Luke v Waite [1905] HCA 5

Luke v Waite [1905] HCA 5

The subscriptions were voluntary donations to the company to further its objects and not impressed with a specific trust. Where an option for share application was given, this constitutes consideration. There is no resulting trust in favour of the Adelaide subscribers; the fund belongs to the proposed company's shareholders.

Parties
Appellants; Plaintiffs: Thomas Luke, Arthur Woodfall and Wakefield Chambers; Respondent (as to Declaration), Defendant Representing Shareholders: William Charles Palmer; Respondent (as to Fund Ownership), Defendant Representing Adelaide Subscribers: Peter Waite
Jurisdiction
Australia
Judgment Date
18 March 1905
Procedural Posture
Appeal / Appeal to High Court From the Supreme Court of Victoria
Outcome
Appeal allowed. Judgments below discharged. Respondent Waite's counterclaim dismissed.
Legal Topics
Resulting Trust, Failure of Purpose, Subscriptions to Unincorporated Company, Voluntary Gifts, Mandate, Charitable Gifts, Inference From Undisputed Fact
Trusts Contract Law Resulting Trust Failure of Purpose Subscriptions to Unincorporated Company Voluntary Gifts Mandate Charitable Gifts +1 more

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Parties

Thomas Luke, Arthur Woodfall and Wakefield Chambers

Appellants; Plaintiffs

William Charles Palmer

Respondent (as to Declaration), Defendant Representing Shareholders

Peter Waite

Respondent (as to Fund Ownership), Defendant Representing Adelaide Subscribers

Procedural Posture

Appeal / Appeal to High Court From the Supreme Court of Victoria

Legal Issues

  1. 1 Whether subscriptions given by Adelaide subscribers for 'the objects of the company' constituted a trust or an absolute gift
  2. 2 Whether there was a resulting trust in favour of subscribers on failure of the purpose
  3. 3 Whether an option to apply the funds as payment for shares constitutes consideration excluding resulting trust

Ratio Decidendi

The subscriptions were voluntary donations to the company to further its objects and not impressed with a specific trust. Where an option for share application was given, this constitutes consideration. There is no resulting trust in favour of the Adelaide subscribers; the fund belongs to the proposed company's shareholders.

Court Disposition

Appeal allowed. Judgments below discharged. Respondent Waite's counterclaim dismissed.

Orders

  • Declaration that the fund is held by appellants on behalf of the subscribers for shares in the proposed company.
  • Costs of the action and counterclaim to appellants out of the fund; surplus to costs of the defendant Palmer, any further surplus to costs of Waite up to counterclaim.