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DIPLOMA IN LAWLEGAL PROFESSIONADMISSION BOARD

LAW EXTENSION COMMITTEE

LAW EXTENSION COMMITTEE SUBJECT GUIDE

07 EQUITYWINTER SESSION 2017

This Guide includes the Law Extension Committee’s course information and teaching program and the Legal Profession Admission Board’s syllabus. The syllabus is contained under the heading “Prescribed Topics and Course Outline” and has been prepared in accordance with Rule 27H(a) of the NSW Admission Board Rules 2015.

Course Description and Objectives 1Lecturers 1Assessment 1-2September 2017 Examination 2Lecture Program 3Weekend Schools 1 and 2 4-5Texts and Materials 6Compulsory Assignment 7Assignment Questions 7Prescribed Topics and Course Outline 8-26

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LAW EXTENSION COMMITTEE WINTER 201707 EQUITY

COURSE DESCRIPTION AND OBJECTIVES

Equity, which includes the law of trusts, considers the historical origins and development of the equitable jurisdiction, equitable doctrines and the nature and creation of trusts.

The emphasis in the course will be on developing an understanding of the principles of equity and their practical application. In this respect cases will be discussed and studied, but primarily as examples of the application of principle, and as a means of understanding particular principles, rather than as an end in themselves. Students are expected to identify and grasp the equitable issues arising in a given set of facts and, also, how a court exercising an equitable jurisdiction would deal with those issues in applying the principles discussed in the course to grant or refuse relief.

At the conclusion of the Equity course, students should be able to: Describe the key principles of equity and trusts law; Select equitable principles applicable to a given set of facts; Apply key principles of equity and trusts to factual scenarios; Draw conclusions regarding the likely outcome of applying equitable principles to problems; Compare and contrast the common law and equity in Australia; and Reflect on the application of equitable principles to real world situations.

LECTURERS

Prof Peter Radan, BA, LLB, PhD (Syd), DipEd (SCAE)

Peter Radan is a Professor of Law at Macquarie Law School. He holds the degrees of Bachelor of Arts, Bachelor of Laws and Doctor of Philosophy from the University of Sydney, as well as a Diploma in Education from Sydney College of Advanced Education. He has been a teacher with the Law Extension Committee since 1984. His most recent published books include (with C Stewart) Principles of Australian Equity & Trusts (3rd ed, LexisNexis, 2016); (with C Stewart & I Vickovich), Principles of Australian Equity & Trusts, Cases & Materials (3rd ed, LexisNexis, 2016); and (with J Gooley & I Vickovich) Principles of Australian Contract Law (4th ed, LexisNexis, forthcoming, 2017).

Prof Cameron Stewart, BEc, LLB (Hons), GradDipJur, GradDipLegal Prac, PhD

Cameron Stewart is Professor at Sydney Law School and has lectured in property and equity for many years. He has published widely on matters of health law, guardianship and human tissue regulation. His most recent published books include (with P Radan) Principles of Australian Equity & Trusts (3rd ed, LexisNexis, 2016) and (with P Radan & I Vickovich), Principles of Australian Equity & Trusts, Cases & Materials (3rd ed, LexisNexis, 2016).

ASSESSMENT

To be eligible to sit for the Board’s examinations, all students must complete the LEC teaching and learning program, the first step of which is to ensure that you have registered online with the LEC in each subject for which you have enrolled with the Board. This gives you access to the full range of learning resources offered by the LEC.

To register with the LEC, go to www.sydney.edu.au/lec and click on the WEBCAMPUS link and follow the instructions. Detailed guides to the Webcampus are contained in the material distributed by the LEC, in the Course Information Handbook, and on the Webcampus.

http://www.sydney.edu.au/lec

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Eligibility to Sit for Examinations

In accordance with the Legal Profession Admission Rules, the LEC must be satisfied with a student’s performance in a subject in order for the student to be eligible to sit for the examination, conducted by the Legal Profession Admission Board (LPAB). Assignments are used to assess eligibility.

Students are expected to achieve at least a pass mark of 50% in assignments to be eligible to sit for examinations. However, a category of “deemed eligible” has been introduced to offer students whose assignment mark is between 40-49% an opportunity to sit for the examination. In these circumstances students are often advised not to sit. A mark below 40% means a student is not eligible to sit for the examination.

Assignments as part of the Board’s Examinations

Assignment results contribute 20% to the final mark in each subject.

The Law Extension Committee (LEC) administers the setting and marking of assignments. The LEC engages the LPAB’s Examiners to assess or supervise the assessment of assignments.

Submission

Assignments must be received by 11:59pm on the due date unless an extension has been granted. Extensions must be requested by email prior to the due date. Specific supporting evidence must be provided. Assignments that are more than ten days late will not be accepted. Late assignments attract a penalty of one mark out of 20, or 5% of the total marks available, per day.

Assessment

Assignments are assessed according to the “Assignment Grading and Assessment Criteria” outlined in the Guide to the Presentation and Submission of Assignments. Prior to the examination, assignments will be returned to students and results posted on students’ individual results pages of the LEC Webcampus. Students are responsible for checking their results screen and ascertaining their eligibility to sit for the examination.

Review

Where a student’s overall mark after the examination is between 40-49%, the student’s assignment in that subject will be included in the Revising Examiner’s review. The final examination mark is determined in accordance with this review. Assignment marks will not otherwise be reviewed.

SEPTEMBER 2017 EXAMINATION

Candidates will be expected to have a detailed knowledge of the prescribed topics:

The History and Nature of Equity; The Relationship between Law and Equity; Assignments of Property in Equity; Fiduciary Obligations; Estoppel in Equity; Confidential Information; Introduction to Trusts; The Creation of Express Trusts; Variation and Termination of Trusts; Charitable Trusts; Resulting Trusts; Constructive Trusts; The Duties of Trustees; The Powers of a Trustee; The Rights of Trustees; Beneficiaries; and Equitable Remedies & Defences.

Candidates will be expected to have made a study of the prescribed materials in relation to those topics, and to have analysed cases contained in the Law Extension Committee's course outline.

All enquiries concerning the examination should be directed to the Legal Profession Admission Board.

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LECTURE PROGRAM

Lectures in Equity will be held on Thursdays from 6.00pm until 9.00pm. For details as to the location of venues, refer to the Course Information Handbook for a map of the University of Sydney main campus.

Please note that this program is a general guide and may be varied according to necessity. Readings are suggested to introduce you to the material to be covered in the lecture, to enhance your understanding of the topic, and to encourage further reading. You should not rely on them alone.

WEEK VENUE TOPIC KEY READING

111 May CLT 273

The History and Nature of EquityThe Relationship between Law and Equity(Peter Radan)

Principles of Australian Equity and Trusts (‘PAET’), Chp 1, 2 & 3; Principles of Australian Equity and Trusts: Cases and Materials (‘CM’) Chp 1, 2 & 3

218 May CLT 273

Nature of Equitable Interests, Dispositions of Property(Peter Radan)

PAET Chps 4, 5, 6 & 7 CM Chps 4, 5, 6 & 7

325 May CLT 273 Fiduciary Obligations

(Peter Radan) PAET Chp 10; CM Chp 10

41 June CLT 273

Confidential InformationIntroduction to Trusts(Peter Radan)

PAET Chps 9 & 20; CM 9 & 20

58 June CLT 273

The Creation of Express Trusts Variation and Termination of Trusts(Peter Radan)

PAET Chps 21 & 22; CM Chps 21 & 22

615 June CLT 273 Charitable Trusts

(Peter Radan)PAET Chps 23 & 24; CM Chps 23 & 24

Study Break: Saturday 17 June – Sunday 2 July 2017

76 July CLT 273 Resulting Trusts

(Peter Radan) PAET Chp 25; CM Chp 25

813 July CLT 273 Constructive Trusts

(Cameron Stewart)PAET Chps 35 & 36; CM Chps 35 & 36

920 July CLT 273

TrusteesBeneficiaries Tracing(Cameron Stewart)

PAET Chps 26, 27 & 37; PAET Chps 26, 27 & 37

1027 July CLT 273 Problem Solving & Revision

(Cameron Stewart)See problem questions at end of study guide

113 Aug CLT 273

DeclarationsSpecific PerformanceInjunctions(Peter Radan)

PAET Chps 28, 29 & 30; CM Chps 28, 29 & 30

1210 Aug CLT 273

Freezing & Search Orders Monetary Remedies in Equity (Peter Radan)


1317 Aug CLT 273

Other Equitable RemediesEquitable DefencesEquitable Estoppel(Peter Radan)

PAET Chps 38 & 39; CM 38 & 39

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WEEKEND SCHOOLS 1 AND 2

There are two weekend schools primarily for external students. Lecture students may attend on the understanding that weekend schools are primarily for the assistance of external students.

Please note that it may not be possible to cover the entire course at the weekend schools. These programs are a general guide and may be varied according to need. Students are expected to have read the relevant chapters of the text in advance of the lectures. You are advised to comply with this reading to enhance your understanding of the topic and to encourage further reading.

The listed topics for lectures and times are set as a guide only. The time taken to cover individual topics may vary.

Weekend School 1

TIME MAJOR TOPICS KEY READINGFriday 26 May 2017: 5.00pm – 9.00pm in New Law School Lecture Theatre 026 (New LSLT 026)

5.10pm-6.20pm The History and Nature of EquityThe Relationship between Law and Equity(Cameron Stewart)

Principles of Australian Equity and Trusts (‘PAET’), Chp 1, 2 & 3; Principles of Australian Equity and Trusts: Cases and Materials (‘CM’) Chp 1, 2 & 3

6.30pm-7.35pm Nature of Equitable InterestsDispositions of Property (Cameron Stewart)

PAET Chps 4, 5, 6 & 7; CM Chps 4, 5, 6 & 7

7.45pm-9.00pmFiduciary Obligations (Cameron Stewart) PAET Chp 10; CM Chp 10

Saturday 27 May 2017: 8.00am – noon in New Law School Lecture Theatre 026 (New LSLT 026)

8.10am-9.20amSpecific Performance, Injunctions(Cameron Stewart)


9.30am-10.40am Monetary Remedies in Equity(Cameron Stewart)

PAET Chp 32; CM Chp 32

10.45am-11.45am Equitable Defences(Cameron Stewart) PAET Chp 39; CM Chp 39

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Weekend School 2

TIME MAJOR TOPICS KEY READINGFriday 21 July 2017: 5.00pm – 9.00pm in New Law School Lecture Theatre 026 (New LSLT 026)

5.10pm-6.20pm Introduction to TrustsThe Creation of Express Trusts(Cameron Stewart)


6.30pm-7.35pm Variation and Termination of Trusts(Cameron Stewart) PAET Chp 22; CM Chp 22

7.45pm-9.00pm Charitable Trusts(Cameron Stewart)


Saturday 22 July 2017: 8.00am – noon in New Law School Lecture Theatre 026 (New LSLT 026)

8.10am-9.20am Resulting Trusts(Cameron Stewart) PAET Chp 25; CM Chp 25

9.30am-10.40am Constructive Trusts(Cameron Stewart)


10.45am-11.45am Trustees, Beneficiaries, & Tracing(Cameron Stewart)

PAET Chps 26, 27 & 37; PAET Chps 26, 27 & 37

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TEXTS AND MATERIALS

Course Materials

Guide to the Presentation and Submission of Assignments (available on the LEC Webcampus)

Other materials may be made available on the LEC Webcampus

Prescribed Texts

P. Radan and C. Stewart, Principles of Australian Equity and Trusts, 3nd ed., LexisNexis, 2016, (together with up-dates available on the LEC Webcampus) (hereafter referred to as ‘PAET’)

P Radan, C Stewart and I Vickovich, Principles of Australian Equity and Trusts - Cases & Materials, 3rd ed., LexisNexis, 2016 (hereafter referred to as ‘CM’)

Recommended Materials

G Dal Pont, Equity and Trusts in Australia and New Zealand, 6th ed., Thomson Reuters, 2015

G Dal Pont, Equity and Trusts: Commentary and Materials, 6th ed., Thomson Reuters, 2015

Dal Pont and Cockburn, Equity and Trusts: In Principle, 3rd ed, Thomson Reuters, 2014

M B Evans, Equity and Trusts, 4th ed, LexisNexis, Sydney, 2016

H A J Ford & W A Lee, Principles of the Law of Trusts, 3rd ed, Thomson Reuters, 1995 (now loose leaf)

J D Heydon & M J Leeming, Jacobs' Law of Trusts in Australia, 8th ed., LexisNexis, Sydney, 2016

J D Heydon, & P Loughlan, Cases and Materials on Equity and Trusts, 8th ed., LexisNexis, Sydney, 2011

J. D. Heydon, M J Leeming & P G Turner, Meagher, Gummow & Lehane's Equity - Doctrines and Remedies, 5th ed, LexisNexis, Sydney, 2015

D S K Ong, Ong on Equity, Federation Press, 2011

D S K Ong, Trusts Law in Australia, 4th ed., Federation Press, 2012

P W Young, C Croft & M L Smith, On Equity, Thomson Reuters, 2009

LexisNexis Questions and Answers – Equity and Trusts, 4th ed.

LEC Webcampus

Once you have registered online with the LEC, you will have full access to the Webcampus. Regularly check the Course Materials section in the LEC Webcampus for additional materials, notes, assignment questions and other relevant research sites.

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COMPULSORY ASSIGNMENT

In Equity, there is only ONE ASSIGNMENT. This assignment is compulsory and must be submitted by all students. Students must submit the assignment by the due date. A pass mark is 50%. Refer to the Guide to the Presentation and Submission of Assignments for the assignment grading and assessment criteria. Students who fail to satisfy the compulsory requirements will be notified through the Results screen on the Webcampus before the examination period of their ineligibility to sit the examination in this subject. The maximum word limit for the assignment is 2000 words (inclusive of all footnotes but not bibliography).

The rules regarding the presentation of assignments and instructions on how to submit an assignment are set out in the LEC Guide to the Presentation and Submission of Assignments which can be accessed on the LEC Webcampus. Please read this guide carefully before completing and submitting an assignment.

The completed assignment should be lodged through the LEC Webcampus, arriving by 11:59pm on the following date:

Compulsory Assignment Wednesday 14 June 2017 (Week 6)

ASSIGNMENT QUESTIONS

To obtain a copy of the Equity assignment for the Winter Session 2017, please follow the instructions below:

1. Register online with the LEC (see page 24 of the Course Information Handbook for detailed instructions). Once you have registered, you will have full access to all the facilities on the LEC Webcampus.

2. Then go into the Webcampus, select the Course Materials section and click on the link to the assignment questions for this subject.

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PRESCRIBED TOPICS AND COURSE OUTLINE

Note: All items listed under ‘Key Readings’ are found in CM, unless otherwise indicated

Lecture One The History and Nature of EquityThe Relationship between Law and EquityPAET, Chapters 1, 2 & 3; CM Chapters 1, 2 & 3

The History of Equity

Questions to guide your reading:

What were the key stages in the development of the law of equity? How has the historical development of the law of equity affected its modern

application?

Key readings:

St Germain, ‘What is Equytie’ Avini, ‘The waqf and the trust’ Stebbings, ‘The trust in Victorian England’ Auchmuty, ‘Equity “Looking After” Women’ Dickens, ‘In Chancery’ Mason, ‘Variety and Stages of Fusion’ McPherson, ‘Judicial Reception of Equity’

The Nature of Equity


What are the key underlying principles that guide equity’s intervention? What is an ‘equitable maxim’? What are the most significant equitable maxims?

Key cases and readings:

Parkinson, ‘The Conscience of Equity’ Jackson, ‘The Maxims of Equity Revisited’ King v The Chiltern Dog Rescue Kirby, ‘Reasons for Equity to Grow’ Levenstein, ‘Aiding the Vigilant’

The Relationship between Law and Equity


How did the Judicature Act change the administration of law and equity? What is a ‘fusion fallacy’? Should legal and equitable principles influence each other?

Key cases:

Harris v Digital Pulse Pty Ltd Walsh v Lonsdale Chan v Cresdon Pty Ltd

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Lecture Two Nature of Equitable Interests and Dispositions of PropertyPAET, Chapters 4, 5, 6 & 7; CM Chapters 4, 5, 6 & 7

The Nature of Equitable Interests


What are the indicia of a proprietary equitable interest? What is the difference between an equitable interest, a personal equity and a mere

equity?


Gross v Lewis Hillman Ltd Commissioner of Stamp Duties (Qld) v Livingston Horton v Jones Latec Investments Ltd v Hotel Terrigal Pty Ltd Hepburn, ‘The Benefits of Equitable Classification’

Assignments

This section of the course deals with the issues concerning the recognition in equity of assignments of property or interests in property, both legal and equitable. In assessing whether a court of equity will uphold or recognise any purported assignment it is essential to correctly identify the components of the assignment, both as to form and content, in order to identify the rules which determine the validity of that particular transaction. Satisfy yourself on the following points:

(a) Who is the assignor?(b) Who is the assignee?(c) What interest cannot be assigned?(d) What are the requirements for the assignment of property at law, especially the

assignment of a debt?(e) When do you need to consider whether an interest has been assigned in equity?(f) What are the rules for the assignment of property in equity?(g) What is meant by a disposition of property?(h) When, if at all, is a disposition of property required to be in writing?


Austino Wentworthville Pty Ltd v Metroland Australia Ltd Comptroller of Stamps (Victoria) v Howard-Smith Norman v Federal Commissioner of Taxation Shepherd v Commissioner of Taxation of the Commonwealth of Australia Re Lind, Industrials Finance Syndicate Ltd v Lind Corin v Patton Grey v Inland Revenue Commissioners Vandervell v Inland Revenue Commissioners Oughtred v Inland Revenue Commissioners Tettenborn, ‘Champerty and Assignments’ Equuscorp Pty Ltd v Haxton

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Lecture Three Fiduciary ObligationsPAET Chapter 10; CM Chapter 10

Fiduciary Obligations


What is a fiduciary relationship? When will a fiduciary relationship be imposed? When will a fiduciary breach their duty? What are the defences to a breach of fiduciary duty?

Key cases:

Hospital Products Ltd v United States Surgical Corporation Boardman v Phipps United Dominions Corporation Ltd v Brian Pty Ltd Paramasivam v Flynn Breen v Williams Bodney v Westralia Airports Corporation Pty Ltd Howard v Commissioner of Taxation

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Lecture Four Confidential Information & Introduction to TrustsPAET Chapters 9 & 20; CM Chapters 9 & 20

Confidential Information


What are the elements of the modern doctrine of breach of confidence? What is ‘confidential information’? When will there be an obligation of confidence? What is the test for establishing a breach of the duty of confidence? What are the possible defences for breach of the duty of confidence?

Key cases:

Prince Albert v Strange Morison v Moat Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) Coco v A N Clark (Engineers) Ltd Australian Football League v Age Company Ltd Del Casale v Artedomus (Aust) Pty Limited Commonwealth v John Fairfax & Sons Ltd Giller v Procopets Australian Broadcasting Corporation v Lenah Game Meats Pty Limited

Introduction to Trusts

Questions to guide your reading

What are the differences between trusts and contracts, fiduciary obligations, agency, charges, conditional dispositions, debt and equitable obligations?

Key cases:

Gosper v Sawyer Visnic v Sywak Olma v Amendola Countess of Bective v Federal Commissioner of Taxation Barclays Bank Ltd v Quistclose Investments Ltd Hammond v Hammond

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Lecture Five Creation of Express Trusts and Variation & Termination of Trusts Charitable TrustsPAET, Chapters 21 & 22; CM Chapters 21 & 22

Creation of Express Trusts


What are the three certainties? What are the requirements for proper constitution of the trust?

Key cases:

Byrnes v Kendle White v Shortall McPhail v Doulton Pascoe v Boensch

Variation and Termination of Trusts

Questions to guide your reading

What are the conditions under which a variation of trust can occur? What is the test for illegality? How does public policy effect the creation of trusts? What is the modern rule of perpetuities?

Key cases:

Stein v Sybmore Holdings Nelson v Nelson Ashton v Pratt Ellaway v Lawson Nemesis Australia Pty Ltd v Commissioner of Taxation

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Lecture Six Charitable Trusts PAET, Chapters 23 & 24; CM Chapter 23 & 24

Charitable Trusts


What is the definition of charity? Define poverty Define advance of education Define advancement of religion Define ‘beneficial to the community’ What are cy-pres schemes?

Key cases:

Commissioner for Special Purposes of the Income Tax v Pemsel Aid/Watch Inc v Commissioner of Taxation Ballarat Trustees Executors & Agency Co v Federal Commissioner of Taxation Oppenheim v Tobacco Securities Co Ltd Commissioner of Taxation v Word Investments The Incorporated Council of Law Reporting of the State of Queensland v Federal

Commissioner of Taxation Attorney-General (NSW) v Perpetual Trustee Co Ltd Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust

v Bishop Irinej Dobrijevic [2017] NSWCA 28 – extract on WebCampus

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Lecture Seven Resulting Trusts PAET, Chapter 25; CM Chapter 25

Resulting Trusts


What are the two different kinds of resulting trusts? When does the presumption of resulting trust arise? When does the presumption of advancement arise? What evidence can be brought to reverse the presumptions?

Key cases

Re Gillingham Bus Disaster Fund Calverley v Green Anderson v Anderson (No 2) Trustees of the Property of Cummins (a bankrupt) v Cummins

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Lecture Eight Constructive Trusts PAET, Chapters 35 & 36; CM Chapters 35 & 36

Constructive Trusts


What are the key characteristics of a constructive trust? When is a constructive trust institutional or remedial? When are constructive trusts available?

Key cases:

Muschinski v Dodds Black v S Freedman & Co Grimaldi v Chameleon Mining NL (No 2) Westpac Banking Corporation v The Bell Group (No 3) Shepherd v Doolan

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Lecture Nine Trustees, Beneficiaries and TracingPAET, Chapters 26, 27 & 37; CM Chapters 26, 27 & 37

Trustees

Key cases:

Nolan v Collie Byrnes v Kendle McDonald v Ellis Karger v Paul

Beneficiaries

Key cases:

Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Elliott

CPT Custodian Pty Ltd v Commissioner of State Revenue Kennon v Spry

Tracing

Key cases:

Foskett v McKeown Re French Caledonia Travel

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Lecture Ten Revision and Problem Solving

Students should prepare, prior to this class, notes on answers to the questions set out at the end of the Study Guide, starting at page 21.

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Lecture Eleven DeclarationsSpecific PerformanceInjunctionsPAET Chapters 28, 29 (pp 754-774 only) & 30; CM Chapters 28, 29 & 30

Declarations


On what basis can courts make declarations? What is the equitable jurisdiction for declarations?

Key cases:

ACCC v MSY Technology Pty Ltd Forster v Jododex Pty Ltd Australian Conservation Foundation Inc v Commonwealth of Australia Sankey v Whitlam

Specific performance


When will specific performance be an appropriate remedy? What jurisdictional factors will preclude an order for specific performance? What discretionary factors may lead to an order for specific performance being

refused?

Key cases Beswick v Beswick Falcke v Grey C H Giles & Co Ltd v Morris Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd Mehmet v Benson

Injunctions


What is the difference between prohibitive and mandatory injunctions? When will an injunction be granted in equity’s auxiliary jurisdiction? When will an injunction be granted in equity’s exclusive jurisdiction? What is the difference between perpetual and interlocutory injunctions? When will an interlocutory injunction be granted?

Key cases:

Australian Broadcasting Corp v Lenah Game Meats Pty Ltd Redland Bricks Ltd v Morris European Bank Ltd v Evans Australian Broadcasting Corporation v O’Neill Warner Bros Pictures Inc v Nelson Gouriet v Union of Post Office Workers The Attorney-General, on the Relation of Daniels, Steward and Wells v Huber,

Sandy, and Wichmann Investments Pty Ltd

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Lecture Twelve Freezing & Search Orders Monetary Remedies in EquityPAET Chapters 31 & 32; CM Chapters 31 & 32

Freezing & Search Orders


What is the purpose of a freezing order? What are the requirements for obtaining a freezing order? What is the purpose of a search order? What are the requirements for obtaining a search order?

Key cases:

Jackson v Sterling Industries Ltd Cardile v LED Builders Pty Limited Anton Piller KG v Manufacturing Process Limited Long v Specifier Publications Pty Ltd

Monetary Orders in Equity


What are the differences between equitable compensation and damages? What is the purpose of equitable compensation? When may a court award equitable damages?

Key cases:

Re Dawson (dec'd) Wentworth v Woollahra Municipal Council Johnson v Agnew Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd

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Lecture Thirteen Other Equitable Remedies Equitable DefencesEquitable EstoppelPAET Chapters 14, 38 & 39; CM Chapters 14, 38 & 39

Other Equitable Remedies

Key cases

Dart Industries Inc v Décor Corporation Pty Ltd Langman v Handover

Equitable Defences

Key cases:

Black Uhlans Inc v New South Wales Crime Commission Lamshed v Lamshed Gerace v Auzhair Supplies Pty Ltd AWA Ltd v Exicom Australia Pty Ltd Commonwealth v Verwayen

Equitable Estoppel


What is estoppel? What are the elements of equitable estoppel? What is the aim of relief for equitable estoppel?

Key cases:

Waltons Stores (Interstate) Ltd v Maher Commonwealth v Verwayen Thorner v Major Giumelli v Giumelli Delaforce v Simpson-Cook Sidhu v Van Dyke

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QUESTIONS FOR REVISION CLASS IN LECTURE 10.

Question 1

In 2010 a trust, with Gina appointed as the trustee, was set up in relation to the following assets:

(i) 1,000 shares, each worth $10, in Gold Exploration Ltd (GEL), a publicly listed company valued at 250 million dollars;

(ii) a vacant residential property in Collaroy;(iii) a supermarket in Mosman; and(iv) the sum of $1,000,000 which was invested in a high interest account with

Acme Banking Corporation Ltd (Acme).

The beneficiaries of the trust in equal shares to all the trust assets are Gina’s children, John (now aged 28) and Bianca (now aged 14).

In early 2015 the Full Court of the Federal Court of Australia found Gina guilty of breaches of s 18 of the Australian Consumer Law in relation to certain actions she had taken in managing and operating the Mosman supermarket. Gina was ordered to pay, and did pay from her own funds, $500,000 in damages to the plaintiff in that case. Gina was also ordered to pay, and did pay from her own funds, the plaintiff’s legal costs of $50,000. In the course of the Full Court’s joint judgment, the court observed that Gina’s actions that constituted the breach of s 18 were ‘outrageous and bordering on criminal fraud’. In relation to the damages and legal costs that she has paid to the plaintiff, Gina claims that she is entitled to a lien against the funds invested in Acme.

At all times since the trust was set up, the Collaroy property was vacant and Gina never sought to have it leased to a tenant.

At no time since the trust was established has Gina provided John or Bianca with copies of any trust documents or information about the s 18 litigation.

John, who is now very concerned about Gina’s conduct as trustee, seeks your advice as to the following:

(i) whether he can have legal title to 500 shares in GEL transferred to him;

(ii) whether Gina is entitled to a lien over the funds deposited with Acme in relation to the damages paid to the plaintiff and the legal costs incurred in the s 18 litigation;

(iii) whether Gina has incurred any liability to the trust in relation to her management of the Collaroy property;

(iv) whether Gina is required to hand over to John copies of the trust deed, financial accounts relating to the trust and all documents in her possession as trustee relating to the s 18 litigation; and

(v) whether the Supreme Court of New South Wales can, and would, remove Gina as trustee and appoint a new trustee.

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Question 2

Walter owns a small farm south of Sydney. Gustav owns an adjoining property of approximately 2,000 hectares. Gustav, a bluegrass musician, is planning to hold a week-long bluegrass music festival on his property on 14-15 November 2015. In early June 2015, Gustav began advertising his bluegrass music festival. Prior to that point he had spent $100,000 on preparations and facilities for the big event. At no stage did Gustav seek or obtain local authority approval as he was required to do by the provisions of the Outdoor Musical Events Act 2001 (NSW). If prosecuted by the local authority, Gustav’s failure to do obtain the necessary local authority approval renders him liable to a penalty under the Act of $20,000.

Two days ago, Walter, who, with his brother Eric, had been holidaying and visiting their parents in a remote part of Argentina since April 2015, returned to Sydney. Walter immediately became aware of Gustav’s plans. He is greatly concerned, particularly so as his parents (both in their late eighties) will be visiting for a week at exactly the same time as Gustav’s proposed festival is scheduled to be held. Walter has already paid $15,000 for their return airfares from and to Argentina.

Eric, who lives in Gosford and hates bluegrass music, is also angered by Gustav’s actions.

In relation to the above facts:

(i) If Walter commences proceedings to prevent the bluegrass festival from taking place, what are the possible outcomes of such proceedings? (Note: In answering this question you can assume: (i) the court would conduct a hearing on the merits and hand down its decision on Walter’s application prior to 14 November 2015; and (ii) if the bluegrass festival is held, Gustav will be liable to Walter in the tort of nuisance).

(ii) Advise Eric on his prospects of being successful in any proceedings he may take to prevent the bluegrass festival from taking place.

Question 3

Mark is the writer of the words and music to a famous pop song entitled ‘American Fly’ recorded in the 1970s by Ron McLean. Mark has been receiving royalties ever since from Bizarro Productions Ltd, the music company that published all of McLean’s musical recordings.

In March 2013, for valuable consideration, Mark assigned to Kelly ‘my royalties from “American Fly” payable to me by Bizarro Productions Ltd for the 2014-2015 financial year’.

On 1 August 2015, Bizarro Productions Ltd deposited $30,000 into Mark’s bank account with EastPac Banking Corporation in payment of his royalties for ‘American Fly’ for 2014-2015. On the same day Mark advised Kelly about the receipt of the $30,000.

On 2 August 2015, Kelly telephoned Mark and directed him to hold his (Kelly’s) interest in the $30,000 on trust for his nephew Jack.

On 1 September 2015, Mark executed his will, in which he appointed Frank as executor. Clause 4 of Mark’s will stipulated as follows:

I give my bank account with Vanderlay Banking Corporation to my executor to hold on trust for the scholarships for students undertaking post-graduate research in American history with a preference to be given to the children of employees and former employees of Kramerica Enterprises Ltd.

Clause 5 of Mark’s will stipulated as follows:

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I give my house at 22 Clarke Street, Manly to Manuel De la Vega on condition that he keep it as a home and provide board for his sisters Linda De La Vega and Maria De La Vega.

Clause 6 of Mark’s will stipulated as follows:

I give the residue of my estate to Basil.

Frank seeks your advice as to the following:

(i) who is entitled to the royalties received by Mark on 1 August 2015;

(ii) the effect of Clause 4 of Mark’s will; and

(iii) the effect of Clause 5 of Mark’s will.

Question 4

In the early 1990s Belinda’s husband was killed on active military service during the First Gulf War. As a result, she was entitled, pursuant to the War Veterans Act 1919 (Cth) (the Act), to a subsidised loan in relation to the purchase of a house or home unit. Section 45 of the Act stipulated that such subsidised loans were only available to a former soldier’s widow if, at the time of purchasing the house or home unit, the widow ‘owned no land or interest in land’ anywhere in Australia.

In 2001 Belinda and her niece Alicia decided to buy a Torrens title house in Warriewood for the sum of $500,000. Belinda and Alicia contributed equally towards the purchase price. However, the house was registered in Alicia’s name as sole registered proprietor. This was done because Belinda intended to apply for a subsidised loan pursuant to the Act at a later date to purchase another house. A few months after moving into the house Belinda and Alicia decided that it would be a good idea to add a couple of rooms to the house. This was done at a cost of $100,000 paid for by Alicia.

In 2005 Belinda purchased a house in Dee Why. To enable her to purchase this house she successfully applied for a subsidised loan pursuant to the Act. In her application for the subsidised loan, Belinda declared that she ‘did not own land or any interest in land in Australia’.

In mid-2015, following a falling out between Belinda and Alicia, the property at Warriewood was put up for sale. Last week, contracts for the sale of the property for $900,000 were exchanged. Alicia has told her aunt that she (Alicia) is entitled to the whole of the sale proceeds upon completion of the sale.

Belinda seeks your advice as to whether she (Belinda) has a claim to any of the proceeds of sale of the Warriewood house.

Question 5

Mark was the owner of a Torrens title property at 15 Lister Street, Manly. The certificate of title to the property was held in safe custody by Mark’s solicitor Bill. One month ago Mark instructed Bill to prepare the necessary documentation to have the property transferred to Teresa as a gift. A few days later Mark and Teresa went to Bill's office where they executed the Memorandum of Transfer that had been prepared by Bill. Bill advised them that the property had to be valued for stamp duty purposes and that, once a valuation had been done, stamp duty on the transaction had to be paid. He further advised them that, after the payment of stamp duty, the transfer, together with the certificate of title, would have to be lodged for

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registration, whereupon Teresa would become the registered proprietor of the Manly property. Mark then gave Bill a cheque to cover the stamp duty and other expenses involved in getting the property registered into Teresa's name.

Two days ago Mark telephoned Bill to enquire how things were proceeding in relation to the transfer of the Manly property to Teresa. Bill told him that stamp duty had been paid, that the valuation had been done and that he was going to lodge the transfer for registration on the next day. An hour after speaking to Bill, Mark was killed in a motor vehicle accident. Because of Mark’s death Bill did not lodge the transfer for registration.

In his will, Mark appointed his sister Gillian as his executrix, trustee, and residuary beneficiary. The will was executed on 29 November 2005. Clause 2 of Mark's will stipulated as follows: ‘I give my property at 15 Lister Street, Manly to Joe on trust’.

Clause 3 of Mark’s will stipulated as follows: ’I give my bank account with Eastpac Banking Corporation to Gillian on trust for the education of the descendants of three my nephews, Moe, Larry and Shemp’.

After reading the terms of the will, Gillian approached Joe in relation to Clause 2. Joe, a close friend of Mark's, told Gillian that in early 2006: (i) Mark had told Joe that he (Mark) had made a will which stipulated that the property at Manly was to go to Joe, but that he (Mark) wanted Joe to hold that property on trust for somebody else; (ii) Mark gave Joe a sealed envelope in which he (Mark) said was a note containing the name of the person for whom Joe was to hold the property on trust; (iii) Mark instructed Joe that the envelope was not to be opened until he (Mark) had died; and (iv) Joe had said to Mark that he (Joe) would carry out Mark's instructions.

Joe then produced the envelope that he had received from Mark and opened it in Gillian's presence. Inside was a written note, signed by Mark, which, after referring to the provisions of clause 2 of his will, stated that Joe was to hold the Manly property on trust for Regina Falange. At the date of his death, Mark’s bank account with Eastpac Banking Corporation had a balance of $4,003,221.

Gillian seeks your advice as to:

(a) who is entitled to the Manly property; and

(b) the effect of Clause 3 of Mark's will.

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Question 6

Jennifer is the registered proprietor of Torrens title land known as Leica Chalet. She was also the registered shareholder of 2,000 shares in Acme Constructions Ltd. Jennifer wanted to make a gift of property to her niece Evelyn. To do this she made oral declarations to the effect that she held Leica Chalet and the shares on trust for Evelyn.

A few days after Jennifer’s declarations, Evelyn, in a letter to Maralyn, wrote: ‘I give to you any interest I have in Leica Chalet’. In a telephone conversation with Jennifer on the same day Evelyn said: ‘I want Maralyn to have my shares in Acme Constructions Ltd. Transfer them to her as soon as possible’.

Evelyn died the next day, leaving a will in which Filipe was named as sole beneficiary of her entire estate.

Jennifer seeks your advice as to who is entitled, in law and equity, to Leica Chalet and the shares.

Question 7

Jack (born in 1950) and Jill (born in 1955) met in 1974 and entered into a de facto relationship in 1975. In 1976 they had a child named Zac. In 1987 they purchased a house in Richmond for $150,000. The purchase price was paid by Jack, the money coming to Jack as an inheritance from the estate of his late uncle. At the time of purchase Jack decided to have the property registered in his, Jill’s and Zac’s names as tenants in common and in equal shares.

In 1994, when Zac reached his majority age Jack opened a bank account with the Western Sydney Bank Ltd in the joint names of Jack and Zac. All the money for the account was supplied by Jack. When opening the account Jack told Zac that he (Jack) alone would be making all the deposits into the account and would withdraw from the account whenever he wanted to. However, he also said that if anything should ever happen to him (ie Jack) the money then in the account would belong to Zac.

Two weeks ago Jack and Jill died instantly in a car accident. In his will Jack left his entire estate to Lucy, his daughter that he had fathered in 1972. In her will Jill left her entire estate to Zac. At the time of their deaths the Richmond property was worth $800,000, and the bank account at Western Sydney Bank Ltd had a balance of $5,000.

Lucy seeks your advice as to whether she has any entitlements in the Richmond property and the bank account, and, if not, who is entitled and to what extent.

Note: Students should ignore the provisions of any relevant statute and answer the question on the basis of the principles of equity.

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Question 8

Characterise the following provisions contained in Lionel’s will:

a. I give the whole of my personal estate to James, whom I also appoint as my executor and trustee, subject to James paying the sum of $5,000 to my son Alvin within two years of the date of my death.

(Note: Assume that Lionel died three years ago and no payment has been made to Alvin).

b. I give my house in Cooma to Petra absolutely, with the hope that she will allow my mother to live there until she dies.

c. I give $2,000,000 to my trustees upon trust for the purchase or provision of an area of land in rural New South Wales to be used as a park or reservation or sanctuary for the purpose of the preservation and conservation of native Australian flora and fauna.

Question 9

In 2005 George Van Nostrum opened a bank account in the name of 'Nancy van Nostrum – George van Nostrum, Trustee’. At the time of opening the account, George never had any intention to hold the money in the account on trust for Nancy. The account was operated by George solely for his benefit and purposes.

Last week Nancy died. In her will Nancy left the whole of her estate to Benito. The bank account at the date of her death had a credit balance of $25,000.

Benito seeks your advice as to whether he is entitled to any interest in the bank account.

Question 10

Jack recently entered into two separate contracts with Kevin, a well-known painter. In the first contract Kevin agreed to sell to Jack, a guitar once used by the legendary rock guitarist, Eric Clapton. The contract price was $2,000, although the commercial value of the guitar was $15,000.

In the second contract Kevin agreed to paint Fred’s wooden garden furniture in return for Jack paying Kevin $1500 for the paint work to be done. Fred was Jack’s next-door neighbour. A few days ago Jack and Kevin had a serious argument following which Kevin told Jack that he was not going ahead with either of the contracts.

Jack seeks your advice as to whether he can insist on Kevin complying with his contractual obligations.

Documents

Lecture One - University of Sydneysydney.edu.au/lec/subjects/Subject Guides_Winter 2017/… · Web viewCommissioner of Taxation v Word Investments . ... Eric Clapton. The contract