Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd & ors [2000] NSWSC 1120

Perpetual Trustees (WA) Ltd v Equuscorp Pty Ltd & ors [2000] NSWSC 1120

The Deed of Settlement operates as a covenant not to sue, not a release, so the Cherry v Boultbee equity applies to HK Capital Ltd as assignee. The trustee must retire when it is in a position to comply with its obligations under the trust deed upon appointment and approval of a new trustee.

Parties
Plaintiff: Perpetual Trustees (WA) Ltd; Defendants: Equuscorp Pty Ltd & Ors
Jurisdiction
Australia
Judgment Date
05 December 2000
Procedural Posture
Equity / Judgment on Issues of Construction and Trustee Retirement
Outcome
Deed construed as covenant not to sue. Cherry v Boultbee equity applicable. Trustee to retire when new trustee approved.
Legal Topics
Application of Cherry V Boultbee Equity to Assignee, Construction of Deed of Settlement, Nature of Release Vs Covenant Not to Sue, Retirement of Trustee Under Trust Deed and Corporations Law, Distribution of Trust Fund
Equity Corporations Law Trusts Deeds Application of Cherry V Boultbee Equity to Assignee Construction of Deed of Settlement Nature of Release Vs Covenant Not to Sue Retirement of Trustee Under Trust Deed and Corporations Law +1 more

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Parties

Perpetual Trustees (WA) Ltd

Plaintiff

Equuscorp Pty Ltd & Ors

Defendants

Procedural Posture

Equity / Judgment on Issues of Construction and Trustee Retirement

Legal Issues

  1. 1 Whether the Cherry v Boultbee equity applies to the assignee of the first defendant (HK Capital Ltd)
  2. 2 Whether the Deed of Settlement is to be construed as a release or a covenant not to sue
  3. 3 Whether the trustee plaintiff is required to retire as trustee prior to approval of new trustee by ASIC

Ratio Decidendi

The Deed of Settlement operates as a covenant not to sue, not a release, so the Cherry v Boultbee equity applies to HK Capital Ltd as assignee. The trustee must retire when it is in a position to comply with its obligations under the trust deed upon appointment and approval of a new trustee.

Court Disposition

Deed construed as covenant not to sue. Cherry v Boultbee equity applicable. Trustee to retire when new trustee approved.