Stafford & anor v Kekatos & anor (No 3) [2008] NSWSC 1093

New South Wales Supreme Court

CITATION : Stafford & anor v Kekatos & anor (No 3) [2008] NSWSC 1093

HEARING DATE(S) : 8-16 September 2008

JUDGMENT DATE : 17 October 2008

JURISDICTION : Equity Division

JUDGMENT OF : Brereton J

DECISION : First defendant is estopped from denying she took assignment of charge as trustee. First defendant was bound to acquire first mortgage if at all on behalf of trust and holds same on constructive trust. First defendant is liable to account to plaintiffs for one half of proceeds of royalties and sale, subject to indemnity for costs reasonably incurred. Judgment that first defendant pay plaintiffs $613,177.18.

CATCHWORDS : TRUSTS – where parties held charge over assets of a jointly owned company which owned certain land – where company went into liquidation and parties sought to purchase the land – where plaintiffs agreed to transfer interests in charge to first defendant – whether transfer to first defendant was absolute or as trustee for their benefit – whether first defendant is a trustee by way of express, constructive or resulting trust and/or estoppel – whether plaintiffs relied on defendants' representations in respect of the first defendant taking assignment as trustee – where first defendant acquired first mortgage in the land from third party after assignment of the charge – whether first defendant held that interest as trustee for plaintiffs – whether royalties received in right of first mortgagee and chargee held on trust for plaintiffs – where the land was sold to a third party and a percentage of the proceeds were paid to first defendant – whether first defendant holds those proceeds on trust for plaintiffs – whether first defendant entitled to be indemnified from trust assets for expenses incurred – CONSTRUCTIVE TRUSTS – whether first defendant should account for contributions of plaintiffs to a venture that has failed without attributable blame – whether parties intended that contributions to the venture would be returned in event of failure – whether venture failed - EQUITABLE ESTOPPEL – whether first defendant is estopped from asserting that the assignment to her was absolute or other than as trustee – whether defendants knowingly induced an expectation in plaintiffs that defendant would take assignment of charge as trustee – whether plaintiffs acted in reliance on that expectation – whether distrust between parties negatives reliance on representation – whether absence of writing precludes a finding of equitable estoppel - SALE OF LAND – requirement for writing – whether an agreement between two or more parties to purchase land from a third party is an agreement for the sale or other disposition of land – whether an agreement that a person is to hold land as trustee upon its purchase is an agreement for the sale or other disposition of land – whether requirement for writing affects interest by way of equitable estoppel - MISLEADING AND DECEPTIVE CONDUCT – (NSW) Fair Trading Act 1984, s 42 – whether representations made by defendants to plaintiffs that first defendant would take assignment as trustee for them amounted to misleading and deceptive conduct – where representations were as to a future matter – whether defendants had reasonable grounds for making representations - EVIDENCE – where first defendant did not give evidence – permissible inferences from failure to give evidence.