AKHIL HOLDINGS LTD v BANQUE COMMERCIALE SA (IN LIQ) [1988] NSWCA 4

AKHIL HOLDINGS LTD v BANQUE COMMERCIALE SA (IN LIQ) [1988] NSWCA 4

Whether or not an express trust was established, a resulting trust arose from Akhil Holdings' provision of consideration for the shares allotted to the Bank. Unauthorised subsequent transfers of those shares by the Bank and Deauville were breaches of trust. Mr Messara, having knowledge of the trust and assisting in the breaches, is also liable. The deed of release does not bar the claim because at the time of release Akhil Holdings was unaware of the breach, and it would be unconscionable to apply the release to the current claim. Limitation defences do not apply because the claims involve fraudulent breach of trust. The appeal is allowed and Akhil Holdings is entitled to damages, with...

Parties
Appellant: Akhil Holdings Ltd; First Respondent: Banque Commerciale SA (in liq); Second Respondent: Deauville Nominees Pty Ltd; Third Respondent: Maurice Messara
Jurisdiction
Australia
Judgment Date
15 November 1988
Procedural Posture
Appeal / Decision on Appeal From Trial Judgment
Outcome
Appeal allowed
Legal Topics
Resulting Trusts, Breach of Trust, Conversion, Constructive Trusts, Fiduciary Duties, Limitation Statutes, Deed of Release, Burden of Proof, Failure to Call Evidence
Equity Trusts Evidence Appeal Limitation Resulting Trusts Breach of Trust Conversion +6 more

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Parties

Akhil Holdings Ltd

Appellant

Banque Commerciale SA (in liq)

First Respondent

Deauville Nominees Pty Ltd

Second Respondent

Maurice Messara

Third Respondent

Procedural Posture

Appeal / Decision on Appeal From Trial Judgment

Legal Issues

  1. 1 Whether an express or resulting trust existed over shares allotted as part of consideration for sale of mining rights
  2. 2 Whether respondents breached trust or were liable for breach of trust regarding unauthorised transfer of shares
  3. 3 Whether a deed of release settled claims based on breach of trust

Ratio Decidendi

Whether or not an express trust was established, a resulting trust arose from Akhil Holdings' provision of consideration for the shares allotted to the Bank. Unauthorised subsequent transfers of those shares by the Bank and Deauville were breaches of trust. Mr Messara, having knowledge of the trust and assisting in the breaches, is also liable. The deed of release does not bar the claim because at the time of release Akhil Holdings was unaware of the breach, and it would be unconscionable to apply the release to the current claim. Limitation defences do not apply because the claims involve fraudulent breach of trust. The appeal is allowed and Akhil Holdings is entitled to damages, with...

Court Disposition

Appeal allowed

Orders

  • Judgment and orders of Cohen J set aside.
  • Declaration that each respondent holds in trust for the appellant any interest still held in the subject shares.