Southern Wine Corporation Pty Ltd (in Liq) v Frankland River Olive Co Ltd & Anor

(2005) 31 WAR 162; [2005] WASCA 236

Western Australia Court of Appeal

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Interrogate

Catchwords

1. Equity
2. › Equitable charge
3. › Creation by contract
4. › Intention of parties
5. › Whether contractual provisions for deduction of management fees from future income created equitable charge
6. › Managed investment scheme
7. › Corporations Act 2001 (Cth), Ch 5C
1. Equity
2. › Trusts
3. › Trustee's remuneration
4. › Whether trustee had beneficial interest in trust property for remuneration
5. › Distinction between right of indemnity and right to remuneration
1. Equity
2. › Equitable charge
3. › Future property
4. › Whether uncertainty as to quantum of future fund precluded equitable charge
1. Practice and Procedure
2. › Striking out
3. › Whether statement of claim disclosed reasonable cause of action
4. › Test of manifest untenability
5. › Rules of the Supreme Court (WA), O 20 r 19(1)

Quick Take

A former responsible entity of a managed investment scheme may have an arguable claim to an equitable charge over scheme property for unpaid management fees where the contractual documents provide express obligations and rights to appropriate from scheme income, the language mirrors the right of indemnity, and there is no in personam remedy against scheme members. However, where the right to deduct fees from future income is merely one of several options available to the responsible entity, the contractual provisions may not manifest an intention to create a present equitable right sufficient for an equitable charge. A trustee's right to remuneration under a trust deed does not, without more, confer a beneficial interest in trust property.