Written by Despina Bouletos

In a significant development in Australian privacy law, Bunnings Warehouse (“Bunnings”) has been found to have breached its customers’ right to privacy through its use of facial recognition technology in stores. The finding was made by the Office of the Australian Information Commissioner (“OAIC”) earlier this month following a two-year long investigation. The OAIC determined that Bunnings had breached the privacy of hundreds of thousands of its customers in 63 stores across NSW and Victoria over a three year time span from 2018 to 2021.

What was the OAIC’s Determination?

A key aspect of the OAIC’s finding was that Bunnings did not obtain consent from each of its customers to use facial recognition technology, that is, targeted customers were not aware at the time that they were in the store that facial recognition technology was being utilised by Bunnings and that their private information was being retained.

How was the Data Retained and Used?

The unique “face prints” which were captured by Bunnings’ facial recognition technology are considered sensitive biometric data in accordance with Australia’s privacy laws. The OAIC found that Bunnings had been using the face prints to cross reference against a database of previous Bunnings customers who were considered to present a security risk, on the basis of inappropriate conduct in stores such as stealing or acting aggressively towards staff. When a face print matched a customer in this database, an alert was generated on Bunnings’ systems.

How has Bunnings Responded?

In its response to the OAIC, Bunnings indicated that it had deployed the facial recognition technology in an attempt to protect the safety of its staff members and customers. Bunnings’ view is that the deployment of the facial recognition software is the quickest and most accurate way to identify and remove individuals who pose a threat to the safety of others in Bunnings stores. Bunnings maintains that the data collected was not used for marketing purposes. Bunnings also advised the OAIC that, where the face print did not generate a match in Bunnings’ database, then the data was automatically deleted in less than a second. Bunnings has indicated that it will be seeking a review of the decision of the OAIC.

What Penalty was Imposed?

As a result of the OAIC’s findings, Bunnings was ordered not to deploy its facial recognition software going forward and to destroy any personal and sensitive information that was collected within one year. Bunnings is also required to publish a statement on its website within 30 days apologising, explaining its use of the technology and providing information to customers who may wish to make a complaint in respect of the collection of their data.

Implications

The OAIC’s determination is likely to have significant implications for how Australian businesses use data collection technology in future. Businesses will need to carefully consider how the use of software such as facial recognition may impact upon the privacy of customers and appropriate frameworks for implementing such technologies. This is particularly pressing given that a number of other stores are also deploying facial recognition technology.

Uther Webster & Evans is well-versed in dealing with regulators such as the OAIC and can provide you with detailed advice as to how your business interacts with Australia’s privacy legislation or if you have concerns regarding a privacy breach.

The contents of this post are for informational purposes only. They do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. If you require legal advice or representation, please contact our team.

On 17 July 2024, A Thousand Miles from Care, a memoir canvassing Steve Johnson’s thirty-year effort to uncover the truth about the murder of his brother, Scott Johnson, will be published in Australia by Harper Collins.

Vivian Evans (Vivian) of Uther Webster & Evans has worked closely with Steve and his US Legal team, and John Agius SC (John) over the last decade, in his attempt to obtain justice for Scott. Vivian and John assisted Steve to secure a third coronial inquest into Scott’s death, which resulted in a finding that Scott’s death was a homicide and led to a new police taskforce being appointed and the arrest and sentencing of Scott’s killer. Steve’s work also paved the way for the recent New South Wales inquiry into gay hate crimes.

In December 1988, Scott, who was a 27-year-old American PHD student living in Australia, was found dead at the bottom of a cliff at North Head, in the Manly area. Following an autopsy that concluded no foul play, Scott’s death was initially ruled a suicide.

Steve, who was unsatisfied with this finding, commenced what would ultimately be a three-decade-long investigation into uncovering the truth of what happened to Scott. Refusing to believe that Scott had any reason to end his life or that his death was the result of an accident, Steve lobbied police to continue the investigation into Scott’s death.

However, at a coronial inquest held in March 1989, the coroner found that Scott’s death was the result of a suicide, despite acknowledging that there was no apparent reason for Scott to take his own life. Steve continued to campaign for further investigation into Scott’s death, particularly in light of a number of homophobic killings which occurred around Sydney beaches in the 1980s.

Despite repeated attempts to progress the matter, it was not until 2012 that a second coronial inquest was authorised, in which the coroner overturned the initial suicide verdict and replaced it with an open one. The coroner also called for further police investigation into Scott’s death.

In 2017, a third coronial inquest was held. Following the evidence of several key witnesses, who testified to regular assaults against gay men by gangs in the North Head area, the coroner reached a verdict that Scott fell from the clifftop as a result of actual or threatened violence by an unidentified person or persons who attacked him because they perceived him to be homosexual.

Following this finding, police launched a further investigation into Scott’s death and announced a $2 million reward for information on Scott’s killer, $1 million of which was contributed by Steve personally. Ultimately, the police investigation led to the arrest of Scott White, who was charged with the murder of Scott on 12 May 2020.

On 13 January 2022, White was found guilty of murdering Scott, after entering a plea of guilty. Despite an attempt by White’s lawyer to have his guilty plea withdrawn, on the basis that White was not fit to make an admission of guilt, White was sentenced to 12 years and 7 months imprisonment, with a non-parole period of 8 years and 3 months.

However, six months later, White appealed his conviction, and a re-trial was ordered. On 23 February 2023, following discussions, White pleaded guilty to manslaughter and was subsequently re-sentenced to 9 years in prison, with a non-parole period of 6 years. He will be eligible for parole in 2026.

Following White’s sentence, a special commission of inquiry into LGBTIQ hate crimes was commissioned, appointing Justice John Sackar as Commissioner. The inquiry looked into the unsolved deaths of LGBTIQ people that may have been hate crimes between 1970 and 2010, which were previously the subject of investigation by the NSW Police Force. Specifically, the inquiry was focus upon the deaths of 88 men, potentially motivated by gay hate bias.

On 21 December 2023, the inquiry published its final report comprising almost 3,500 pages. The report calls for an audit and review by NSW Police of all unsolved homicides for the period from 1970 to 2010, and for the implementation of mandatory and ongoing training for NSW Police officers concerning the LGBTIQ community.

UWE is pleased to have been able to work closely with Steve Johnson in achieving not only justice for Scott but also important and long overdue reform in relation to the approach taken by the NSW Police Force in regard to LGBTIQ hate crimes.

The contents of this post are for informational purposes only. They do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.

To discuss your criminal law matter, please contact our office for advice from our experienced criminal law team

Written by Holly Eastway

The recent case of Pugwall v Arthur McKenzie Investments Pty Ltd [2022] VSCA 272, in the Victorian Court of Appeal, serves as a reminder of the risks of personal guarantees for directors, revealing the dangers of personally guaranteeing the obligations of a company, especially where one may consider themselves safe under the corporate veil.

The Facts

A joint venture agreement (“JVA”) between two constructions companies, concerning the development of residential units in Seaford, Victoria turned sour following issues with funding.

Mr Clark, the sole director and secretary of one of the parties, and Mr McKenzie the sole director and secretary of the other, gave personal guarantees on behalf of their own respective companies.

The problem was that, despite being personally named as guarantors within the JVA, neither Mr Clark nor Mr McKenzie signed the JVA in their personal capacities.

First Instance Decision

The trial judge held, among other things, that McKenzie could not be held liable in his personal capacity pursuant to the guarantee.

On Appeal

The Court confirmed that the court will assess a party’s intention to be bound to the terms of a contract on the basis of an objective construction of the document as a whole, rather than the subjective, uncommunicated intentions of that party.  Upon assessing the JVA in its entirety, it was found that the JVA evidenced the intention for the guarantors to be personally liable and that the formal way in which a party signs a contractual document, will not be determinative of a party’s intention.

Mr McKenzie submitted that his signature to the JVA was only in his capacity as sole director/secretary, and that no signing clause was provided for him in his personal capacity as guarantor.  However, the Court found on appeal that the entirety of the JVA evidenced otherwise.

Key Takeaways

Pugwall v Arthur McKenzie Investments Pty Ltd is a potent reminder of the dangers of personal guarantees. It demonstrates the importance for lawyers to understand the wide ramifications of commercial relationships gone bad and the significance of good legal drafting skills. All in all, the Victorian Court of Appeal has set a precedent for ignoring the subjective intentions of parties to a contract in favour of an objective analysis of the contract itself.

Contact Us

If you’re thinking of entering into a contractual arrangement as a guarantor, seek legal advice in advance.  Uther Webster & Evans can provide you with advice and guidance, so contact our office here.

Disclaimer: the contents of this article are for informational purposes only and do not constitute legal advice, nor are the contents of this article intended to be a substitute for legal advice or to be relied upon as such.

Background

This case involved a dispute between four adult siblings, Giovanni (the Plaintiff), Nicola, Salvatore and Carmine Mantovani, as to the terms of and entitlement to assets within a family trust and, consequently, the distribution of their mother, Teresa’s, estate.

In 1976,  the Mantovani Family Trust (the Trust) was established and a corporation known as Vanta Pty Ltd (Vanta) was appointed as the trustee. Teresa transferred her interest in a number of properties to Vanta, with the transfers treated as loans in the trust records. In 2015, Teresa died. Under her Will, she purported to gift the properties which had been transferred to Venta to each of her children in equal shares. Over the years, Vanta had been controlled by members of the Mantovani family. At the time of the proceedings, Nicola and Salvatore were Vanta’s directors and shareholders.

Despite extensive searches, the original Deed for the Trust was unable to be located and the parties agreed that it had been lost. However, a Trust Schedule existed, which included the date, name, settled sum, settlor, trustee, appointer and beneficiaries of the Trust. There were also financial statements and tax returns for the Trust from 2012 to 2020.

The Plaintiff sought a declaration that all assets held by Vanta were subject to a resulting trust in favour of Teresa’s estate and an order for the taking of accounts and payment of the amounts found to be due to Teresa’s estate. The key issue for determination by the Court was what, if any, legal consequences flowed from the loss of the Deed. In order to reach a conclusion on this issue, the Court was required to answer the following questions:

1. Was the Deed Lost?

The Court held that the Deed was lost, in circumstances where reasonable searches and inquiries had been made by all parties.

2. Could Secondary Evidence Prove the Deed’s Existence and Contents?

The Court referred to the standard of “clear and convincing proof” required to prove a Deed’s existence and contents by way of secondary evidence. Whilst the schedule and financial documents proved the existence of the Deed, they did not prove its contents. For example, the documents did not explain the basis on which distributions were to be made or how or when vesting was to occur.

3. Did the Presumption of Regularity Apply?

The presumption of regularity says that, where a formal act is done which can only legally be done after the performance of some prior act, proof of the prior act is presumed. The Court held that the issues arising from the loss of the Deed extended beyond mere adherence to formal requirements, to substantive concerns as to the Deed’s contents. As such, the presumption could not be relied on to overcome the lack of evidence as to the Deed’s subject matter.

4. Did the Trust fail for uncertainty?

The obligation to act in strict conformance with the terms of a trust is perhaps the most important duty of a trustee.  Where the contents of a trust deed cannot be ascertained, the trustee cannot discharge this obligation and the trust must fail. Accordingly, the Court held that Vanta had acted in breach of trust and the Trust failed for uncertainty.

5. Should a Declaration of Resulting Trust be made?

The Court noted that, where an express trust fails, an automatic resulting trust arises by operation of law, such that the trustee holds the trust property on trust for the settlor. Under an automatic resulting trust, the settlor has transferred the legal interest in property, but not the beneficial interest.

In this case, Teresa’s (albeit invalid) devising of properties under her Will indicated that she did not wish for Vanta to retain the beneficial interest in those properties. Although Teresa’s father was the trust’s settlor, Teresa established the trust and transferred the property, so she was the provider of the trust property. As such, all assets held by Vanta were subject to a resulting trust in favour of Teresa’s estate.

6. Should the Plaintiff’s Proposed Orders be made?

A claim for accounts in common form enforces a trustee’s obligation to account to the beneficiaries of the trust. As trustee, Vanta had an ongoing duty to account and pay amounts owed. The Court found that the Deed must have been lost since at least 2011, and that the $120,000 in distributions which Vanta made since that time to Nicola and Salvatore were a breach of trust. Accordingly, the orders sought by the Plaintiff were justified.

Costs

Given that these proceedings involved hostile litigation and allegations of breach of trust, the Court held that costs should be treated in the same way as ordinary litigation and follow the event. Although a trustee generally has an implied right of indemnity for expenses properly incurred in the administration of the trust, Vanta had not properly incurred the costs involved in these proceedings. The fact that Vanta breached its duties as trustee and adopted an adversarial approach to the proceedings warranted an order that the Plaintiff was entitled to costs on an indemnity basis.

Key Takeaways

These proceedings highlight the importance of trustees being familiar with the location of the trust deed and ensuring its safekeeping. If a trust deed cannot be found, it is crucial to seek directions from the Court as to how the trust should be administered going forward. Otherwise, trustees expose themselves to the risk of not only protracted litigation, but also an adverse costs order.

The contents of this post are for informational purposes only. They do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.

To discuss your trust matter, please contact our office for advice from our experienced lawyers.

Written by Despina Bouletos

In a significant development in Australian privacy law, Bunnings Warehouse (“Bunnings”) has been found to have breached its customers’ right to privacy through its use of facial recognition technology in stores. The finding was made by the Office of the Australian Information Commissioner (“OAIC”) earlier this month following a two-year long investigation. The OAIC determined that Bunnings had breached the privacy of hundreds of thousands of its customers in 63 stores across NSW and Victoria over a three year time span from 2018 to 2021.

What was the OAIC’s Determination?

A key aspect of the OAIC’s finding was that Bunnings did not obtain consent from each of its customers to use facial recognition technology, that is, targeted customers were not aware at the time that they were in the store that facial recognition technology was being utilised by Bunnings and that their private information was being retained.

How was the Data Retained and Used?

The unique “face prints” which were captured by Bunnings’ facial recognition technology are considered sensitive biometric data in accordance with Australia’s privacy laws. The OAIC found that Bunnings had been using the face prints to cross reference against a database of previous Bunnings customers who were considered to present a security risk, on the basis of inappropriate conduct in stores such as stealing or acting aggressively towards staff. When a face print matched a customer in this database, an alert was generated on Bunnings’ systems.

How has Bunnings Responded?

In its response to the OAIC, Bunnings indicated that it had deployed the facial recognition technology in an attempt to protect the safety of its staff members and customers. Bunnings’ view is that the deployment of the facial recognition software is the quickest and most accurate way to identify and remove individuals who pose a threat to the safety of others in Bunnings stores. Bunnings maintains that the data collected was not used for marketing purposes. Bunnings also advised the OAIC that, where the face print did not generate a match in Bunnings’ database, then the data was automatically deleted in less than a second. Bunnings has indicated that it will be seeking a review of the decision of the OAIC.

What Penalty was Imposed?

As a result of the OAIC’s findings, Bunnings was ordered not to deploy its facial recognition software going forward and to destroy any personal and sensitive information that was collected within one year. Bunnings is also required to publish a statement on its website within 30 days apologising, explaining its use of the technology and providing information to customers who may wish to make a complaint in respect of the collection of their data.

Implications

The OAIC’s determination is likely to have significant implications for how Australian businesses use data collection technology in future. Businesses will need to carefully consider how the use of software such as facial recognition may impact upon the privacy of customers and appropriate frameworks for implementing such technologies. This is particularly pressing given that a number of other stores are also deploying facial recognition technology.

Uther Webster & Evans is well-versed in dealing with regulators such as the OAIC and can provide you with detailed advice as to how your business interacts with Australia’s privacy legislation or if you have concerns regarding a privacy breach.

The contents of this post are for informational purposes only. They do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. If you require legal advice or representation, please contact our team.

On 17 July 2024, A Thousand Miles from Care, a memoir canvassing Steve Johnson’s thirty-year effort to uncover the truth about the murder of his brother, Scott Johnson, will be published in Australia by Harper Collins.

Vivian Evans (Vivian) of Uther Webster & Evans has worked closely with Steve and his US Legal team, and John Agius SC (John) over the last decade, in his attempt to obtain justice for Scott. Vivian and John assisted Steve to secure a third coronial inquest into Scott’s death, which resulted in a finding that Scott’s death was a homicide and led to a new police taskforce being appointed and the arrest and sentencing of Scott’s killer. Steve’s work also paved the way for the recent New South Wales inquiry into gay hate crimes.

In December 1988, Scott, who was a 27-year-old American PHD student living in Australia, was found dead at the bottom of a cliff at North Head, in the Manly area. Following an autopsy that concluded no foul play, Scott’s death was initially ruled a suicide.

Steve, who was unsatisfied with this finding, commenced what would ultimately be a three-decade-long investigation into uncovering the truth of what happened to Scott. Refusing to believe that Scott had any reason to end his life or that his death was the result of an accident, Steve lobbied police to continue the investigation into Scott’s death.

However, at a coronial inquest held in March 1989, the coroner found that Scott’s death was the result of a suicide, despite acknowledging that there was no apparent reason for Scott to take his own life. Steve continued to campaign for further investigation into Scott’s death, particularly in light of a number of homophobic killings which occurred around Sydney beaches in the 1980s.

Despite repeated attempts to progress the matter, it was not until 2012 that a second coronial inquest was authorised, in which the coroner overturned the initial suicide verdict and replaced it with an open one. The coroner also called for further police investigation into Scott’s death.

In 2017, a third coronial inquest was held. Following the evidence of several key witnesses, who testified to regular assaults against gay men by gangs in the North Head area, the coroner reached a verdict that Scott fell from the clifftop as a result of actual or threatened violence by an unidentified person or persons who attacked him because they perceived him to be homosexual.

Following this finding, police launched a further investigation into Scott’s death and announced a $2 million reward for information on Scott’s killer, $1 million of which was contributed by Steve personally. Ultimately, the police investigation led to the arrest of Scott White, who was charged with the murder of Scott on 12 May 2020.

On 13 January 2022, White was found guilty of murdering Scott, after entering a plea of guilty. Despite an attempt by White’s lawyer to have his guilty plea withdrawn, on the basis that White was not fit to make an admission of guilt, White was sentenced to 12 years and 7 months imprisonment, with a non-parole period of 8 years and 3 months.

However, six months later, White appealed his conviction, and a re-trial was ordered. On 23 February 2023, following discussions, White pleaded guilty to manslaughter and was subsequently re-sentenced to 9 years in prison, with a non-parole period of 6 years. He will be eligible for parole in 2026.

Following White’s sentence, a special commission of inquiry into LGBTIQ hate crimes was commissioned, appointing Justice John Sackar as Commissioner. The inquiry looked into the unsolved deaths of LGBTIQ people that may have been hate crimes between 1970 and 2010, which were previously the subject of investigation by the NSW Police Force. Specifically, the inquiry was focus upon the deaths of 88 men, potentially motivated by gay hate bias.

On 21 December 2023, the inquiry published its final report comprising almost 3,500 pages. The report calls for an audit and review by NSW Police of all unsolved homicides for the period from 1970 to 2010, and for the implementation of mandatory and ongoing training for NSW Police officers concerning the LGBTIQ community.

UWE is pleased to have been able to work closely with Steve Johnson in achieving not only justice for Scott but also important and long overdue reform in relation to the approach taken by the NSW Police Force in regard to LGBTIQ hate crimes.

The contents of this post are for informational purposes only. They do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.

To discuss your criminal law matter, please contact our office for advice from our experienced criminal law team

Written by Holly Eastway

The recent case of Pugwall v Arthur McKenzie Investments Pty Ltd [2022] VSCA 272, in the Victorian Court of Appeal, serves as a reminder of the risks of personal guarantees for directors, revealing the dangers of personally guaranteeing the obligations of a company, especially where one may consider themselves safe under the corporate veil.

The Facts

A joint venture agreement (“JVA”) between two constructions companies, concerning the development of residential units in Seaford, Victoria turned sour following issues with funding.

Mr Clark, the sole director and secretary of one of the parties, and Mr McKenzie the sole director and secretary of the other, gave personal guarantees on behalf of their own respective companies.

The problem was that, despite being personally named as guarantors within the JVA, neither Mr Clark nor Mr McKenzie signed the JVA in their personal capacities.

First Instance Decision

The trial judge held, among other things, that McKenzie could not be held liable in his personal capacity pursuant to the guarantee.

On Appeal

The Court confirmed that the court will assess a party’s intention to be bound to the terms of a contract on the basis of an objective construction of the document as a whole, rather than the subjective, uncommunicated intentions of that party.  Upon assessing the JVA in its entirety, it was found that the JVA evidenced the intention for the guarantors to be personally liable and that the formal way in which a party signs a contractual document, will not be determinative of a party’s intention.

Mr McKenzie submitted that his signature to the JVA was only in his capacity as sole director/secretary, and that no signing clause was provided for him in his personal capacity as guarantor.  However, the Court found on appeal that the entirety of the JVA evidenced otherwise.

Key Takeaways

Pugwall v Arthur McKenzie Investments Pty Ltd is a potent reminder of the dangers of personal guarantees. It demonstrates the importance for lawyers to understand the wide ramifications of commercial relationships gone bad and the significance of good legal drafting skills. All in all, the Victorian Court of Appeal has set a precedent for ignoring the subjective intentions of parties to a contract in favour of an objective analysis of the contract itself.

Contact Us

If you’re thinking of entering into a contractual arrangement as a guarantor, seek legal advice in advance.  Uther Webster & Evans can provide you with advice and guidance, so contact our office here.

Disclaimer: the contents of this article are for informational purposes only and do not constitute legal advice, nor are the contents of this article intended to be a substitute for legal advice or to be relied upon as such.

Background

This case involved a dispute between four adult siblings, Giovanni (the Plaintiff), Nicola, Salvatore and Carmine Mantovani, as to the terms of and entitlement to assets within a family trust and, consequently, the distribution of their mother, Teresa’s, estate.

In 1976,  the Mantovani Family Trust (the Trust) was established and a corporation known as Vanta Pty Ltd (Vanta) was appointed as the trustee. Teresa transferred her interest in a number of properties to Vanta, with the transfers treated as loans in the trust records. In 2015, Teresa died. Under her Will, she purported to gift the properties which had been transferred to Venta to each of her children in equal shares. Over the years, Vanta had been controlled by members of the Mantovani family. At the time of the proceedings, Nicola and Salvatore were Vanta’s directors and shareholders.

Despite extensive searches, the original Deed for the Trust was unable to be located and the parties agreed that it had been lost. However, a Trust Schedule existed, which included the date, name, settled sum, settlor, trustee, appointer and beneficiaries of the Trust. There were also financial statements and tax returns for the Trust from 2012 to 2020.

The Plaintiff sought a declaration that all assets held by Vanta were subject to a resulting trust in favour of Teresa’s estate and an order for the taking of accounts and payment of the amounts found to be due to Teresa’s estate. The key issue for determination by the Court was what, if any, legal consequences flowed from the loss of the Deed. In order to reach a conclusion on this issue, the Court was required to answer the following questions:

1. Was the Deed Lost?

The Court held that the Deed was lost, in circumstances where reasonable searches and inquiries had been made by all parties.

2. Could Secondary Evidence Prove the Deed’s Existence and Contents?

The Court referred to the standard of “clear and convincing proof” required to prove a Deed’s existence and contents by way of secondary evidence. Whilst the schedule and financial documents proved the existence of the Deed, they did not prove its contents. For example, the documents did not explain the basis on which distributions were to be made or how or when vesting was to occur.

3. Did the Presumption of Regularity Apply?

The presumption of regularity says that, where a formal act is done which can only legally be done after the performance of some prior act, proof of the prior act is presumed. The Court held that the issues arising from the loss of the Deed extended beyond mere adherence to formal requirements, to substantive concerns as to the Deed’s contents. As such, the presumption could not be relied on to overcome the lack of evidence as to the Deed’s subject matter.

4. Did the Trust fail for uncertainty?

The obligation to act in strict conformance with the terms of a trust is perhaps the most important duty of a trustee.  Where the contents of a trust deed cannot be ascertained, the trustee cannot discharge this obligation and the trust must fail. Accordingly, the Court held that Vanta had acted in breach of trust and the Trust failed for uncertainty.

5. Should a Declaration of Resulting Trust be made?

The Court noted that, where an express trust fails, an automatic resulting trust arises by operation of law, such that the trustee holds the trust property on trust for the settlor. Under an automatic resulting trust, the settlor has transferred the legal interest in property, but not the beneficial interest.

In this case, Teresa’s (albeit invalid) devising of properties under her Will indicated that she did not wish for Vanta to retain the beneficial interest in those properties. Although Teresa’s father was the trust’s settlor, Teresa established the trust and transferred the property, so she was the provider of the trust property. As such, all assets held by Vanta were subject to a resulting trust in favour of Teresa’s estate.

6. Should the Plaintiff’s Proposed Orders be made?

A claim for accounts in common form enforces a trustee’s obligation to account to the beneficiaries of the trust. As trustee, Vanta had an ongoing duty to account and pay amounts owed. The Court found that the Deed must have been lost since at least 2011, and that the $120,000 in distributions which Vanta made since that time to Nicola and Salvatore were a breach of trust. Accordingly, the orders sought by the Plaintiff were justified.

Costs

Given that these proceedings involved hostile litigation and allegations of breach of trust, the Court held that costs should be treated in the same way as ordinary litigation and follow the event. Although a trustee generally has an implied right of indemnity for expenses properly incurred in the administration of the trust, Vanta had not properly incurred the costs involved in these proceedings. The fact that Vanta breached its duties as trustee and adopted an adversarial approach to the proceedings warranted an order that the Plaintiff was entitled to costs on an indemnity basis.

Key Takeaways

These proceedings highlight the importance of trustees being familiar with the location of the trust deed and ensuring its safekeeping. If a trust deed cannot be found, it is crucial to seek directions from the Court as to how the trust should be administered going forward. Otherwise, trustees expose themselves to the risk of not only protracted litigation, but also an adverse costs order.

The contents of this post are for informational purposes only. They do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.

To discuss your trust matter, please contact our office for advice from our experienced lawyers.