NEW SOUTH WALES COURT ISSUES JUDGEMENT FOR AURORA AUSTRALASIA, ET AL. V/S HUNT PROSPERITY, ET AL. CASE

Australia, March 20 -- New South Wales Land and Environment Court issued text of the following judgement Feb. 20:

1. WARD P: In this matter, the appellants (Aurora Australasia Pty Limited (Aurora) and its sole director and secretary, Mr David Driver), challenge orders made by the primary judge on 23 August 2024 (Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd trading as trustee of the Aurora Australasia Investment Fund Unit Trust [2024] NSWSC 1054 - the primary judgment) and 26 September 2024 (Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd trading as trustee of the Aurora Australasia Investment Fund Unit Trust (No 2) [2024] NSWSC 1210 - the costs judgment).

2. Relevantly, her Honour made declarations in respect of the units in the Aurora Australasia Investment Fund Unit Trust (Aurora Unit Trust) recorded in Certificate 3 (the Units) that had been issued by the first respondent, Hunt Prosperity Pty Ltd (the Trustee), as trustee of the Aurora Unit Trust; restrained the Trustee from processing any redemption request by or at the direction of Mr Driver in respect of the Units; and made costs orders against the appellants in relation to the proceedings (see [155] of the primary judgment and [43] of the costs judgment).

3. The central question arising on the appeal is whether her Honour was correct in concluding that Mr Driver had granted an equitable charge in favour of the second and third respondents (the Hartley Parties) over his beneficial interest in the Units (Ground 2 of the grounds of appeal - see Amended Notice of Appeal filed 28 October 2024).

4. The appellants maintain that her Honour erred in so finding on two bases: first, that no claim to that effect was pleaded or advanced in the proceedings and, second, that the conclusion that there was an equitable charge was incorrect in any event. There is also an issue as to the relief that flows if the appellants' contention on that central question is correct. In that event, the appellants seek an order that the Trustee redeem the Units and pay the redemption proceeds in the amount calculated by the Trustee as at 30 November 2023 (which they contend is the Withdrawal Date) whereas both the Trustee, on the one hand, and the second and third respondents, on the other, seek that the matter be remitted to the primary judge (although it is not clear what the primary judge would then need to determine).

5. For the reasons that follow, the appeal should be allowed and both the declaration (at Order (2)) and order (at Order (3)) made by the primary judge as to the equitable charge over the Units should be set aside. As to the relief to be granted, in my opinion it should be inferred (from the fact that the Trustee did not, in the hearing before the primary judge or otherwise, dispute its own calculation of the redemption price predicated on a 30 November 2023 Withdrawal Date and had, prior to the proceedings at first instance, communicated its intention to process the redemption without delay) that the Trustee elected to proceed on the basis that the Withdrawal Date should not be otherwise than the date provided for under the Trust Deed (in the absence of an "otherwise" determination). In those circumstances, the Units should now be redeemed at the Withdrawal Price that the Trustee had itself calculated on the basis of a Withdrawal Date of 30 November 2023, i,e, $1,696,472.17.

6. For completeness, had I not drawn the above inference then I would have concluded that the appropriate relief was simply to direct that the Trustee redeem the Units and pay the redemption proceeds to or at Mr Driver's direction without further delay (rather than remitting the matter to the primary judge as the respondents contend).

7. In either case, I see no reason why costs should not follow the event, although I note that the appellants do not seek to disturb Order 5 of the primary judge's costs orders (as to the entitlement of the Trustee to recoup its costs out of the Aurora Unit Trust funds).

*Rest of the document and Footnotes can be viewed at: (https://www.caselaw.nsw.gov.au/decision/1951bb57352a2506f543b8ee)

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