New South Wales Supreme Court CITATION : Sanofi-Aventis Australia v Kartono [2006] NSWSC 1284 HEARING DATE(S) : 27 November 2006 JUDGMENT DATE : 27 November 2006 JURISDICTION : Equity JUDGMENT OF : Campbell J EX TEMPORE JUDGMENT DATE : 11/27/2006 DECISION : Leave to amend proceedings to add minor as defendant. Mareva order made. CATCHWORDS : TRUSTS – capacity to be a trustee – whether minor can be subject to a resulting or constructive trust – INFANTS AND CHILDREN – property – whether minor can be subject to a resulting or constructive trust – PROCEDURE – whether rule forbidding taking any step in proceedings against person under legal incapacity following service of originating process until tutor has been appointed applies to making of Mareva order against a minor at time of institution of proceedings against that minor Conveyancing Act 1919 LEGISLATION CITED : Minors (Property and Contracts) Act 1970 Uniform Civil Procedure Rules 2005 CASES CITED : Re Muller; Cassin v Mutual Cash Order Co Ltd [1953] 3 NZLR 879 Re Vinogradoff; Allen v Jackson [1935] WN 68 Sanofi-Aventis Australia Pty Ltd - Plaintiff Marsiana Kartono - First Defendant PARTIES : Tat Hin Lai - Second Defendant Thian Moy Wong - Third Defendant Anthony Lai - Fourth Defendant FILE NUMBER(S) : SC 5507/06 COUNSEL : J Thomson - Plaintiff A Hoang, solicitor - First to Third Defendants SOLICITORS : Minter Ellison - Plaintiff Al C Hoang Solicitors - First to Third Defendants IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST CAMPBELL J MONDAY 27 NOVEMBER 2006 5507/06 SANOFI-AVENTIS AUSTRALIA PTY LTD v MARSIANA KARTONO & ORS JUDGMENT – Ex Tempore 1 HIS HONOUR: This is an application to join an extra defendant, Mr Anthony Lai, in proceedings that are already on foot. Those proceedings are ones that were begun by the former employer of a lady known to the plaintiff as Roslyn Duffy, who had been employed as a payroll officer. There is some evidence, which I stress has not been responded to by any defendant, which has satisfied another judge that it is appropriate to make some Mareva Orders in relation to some money that is apparently missing from the assets of the plaintiff. 2 There is some evidence that suggests, at the prima facie level, that a sum of $105,000 of the plaintiff's money came to be transferred to an account maintained in the name of Mr Anthony Lai, with the Commonwealth Bank. The account opening records for that account show Mr Lai's date of birth as being 16 November 1989, and his occupation as being a student. That occupation presumably relates to the time the account was opened, which was in January 1997. Even so, on the basis of the date of birth shown in the account opening record, he would presently be aged 17. 3 The claim that is made against Mr Lai is, in substance, that he owes the duties of a resulting or constructive trustee concerning the money that, on the limited and one-sided evidence presently before the Court, appears to have found its way into his bank account. It also appears, I might say, that some of that $105,000 has also found its way out from his bank account, though a balance still remains, and one amount of $50,000 appears, again on the basis of evidence from one side only, and at the prima facie level, to be represented by a term deposit. 4 Mr Thomson, for the plaintiff, rightly drew my attention to the fact that Mr Lai is 17 years old, and that this may be a matter that is relevant to both the relief ultimately sought against him, and also to the procedural course that the case should follow. If the relief that is sought against him is a type of relief that the court would never grant, that would raise a question of whether it was appropriate to allow proceedings to be commenced against him at all. 5 Section 151A Conveyancing Act 1919 provides: "(1) The appointment of a minor to be a trustee in relation to any trust shall be void, but without prejudice to the power to appoint a new trustee to fill the vacancy. (2) This section applies only to appointments made after the commencement of the Conveyancing (Amendment) Act 1930 . (3) The amendments made to this section by the Minors (Property and Contracts) Act 1970 apply only to appointments made after the commencement of that Act." 6 The text of section 151A(1), as originally enacted, related to the appointment of infants, and did not include section 151A(3). The Minors (Property and Contracts) Act 1970, section 3 and First Schedule, replaced "an infant" in section 151A(1) by "a minor", and added section 151A(3). As well, the operation of section 151A was in effect altered by the Minors (Property and Contracts) Act 1970, which provides, in section 10: "(1) A person aged 18 years or upwards may, after the commencement of this Act... (b) become a trustee upon a constructive or other trust by declaration, appointment or otherwise." 7 Section 151A and section 10 clearly affect the ability of an infant to be an express trustee. In my view, however, those sections do not preclude a person who has received money that is the property of someone else, as a volunteer, from holding that money on a resulting or a constructive trust. A resulting trust is something that is dependent upon intention, but it is the intention of the person who conveys the property or provides the purchase price for property that matters: Black Uhlans Inc v New South Wales Crime Commission and Others (2002) 12 BPR 22,421 at [133]-[141], 22,423-22,425. Thus, the fact that the person to whom it is conveyed is under 18 does not affect the operation of a resulting trust. A constructive trust operates by imposing upon the conscience of the legal holder of property an obligation, that arises from the circumstances in which that property has come to be held. There is no reason why people under 18 should, merely by virtue of that fact, be immune from obligations of conscience, of the type that are recognised as giving rise to constructive trusts. This is recognised in the authorities: Re Vinogradoff; Allen v Jackson [1935] WN 68; Re Muller; Cassin v Mutual Cash Order Co Ltd [1953] 3 NZLR 879; Jacobs Law of Trusts in Australia, 7th Edition, page 306-307, [1402]; Underhill & Hayton, Law of Trusts and Trustees, 15th Edition page 41. Thus, there is no reason of principle for the proceedings not being commenced against the intended defendant, arising from the mere fact of his age. 8 I grant leave to the plaintiff to join as a defendant Anthony Lai, and to amend the summons by adding a reference to the fourth defendant to prayer five of the summons. 9 Mr Thomson seeks a Mareva order of the asset-freezing type against the newly added fourth defendant. That gives rise to a procedural problem. Uniform Civil Procedure Rule 7.17 provides that: "subject to [an exception not presently relevant] the plaintiff in proceedings against a defendant who is a person under legal incapacity may take no further step in the proceedings following service of the originating process until a tutor has entered an appearance on behalf of the defendant." 10 Strictly, that rule does not, it seems to me, apply to the present application, because the present application is brought at a time before service of the originating process on the newly added fourth defendant. However, even if I were wrong in that construction of the Rule, I would grant leave to dispense with that requirement of the Rule. The circumstances in which the money has come to be in the account of the new fourth defendant are sufficient, in my view, to make it appropriate to make an order that will do nothing more than freeze the assets, until the Court has time in which to look in more depth at the claim. Thus, I shall make the freezing order that is sought. 11 I make an order in terms of annexure A to the notice of motion filed in Court today. These orders may be entered forthwith. I abridge the time for service of the notice of motion to 3 pm Tuesday 28 November 2006. I appoint Thursday 30 November 2006 before me for the further hearing of the notice of motion. I stand the proceedings over to the duty judge list on Monday 4 December 2006, but grant to any party to the proceedings leave to restore on two hours notice before the duty judge. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.