Reliance Financial Services Pty Ltd v Antalija Developments No 4 Pty Ltd [2022] NSWSC 519

Procedural Posture

Equity Proceedings Concerning Contract, Statutory Misleading or Deceptive Conduct, Unit Trust and Alleged Breaches of Trust / Principal Judgment After Hearing of the Plaintiffs' Claim Against the First Four Defendants; Outstanding Issues and Short Minutes of Order Deferred

Legal Issues

1. 1 ['What terms bound Antalija No 4 and the unit holders concerning contribution of capital to the Unit Trust, payment of interest to any unit holder contributing more than a proportionate share, and distribution of proceeds of the Moncrieff land development after payment of costs.' 'Whether Antalija No 4 should be replaced as trustee of the Unit Trust for breach of duty or any other reason, and, if so, who should be appointed replacement trustee.' 'Whether Antalija No 4 or a replacement trustee should be ordered to furnish an account of the affairs of the Unit Trust, and the form of any account.' 'Whether clause 9(e) and (f) of the Unit Holders Agreement was binding or should be declared void because execution was induced by misleading or deceptive conduct by Mr Cassaniti as agent for Ms Morvillo.' 'Whether Antalija No 4 breached trust by borrowing $2,075,000 from St George Bank on security of the Moncrieff land and paying that amount to Antalija No 2.' "Whether Antalija No 4 breached trust by repaying capital contributions to Ms Price and Antalija Constructions or by entering into the defendants' solicitors' costs agreement."]

Ratio Decidendi

Clause 9(e) and (f) of the Unit Holders Agreement did not reflect the real informal agreement made in the quasi-family commercial context. Mr Cassaniti, acting with authority for Ms Morvillo, procured execution of the Unit Holders Agreement after Mr Katavic asked whether he needed legal or accounting advice and was told the documents contained standard or simple terms, while clause 9 imposed unusual obligations that were not explained. That conduct was misleading or deceptive in trade or commerce and induced execution, so the Court should exercise powers under ss 237(1)(a)(i) and 243(a)(ii) of the Australian Consumer Law to declare clause 9(e) and (f) void ab initio. The plaintiffs did...

Court Disposition

Clause 9(e) and (f) of the Unit Holders Agreement should be declared void ab initio; most breach of trust allegations were not established on the present record; final relief concerning replacement of trustee, account, asset preservation orders, tax, costs and consequential matters was deferred for short minutes and...

Orders

• ['The parties should confer for the purpose of preparing short minutes of order to give effect to these reasons.' 'The short minutes should include case management orders to deal with all outstanding issues.']