In Canehire Pty Ltd & Anor v Themis Holdings Pty Ltd  QCA 296 the Queensland Court of Appeal dismissed an appeal by Canehire Pty Ltd (the former trustee of the Holzapfel Family Trust) and its director Philip Ham from a decision by Philippides J who found after a 10 day trial that both Canehire and Mr Ham were liable to pay equitable compensation in a sum excess of $4,000,000 together with indemnity costs to the plaintiff, the new trustee arising from a dishonest breach of trust.
The facts as found at trial were that the trust was the owner of a Crown Lease in its capacity as trustee and when it exercised its right as lessee to purchase the freehold of the land, it also did so as trustee. At the time the right was exercised, Mr Ham had agreed with Mr Trevor Holzapfel, the family patriarch, to source the funds to acquire the land and thereafter had proposed to mortgage the land and pay of the interest from rent received. For six years Mr Ham, a well-known chartered accountant in Brisbane who was also a close family friend and who had also been the family’s accountant for more than 30 years maintained the pretence that that is what he had done when in fact he with his business partner treated the property as an asset of a different trust. When Canehire sold the land in 2008, none of the proceeds of sale, or any other amounts Canehire had received along the way from refinancings it had carried out, were paid to the Trust. Mr Ham raised a number of defences, including that the agreement with Mr Holzapfel permitted his conduct, that the presumption of advancement discussed in Calverley v Green ought apply, that the well-known principle of Keech v Sandford was or ought be limited and that the exclusion in the trust deed (which excluded breaches of trust which were not committed in personal conscious bad faith) applied. All of these defences were rejected.
On appeal, the findings of dishonesty were not disputed, nor was the acceptance by the trial judge of Mr Holzapfel’s version of the agreement. Mr Ham and Canehire principally contended that the remedy of equitable compensation was in appropriate because on the facts as decided, the Court should have concluded that Canehire was a constructive trustee (as oppose to an express trustee) of the land, the remedy for which should have been an account of profits. This argument was rejected, Muir JA said at 
51. “If, contrary to my opinion, Canehire had succeeded in acquiring the freehold other than as trustee of the HPT, it would have done so in circumstances in which a conflict existed between its fiduciary duty and its own interest in pursuing such a benefit or gain. Moreover, the freehold interest would have been obtained by Canehire by the use of or by reason of its fiduciary position.”
As to the appellants’ reliance on the presumption of advancement, Muir JA said at  and :
63. The appellants contended that the primary judge erred in not applying the rebuttable presumption that “where A purchases a property with funds provided by B then, unless the presumption of advancement applies, there is a presumption that A holds the property on trust for B”.52 The contention must be rejected.
64. No authority was identified by the appellants that would displace the rights of beneficiaries in the circumstances under consideration and it is highly unlikely that any exist. It is unlikely to be the policy of the law that equitable principles of the nature of those under consideration are displaced by a rule of thumb, of which Deane J observed in Calverley v Green,53 “… their propriety is open to serious doubt”.
The appellants also ran an argument based on Browne v Dunn relying on the alleged failure to put to Mr Ham the actual finding of dishonesty the trial judge was invited to (and did) make. This too was rejected.”
Damian Clothier QC and Christopher Johnstone successfully appeared for the respondent.
A copy of the judgment can be found here: http://archive.sclqld.org.au/qjudgment/2014/QCA14-296.pdf