Lane & Anor v Conlan

[2004] WASC 15

Supreme Court of Western Australia

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For Australian Law.

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Interrogate

Catchwords

1. Equity
2. › Bona fide purchaser for value without notice
3. › Whether value given
4. › Surrender of right to sue trustee for breach of trust as valuable consideration
5. › Whether loss of right of action against defaulting trustee constitutes value
1. Equity
2. › Bona fide purchaser for value without notice
3. › Notice
4. › Notice acquired between payment of consideration and acquisition of legal interest
5. › Whether subsequent notice defeats claim where breach of trust completed before notice received
1. Trusts
2. › Breach of trust
3. › Tracing trust property
4. › Defence of bona fide purchaser for value without notice
5. › Third party transaction involving misappropriated trust funds
1. Practice and Procedure
2. › Summary judgment
3. › Whether plaintiffs entitled to summary judgment on claim for moneys paid under mortgage covenant

Quick Take

Where a trustee misappropriates trust funds and uses them in a third-party transaction, the beneficiaries of that transaction give valuable consideration by surrendering their right to sue the trustee for breach of trust, and may therefore qualify as bona fide purchasers for value without notice. Notice of the breach acquired after consideration is given but before the legal interest is obtained does not defeat the defence where the breach was completed before notice and no further act by the trustee was necessary.