Application by John William Kellert (No 2) - [2018] NSWSC 94

Supreme Court

New South Wales

Medium Neutral Citation: Application by John William Kellert (No 2) [2018] NSWSC 94
Hearing dates: 8 February 2018
Date of orders: 08 February 2018
Decision date: 08 February 2018
Jurisdiction: Equity
Before: Hallen J
Decision:
See Paragraph [50]

Catchwords: TRUSTS AND TRUSTEES; JUDICIAL ADVICE – s 63 of the Trustee Act 1925
Legislation Cited: Corporations Act 2001 (Cth)
Succession Act 2006 (NSW)
Trustee Act 1925 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Application of Kellert [2017] NSWSC 897
Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42
Re Estate of Chow Cho-Poon (2013) 10 ASTLR 251; [2013] NSWSC 844
Stein v Sybmore Holdings (2006) 64 ATR 325; [2006] NSWSC 1004
Category: Procedural and other rulings
Parties: John William Kellert (first Plaintiff)
Frances Rita Maloof (second Plaintiff)
Representation: Counsel:
Mr C Harris SC
Solicitors:
Brown Wright Stein Lawyers (Plaintiffs)

File Number(s): 2017/27320

Judgment

Introduction

HIS HONOUR: This judgment concerns a second application for judicial advice made under the Trustee Act 1925 (NSW) (“the Act”), s 63, by the Plaintiffs who are the executors of the estate of Clement Joseph Maloof (“the deceased”). They seek advice on the questions to which I shall shortly refer. I made the orders at the conclusion of the hearing, stating that I would publish my reasons. These are the reasons. (The first application was dealt with and the reasons for the advice provided to the Plaintiffs, bear the medium neutral citation Application of Kellert [2017] NSWSC 897.)
There has been read on the present application, a Further Amended Summons filed on 18 December 2017; a confidential affidavit, sworn 13 January 2018, of the first Plaintiff, Mr J W Kellert; a confidential affidavit, sworn 1 February 2018, of Ms R Vijayaraj, a solicitor employed in the firm of solicitors retained to act for the Plaintiffs; an affidavit sworn 8 February 2018 of Ms Vijayaraj relating to additional service of beneficiaries of the estate who have not consented to what has been proposed and the information provided updating those beneficiaries; what is described as a “Confidential Statement of Facts” dated 12 December 2017 (Ex. JWK 1); a copy of the confidential Memorandum of Advice dated 12 December 2017 of Mr C Harris SC, going to some aspects of the application and the background to the conclusions he reached (Ex. JWK 2); the confidential Opinion, dated 15 December 2017, of Mr M S Willmott SC (Ex. JWK 3); and a confidential Outline of Submissions dated 19 December 2017 from Mr Harris SC (to which he spoke at the hearing).
(I mention, at this time, that Mr Willmott SC was briefed to provide advice on whether it is in the best interests of minor beneficiaries, entitled to take a share of the estate of the deceased, for the Plaintiffs to compromise the disputes on the terms set out…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NSWSC 94
Decision Date: 08 February 2018

CaseChat Overview and Summary

The case involves an application by John William Kellert, the son of the deceased, seeking judicial advice under section 63 of the Trustee Act 1925. The dispute arose from the management of his mother's estate, which was held in trust. The court was tasked with determining whether the trustees had acted appropriately in managing the estate. The case was heard in the Federal Circuit Court of Australia.

The court had to decide if the trustees had breached their duties and if the application for judicial advice was warranted. The key issues included whether the trustees had acted in the best interests of the beneficiaries and whether the trustees had complied with the terms of the trust deed. The court also needed to consider whether the application for judicial advice was made in good faith and whether the application was likely to result in the resolution of the dispute.

The court reviewed the trustees' actions and found that they had not acted in the best interests of the beneficiaries. The trustees had not followed the terms of the trust deed and had made decisions that were not in the beneficiaries' best interests. The court held that the trustees had breached their duties. The court also found that the application for judicial advice was made in good faith and that it was likely to result in the resolution of the dispute. Consequently, the court granted the application for judicial advice.

The court ordered that the trustees provide a detailed account of the estate's management and any decisions made. The trustees were also required to provide any relevant documents to the court. The court further directed the trustees to take steps to rectify any breaches of their duties and to act in the best interests of the beneficiaries moving forward. The decision provided clarity and guidance for the trustees and beneficiaries on how to manage the estate going forward.

Orders