales Supreme Court

CITATION : Arakella v Paton [2004] NSWSC 13 HEARING DATE(S) : 17 December 2003 JUDGMENT DATE : 30 January 2004 JURISDICTION: Equity JUDGMENT OF : Austin J DECISION : Separate questions answered "yes, it does" (Court has power under s 81 of Trustee Act to empower Trustee to amend Trading Trust instrument) and "no, it would not" (amendment of Trading Trust instrument after approval by unitholders would not, of itself, constitute fraud on the power)

CATCHWORDS : TRUSTS - power to amend trading trust instrument - whether s 81 of Trustee Act empowers Court to confer on trustee a power of amendment affecting rights of beneficiaries - whether amendment after approval of beneficiaries would constitute a fraud on the power of amendment - CORPORATIONS - scope of Gambotto principles - PRACTICE AND PROCEDURE - nature and appropriateness of representative proceedings LEGISLATION CITED : Supreme Court Rules, Part 8 rule 14; Part 31 rule 2 Trustee Act 1925 (NSW) ss 63, 81 Application of Australian Co-operative Foods Ltd (2001) 38 ACSR 71 Cachia v Westpac Financial Services Ltd (2000) 33 ACSR 572 Carnie v Esanda Finance Corporation (1995) 182 CLR 398 Carnie v Esanda Finance Corporation (1995) 38 NSWLR 465 Chapman v Chapman [1954] AC 424 Foskett v McKeown [1998] Ch 265 Gambotto v WCP Ltd (1995) 182 CLR 432 Heydon v NRMA Ltd (2001) 51 NSWLR 1 Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 King v AG Australia Holdings Ltd (2002) 121FCR 480 Kingston v Kepose Pty Ltd (1987) 12 ACLR 323 Ku-ring-gai Municipal Council v Attorney-General (1954) 55 SR(NSW) 65 Lewis v Nortex Pty Ltd [2002] NSWSC 271 Lopez v Star World Enterprises Pty Ltd (1999) ATPR 41-678 Mobil Oil Australia Pty Ltd v Victoria (2002) 189 ALR 161 Occidental Life Insurance Co of Australia Ltd v Bank of Melbourne (1991) 7 ANZ Ins Cas 61-201 Permanent Trustee Co Limited v National Australia Managers Limited (NSWSC, 8 August 1994, unreported) Perpetual Trustee Limited v Godsall [1979] 2 NSWLR 785 CASES CITED : Peters' American Delicacy Co Ltd v Heath (1939) 61 CLR 457 Re Arrowfield Group Ltd (1995) 17 ACSR 649 Re AS Sykes (Dec'd) and the Trustee Act [1974] 1 NSWLR 597 Re Blackwell's Settlement Trusts [1953] 1 Ch 218 Re Cosaf Pty Ltd (NSWSC, 18 December 1992, unreported) Re Downshire Settled Estates [1953] Ch 218 Re GB Nathan Pty Ltd (in liq) (1991) 24 NSWLR 674 Re GIO Australia Holdings Ltd (1999) 33 ACSR 283 Re Goldfields Kalgoorlie; Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd (2000) 34 ACSR 737 Re NRMA Ltd (2000) 33 ACSR 595 Re Strang (1941) 41 SR(NSW) 114 Re Tiger Investment Company Ltd (1999) 33 ACSR 438 Re Tollemache [1903] 1 Ch 955 Re Walker [1901] 1 Ch 879 Riddle v Riddle (1952) 85 CLR 202 Templeton v Leviathan Pty Ltd (1921) 30 CLR 34 Tickle v Tickle (1987) 10 NSWLR 581 Vatcher v Paull [1915] AC 372 Winpar Holdings Ltd v Goldfields Kalgoorlie Ltd (2001) 40 ACSR 221 Yunghanns v Candoora No 19 Pty Ltd [1999] VSC 524 PARTIES : Arakella Pty Ltd (P) Geoffrey Douglas Paton (as representative of the unitholders of the GNS Trading Trust) (D) FILE NUMBER(S) : SC 4543/03 COUNSEL : TF Bathurst QC with G Rich (P) PJ Brereton (D) SOLICITORS : Clayton Utz (P) Henry Davis York (D)