Knudsen v Kara Kar [2000] NSWSC 715

Knudsen v Kara Kar [2000] NSWSC 715

Because Schedule 4 to the 1990 Rules was incomplete, a dispositive gap existed; equity imposed a resulting trust so withdrawal entitlements were governed by clause 15 of the 1979 trust deed, granting the trustee a discretion to pay out the full employer contribution account. The trustee, through its directors, had exercised this discretion to pay the plaintiffs the full credit balances. Plaintiffs were therefore entitled to payment of the balance of those amounts, less previous withdrawals.

Parties
Plaintiff: Niels Knudsen; Plaintiff: Suchindra Knudsen; Defendant: Kara Kar Holdings Pty Ltd; Defendant: William Yardy; Defendant: Jennifer Yardy
Jurisdiction
Australia
Judgment Date
21 July 2000
Procedural Posture
Equity Proceedings Regarding Trust and Superannuation Entitlements / Judgment Following Remittal and Rehearing With Answers to Separate Questions Under Part 31 of the Supreme Court Rules
Outcome
Separate questions answered in favour of the plaintiffs; judgment to be entered for them in sums reflecting full account entitlements (less amounts already received), with interest to be determined or agreed; directions for short minutes of order and costs argument; answers to separate questions provided.
Legal Topics
Resulting Trusts, Trust Deed Construction, Board of Directors' Powers, Withdrawal Benefits Under Superannuation Trust, Judicial Review of Discretionary Trustee Powers
Equity Superannuation Trusts Corporations Resulting Trusts Trust Deed Construction Board of Directors' Powers Withdrawal Benefits Under Superannuation Trust +1 more

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Parties

Niels Knudsen

Plaintiff

Suchindra Knudsen

Plaintiff

Kara Kar Holdings Pty Ltd

Defendant

William Yardy

Defendant

Jennifer Yardy

Defendant

Procedural Posture

Equity Proceedings Regarding Trust and Superannuation Entitlements / Judgment Following Remittal and Rehearing With Answers to Separate Questions Under Part 31 of the Supreme Court Rules

Legal Issues

  1. 1 Proper construction of the trust instrument governing the Kara Kar Employees Pension Fund and rights to withdrawal benefits; whether the trustee exercised its discretion to make distributions; effect of an incomplete Schedule specifying proportions of entitlement; whether clause 15 of the 1979 trust deed operated by resulting trust in light of incomplete dispositive provisions; whether Court should intervene in or review trustee's decision.

Ratio Decidendi

Because Schedule 4 to the 1990 Rules was incomplete, a dispositive gap existed; equity imposed a resulting trust so withdrawal entitlements were governed by clause 15 of the 1979 trust deed, granting the trustee a discretion to pay out the full employer contribution account. The trustee, through its directors, had exercised this discretion to pay the plaintiffs the full credit balances. Plaintiffs were therefore entitled to payment of the balance of those amounts, less previous withdrawals.

Court Disposition

Separate questions answered in favour of the plaintiffs; judgment to be entered for them in sums reflecting full account entitlements (less amounts already received), with interest to be determined or agreed; directions for short minutes of order and costs argument; answers to separate questions provided.

Orders

  • Order that separate questions be determined under Part 31 of the Supreme Court Rules.
  • Question 1: Yes. Each plaintiff was entitled to the full amount standing to the credit of their Employer Contribution Account as of 1 March 1991.