Codelfa Construction Pty Ltd v State Rail Authority of New South Wales

The alternative bases on which the ASC puts its case is that if clause 6 is ambiguous then it is appropriate to have resort to the circumstances surrounding the execution of the Deed of Indemnity. If such is done, so it is said, the factual context existing at and immediately prior to 14 June 1989 makes clear that one of the objects and commercial purposes of clause 6 was to impose on CP Co and the Snows the very risk which subsequently occurred, namely the liability for stamp duty and penalties on the Deed of Appointment in connection with the contemplated transfer of the AB Centre to the CP Trust. Perpetual's submission is that, construed as a term of the Deed of Indemnity itself, clause 6 is clear and unambiguous in its meaning. The recitals of the Deed make plain its provenance: before Perpetual would be prepared to accept appointment as trustee of the T & G Trust it required that the Deed be executed. Clauses 1, 2 and 4 of the Deed, in differing ways, relate to the T & G Trust and the rights and liabilities of Perpetual as trustee of it. Clause 3 for present purposes is of no particular significance. In this setting, though clause 6 does not refer expressly to Perpetual or to its trusteeship of the T & G Trust, the instruments to which it refers relate to its assuming that trusteeship and to its becoming the registered proprietor of property to be held on that trust. The indemnity given by the clause is clearly only for liabilities incurred by Perpetual as trustee for the T & G Trust. For this reason it is unnecessary and inappropriate to look beyond the Deed itself to the surrounding factual matrix. There is no ambiguity, no possible diversity in meanings, that needs to be resolved. As an ancillary submission Perpetual has contended that the instruments referred to in clause 6 relate to its assumption of the T & G Trust. If any of them (but particularly the s 138 Application) is found to give rise to duty because it is not an exempt transfer, the transfer necessarily is to Perpetual as such trustee and consequently any duty payable by it as transferee is payable as trustee of that trust: see the Act, s 22. Perpetual has made additional submissions to the effect that if there is an ambiguity resort to the factual matrix supports the construction for which it contends in any event. Counsel for the Snows have made submissions similar in substance to those of Perpetual. They contend, first, that the promise implicit in clause 6 - it is in form a statement - is a promise to Perpetual in its capacity as trustee of the T & G Trust because the instruments referred to relate to Perpetual as such trustee and are quite unrelated to the CP Trust; but, secondly, even if Perpetual's capacity as promisee is not so qualified, if any of the instruments in question, and particularly the s 138A application, is found to be a dutiable transfer that instrument given its character could relate only to the process of Perpetual becoming transferee as trustee of the T & G Trust. For my own part I would have to say that I consider the construction of clause 6 as free from difficulty. Though, as counsel for the Snows rightly identifies and all parties accept, it contains an implicit promise in the setting of the Deed itself, that promise is to Perpetual as trustee of the T & G Trust. The Deed was the condition of acceptance of that Trust; the covenants expressly creating obligations relate to Perpetual in virtue of that trusteeship; and clause 6, in the instruments to which it refers, likewise is related to the process of the appointment of, the evidencing of, and any change of legal ownership of T & G Trust assets consequent upon the appointment of, Perpetual as trustee of the T & G Trust. The Deed is silent in order to the CP Trust of which Perpetual was already trustee. It is inappropriate, given the declared condition the Deed satisfied, for the "implicit promise" of clause 6 to extend to Perpetual's trusteeship of that trust and in respect of transactions (even if part of a scheme) that were to occur subsequent to the limited set of events which the instruments in clause 6 were intended to evidence. For this reason I would answer the preliminary question: "No". The indemnity did not extend to a liability incurred by Perpetual in its capacity as trustee of the CP Trust. I should, though, make the following additional comments. Accepting that Perpetual's appointment to the trusteeship of the T & G Trust was, as the ASC has submitted, the first step towards the acquisition of the beneficial interest in the AB Centre on behalf of the CP Trust, the evidence before me does not in any way suggest that that acquisition occurred (as a result of prior agreement for value or otherwise) either on Perpetual's acceptance of the T & G trusteeship or on the registration of the s 138A application. On the contrary. For this reason I have some difficulty in understanding the present relevance of the observations of Davies J in the Perpetual Trustee Company case, to which I earlier referred in outlining the ASC's submissions. More fundamentally, though, I am on the material before me left quite in the dark as to precise legal means by which the beneficial interest in the AB Centre was "acquired by the CP Trust" - to put the matter colloquially. Indeed I do not know whether it was to and did occur in a way which could not have involved Perpetual in liability for stamp duty in any event, even assuming the acquisition did not result from an effective declaration of trust. It is unnecessary for me to speculate on such matters as the possible role that the Imperial Acts (Substituted Provisions) Act 1986 (ACT), Sched 2 Part 11 cl 1(1)(a) and/or (c) may have had in the matter: cf generally Meagher, Gummow & Lehane, Equity: Doctrines and Remedies, Ch 7 (3rd Ed). I refrain from doing so. I certify that this and the preceding fourteen (14) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn

Associate: Dated: 14 May 1998 Counsel for the Applicant: M A Pembroke SC with M J Lawler

Solicitor for the Applicant: Australian Securities Commission

Counsel for the Respondent: G Palmer QC with Mr Speakman

Solicitor for the Respondent: Minter Ellison

Counsel for the Cross-Respondent: A J Meagher SC

Solicitor for the Cross-Respondent: Malleson Stephen Jaques

Date of Hearing: 27 April 1998

Date of Judgment: 15 May 1998