Global Custodians Ltd v Mesh

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2539/98 -GLOBAL CUSTODIANS LTD v MESH 3156/99 - GLOBAL CUSTODIANS LTD v MESH 3354/99 - BHAGAT v GLOBAL CUSTODIANS LTD JUDGMENT 1 YOUNG CJ in EQ: On 14 February 2002 I gave reasons for judgment in three sets of proceedings. The matter came into the list today, some three and a half hours ago on a mention basis, the purpose of today being to make the orders that flowed from those reasons. 2 The day commenced with three motions being filed, one in each set of proceedings by Mr Bhagat, which asked for a stay of my further consideration of the short minutes, until some other litigation had been dealt with in the Common Law Division, but I refused to make those orders. It was quite clear from the evidence tendered on those motions, that Mr Bhagat had been able to make a thorough analysis of the reasons for judgment that were handed down on 14 February 2002. 3 Just to make things abundantly clear, Mr Bhagat had notified my chambers that he would be overseas until 25 March, and so when I handed the reasons down on 14 February, I directed the plaintiffs that they were to bring in short minutes and to e-mail those short minutes to Mr Bhagat at his overseas address by 25 February, and it would appear that it was done. 4 When the motions were disposed of, and the draft minutes of order were being considered, the defendants said that they were taken by surprise with respect to some of the orders and needed more time. It seemed to me, quite clearly, that the great majority of findings in my reasons of 14 February were going to be the subject of an appeal, and that it was best for everybody if I concluded as much as possible today, so that the appeal process could be got in hand and the matter finally disposed of out of the court system as quickly as possible. 5 The orders fell into two categories: (a) final orders; and (b) machinery to carry out the final orders. It seemed to me that most of the objections on the ground of surprise were for the latter, and that the way to deal with the matter was to deal with the final orders today and to deal with the machinery orders next week. 6 I then proceeded on that basis, and I have had lengthy submissions from both the plaintiffs and the third defendant on that basis, and also some restrained submissions on behalf of the first and second defendants, the trustees. 7 I have now reduced the orders I should make today to writing, by altering the draft that was handed up, and in both 2539/98 and 3156/99 I make orders 1, 2, 3, 6(a), 7, 7A, 10, 11, 12, 13, 14 and 15 in the short minutes, which I have signed, and in 3354/99 I make the orders in the short minutes which I have initialled. 8 I should note that I handed down these at about half past 12 this afternoon, and then adjourned until 2.15 pm, so that they could be considered, and heard further submissions on them at 2.15 pm. I should add some further reasons to clarify why I have made the orders in the form that I have. 9 First, it is common ground that the Speights got their money back in March 1991. Mr Bhagat says it was before 13 March 1991, but the exact date does not matter very much, because the next date of importance is 1998. However, there is no actual reference in my reasons of 14 February 2002 to that date, so both parties having submitted the date, I will include it in the order of March 1991. 10 Secondly, the form of the questions commenced in many cases with the words, "If the answer to question X is in the affirmative", or something similar. 11 As things have turned out, some of the pivotal questions were answered in a conditional way, but this, technically speaking, means that some of the later questions cannot be answered directly. Apart from Q.7, I have given a specific answer, or indicated that the matter does not arise. In Q.7 I have amended the question to get rid of the problem. 12 The next point that must be made is that Mr Bhagat has raised a whole series of objections to the short minutes on the basis that when the alleged Deed of Assignment was made in February or May 1998, the Speights and the Greenlees ceased to have any interest in the Trust and Global Custodians Ltd had no interest before that date. However, this has lost its significance, if it be the case, for two reasons: (a) because of the institution of suit 3156 of 1999; and (b) because when I withdrew my previous reasons, it was because the suit had been reconstituted by consent to remove all those technical problems. 13 The next matter that I should mention is the form that the reasons for judgment took. In para 88, I mentioned that certain of the matters which were argued before me, and formed part of my 1999 judgment since withdrawn, had to my mind ceased to be of current relevance. Yet because I had made those determinations it was only fair to the parties that they should be kept current, and accordingly, they were put in the Appendix. 14 As para 74 of the judgment says, some of what I said was inconsistent with what Hill J found in Trustees of Estate Mortgage Fighting Fund Trust v Federal Commissioner of Taxation (2000) 175 ALR 482, a decision that all parties seem to have adopted as being correct in the instant case. However, I took the view that in para 88 the problems relative to amendment of the trust deeds were of little current significance. 15 Today both parties argued that that was not right, particularly Mr Margo SC and Mr Spencer for the plaintiffs, and Mr Margo asked me to make order 3 in his draft minutes in one form or another. 16 A problem is that the Appendix in the judgment, paras 122 to 124, could be said not to have decided these questions definitively. Mr Bhagat says that that is where I should leave it. On the other hand, Mr Margo SC and Mr Spencer say that the answers well appear from inference, at least from 122 to 124, and the matters here should be definitively decided, because the Court of Appeal might just as well deal with that matter, as all the other matters, and that it is necessary to give complete answers to the suit. Although Mr Bhagat opposes that, I think that is the right approach. 17 The three matters that should be commented on are first, in para 124(3) I set out Mr Bhagat's interpretation of the phrase "unless all the beneficiaries agree" in cl 9.1 of the deed. I do not adopt that construction. It is not necessary to go further, because if that construction is wrong, then the proposed order 3 should follow. Furthermore, what I said in 124(4) is my decision and the word "may" should be taken out. 18 The other matter is with 122. The exercise of a power to amend is a very technical matter. Up until the Conveyancing Act, or up until the Imperial Laws Application Act, the only way one could amend a trust, technically, was if the original deed contained uses in favour of the settlor to revoke and to re-appoint. It is a very technical matter, and is dealt with in Thomas on Powers (Sweet & Maxwell, London, 1998) Chapter 13. As the learned author points out in para 13-11 at p 563, every such power reserved in a deed will be construed strictly. Authority such as Hele v Bond (1717) Precedents in Chancery 474; 24 ER 213, and Evans v Saunders (1855) 6 De GM & G 654 at 671; 43 ER 1387 at 1394 bear this out. 19 Although it is possible that the deed is drafted in a sufficiently wide way to allow even a retrospective power of amendment; see eg Gra-Ham Australia Pty Ltd v Perpetual Trustees WA Limited & Ors (1989) 1 WAR 65, this present deed is not sufficient to do that. Accordingly I make order 3 in the short minutes. 20 I should add that Mr Bhagat also questions the locus of the plaintiffs to obtain order 3, but in my view on the facts as I have found them, locus standi is there. 21 The remaining matter is that Mr Margo SC and Mr Spencer have asked that in aid of the declaration, order 7, as the plaintiffs are entitled to access to documents and information of the Trust, I should appoint Mr Green as receiver of part of the Trust property. This question, together with allied questions, I have reserved until Friday of next week. However, I should say that prima facie there is a lot of good sense in proceeding along this route. I indicated the advantages of receivers and the role they can play in Glazier Holdings Pty Limited v Australian Mens Health Pty Ltd (30 April 1998, unreported) which was applied and supplemented by Warren J in her judgment in Yunghanns v Candoora No 19 Pty Ltd (No 2) (2000) 35 ACSR 34 at [46] to [52] and [64] to [82]. 22 One of Mr Bhagat's expressed fears in the matter, which one can see he has some basis for holding, is that information about the Trust should not fall into what I might colloquially call enemy hands. The intervention of the receiver as an officer of the Court, who would have duties of confidentiality, would allow there to be an assurance given to the Court, if it be the case, that there was nothing wrong with the administration of the Trust, or alternatively, that there was further action that should be taken, without disclosing to any enemy intimate details. 23 Accordingly, I indicate that I have some inclination to make order 4, but not to include in 4(d) the words "and the parties". So that in the first instance the receiver's report would be to the Court. But I merely indicate this so that everyone will be ready to argue the matter next Friday. So for these reasons I make the orders that I have indicated.

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