Korda And Ors V Australian Recontinent (Sa) Limited Case Brief

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Case Analysis Korda and Ors v Australian Executor Trustees (SA) Limited [2015] HCA 6 I FACTS. The case concerns two companies, SEAS Sapfor Forests Pty Ltd (the Forest Company) and SEAS Sapfor Harvesting Pty Ltd (the Milling Company), who operated a timber plantation investment scheme for several years. Under the scheme, the Forest Company planted the pine trees on land it owned or leased whilst the Milling Company felled, milled, marketed and sold the trees when they were mature. The Milling Company would pay the Forest Company the proceeds of sale of timber after making certain allowances and deductions. In order to finance its operations, the Forest Company issued prospectuses from time to time to investors (Covenantholders) who entered …show more content…

It Nevertheless, equity requires that trusts satisfy the three certainties: certainty of intention, certainty of subject matter and certainty of objects. As this case demonstrated, a trust will not arise unless the parties expressly declare their intention to create a trust or their intention can be inferred by the language of the parties and the commercial circumstances. Further, the court will not infer that an express trust existed simply by reference to the commercial context or to protect the interests of particular parties from inherent risks of their transactions. This is because it would confuse the process of ascertaining an express trust with the imposition of a constructive trust. The outcome of this case was arguably not unfair for the Covenantholders as they were getting a tax advantage from the scheme. Nevertheless, many a cases may arise similar to the one at hand but without the tax advantage highlighting to those who seek to rely on the existence of an express trust that they should ensure their intention to do so is expressed clearly in any relevant

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