Byrnes v Kendle
[2011] HCA 26Byrnes
vKendle
Judges:
French CJ
Gummow J
Hayne J
Heydon J
Crennan J
Subject References:
Acquiescence
bare trust
consent
estoppel
express trust
in-tention
upon trust
Legislative References:
Law of Property Act 1936 (SA) - s 29(1)(b); s 41
Trustee Act 1936 (SA) - s 6; s 7; s 8; s 25A; s 25C
Judgment date: 3 August 2011
Order
1. Appeal allowed with costs.
2. Orders 1 and 3 of the orders of the Full Court of the Supreme Court of South Australia sealed 20 January 2010 be set aside and in place thereof it be ordered that:
- (a)
- the appeal to the Full Court be allowed with costs; and
- (b)
- the orders of the District Court made on 31 March 2009 and O 1 of the orders made on 22 June 2009 be set aside and in place thereof:
- (i)
- declare that the solicitors for the respondent, Clifford Frank Kendle, be at liberty to account for the moneys held by them in trust pursuant to O 4 of the orders of the District Court made on 11 September 2008 by paying thereout to the first appellant, Martin Francis Byrnes, or as he may direct in writing, the sum of $73,534.70 and by paying the balance to Mr Kendle, or as he may direct in writing;
- (ii)
- order that:
- (A)
- Mr Kendle pay the costs of the appellants on a party and party basis of the trial and all applications filed in the District Court action; and
- (B)
- the action otherwise be dismissed.
Counsel for the appellants: D M J Bennett QC with A L Tokley
Counsel for the respondent: M A Frayne SC with N J Floreani
Solicitors for the appellants: Haarsma Lawyers
Solicitors for the respondent: Corsers Lawyers
Byrnes v Kendle [2009] SADC 36 .
Byrnes v Kendle (2009) 3 ASTLR 459 .
Reasons of Gummow and Hayne JJ at [32]-[39].
Law of Property Act, s 7.
Kauter v Hilton (1953) 90 CLR 86 at 98 ; [1953] HCA 95 .
The relevant requirements imposed by the Law of Property Act for a deed executed by a natural person are the application of the person's signature or mark on the deed (s 41(1)(a)) and attestation by a non-party witness (s 41(2)(a)). The Acknowledgment of Trust was also expressed to be a deed: Law of Property Act, s 41(5)(a).
Barry v Heider (1914) 19 CLR 197 at 213 per Isaacs CJ; [1914] HCA 79 ; Frazer v Walker [1967] 1 AC 569 at 585; Breskvar v Wall (1971) 126 CLR 376 at 384-385 per Barwick CJ; [1971] HCA 70 ; Bahr v Nicolay [ No 2 ] (1988) 164 CLR 604 at 613 and 618 per Mason CJ and Dawson J, 638 per Wilson and Toohey JJ; [1988] HCA 16 ; Bank of South Australia v Ferguson (1998) 192 CLR 248 at 255 per Brennan CJ, Gaudron, McHugh, Gummow and Kirby JJ; [1998] HCA 12 . The Real Property Act 1886 (SA), s 71(e) expressly preserves the rights of a cestui que trust against the operation of the indefeasibility provisions in ss 69 and 70 where the registered proprietor is a trustee.
Trustee Act, s 7(1)(b).
Trustee Act, s 8(1).
Jacobs' Law of Trusts in Australia , 7th ed (2006) at [2020]; Attorney-General v Owen (1805) 10 Ves Jun 555 [ 32 ER 960 ]; Earl of Egmont v Smith (1877) 6 Ch D 469 ; Re Shaw's Trusts (1871) LR 12 Eq 124 ; Re Byrne (1902) 19 WN (NSW) 141.
Trustee Act, s 25C(5).
Trustee Act, s 25A(1)(b) and (d).
(1920) 28 CLR 178 ; [1920] HCA 45 .
(2009) 3 ASTLR 459 at 464 [28].
Queensland statute, s 12 of the Schedule.
(1920) 28 CLR 178 at 184-185 per Isaacs J.
(1920) 28 CLR 178 at 181 per Knox CJ and Gavan Duffy J, 182 per Isaacs J.
(1920) 28 CLR 178 at 181.
Lewin on Trusts , 18th ed (2008) at 95 [4-23].
(1850) 13 Beav 78 ; [ 51 ER 30 ].
Similar facts existed in Gaskell v Gaskell (1828) 2 Y & J 502 [ 148 ER 1017 ], footnoted in the passage from Lewin . The settlor's purpose was to avoid estate duty and the creation of the trust was not communicated to the appointed trustee.
Such as fraud, undue influence, duress, the non est factum principle or an intention to create a sham trust.
(1920) 28 CLR 178 at 187.
(1920) 28 CLR 178 at 191.
Garrett v L'Estrange (1911) 13 CLR 430 at 434 per Griffith CJ, Barton and O'Connor JJ agreeing at 435; [1911] HCA 67 .
(1953) 90 CLR 86 at 98.
(1953) 90 CLR 86 at 100.
(2000) 202 CLR 588 ; [2000] HCA 25 .
(2000) 202 CLR 588 at 605 [34] per Gaudron, McHugh, Gummow and Hayne JJ.
Lewin on Trusts , 18th ed (2008) at 95-96 [4-23].
2nd ed (2010) at 1495 [58.04].
Reasons of Gummow and Hayne JJ at [46]-[66].
[2009] SADC 36 at [33].
[2001] SASC 75 .
[1935] SASR 263 .
B & M Property Enterprises Pty Ltd (in liq) v Pettingill [2001] SASC 75 at [125]; see also Starr v Starr [1935] SASR 263 at 266-267.
(2009) 3 ASTLR 459 at 464 [28].
(2009) 3 ASTLR 459 at 466 [38].
(2009) 3 ASTLR 459 at 466 [37].
Jacobs' Law of Trusts in Australia , 7th ed (2006) at 48 [315].
Jacobs' Law of Trusts in Australia , 7th ed (2006) at 48 [315] and fn 42.
Lewin on Trusts , 18th ed (2008) at 1215 [34-03].
Lewin on Trusts , 18th ed (2008) at 18 [1-25]; Ingram v Internal Revenue Commissioners [2000] 1 AC 293 at 305 per Lord Hoffmann, approving Millett LJ in Ingram v Internal Revenue Commissioners [1997] 4 All ER 395 at 424. See also CGU Insurance Ltd v One Tel (in liq ) (2010) 84 ALJR 576 at 581 [36]; (2010) 268 ALR 439 at 446; [2010] HCA 26 .
Adamson v Reid (1880) 6 VLR (E) 164 at 167 per Molesworth J -- a case concerning the general law obligation on a trustee to invest.
(1877) 6 Ch D 469 .
(1877) 6 Ch D 469 at 476 per Jessel MR
(2009) 3 ASTLR 459 at 467 [45].
[2009] SADC 36 at [42].
(2009) 3 ASTLR 459 at 467 [46].
(2009) 3 ASTLR 459 at 467 [49].
(1992) 26 NSWLR 666 at 669-670.
(1992) 26 NSWLR 666 at 670.
(1992) 26 NSWLR 666 at 682.
(1992) 26 NSWLR 666 at 674-675.
Meagher, Heydon and Leeming, Equity, Doctrines and Remedies , 4th ed (2002) at 1043-1045 [36-090], [36-095].
[2009] SADC 36 at [20].
Schalit v Joseph Nadler Ltd [1933] 2 KB 79 at 83-84.
See Nelson v Nelson (1995) 184 CLR 538 at 568-570 ; [1995] HCA 25 .
Byrnes v Kendle (2009) 267 LSJS 43 .
Scott and Ascher on Trusts , 5th ed (2007), vol 3, §17.4, fn 1.
Kemp v Burn (1863) 4 Giff 348 at 349-350 [ 66 ER 740 at 740-741]; Scott and Ascher on Trusts , 5th ed (2007), Vol 3, §17.4. cf Trustee Act 1936 (SA), s 84B.
(2002) 54 NSWLR 146 at 149-150 [14]-[15], 163 [65]-[66].
Fink v Robertson (1907) 4 CLR 864 at 891 ; [1907] HCA 7 .
(1914) 19 CLR 197 at 206; [1914] HCA 79 .
29 Car II c 3.
(1953) 90 CLR 86 at 98 ; [1953] HCA 95 .
(1988) 164 CLR 604 at 618; [1988] HCA 16 .
In re Schebsman ; Official Receiver v Cargo Superintendents (London) Ltd [1944] Ch 83 at 104.
(2000) 202 CLR 588 at 605 [34]; [2000] HCA 25 .
Byrnes v Kendle [2009] SADC 36 at [33].
(2009) 267 LSJS 43 at 47 [30].
cf Nelson v Nelson (1995) 184 CLR 538 .
(2008) 238 CLR 516 at 531-532 [35], 567 [173]-[174]; [2008] HCA 21 .
(2004) 219 CLR 165 at 181-182 [46]-[47]; [2004] HCA 52 . See also the discussion by White J in Forrest v Cosmetic Co Pty Ltd (2008) 218 FLR 109 at 116-117 [32].
K D Morris & Sons Pty Ltd (In liq) v Bank of Queensland Ltd (1980) 146 CLR 165 at 199 per Aickin J; [1980] HCA 20 .
Grey v Pearson (1857) 6 HLC 61 at 106 [ 10 ER 1216 at 1234]; Abbott v Middleton (1858) 7 HLC 68 at 114 [ 11 ER 28 at 46].
Norton, A Treatise on Deeds , 2nd ed (1928) at 50.
Currie v Glen (1936) 54 CLR 445 at 458 ; [1936] HCA 1 .
Brennan v Permanent Trustee Co of New South Wales Ltd (1945) 73 CLR 404 at 412 ; [1945] HCA 17 .
(1953) 90 CLR 86 at 100.
In re Kayford Ltd (In liq ) [1975] 1 WLR 279 at 282 ; [1975] 1 All ER 604 at 607.
[2002] 2 AC 164 at 185 [71]. See also Mills v Sportsdirect . com Retail Ltd [2010] 2 BCLC 143 at 158 [52]-[54].
(1953) 90 CLR 86 .
Scott, The Law of Trusts , (1939), Vol 1, §23.
5th ed (2006), Vol 1, §4.1.
(1983) 151 CLR 422 at 429; [1983] HCA 5 .
(1983) 151 CLR 422 at 428.
(1985) 160 CLR 548 at 568-569; [1985] HCA 19 . See also Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (In liq ) (2000) 202 CLR 588 at 603 [26]-[28] per Gaudron, McHugh, Gummow and Hayne JJ.
Lewin, A Practical Treatise on the Law of Trusts , 11th ed (1904) at 85.
(1828) 2 Y & J 502 [ 148 ER 1017 ].
(1842) 1 Hare 476 [ 66 ER 1119 ].
(1845) 15 Sim 56 [ 60 ER 537 ].
[1902] 1 Ch 403 .
(1920) 28 CLR 178 ; [1920] HCA 45 .
(1920) 28 CLR 178 at 181.
[1935] SASR 263 at 267.
(1940) 57 WN (NSW) 151 at 153.
[1970] SASR 224 at 239.
[2003] NSWSC 624 at [38]. An appeal was dismissed by the Court of Appeal: [2004] NSWCA 72 .
Lewin on Trusts , 17th ed (2000) at 81 [4-23], fn 6.
Field v Lonsdale (1850) 13 Beav 78 at 81 [ 51 ER 30 at 31]. See also Gaskell v Gaskell (1828) 2 Y & J 502 at 509 [ 148 ER 1017 at 1020], where it was said to be "evident that these transfers were made with an intent to evade the legacy duty".
cf Williams v McIntosh (1909) 9 SR (NSW) 391.
Commissioner of Stamp Duties (Q) v Jolliffe (1920) 28 CLR 178 at 180.
Commissioner of Stamp Duties (Q) v Jolliffe (1920) 28 CLR 178 at 181-182.
(1995) 184 CLR 538 .
(2011) 85 ALJR 480 ; 275 ALR 611 ; [2011] HCA 9 .
(1920) 28 CLR 178 at 191-192.
Scott and Ascher on Trusts , 5th ed (2007), Vol 3, §18.1.3.
(2009) 267 LSJS 43 at 48 [36]-[37].
(2009) 267 LSJS 43 at 48 [38].
(2009) 267 LSJS 43 at 49 [43].
(2008) 238 CLR 570 at 586-588 [49]-[55], 625 [162]; [2008] HCA 57 .
[2009] SADC 36 at [42].
(2009) 267 LSJS 43 at 50 [49]-[50].
Schalit v Joseph Nadler Ltd [1933] 2 KB 79 at 83-84.
(1992) 26 NSWLR 666 at 669.
(1992) 26 NSWLR 666 at 669-670.
(1989) 167 CLR 316 at 337- 338 and 340 ; [1989] HCA 4 .
Orr v Ford (1989) 167 CLR 316 at 341 per Deane J.
[2001] SASC 75 at [124]-[126].
[1935] SASR 263 at 266-267.
(1920) 28 CLR 178 at 181; [1920] HCA 45 .
"Sonnet LXV and the "Black Ink" of the Framers' "Intention", (1987) 100 Harvard Law Review 751 at 758-759 (emphasis in original, footnotes omitted). Fried attributes the reasoning to passages in Dworkin, Law's Empire , (1986) at 54- 57 and 359 -365.
Tasmania v Commonwealth and Victoria (1904) 1 CLR 329 at 358-359 ; [1904] HCA 11 . For modern discussions, see Wilson v Anderson (2002) 213 CLR 401 at 417-419 [7]-[9]; [2002] HCA 29 ; Singh v Commonwealth (2004) 222 CLR 322 at 335-336 [19]; [2004] HCA 43 .
Holmes, "The Theory of Legal Interpretation", (1899) 12 Harvard Law Review 417 at 419.
Jones v Harris Associates LP 527 F 3 d 627 at 633 (7th Cir 2008) (emphasis in original).
R (Wilkinson) v Inland Revenue Commissioners [2005] 1 WLR 1718 at 1723 [17]; [2006] 1 All ER 529 at 535. See also R (Westminster City Council) v National Asylum Support Service [2002] 1 WLR 2956 at 2958-2959 [5]; [2002] 4 All ER 654 at 656-657.
Pepper (Inspector of Taxes) v Hart [1993] AC 593 at 630-640.
See Burrows, Statute Law in New Zealand , 3rd ed (2003) at 181-184.
Acts Interpretation Act 1901 (Cth), s 15AB, and equivalents in some other jurisdictions.
Deutsche Genossenschaftsbank v Burnhope [1995] 1 WLR 1580 at 1587 ; [1995] 4 All ER 717 at 724. See also Rabin v Gerson Berger Assn Ltd [1986] 1 WLR 526 at 533 ; [1986] 1 All ER 374 at 379-380.
Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101 at 1112 [14]. A fact known to one party but not reasonably available to the other cannot be taken into account: Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251 at 272 [49]. Gleeson CJ, Gummow and Hayne JJ agreed with this in Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at 188 [11]; [2001] HCA 70 . See also Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179 [40]; [2004] HCA 52 . There is or may be considerable controversy in relation to whether the test turns on what background knowledge was reasonably available to the parties or on what knowledge they actually had; if the former, to whether the knowledge is what each party might reasonably have expected the other to know; and to whether the knowledge of third parties into whose hands the contract may fall is relevant. Similar problems can arise with trusts. The issues in the present case do not call for their resolution.
Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101 at 1117-1121 [33]-[42].
(2004) 219 CLR 165 at 179 [40] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ. Thus the question is: "what would the first party have led a reasonable party in the position of the other party to believe the first party intended, whatever the first party actually intended?" See Hoffmann, "The Intolerable Wrestle With Words and Meanings", (1997) 114 South African Law Journal 656 at 661; Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251 at 272-273 [51]. See also Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441 at 502; Pioneer Shipping Ltd v BTP Tioxide Ltd [1982] AC 724 at 736; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 462 [22]; [2004] HCA 35 .
That course is permissible, but how far is controversial. This court said in Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45 at 62-63 [39]; [2002] HCA 5 that until this court had decided on whether there were differences between Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 ; [1998] 1 All ER 98 and Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 ; [1982] HCA 24 , and if so which should be preferred, the latter case should be followed in Australia. The question has not been argued or decided in this Court. The opinions stated in Masterton Homes Pty Ltd v Palm Assets Pty Ltd (2009) 261 ALR 382 at 384-385 [1]-[4] and 406-407 [112]-[113] and Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 at 616-618 [14]-[18], 621-622 [42], 626 [63] and 663-678 [239]-[305] must be read in this light.
Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101 at 1108 (emphasis added).
Holmes, "The Path of the Law", (1897) 10 Harvard Law Review 457 at 463-464 (emphasis in original).
Taylor v Johnson (1983) 151 CLR 422 at 432 ; [1983] HCA 5 .
Conaglen, "Sham Trusts", (2008) 67 Cambridge Law Journal 176 at 178, 182 and 193 .
Gosper v Sawyer (1985) 160 CLR 548 at 568-569 ; [1985] HCA 19 (emphasis added).
Buttery & Co v Inglis (1877) 5 R 58 at 70.
Countess of Rutland's Case (1604) 5 Co Rep 25b at 26a-26b [ 77 ER 89 at 90].
Smith v Lucas (1881) 18 Ch D 531 at 542.
Inland Revenue Commissioners v Raphael [1935] AC 96 at 142-143.
[1971] AC 886 at 906.
(1986) 6 NSWLR 175 at 189-190.
(1988) 165 CLR 107 at 121; [1988] HCA 44 (emphasis added).
Prenn v Simmonds [1971] 1 WLR 1381 at 1384 ; [1971] 3 All ER 237 at 239; Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 997 ; [1976] 3 All ER 570 at 575.
Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 at 148.
(1990) 19 NSWLR 382 at 385-386.
Kirkham v Peel (1880) 43 LT 171 at 172.
Walker v Corboy (1990) 19 NSWLR 382 at 397.
Re Australian Elizabethan Theatre Trust ; Lord v Commonwealth Bank of Australia (1991) 30 FCR 491 at 503. See also Winterton Constructions Pty Ltd v Hambros Australia Ltd (1991) 101 ALR 363 at 370. Walker v Corboy and Re Australian Elizabethan Theatre Trustwere followed in Di Pietro v Official Trustee in Bankruptcy (1995) 59 FCR 470 at 484.
Mettoy Pension Trustees Ltd v Evans [1990] 1 WLR 1587 at 1610 ; [1991] 2 All ER 513 at 537.
Mettoy Pension Trustees Ltd v Evans [1990] 1 WLR 1587 at 1610-1611 ; [1991] 2 All ER 513 at 537; National Grid Co plc v Mayes [2001] 1 WLR 864 at 870 [18]-[20]; [2001] 2 All ER 417 at 423-424.
Stevens v Bell [2002] EWCA Civ 672, quoted in Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd (2002) 174 FLR 1 at 56-57 [216].
Mettoy Pension Trustees Ltd v Evans [1990] 1 WLR 1587 at 1610 ; [1991] 2 All ER 513 at 537; Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 1 WLR 589 at 597 ; [1991] 2 All ER 597 at 605-606.
Mettoy Pension Trustees Ltd v Evans [1990] 1 WLR 1587 at 1611 ; [1991] 2 All ER 513 at 537-538; Stevens v Bell [2002] EWCA Civ 672.
Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liq ) (2000) 202 CLR 588 at 605 [34]; [2000] HCA 25 (footnote omitted). In Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4 ) (2007) 160 FCR 35 at 77 [281] the principles of contractual construction discussed above were applied to an inquiry into whether a fiduciary relationship founded on a contract existed.
Conaglen, "Sham Trusts", (2008) 67 Cambridge Law Journal 176 at 181.
(1953) 90 CLR 86 at 97; [1953] HCA 95 .
Commissioner of Stamp Duties (Qd) v Jolliffe (1920) 28 CLR 178 at 191 per Isaacs J.
Nelson v Nelson (1995) 184 CLR 538 ; [1995] HCA 25 .
Conaglen, "Sham Trusts", (2008) 67 Cambridge Law Journal 176. Although this was not the way the decision was reasoned, Starr v Starr [1935] SASR 263 may be an example, for the three trusts appear to have been created by unilateral declarations of trust which the defendant treated as "mere formalities" (at 265).
Commissioner of Stamp Duties (Qd) v Jolliffe (1920) 28 CLR 178 at 191 per Isaacs J.
Lewin, A Practical Treatise on the Law of Trusts , 11th ed (1904) at 85.
Commissioner of Stamp Duties (Qd) v Jolliffe (1920) 28 CLR 178 at 181.
Lewin on Trusts , 17th ed (2000) at 81 [4-23] n 6.
Lewin on Trusts , 18th ed (2008) at 95 [4-23] n 12.
Stafford v Fiddon (1857) 23 Beav 386 [ 53 ER 151 ]; Adamson v Reid (1880) 6 VLR (E) 164 at 167; Gilroy v Stephens (1882) 51 LJ Ch 834; Re Jones ; ; Jones v Searle (1883) 49 LT 91 ; Wharton v Masterman [1895] AC 186 at 197.
Rocke v Hart (1805) 11 Ves Jun 58 at 60 [ 32 ER 1009 at 1010] per Sir William Grant MR
Earl of Egmont v Smith (1877) 6 Ch D 469 at 476 (a strong holding, since the case concerned not an express trust, as in this appeal, but the special kind of trust which exists between vendor and purchaser of land after exchange of contracts but before completion); Re Byrne ; Byrne v Byrne (1902) 19 WN (NSW) 141.
(1989) 167 CLR 316 at 337; [1989] HCA 4 .
(1989) 167 CLR 316 at 337.
Orr v Ford (1989) 167 CLR 316 at 337.
(1863) 1 De G J & S 107 at 119-120 [ 46 ER 42 at 46-47].
Orr v Ford (1989) 167 CLR 316 at 338.
Orr v Ford (1989) 167 CLR 316 at 338.
Orr v Ford (1989) 167 CLR 316 at 338.
Orr v Ford (1989) 167 CLR 316 at 341.
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