Segelov v Ernst & Young Services Pty Ltd [2015] NSWCA 156

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Segelov v Ernst & Young Services Pty Ltd [2015] NSWCA 156 Hearing dates: 23 March 2015 Decision date: 09 June 2015 Before: Meagher JA at [1]; Gleeson JA at [2]; Leeming JA at [156] Decision: Appeal dismissed. Appellant to pay the respondent's costs. Catchwords: EQUITY – trusts – express trust – discretionary – construction – services trust used by large accounting firm – potential objects of trust included spouses of partners and persons nominated by partners – partner nominates spouse as a potential object – distributions paid to a bank account in joint names of the partner and their spouse – spouse unaware of entitlement or that distributions paid into joint account – whether the trust deed permitted interim distributions of 'income' – whether trustee had benefit of discharge afforded by the trust deed on payment of distributions into bank account – whether the trustee owed a duty to inform the beneficiary of their entitlement – whether trustee entitled to exemption from liability under the trust deed Legislation Cited: Trustee Act 1925 (NSW) s 85 Cases Cited: Armitage v Nurse [1998] Ch 241 Barangaroo Delivery Authority v Lend Lease (Millers Point) Pty Ltd [2014] NSWCA 279 Byrnes v Kendle [2011] HCA 26; 243 CLR 253 Chapmans Ltd v Australian Stock Exchange Ltd [1996] FCA 474; 67 FCR 402 Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101 Commissioner of Taxation v Bamford [2010] HCA 10; 240 CLR 481 El Sayed v El Hawach [2015] NSWCA 26; 317 ALR 771 Federal Commissioner of Taxation v Cornell [1946] HCA 32; 73 CLR 394 Federal Commissioner of Taxation v Phillips (1978) 20 ALR 607 Federal Commissioner of Taxation v Vegners [1989] ATC 5,274 Gibb v Commissioner of Taxation (Cth) [1966] HCA 74; 118 CLR 628 Halford v Price [1960] HCA 38; 105 CLR 23 Hardy Wine Company Ltd v Janevruss Pty Ltd [2006] VSCA 28 Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405 Hawkesley v May [1956] 1 QB 304 Hawkins v Clayton [1988] HCA 15; 164 CLR 539 Horsell International Pty Ltd v Divetwo Pty Ltd [2013] NSWCA 368 In Re Vickery [1931] 1 Ch 572 Kelly v The Queen [2004] HCA 12; 218 CLR 216 Leerac Pty Ltd v Garrick E Fay [2008] NSWSC 1082 Leon Fink Holdings Pty Ltd v Australian Film Commission [1979] HCA 26; 141 CLR 672 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 Owners of the Ship "Shin Kobe Maru" v Empire Shipping Co Inc [1994] HCA 5; 181 CLR 404 Perpetual Custodians Ltd (as custodian for Tamoran Pty Ltd (as trustee for Michael Crivelli)) v IOOF Investment Management Ltd; Murray v Perennial Investment Partners Ltd [2013] NSWCA 231; 304 ALR 406 Rankine v Rankine [1998] QSC 48 Re Manisty's Settlement [1974] Ch 17 Re Simersall; Backwell v Bray (1992) 35 FCR 584 Russell v Scott [1936] HCA 34; 55 CLR 440 SAS Trustee Corporation v Cox [2011] NSWCA 408; 285 ALR 623 Sayden Pty Ltd v Chief Commissioner of State Revenue (NSW) [2013] NSWCA 111; 83 NSWLR 700 Sigiriya Capital Pty Ltd v Scanlon [2013] NSWCA 401; 97 ACSR 183 Streller v Albury City Council [2013] NSWCA 348 Sydney Futures Exchange Ltd v Australian Stock Exchange Ltd (1995) 56 FCR 236 Vegners v Federal Commissioner of Taxation [1991] ATC 4,213 Wacal Developments Pty Ltd v Realty Developments Pty Ltd [1978] HCA 30; 140 CLR 503 Youyang Pty Ltd v Minter Ellison Morris Fletcher [2003] HCA 15; 212 CLR 484 YZ Finance Co Pty Ltd v Cummings [1964] HCA 12; 109 CLR 395 Zhu v Treasurer of the State of New South Wales [2004] HCA 56; 218 CLR 530 Texts Cited: D Hayton, P Matthews and C Mitchell, Underhill and Hayton Law of Trusts and Trustees, (18th ed 2010, LexisNexis) D Ong, Trust Law in Australia, (4th ed 2012, Federation Press) H A J Ford and W A Lee, Thompson, Principles of the Law of Trusts, vol 1 (at Release 97) J C Campbell "Should the 'Rule in Hastings-Bass' Be Followed in Australia? - Trustees' Duties to Enquire and Trustees' Mistakes" (2011) 34 Australian Bar Review 259 J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia, (7th ed 2006, LexisNexis Butterworths) K Lewison and D Hughes, The Interpretation of Contracts in Australia, (2012, Lawbook Co) L Tucker et al, Lewin on Trusts, (19th ed 2015, Sweet & Maxwell) Category: Principal judgment Parties: Dana Segelov (Appellant) Ernst & Young Services Pty Ltd (Respondent) Representation: Counsel: M K Meek SC with D Barlin (Appellant) I M Jackman SC with D F C Thomas (Respondent)