Coolbrew Pty Ltd v Westpac Banking Corporation

Relevant Facts 11By way of background, it should be noted that Coolbrew is the trustee of the Coolbrew Unit Trust. Its shareholders are Mr Crane and Astbury Enterprises Pty Ltd, a company associated with Mr Swift. Coolbrew owns a property at Gateshead which is mortgaged to the Bank. Crown is the trustee of Crown Property Investments Unit Trust. Its shareholders include Mr Crane and Astbury Enterprises Pty Ltd. Crown owns a property at Cooks Hill. 12The Facility Offer given by the Bank to Crown on 24 June 2011 provided for construction finance of $9,675,000. The term was expressed to be 15 months from the first drawdown date. At least $502,000 of Crown's own money had to be used for the contemplated works before a drawdown could be requested. It was envisaged that drawdowns would occur progressively, with the initial drawdown to occur within 60 days of the date of the approval. The Offer had been accepted by Crown and each of its directors by about 4 July 2011. 13As noted earlier, the Facility Offer required further security to a value of $2,000,000 to be provided by the directors of Crown. Of that amount, $1,300,000 was to be provided by Mr Nicholson through a company, Lake Maintenance (NSW) Pty Ltd. The remaining $700,000 was to be made up of $175,000 provided personally by each of the other four directors. 14It appears that the provision of personal security by those directors had been the subject of discussion with the Bank as early as February 2011, and was further discussed at a meeting held on 18 April 2011. There were also discussions between Mr Crane and Mr Jones of the Bank, during which the possibility was raised of Coolbrew borrowing $350,000 in order to fund the contributions of Messrs Swift and Crane. There is some dispute between Mr Crane and Mr Jones as to what was said, including as to whose idea it was for Coolbrew to be the source of the required funds, and as to why the cash deposits were in the names of the two directors even though the money was coming from Coolbrew. 15According to Mr Crane, who was not cross-examined, Mr Jones came up with the idea of Coolbrew borrowing to obtain the funds, and said that the cash deposits were not in Coolbrew's name because it was easier for the Bank "to do it this way and put it in the names of the directors of Crown". 16According to Mr Jones, who was cross-examined but not as to these matters, Mr Crane came up with the idea of Coolbrew borrowing to obtain the funds, and said that the equity contributions should be in the names of the individual directors as "we want to avoid involving Coolbrew and Coolbrew's property in the transaction involving Crown Property". 17I do not think that it is necessary to resolve those differences which seem to me to be of little or no significance to the issue at hand. The identity of the author of the idea to use Coolbrew as the source of funds seems to be immaterial, and the reasons why the cash deposits were to be held in the names of the two directors rather than Coolbrew are, in themselves, of little moment. Of greater importance is the fact that all parties apparently proceeded on the basis that whilst the money to enable the directors to provide their shares of the required security was to come from Coolbrew, the cash deposits would be held in the names of the individual directors. 18On 28 June 2011, the Bank issued a Facility Offer to Coolbrew in respect of a new commercial loan of $350,000 on top of its existing commercial bill facility of $1,170,000. The stated purpose of the loan was "Equity contribution for Crown Property development". The term of the commercial loan was expressed to be fifteen months from the first drawdown date. A single drawdown was permitted, such drawdown to take place within thirty days of the date of acceptance of the offer. Messrs Swift and Crane were required to provide Guarantee and Indemnity extensions in relation to their existing guarantees of Coolbrew's obligations. 19On 6 July 2011, Coolbrew executed a Drawdown Request in relation to the commercial loan. The request was signed by both Mr Swift and Mr Crane. It was for a drawdown of $350,000 to take place on 7 July 2011. Under the heading "Payment Instructions", two boxes for "Internal Transfers to another St George Bank account" were ticked. Under the first box, the following appears: "Name of Beneficiary: Martin Swift Account Number: Term Deposit BSB: 332-083 Amount: $175,000" 20Under the second box, the following appears: "Name of Beneficiary: Douglas Crane Account Number: Term Deposit BSB: 332-083 Amount: $175,000" 21On 7 July 2011, Messrs Swift and Crane each provided signed application forms to the Bank for the establishment of a term deposit. The parts of the forms which are to be filled out when the applicant is a trustee were in each case left blank. 22On 12 July 2011, they each provided (as "Depositor") a signed "Authority to Set-Off Deposits" form to the Bank (as "Depositee"). These forms included the following: "1. This agreement is entered into in consideration of us providing or continuing to provide financial accommodation to you or at your request. It sets out the terms on which we will be paying the balance at any time now or in the future standing to the credit of each of the accounts with us specified in the details and any new account opened in accordance with clause 3.2. In this agreement, these balances are called the deposits and an account includes a term deposit. 2. We need not repay the deposits: (a) until we have received all money you owe us at any time or which we determine you will or may owe us in the future; and (b) until we are satisfied that we will not be asked to refund any such money (or any part of it) to a trustee in bankruptcy, a liquidator or any other person; and (c) other than in accordance with the terms applying to each deposit. It is entirely within our discretion whether we agree to repay a deposit earlier than this. You have no right to call for an earlier repayment and agree not to do so. 3.1. Your right to receive interest on any deposit in accordance with the terms applying to it is not affected by this agreement except as described in clause 4. 3.2. In our discretion, we may require that any interest which accrues on any deposit be added to the balance of that deposit when the interest becomes due for payment. In that case, the interest then becomes part of that deposit. Alternatively, in our discretion we may require that any interest which accrues on any deposit be placed in any account in your name that we specify. In either case, you are only entitled to receive it when we repay the deposits under clause 2 unless we agree otherwise. 4. We may set-off any amount we owe you in connection with the deposits against any money you owe us. We may do this at any time and without giving you advance notice and whether or not a deposit has matured. If a deposit has not matured at the time we set-off any amount, we pay any interest on the amount set-off only until the date of set-off (this interest is payable as if you had elected to break the term of the deposit on the date we set-off the amount). 5. You declare that you hold and will continue to hold the deposits: (a) as beneficial owner, free of any interest of a third party; and (b) in the same capacity as you have entered or will enter into: (i) agreements under which we provide you with financial accommodation; and (ii) any guarantee or indemnity you give us; and (iii) arrangements under which you otherwise incur obligations to us (including but not limited to treasury transactions and international transactions). 6. Unless we consent, you may not assign, charge, declare any trust over or otherwise deal with any of your rights in connection with the deposits or this agreement. Any attempt to do any of these things is void." 23In the details section of the forms, the details of the accounts are not stated. However, clause 13 of the form provides that the Depositor agrees that the Depositee may fill in any blanks in the agreement. 24Also on 12 July 2011, Mr Swift executed a Guarantee and Indemnity in respect of Crown, as required by the Facility Offer to Crown. By clause 10.2(g) Mr Swift declared that he was not signing the Guarantee and Indemnity as the trustee of any trust or settlement. 25On 13 July 2011, Messrs Swift and Crane executed an Extension of Guarantee and Indemnity in respect of Coolbrew, as required by the Facility Offer to Coolbrew. 26Settlement of the Coolbrew commercial loan (No. XXX XXX 801) occurred on 13 July 2011. In accordance with the Coolbrew payment instructions, $175,000 of the loan funds was used to open a term deposit in the name of Mr Crane (No. XXX XXX 957) and $175,000 of the loan funds was used to open a term deposit in the name of Mr Swift (No. XXX XXX 906 - incorrectly referred to in the letter from the Bank to Coolbrew dated 13 July 2011 as No. XXX XXX 801). 27The evidence discloses that Mr Swift's term deposit matured and was renewed on a number of occasions, with accrued interest being added to the renewed deposit. There is also evidence that in March 2013, when Mr Swift's term deposit was replaced with a renewed deposit (to mature in June 2013), Mr Swift directed the Bank to credit interest of $15,905 to a trading account of Crown. The renewed term deposit (in the amount of $175,102.94) remained in Mr Swift's name. 28Mr Swift ceased to be a director of Coolbrew on 28 June 2013. 29Notices under s 260-5 of Schedule 1 to the Taxation Administration Act, dated 22 August 2013, 25 November 2013 and 26 February 2014 have been served upon the Bank in respect of Mr Swift. On 31 December 2013, upon the maturity of Mr Swift's term deposit, the Bank paid an amount of $5,250.99 to the Australian Taxation Office out of the funds on deposit. This was done in response to the notice dated 25 November 2013. It appears that the payment of that amount reduced the total funds on deposit to exactly $175,000. 30The notice dated 26 February 2014 was amended by a notice dated 3 June 2014 that reduced the amount payable from $146,082.26 to $117,347.47. 31On 5 February 2014, Beazley Singleton Lawyers, acting for Coolbrew, wrote to the Bank in terms which included the following: "[...] Your bank made a loan to Crown and required the directors of Crown to each provide a bank guarantee in the amount of $175,000. Our client is a shareholder of Crown and provided the security for two Bank Guarantees. The writing of the loans were required by and directed by St George and were written in this way for the convenience of the bank. As you are well aware, our client, Coolbrew Pty Ltd is the beneficial owner of the two term deposits [...]. Upon the discharge of the loan to St George for which these terms deposits are security, the term deposits are to be credited against the Commercial Loan Account No. XXX XXX 801. We understand you have already paid interest which has accrued against one of the term deposits to the Australian Taxation Office in respect of Mr Swift's personal tax debt. That money belonged to Coolbrew. The payment of these term deposits to any other persons other than as provided above will result in our client suing your bank for damages." 32On 2 April 2014, Beazley Singleton Lawyers further stated in a letter to the Bank that in circumstances where the loan to Crown was being refinanced and the security was no longer required, the Bank was required to pay each amount of $175,000 back to Coolbrew. 33On 7 April 2014, both Mr Crane and Mr Swift sent emails to Mr Jones of the Bank in which it was stated that "the $175,000 in my name belongs to Coolbrew" and is to be returned by paying off the $350,000 loan to Coolbrew. 34In the course of the correspondence that followed after the Beazley Singleton Lawyers letters, K & L Gates, solicitors acting for the Bank, stated that upon the discharge of the security, the Bank intended to comply with the notices issued by the Deputy Commissioner of Taxation in relation to moneys deposited in the name of Mr Swift.

Submissions 35Mr J T Johnson of Counsel, who appeared for Coolbrew, submitted that it was clear, and known to the Bank, that the term deposits were funded by money that came from Coolbrew. He submitted that the clear purpose of the provision of such funds was to satisfy the requirement that Messrs Swift and Crane give security for the Crown loan which was a stand alone facility not involving Coolbrew. 36Mr Johnson submitted that the relevant intention was that of Coolbrew (not Mr Swift) and it was therefore not relevant that Mr Swift signed a standard form Authority to Set-Off Deposits in which he declared that he would hold the deposits as beneficial owner. It was further put that there was no evidence that the funds were intended to be provided as a gift. 37Mr Johnson further submitted that in all the circumstances the Court should find that the funds on deposit were held by Mr Swift on a resulting trust for Coolbrew whereby Coolbrew would be entitled to call for the funds once the purpose of providing security for the Crown loan was at an end. Reliance was placed upon Barclays Bank Ltd v Quistclose Investments Ltd (supra), and also the presumption of a resulting trust that may arise when a party opens a bank account in the name of another and deposits money into the account. He emphasised that the statements made by Messrs Swift and Crane in April 2014 about the money belonging to Coolbrew had been admitted into evidence without limitation, and no attempt had been made to challenge those statements. 38Mr S Docker of Counsel, who appeared for the Bank, accepted that the Coolbrew loan was made for the purpose of the establishment of the term deposits to be used as security for the Crown loan, and that the funds were transferred for that purpose. However, he submitted that in order to establish the existence of the Quistclose-type trust contended for, Coolbrew had to show that it and Mr Swift had a mutual intention that the funds were never to become part of the assets of Mr Swift, and that once the funds were no longer required for the purpose, they had to be returned to Coolbrew. 39Mr Docker submitted that the question of intention had to be determined objectively in all the circumstances (see Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253, referred to by Campbell JA in Raulfs v Fishy Bite Pty Ltd; Fishy Bite Pty Ltd v Raulfs [2012] NSWCA 135 at [47]-[51]). Mr Docker noted that neither Coolbrew nor Mr Swift gave direct evidence about the transaction and in particular as to whether the funds were received by way of gift or loan or upon trust. He submitted that the statements made in April 2014 were well after the event, and did not say much about the circumstances in which the funds were provided. 40He submitted that the term deposit was opened in Mr Swift's name without any qualification as to his ownership of the funds. Mr Docker also pointed to: (1)the Drawdown Request which described both Mr Swift and Mr Crane as a "Beneficiary" of a term deposit to be funded by the drawdown; (2)the application forms for the establishment of term deposits, which did not show that either Mr Swift or Mr Crane was a trustee in relation to the account; (3)the declarations made by Messrs Swift and Crane in the Authority to Set-Off Deposits forms that they will hold the deposits as beneficial owners, and in the same capacity as they will enter into any guarantee or indemnity; and (4)the terms of the Authority to Set-Off Deposits forms which confer rights of set-off that are not confined to indebtedness in connection with the Crown loan, but extend to any indebtedness of the Depositor to the Bank. 41These matters were cited as circumstances tending to suggest that no trust was intended in respect of the term deposits. 42Mr Docker further submitted that the fact that in 2013 Mr Swift directed the Bank to credit interest on his term deposit to Crown suggested that there was no trust in favour of Coolbrew. 43Ms Foda of Counsel, who appeared for the Commissioner, pointed to some other aspects of the evidence, notably the declaration contained in clause 10.2(g) of the Guarantee and Indemnity executed by Mr Swift in relation to the loan to Crown. She noted that no evidence was adduced by Coolbrew as to how the disbursed loan funds of $350,000 were treated in its accounts. She also submitted that it was not until after the notices were issued by the Commissioner that any statements were made to the effect that the funds were owed by Coolbrew.

Relevant Principles 44In Barclays Bank Ltd v Quistclose Investments Ltd (supra), the respondent lent money to Rolls Razor Limited on terms that it would only be used to pay a dividend the company had declared but was not then in a position to pay. The loan funds were deposited into a separate account held with the appellant bank. Before the dividend could be paid out of the funds, the company went into liquidation. The House of Lords held that the funds were held by the company on trust for the shareholders entitled to the dividend and, upon the purpose of the loan failing, the company held the funds on trust for the respondent. 45The leading speech was given by Lord Wilberforce. His Lordship stated (at 579-580): "It is not difficult to establish precisely upon what terms the money was advanced by the respondents to Rolls Razor Limited. There is no doubt that the loan was made specifically in order to enable Rolls Razor Limited to pay the dividend. There is equally, in my opinion, no doubt that the loan was made only so as to enable Rolls Razor Limited to pay the dividend and for no other purpose. This follows quite clearly from the terms of the letter of Rolls Razor Limited to the bank of July 15, 1964, which letter, before transmission to the bank, was sent to the respondents under open cover in order that the cheque might be (as it was) enclosed in it. The mutual intention of the respondents and of Rolls Razor Limited, and the essence of the bargain, was that the sum advanced should not become part of the assets of Rolls Razor Limited, but should be used exclusively for payment of a particular class of its creditors, namely, those entitled to the dividend. A necessary consequence from this, by process simply of interpretation, must be that if, for any reason, the dividend could not be paid, the money was to be returned to the respondents: "only" or "exclusively" can have no other meaning or effect. That arrangements of this character for the payment of a person's creditors by a third person, give rise to a relationship of a fiduciary character or trust, in favour, as a primary trust, of the creditors, and secondarily, if the primary trust fails, of the third person, has been recognised in a series of cases over some 150 years." 46Lord Wilberforce continued (at 581-582): "The second, and main argument for the appellant was of a more sophisticated character. The transaction, it was said, between the respondents and Rolls Razor Limited was one of loan, giving rise to a legal action of debt. This necessarily excluded the implication of any trust, enforceable in equity, in the respondents' favour: a transaction may attract one action or the other, it could not admit of both. My Lords, I must say that I find this argument unattractive. Let us see what it involves. It means that the law does not permit an arrangement to be made by which one person agrees to advance moneys to another on terms that the money is to be used exclusively to pay debts of the latter, and if, and so far as not so used, rather than becoming a general asset of the latter available to his creditors at large, is to be returned to the lender, the lender is obliged, in such a case, because he is a lender, to accept, whatever the mutual wishes of lender and borrower may be, that the money he was willing to make available for one purpose only shall be freely available for others of the borrower's creditors for whom he has not the slightest desire to provide. [...] There is surely no difficulty in recognising the co-existence in one transaction of legal and equitable rights and remedies: when the money is advanced, the lender acquires an equitable right to see that it is applied for the primary designated purpose [...]: when the purpose has been carried out (i.e. the debt paid) the lender has his remedy against the borrower in debt: if the primary purpose cannot be carried out, the question arises if a secondary purpose (i.e. repayment to the lender) has been agreed, expressly or by implication: if it has, the remedies of equity may be invoked to give effect to it, if it has not (and the money is intended to fall within the general fund of the debtor's assets) then there is the appropriate remedy for recovery of a loan." 47In Re Australian Elizabethan Theatre Trust; Lord v Commonwealth Bank of Australia (1991) 30 FCR 491, Gummow J (then a Judge of the Federal Court) considered Barclays Bank Ltd v Quistclose Investments Ltd (supra) and stated (at 500-501): "However, in the House of Lords, Lord Wilberforce said (at 580, 582) that a necessary consequence of the mutual intention of Quistclose and Rolls Razor to create arrangements which gave rise to a 'primary' trust in favour of those entitled to the dividend was that, if the dividend could not be paid for any reason, the money, as a 'secondary' trust, was to be returned to Quistclose; the intention was clear to create the secondary trust for the benefit of the lender, to arise if the primary trust, to pay the dividend, could not be carried out. This characterisation of what occurred is indicative of an express trust with two limbs rather than an express trust in favour of the shareholders and a resulting trust in favour of Quistclose which arose by reason of an incomplete disposition by Quistclose of the whole of its interest in the money lent to Rolls Razor. But, on either characterisation, Quistclose had a beneficial interest (although not at all relevant times an exclusive beneficial interest) in the money in question. Thus, it was not merely in the position of a lender with the benefit of a promise to repay." 48Gummow J continued (at 501): "But the essential reason why the insolvency law did not strike at the transaction in question in Quistclose was that the moneys represented by the cheque drawn by Quistclose in favour of Rolls Razor and banked in the special account of Rolls Razor never at any stage became the beneficial property of Rolls Razor. It acquired no more than what Dixon J called a dry legal interest: see Commissioner of Stamp Duties (NSW) v Perpetual Trustee Co Ltd (supra) (at 510). On its part, Quistclose had both a contractual right to repayment out of the general assets of Rolls Razor, as a general creditor, and the beneficial interest in a fund, whether by way of resulting trust or as the second limb of an express trust." 49It may be observed that here, unlike the trust found in Barclays Bank Ltd v Quistclose Investments Ltd (supra), the trust propounded by Coolbrew entails the return of money upon the fulfilment of the alleged purpose, rather than upon the failure of the purpose. There is no reason in principle, however, why such a trust could not be created. The question is whether such a trust in fact came into existence in the particular circumstances of this case. 50In considering that question, it is well to remember that references in this context to "purpose" should not be read as characterising an express trust that does not have to satisfy the ordinary requirements for a private trust (see Re Australian Elizabethan Theatre Trust (supra) at 502 per Gummow J). There is, accordingly, a need to find an intention to create the trust. As Gummow J stated (at 502) in Re Australian Elizabethan Theatre Trust (supra): "The question as to the existence of any express trust will always have to be answered by reference to intention. An example of that basic proposition at work in this Court is the decision of Lockhart J in Re Wall; Ex parte Official Receiver v Kemmi's (1979) 25 ALR 615 at 624-625. Ordinarily, the relevant intention is that of the alleged settlor, but where the subject matter of the trust is contractual rights against the settlor, conferred by the settlor upon the alleged trustee, the objective (or "purpose") of the transaction being to benefit third parties, it may be appropriate to look at the mutual intention of the settlor and trustee. This is consistent with the approach by Deane J to a similar question in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1998) 165 CLR 107 at 149, but cf Mason CJ, Wilson J (at 121). At all events, and as I have said, in Quistclose (at 580), Lord Wilberforce looked to "the mutual intention" of Quistclose and Rolls Razor and to the "essence" of their bargain. The relevant intention is to be inferred from the language employed by the parties in question and to that end the court may look also to the nature of the transaction and the relevant circumstances attending the relationship between them: see Walker v Corboy (1990) 19 NSWLR 382; Scott, The Law of Trusts (4th ed., para 25.2). There is no need for particular caution in drawing the inference that a trust was intended: see Bahr v Nicolay (No.2) (1998) 164 CLR 604 at 618-619. However, it is also important to appreciate both the flexibility of the institution of the express trust and the range of equitable institutions which fall short of but have some of the characteristics of a trust." 51Reference should also be made to his Honour's further remarks (at 503) to the effect that a "Quistclose trust" ought not be treated as if it were a new legal institution rather than an example of the particular operation of principle upon the facts as found. 52It is now clear that in deciding whether there is an intention to create a trust, the court ascertains that intention by inference from the outward manifestations of intention. The task of ascertaining an intention to create a trust and, if so, on what terms, is similar to the task of ascertaining the intention of parties to a contract: (see Raulfs v Fishy Bite Pty Ltd; Fishy Bite Pty Ltd v Raulfs (supra) at [48] per Campbell JA where his Honour cited the decision of the High Court in Byrnes v Kendle (supra) at [53]-[59] per Gummow and Hayne JJ and [102]-[115] per Hayden and Crennan JJ). The focus of the enquiry is upon objective indications of intention, not subjective intentions which may have existed but are not apparent from what was said and done (see Byrnes v Kendle (supra) at [113]-[115] per Heydon and Crennan JJ). 53As stated by Campbell JA in Raulfs v Fishy Bite Pty Ltd; Fishy Bite Pty Ltd v Raulfs (supra) at [51], it is necessary to analyse the particular factual situation presented for the purpose of deciding whether there is an intention to create a trust, and, if so, on what terms. 54It is clear that a trust will not necessarily arise in circumstances where money is lent for a particular purpose (see Twinsectra Limited v Yardley [2002] UKHL 12; (2002) 2 AC 164 at [73]; P W Young AO, C Croft QC and M Smith, On Equity (2009, Thomson Reuters/​Lawbook Co) at [6.1020]; Raulfs v Fishy Bite Pty Ltd; Fishy Bite Pty Ltd v Raulfs (supra) at [51] per Campbell JA). 55In relation to the presumption of the existence of a resulting trust, reference should be made to Russell v Scott [1936] HCA 34; (1936) 55 CLR 440 at 449 and 451 which establishes that, aside from circumstances in which a presumption of advancement will arise, there is a prima facie resulting trust for the transferor of funds into a bank account held in the name of another, or held jointly by the transferor and another. Such a presumption may be rebutted or qualified by evidence which manifests an intention to the contrary, including evidence of the acts and declarations of the parties at or about the time of the transaction (see Charles Marshall Pty Ltd v Grimsley [1956] HCA 28; (1956) 95 CLR 353 at 365; Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 at 251, 252 and 269).

Determination 56It is not disputed that Coolbrew borrowed $350,000 for the purpose of providing funds for the term deposits required to be held by Messrs Swift and Crane as security for the loan to Crown. It may be accepted that Coolbrew had such a purpose and, further, that such purpose was known, not only to Messrs Swift and Crane, but also to the Bank. Moreover, it may be accepted that, to the knowledge of the Bank, Messrs Swift and Crane received the funds into the term deposits in their names for that purpose. 57However, a trust does not necessarily arise merely because money is provided for a particular purpose. It remains necessary to consider whether an intention to create a trust can be discerned from the evidence of the conduct of the parties, the nature of the transaction, and relevant circumstances attending the relationship between the parties (see Re Australian Elizabethan Theatre Trust (supra) at 503, cited with apparent approval by Campbell JA in Raulfs v Fishy Bite Pty Ltd; Fishy Bite Pty Ltd v Raulfs (supra) at [47]). 58In this case, no evidence was adduced by Coolbrew (or by Mr Swift) of any particular discussion or resolution concerning the terms upon which the funds would be held. The position is unlike that in Barclays Bank Ltd v Quistclose Investments Ltd (supra) where there was clear evidence that the loan was to be used only for the payment of a dividend, and for no other purpose, such that the court was able to conclude that it was intended that the sum advanced was never to become a part of the assets of Rolls Razor. However, I do not think that is necessarily the end of the matter. 59The trust alleged in this case differs from the trust found in Barclays Bank Ltd v Quistclose Investments Ltd (supra). In essence, it is put that Coolbrew at all times had a beneficial interest in the term deposits and, whilst it was not able to call for the funds for so long as the Crown loan remained unpaid, once that loan was repaid, it became entitled to require the funds to be returned. The existence of such a trust does not seem to me to necessarily depend upon the establishment of an intention that the funds provided by Coolbrew were "never to become part of the assets" of Messrs Swift or Crane. 60In any event, in the absence of direct evidence of any discussion or agreement between Coolbrew and Messrs Swift and Crane (who together constituted the Coolbrew board at the relevant time) about the ownership or use of the funds, it is necessary to focus upon the documentary evidence of the transaction and the circumstances in which it proceeded. 61As was pointed out in the submissions made on behalf of the defendants, that evidence provides no specific support for the alleged trust, and indeed it contains indications that Messrs Swift and Crane were to hold, to the exclusion of all others, the beneficial ownership of the term deposits to be held in their names. Those indications are mainly found in the Authority to Set-Off Deposits forms. Those forms set out the terms upon which the term deposits would be held as between the deposit holders (the Depositors) and the Bank (the Depositee). In at least two respects, the terms are not consistent with the existence of the alleged trust. 62First, the terms plainly proceed on the basis that the Depositor is and will remain the beneficial owner of the deposits "free of any interest of a third party", and that any declaration of trust in connection with the deposits would require the consent of the Bank in order to be effective (see clauses 5(a) and 6). 63Second, the terms also make it clear that the deposits are to be held in relation to all indebtedness of the Depositor, not merely indebtedness in relation to the Crown loan, and the Depositor has no right to call for an earlier repayment of the deposits (see clauses 2 and 4). 64Messrs Swift and Crane signed the authority forms on 12 July 2011. They did so in their personal capacities, not as directors of Coolbrew. However, Coolbrew must be taken to have become aware of the terms of those forms by that time at the latest. 65It may well be true to say, in general terms, that Coolbrew borrowed the $350,000 only for the purpose of providing the funds for the term deposits required as security for the Crown loan. However, the terms upon which the Bank required the security to be given were not consistent with Coolbrew having a beneficial interest in the term deposits, and were not consistent with the holders of the deposit (or anyone else) having the right to call for repayment once the Crown loan was itself repaid. The security was to be given on the basis that the beneficial ownership of the term deposits rested with the holders, namely, Messrs Swift and Crane. That the $350,000 was borrowed only for the purpose of providing the required security does not therefore establish the existence of the alleged trust. 66There are some further indications in the evidence that Coolbrew was not to have any beneficial interest in the term deposits. The Drawdown Request in which Messrs Swift and Crane are described as the "Beneficiary" is one example. The term deposit application forms, which do not show either Messrs Swift or Crane as a trustee, is another. The declaration by Mr Swift that he was not signing his guarantee of the Crown loan as a trustee is yet another example in circumstances where the Authority to Set-Off Deposits form contains a declaration that the deposits are held in the same capacity as the Depositor entered into any guarantee given to the Bank. However, I regard these as slight indications only. 67I do not think that the evidence of the statements made by both Mr Swift and Mr Crane in April 2014 that the term deposit money "belongs to Coolbrew" provides substantial support for the existence of the alleged trust. The evidence was admitted without limitation, and was not sought to be challenged. However, the statements are conclusionary in form, and the factual basis upon which the statements were made is not apparent. They can be read as expressions of subjective belief. In my view, these statements, made well after the alleged trust is said to have arisen, do not provide any cogent evidence of an intention to create such a trust. 68Viewing the evidence overall, and in particular the terms of the Authority to Set-Off Deposits forms which are, in my view, inconsistent with the terms of the alleged trust, I am not persuaded that any such trust came into existence. 69I also consider that the evidence referred to above which tends against the existence of the alleged trust is sufficient to overcome any presumption of a resulting trust. The funds for the term deposits that were required as part of the security for the Crown loan were provided in circumstances where it was known that the terms upon which the Bank required the security to be given stipulated that the Depositors would hold and continue to hold the deposits as beneficial owner "free of any interest of a third party". 70For the above reasons, Coolbrew has not made out its case for declaratory relief, and there is no basis to order the Bank to pay the funds in Mr Swift's term deposit to, or at the direction of, Coolbrew. 71The Summons should be dismissed with costs. The injunction, made on 23 May 2014, restraining the Bank from dealing with the term deposit in the name of Mr Swift, should be discharged.

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. Decision last updated: 15 August 2014