“That loan was for a purpose. Pay it back!”

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P sued natural persons and Cos. D1 was not served and D2 was bankrupt, leaving P to pursue Cos only: [9]

P’s dad spoke with D1 and D2 about an investment. P later transferred $9.2m to one of the DCos: [3], [5]

There was no written agreement: [6]

In 2017, all agreed the $9.2m would be used for property investment, that if the property bought was then sold in a year 35% would be returned, and if unsold the funds would be returned: [6]

In 2018, when the principal was not returned, the parties made a loan agreement, requiring repayment and interest: [8], [61]

Repayments were not made. P sued: [9]

P said the money was advanced to buy a specific property; and so was held in a purposive “Quistclose” trust. P said the money transferred to the other Cos was done with knowledge and so was recoverable: [11]

The Ds denied a trust and said if there was one, then the loan agreement extinguished it: [12]The Ds served no evidence: [15]

P had to prove the 2017 agreement, WITH a mutual intention that the funds would be used for a specific purpose, to be held on trust and returned if the purpose was not achieved: [21]

P never discussed the proposed sum, proposed property or properties, location, or property size: [24]

P said some docs sent after P’s dad’s the discussion were a representation that the money would be used for specific land: [29] - [31]

There was no evidence of the purchase price being referable to specific properties or of any intention to purchase a specific property: [32] - [34]

In this case, there was no intention to create a trust: [36], [41], [48], [54]

That’s because: the creation of a JV vehicle did not prove a trust creation intention [49], the potential of co-mingled funds absent a “trust account” points away from a trust [50], absence of language like “solely” or “exclusively” [51], and the parties treated the funds as loaned rather than held in trust [53]

The Court then considered IF there was a trust, was it brought to an end by the loan agreement: [55]

The Court held the loan extinguished the trust rights (if any) because (i) the loan came after and was inconsistent with a trust, (ii) the loan showed the parties abandoning the earlier agreement, and (iii) the loan’s operation saw existing rights surrendered in exchange for additional terms secured under the loan: [65]

The Court then considered the position if (a) there was a trust, and (b) that trust survived the loan: [68]

Even if both criteria were met, the Court found no basis to order recovery against the DCos: [69] - [109]

P’s claim failed. Costs followed the event: [110]

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