The Court has delivered two judgments to deal with issues that have arisen out of the one statement of claim in these proceedings but concerning different parties: see Reliance Financial Services Pty Ltd v Antalija Developments No 4 Pty Ltd [2022] NSWSC 519 and Reliance Financial Services Pty Ltd v Antalija Developments No 4 Pty Ltd (No 2) [2023] NSWSC 141.
These reasons for judgment deal with a claim made by the third plaintiff, Marginata Securities Pty Ltd (Marginata), against the fifth defendant, Ms Sue Price-Arcidiacono (who has for convenience been called Ms Price in the judgments that have been published). This claim is distinct from those dealt with in the earlier judgments.
The version of the statement of claim that is relevant to the claim that is the subject of these reasons is the fourth further amended statement of claim. The relief sought by Marginata is as follows (I have assigned the numbers 1 and 2 to the prayers for relief as the original numbers of those prayers have been deleted from the pleading):
"Marginata…claims:
1. A declaration that any sum payable by Antalija 4 to Sue Price, being her entitlement to a distribution of profits, is charged for payment to Marginata.
2. An order that Antalija 4 pay any sum payable to Sue Price, being her entitlement to a distribution of profits, to Marginata."
The party called Antalija 4 is Antalija Developments No 4 Pty Ltd (Antalija 4), which is the first defendant in these proceedings. The only present relevance of Antalija 4 is that it is the trustee of a unit trust called the Antalija Unit Trust that was established by a deed of trust made on 29 November 2016 (the Unit Trust Deed). Ms Price is a Registered Unit Holder under the terms of the Unit Trust Deed and holds 25 of the 100 units that have been issued. The property that was held by Antalija 4 as trustee for the Antalija Unit Trust has been sold with the result that the net profit from the business of the Antalija Unit Trust is available for distribution to all Registered Unit Holders in accordance with their entitlement under the Unit Trust Deed. As such, Ms Price is entitled to a distribution from the Antalija Unit Trust. This entitlement is the subject of Marginata's claim against Ms Price. In due course, I will refer to terms of the Unit Trust Deed that are relevant to the determination of Marginata's claim.
Ms Price holds the units in the Antalija Unit Trust in her capacity as trustee of the Price-Arcidiacono Discretionary Trust that was created by a Deed of Settlement made on 29 November 2016 (the Discretionary Trust Deed).
Ms Price is an undischarged bankrupt. Ms Price's Official Trustee has not become involved in these proceedings or sought to resist Marginata's claim against Ms Price. That is likely because Ms Price has no beneficial interest in the property the subject of Marginata's claim so that the property is not available for distribution to Ms Price's unsecured creditors. Under the terms of the Discretionary Trust Deed, an undischarged bankrupt is prohibited from occupying the office of trustee. In the circumstances, Ms Price is a bare trustee of the property of the trust pending the appointment of a new trustee, should that be done. Consequently, notwithstanding her bankruptcy, and pending the appointment of a new trustee, Ms Price has defended Marginata's claim for the benefit of the beneficiaries of the Price-Arcidiacono Discretionary Trust.
The only issue that requires determination is whether the share in the net profit from the operation of the Antalija Unit Trust that Antalija 4 is obliged to pay to Ms Price under the Unit Trust Deed is the subject of a valid charge under a Deed of Loan made on 15 March 2018 (the Deed of Loan). As outlined below, the Deed of Loan was made for the sole purpose of providing financing to Ms Price for the purchase of an apartment in Campbell in the Australian Capital Territory (Apartment).
There were 10 parties to the Deed of Loan, the only relevant ones of which are Marginata and Ms Price, who were described in the statement of the parties as follows:
"1. Marginata Securities Pty Ltd…ATF The Marginata Securities Trust ("Lender") of [address].
2. Susan Gay Price-Arcidiacono (in her own capacity, in her capacity as trustee of the Price-Arcidiacono Discretionary Trust and in her capacity as trustee of the Susan Price-Arcidiacono Discretionary Trust) ("Borrower") of [address]…"
It is to be noted that Ms Price became a party to the Deed of Loan in three specified capacities that were described using words with the effect "in her capacity".
It is necessary to note the following recitals to the Deed of Loan, which are set out under the heading "Background":
"A. The Borrower (specifically in her capacity as trustee for the Price-Arcidiacono Discretionary Trust) has entered into a contract dated 30 March 2016 for the purchase of land described as follows ("Apartment"): [the title details for a property at Campbell in the Australian Capital Territory are then specified]…
B. The Borrower is unable to complete her purchase of the Apartment without additional funding and requests finance from the Lender to allow her to do so. The amount of finance sought is $1,450,000.00 ("Principal"). The Guarantors consent to and support this request. The Principal is to be understood as the precise amount advanced by the Lender."
The Deed of Loan also recited that on completion of the purchase of the Apartment, it would be expected that the Borrower would be indebted to a third party related or associated with the vendor, for around $800,000, which would be secured by a registered mortgage or other security. The relevant Repayment Date for the loan to be made by Marginata was 12 months from the date of the Deed of Loan. There was also a recital that the Deed of Loan did not discharge or replace other loan agreements made between the Borrower and the Lender or related entities.
Clause 1.2 of the Deed of Loan provided: "The Principal is only to be used by the Borrower for the purposes of completing her purchase of the Apartment". Clause 1.4 provided that the Lender (which must be a mistake for the Borrower) was required to repay the Principal and pay interest by the Repayment Date. It is only necessary to record that the Principal and interest has not been fully repaid by Ms Price.
In response to the submissions made on behalf of Ms Price concerning the proper construction of the relevant provisions of the Deed of Loan, Marginata relied upon clause 14, which provides: "This deed is to be construed in favour of the Lender…"
The resolution of the dispute turns upon the proper construction of clause 18 of the Deed of Loan, which relevantly provides (noting that the idiosyncratic numeration of the headings and clauses is not material):
"7 Securities
18. As security for the due and punctual performance by the Borrower of all the Borrower's obligations to the Lender, which obligations include the payment of all amounts owing and/or that come to be owing under this deed (including because of any guarantee), the Borrower:
a. Mortgages in favour of the Lender all her legal right, title and interest in any land (including future-acquired property and irrespective of the nature of that legal right or capacity held and including the Apartment);
b. Charges in favour of the Lender, all her equitable right, title and interest in any land (current as well as future-acquired and irrespective of capacity held);
c. Grants in favour of the Lender a security interest in, registrable under the PPSA, and also an equitable charge over, all her assets (including future assets)…
It is Marginata's case that it is entitled to a charge over Ms Price's entitlement as trustee of the Price-Arcidiacono Discretionary Trust in the distribution under the Antalija Unit Trust by operation of clause 18(b) or clause 18(c) of the Deed of Loan. Ms Price resists this claim.
Marginata did not rely upon clause 18(a) of the Deed of Loan because that charged Ms Price's legal right, title and interest in any land. While Ms Price may have had legal rights as a Registered Unit Holder under the Unit Trust Deed, she at no time held any legal interest in any land owned by Antalija 4 as trustee of the Antalija Unit Trust.
Marginata's reliance upon clause 18(b) and 18(c) of the Deed of Loan started with the proposition that the former charged "all her equitable right etc" and the latter granted an equitable charge over "all her assets"; in respect of which the reference to "her" related back to the definition of Borrower, which described Ms Price in "her" three capacities, one of which was "her capacity as trustee of the Price-Arcidiacono Discretionary Trust". Those provisions of the Deed of Loan, Marginata submitted, established an intention on Ms Price's part to charge property of which she was possessed as trustee of that trust. That being the case, the only property that could have been intended to be charged was the property that Ms Price held as trustee.
Marginata submitted that clause 18(b) applied because Ms Price, as the legal owner of units in the Antalija Unit Trust, had an equitable interest in the land that was the property of that trust. When that property was sold, according to Marginata's submission, Ms Price's interest in the land followed the sale proceeds.
Then, Marginata submitted, in the alternative, that clause 18(c) applied because whatever character the property the subject of the Antalija Unit Trust took, Ms Price's interest as a unit holder in that trust fell within the expression "all her assets". According to Marginata's submission, the expression "all her assets" was not confined to property of which Ms Price was the beneficial owner. That is because, of the three capacities in which Ms Price became the Borrower, only one of which was her personal capacity. As explained, one of the capacities was as trustee of the Price-Arcidiacono Discretionary Trust. The inclusion of this capacity in the description of Ms Price as Borrower would have no content if clause 18(c) was construed as being confined only to catch property of which Ms Price was the beneficial owner.
Ms Price's response to Marginata's reliance upon clause 18(b) was to argue that, on the proper construction of the relevant provisions of the Unit Trust Deed, Ms Price did not have any interest in any land held for the time being by Antalija 4 as trustee, and indeed did not have any interest in any property of the Antalija Unit Trust.
Ms Price also submitted that clause 18(c) did not create a charge over Ms Price's interest in the Antalija Unit Trust, because the proper construction of the expression "all her assets" was that it was limited to assets beneficially owned by Ms Price. She submitted that any superficial appearance that "all her assets" could extend to assets that were in her name as trustee for the beneficiaries of a trust was dispelled by an analysis of the structure of clause 18. That analysis required that it be noted that clause 18(a) ended with the words: "(… and irrespective of the nature of that legal right or capacity held…)" and clause 18(b) ended with the words "(… and irrespective of capacity held)". Thus, the first two subclauses expressly state that the charge catches the property described irrespective of the capacity in which Ms Price holds the property. An equivalent parenthetical statement is missing from clause 18(c). Ms Price submitted that the Court should not simply ignore the omission of the parenthetical elaboration from this sub-clause. Ms Price further submitted that her argument was strengthened by the fact that clause 18(c) did contain a parenthetical elaboration, but it was a different one, being: "(including future assets)". This means, according to Ms Price, that the Court should conclude that the omission of the extension of the charging clause to include property held by Ms Price in any capacity in clause 18(c) was intentional.
The principles that govern the proper approach to the construction of commercial agreements are well settled. It will be sufficient to record the following observations made by French CJ, Hayne, Crennan and Kiefel JJ in the High Court in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 (footnotes omitted) at [35]:
"Both Verve and the Sellers recognised that this Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption "that the parties… intended to produce a commercial result". A commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience".
A preliminary issue that requires consideration is the significance of Marginata's reliance upon clause 14 of the Deed of Loan which, in its terms, requires that the deed be construed in favour of Marginata, as the Lender. This novel clause is the invention of the drafter who, it may be inferred, acted for Marginata. It appears to be intended to have the reverse effect of the maxim verba chartarum fortius accipiuntur contra proferentem, in that its application would lead to contentious issues of construction being construed in favour of the party responsible for the difficulty, not against it. The clause cannot have effect in accordance with its literal meaning because, if it did, every argument about the meaning of the Deed of Loan would be required to be decided in favour of Marginata, however absurd Marginata's claim was. Clause 14 is in that respect literally much more extensive than the contra proferentem rule, which, to the extent that it may currently be recognised, "means that an ambiguous document is construed against the party who put it forward": see Heydon J.D, Heydon on Contract: The General Part (2019, Thomson Reuters) at [8.850]. As clause 14 cannot have been intended to apply literally, there must be doubt as to its true effect, if any. If a provision in the Deed of Loan has one meaning on the application of the accepted rules of construction, clause 14 cannot have the effect that it has a different meaning contended for by Marginata. I am satisfied in the present case that it is possible for the Court to construe the relevant provisions of the Deed of Loan without having regard to any provision that skews the outcome in favour of Marginata. It may be that there is a residual scope for clause 14 to operate in cases where the application of the rules of construction exposes a true ambiguity. That is not the case here, and it is not necessary for the Court to determine the effectiveness of clause 14.
Clause 18(b) will have the effect of charging Ms Price's interest in the Antalija Unit Trust in favour of Marginata if that interest is an equitable interest in land.
The determination of this issue requires an analysis of the relevant terms of the Unit Trust Deed, in order to determine in the first instance the terms that govern Ms Price's legal rights in relation to any land owned by Antalija 4 as trustee of the Antalija Unit Trust.
Ms Price accepted that the primary asset of the Antalija Unit Trust for most of its existence was land in the ACT upon which a development project was constructed. In due course, the individual lots in the development were sold by Antalija 4 and the property of the trust was converted into a fund of money. As I understand Ms Price's position, she accepted that if clause 18(b) created a charge in favour of Marginata over Ms Price's interest in the Antalija Unit Trust while the principal asset of the trust was land, that charge continued to operate when the property was turned into money.
Clause 2 of the Unit Trust Deed created the trust by which Antalija 4 held the Trust Fund, and clause 3 provides as follows:
"3. THE TRUSTS OF THE FUND
(a) The Trustee should hold the capital and income of the Trust Fund UPON TRUST for the Registered Unit Holders in proportion to the number of Units held by them.
(b) The Trustee shall at the request of a Registered Unit Holder pay, apply or otherwise deal with the share of the income of the Trust Fund to which such Registered Unit Holder is entitled in such manner as such Registered Unit Holder may from time to time direct.
(c) A Registered Unit Holder shall be entitled as herein provided to a beneficial interest as a Registered Unit Holder in the Trust Fund but the Registered Unit Holder shall not be entitled, other than as herein provided:
(i) To interfere or to question the exercise or non-exercise by the Trustee of its rights and powers in dealing with the Trust Fund or any part thereof;
(ii) To exercise any rights powers or privileges in respect of any investment forming part of the Trust Fund; or
(iii) To require the transfer to him of any of the assets or property which from time to time constitute the Trust Fund."
Clause 4 of the Unit Trust Deed governs the period of the trust and its determination. It deals with the entitlement of Registered Unit Holders on the determination of the trust, as follows:
"4. PERIOD OF TRUST AND DETERMINATION THEREOF
…
(b) Upon termination of the trusts declared the investments of the Fund shall be realised and the proceeds of the realisation and other available cash shall be distributed among the Registered Unit Holders in proportion to the number of Units held by them."
Relevantly, clause 5 deals with the entitlements of Registered Unit Holders as follows:
"5. UNITS
(a) The beneficial interest in the Fund shall be divided into Units.
(b) Every Unit shall confer an interest in the Fund in accordance with the provisions of Clause 3 hereof but shall not confer any interest in any particular part of the Fund or of any investment but only such interest in the Fund as is conferred on a Registered Unit Holder under the provisions of this Deed…"
Clause 9 of the Unit Trust Deed permits Registered Unit Holders to redeem their units with the consent of Antalija 4 exercised at its discretion. Upon redemption, Antalija 4 may return the capital associated with the units and this may include "the distribution of an appropriate part of the Trust Fund to the relevant Registered Unit Holder". As a practical matter, in the case of the Antalija Unit Trust, that would not involve the distribution of any land held in the trust to Ms Price, because there was only one parcel of land and Ms Price held 25% of the units: see clause 5(d).
Clause 11 of the Unit Trust Deed authorises Antalija 4 to invest the Trust Fund in any kind of asset, and to change investment types, as it wishes. It is not bound to invest in land. Antalija 4 is authorised to enter into dealings with the property of the Trust Fund in a manner inconsistent with Registered Unit Holders having any specific proprietary rights in any assets of the Trust Fund.
Ms Price's case is that the collective effect of these provisions of the Unit Trust Deed is that she did not have an equitable interest in any land for the purposes of clause 18(b) of the Deed of Loan, and specifically, Ms Price relied upon that part of clause 5(b) that provides that the Units held by Ms Price "shall not confer any interest in any particular part of the Fund or any investment".
In response, Marginata claims that as in fact the primary asset of the Antalija Unit Trust was land, and Ms Price as a Registered Unit Holder's interest in the trust was a beneficial one, she had an equitable interest in the land, notwithstanding that clause 5(b) has the effect that she did not have an equitable interest in any particular part of the Trust Fund, including that land. Marginata's case is that Ms Price has an equitable interest in the whole of the Trust Fund that she shares with other Registered Unit Holders, and that it is immaterial that she did not have an equitable interest in any specific parcel of land to the exclusion of other Registered Unit Holders. Under clause 3, Antalija 4 holds the whole of the Trust Fund upon the trusts declared in the Unit Trust Deed. Clause 3(a) specifically provides that Antalija 4 holds the capital and income of the Trust Fund upon trust for all Registered Unit Holders in proportion to the number of Units held by them. It is immaterial, Marginata submits, that Ms Price, as Registered Unit Holder, is only entitled by clause 3(b) to require Antalija 4 to transfer her proportional share of the income to Ms Price, and that, upon termination of the trust, Ms Price would under clause 4(b) only be entitled to a share of the proceeds of the realisation of the Trust Fund. In short, according to Marginata's submission, all clause 18(b) of the Deed of Loan requires is that Ms Price have an equitable interest in land, and it is immaterial that that interest is not exclusive and that the interest does not entitle Ms Price to deal with the land or any specific part of it or to require that it be transferred to her.
Marginata supported its submissions by relying on the decision of White J (as his Honour then was) in Jonsue Investments Pty Ltd v Balweb Pty Ltd [2013] NSWSC 325; (2013) 9 ASTLR 460 (Jonsue). Marginata relied upon the fact that the decision in Jonsue was followed by Master Sanderson in Council Club Pty Ltd v Paradise Island Pty Ltd [2020] WASC 218 (Council Club).
The High Court decided in CPT Custodian Pty Ltd v Commissioner of State Revenue; Commissioner of State Revenue v Karingal 2 Holdings Pty Ltd (2005) 224 CLR 98; [2005] HCA 53 (CPT Custodian) that it will not necessarily be the case where a trustee holds property on trust that some other party must be the beneficial owner of that property (at [25]). It is necessary in each case to determine the legal effect of the particular terms that create the trust. In each case it is necessary to identify the criterion that must be satisfied in relation to the nature of the interest of a beneficiary of the trust in the assets of the trust. That will depend upon the rights granted to the beneficiary by the terms of the trust. In that case, the issue was whether a beneficiary of the trust was an equitable owner of the trust property for the purpose of a taxing statute.
In Jonsue, White J was concerned with whether a beneficiary who was a unit holder of a unit trust had an "equitable estate or interest in land" for the purpose of s 74F(1) of the Real Property Act 1900 (NSW), so that the beneficiary could lodge and maintain a caveat against the title to land that constituted part of the trust fund of the unit trust. His Honour held, on the basis of the terms of the unit trust deed, that the unit holder did have a sufficient interest in the land. It was material to his Honour's reasoning that clause 7(a) of the trust deed provided that the beneficial interest in the trust fund shall be vested in the unit holders for the time being, and that clause 8(a) provided that each unit shall entitle the registered holder together with the registered holders of all other units "to the beneficial interest in the Trust Fund as an entirety but subject thereto shall not entitle a Unit Holder to any particular security or investment comprised in the Trust Fund or any part thereof…". Further, clause 8(a) provided that no unitholder was entitled to the transfer to the unit holder of any property comprised in the trust fund. There was no term that had the effect of denying unit holders any interest in the property in the trust fund.
White J explained why, following the decision of Brooking J in Costa & Duppe Properties Pty Ltd v Duppe [1986] VR 90 (Duppe), the unit holder had a proprietary interest in land that constituted part of the trust fund that was sufficient to support the lodgement of a caveat. That proprietary interest was recognised by clauses 7(a) and 8(a) (as happened also to be the case in Duppe). White J analysed other authorities, including CPT Custodian, which had found that the interest vested in unit holders by the terms of the relevant trust deeds did not satisfy the criteria that were required to be satisfied in the particular cases. His Honour concluded, as far as is relevant to the present case:
"[37] In none of the above cases was it necessary for the court to decide whether a unitholder had a proprietary interest in the assets of the trust as distinct from having to decide whether the unitholder was the equitable owner of the trust assets. For the reasons above, CPT Custodian did not decide that the unitholders or the sole unitholder lacked any proprietary interest in the trust assets. That might have been the position because the trust deed in CPT Custodian expressly provided that no unit conferred any interest in any particular part of the Trust Fund or any investment. There was also a clause precluding a unitholder from lodging a caveat claiming an estate or interest in any real estate (at [20]). But the High Court did not decide whether the unitholders had a proprietary interest falling short of ownership.
[38] The trust deed in the present case does not include a term that unitholders do not have any interest in any asset comprising the trust fund. Clause 8(a) provides that the unitholders are entitled to the beneficial interest in the trust fund as an entirety, but subject thereto no unitholder is entitled to any particular security or investment or any part thereof. To say that a unitholder is not entitled to a particular security or investment or part thereof is not the same as saying that a unitholder does not have any interest in any particular security or investment. In Duppe, Brooking J held that that provision recognised that no unitholder could claim to have any particular asset appropriated to his share or transferred to him otherwise than in accordance with the deed (at 96). I agree that that is the effect of the second part of cl 8(a).
White J then proceeded to consider whether the consequence was that the unit holder had an equitable estate or interest in the land for the purposes of s 74F(1) of the Real Property Act, which is a different question than the one now before the Court.
As did Master Sanderson in Council Club, I respectfully agree with the reasoning of White J in Jonsue and have nothing that I could usefully add.
It is necessary to focus on the fact that clause 18(b) of the Deed of Loan expressly creates a charge in favour of Marginata by Ms Price (in her capacity as trustee of the Price-Arcidiacono Discretionary Trust) of "all her equitable right, title and interest in any land". The clause does not charge any equitable interest of any particular description but charges any equitable interest that may happen to exist. That equitable interest does not have to satisfy any particular criteria that may have the consequence (as was the case in CPT Custodian) that even though there is an equitable interest, it is not of the requisite character to attract the relevant result.
I am satisfied that clause 3(a) of the Unit Trust Deed, which provides that Antalija 4 holds the capital and income of the Trust Fund upon trust for the Registered Unit Holders, is materially the same as clause 7(a) of the trust deed the subject of Jonsue, which provided that the beneficial interest in the trust fund shall be vested in the unit holders for the time being. Clause 3(c) of the Unit Trust Deed entitles each Registered Unit Holder "to a beneficial interest…in the Trust Fund" subject to restrictions as to how the beneficial interest can be exercised in a way that might impede Antalija 4 in performing its obligations as trustee. This provision is materially the same as clause 8(a) of the trust deed the subject of Jonsue, which entitled all unit holders "to the beneficial interest in the Trust Fund as an entirety". The restriction in clause 8(a) that the beneficial interest "shall not entitle a Unit Holder to any particular security or investment comprised in the Trust Fund or any part thereof and no Unit Holder shall be entitled to the transfer to him of any property comprised in the Trust Fund" is relevantly mirrored in clause 5(b) of the Unit Trust Deed. Significantly, no term in either trust deed provided that unit holders did not have any interest at all in the property of the trust fund. There is a material difference between unit holders collectively having beneficial ownership of the whole of the property in the trust fund but no interest in any particular part of the trust fund, and unit holders having no interest in the trust fund at all.
In these circumstances I am satisfied that Ms Price's interest as a Registered Unit Holder in the Antalija Unit Trust gave her an equitable interest in the whole of the property of the trust, including the land held by it, with the result that clause 8(b) of the Deed of Loan created a charge over that equitable interest in favour of Marginata.
Marginata is therefore entitled to succeed on its claim irrespective of whether or not a charge in its favour was also created by clause 18(c) of the Deed of Loan.
I am satisfied that the result would be the same if Marginata was only entitled to rely upon clause 18(c) of the Deed of Loan. That is because, as submitted by Marginata, the chapeau to clause 18 states that the Borrower mortgages, charges or grants security interests (as stated in the three sub-clauses) as security for the performance by the Borrower of all of the Borrower's obligations to Marginata. As extracted at [8] above, Borrower is defined in par 2 of the description of the parties as being Ms Price in her three separate capacities. Therefore, the reference to Borrower in the chapeau to clause 18 should be read in each case as if it expressed the three capacities. If that is correct, the reference to "her assets" in clause 18(c) would extend to Ms Price's personal assets and also the assets held by her as trustee of the two discretionary trusts. A parenthetical statement of the form "(irrespective of capacity held)" would not be necessary to extend the charge to the assets held as trustee of the discretionary trusts. Its absent would be immaterial. The inclusion of the parenthetical statement in clause 18(a) and (b) would therefore be surplusage.
I am reinforced in the conclusions that I have reached concerning the application of clause 18(b) and (c) of the Deed of Loan by a consideration of the purpose for the term Borrower being as including Ms Price personally and Ms Price in her capacity as trustee of the Price-Arcidiacono Discretionary Trust. The loan was borrowed from Marginata for the benefit of the Susan Price-Arcidiacono Discretionary Trust. Yet Ms Price did not become a party to the Deed of Loan solely as trustee of that trust. Although the details do not emerge from the terms of the Deed of Loan or the evidence, the Court must infer that Ms Price personally and Ms Price as trustee of the Price-Arcidiacono Discretionary Trust considered it to be in her and that trust's interests to become party to the Deed of Loan as part of the "Borrower". If Ms Price did not have an equitable interest in any land held by Antalija 4 as trustee of the Antalija Unit Trust (so that clause 18(b) did not apply) and clause 18(c) was limited in its application to Ms Price's personal assets, there would have been no purpose for the parties to the Deed of Loan agreeing to Ms Price becoming a party in her capacity as trustee of the Price-Arcidiacono Discretionary Trust. The only commercial reason for Ms Price to become a party in that capacity was to cause the assets of the Price-Arcidiacono Discretionary Trust to be charged to secure the loan. The only relevant asset was Ms Price's interest as unit holder in the Antalija Unit Trust. The only substantial asset of that trust was expected to be land. The commercial efficacy of the Deed of Loan in achieving the apparent intent of Ms Price being a party, described as Borrower, in her capacity as trustee of the Price-Arcidiacono Discretionary Trust, depended upon one of the sub-clauses of clause 18 creating a security over the assets of that trust.
The orders of the Court are:
1. Declaration that any sum payable by the first defendant to the fifth defendant, being her entitlement to a distribution as a Registered Unit Holder of the Antalija Unit Trust, is charged for payment by the fifth defendant in her capacity as the trustee of the Susan Price-Arcidiacono Discretionary Trust to the third plaintiff of all monies due by the fifth defendant in that capacity as Borrower under the Deed of Loan made on 15 March 2018 between the third plaintiff, the fifth defendant in various capacities, and other parties.
2. Order that the first defendant pay any sum payable to the fifth defendant, being her entitlement to a distribution as a Registered Unit Holder of the Antalija Unit Trust, to the third plaintiff.
3. Order the fifth defendant to pay the third plaintiff's costs of the claim in the statement of claim, as amended, insofar as the costs relate to the claim that has led to the Court making these orders.
4. Grant leave to the parties on seven days' notice by arrangement with the Associate to Robb J to apply to the Court for any orders necessary or desirable to give effect to these reasons for judgment, including any further or varied order consistent with these reasons.
[3]
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Decision last updated: 31 March 2023