Application by Stevens - [2016] NSWSC 1523

Supreme Court

New South Wales

Medium Neutral Citation: Application by Stevens [2016] NSWSC 1523
Hearing dates: 26 October 2016
Decision date: 26 October 2016
Jurisdiction: Equity
Before: Stevenson J
Decision:
Advice given that trustee would be justified in defending proceedings 2016/206770

Catchwords: TRUSTS AND TRUSTEES – JUDICIAL ADVICE – whether trustee would be justified in defending proceedings brought by non-beneficiary seeking information concerning the trust and an order that the trustee pass accounts – whether trustee justified in drawing on trust funds to pay her costs of those proceedings – whether trustee justified in pursuing a motion for summary dismissal of the proceedings
Legislation Cited: Trustee Act 1925 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Category: Principal judgment
Parties: Beryl Joan Stevens (Plaintiff)
Representation:
Counsel:
P Blackburn-Hart SC with S Fitzpatrick (Plaintiff)
Solicitors:
Reynolds & Reynolds Legal Services Solicitors (Plaintiff)

File Number(s): SC 2016/286033

EX TEMPORE Judgment

The plaintiff, Ms Beryl Stevens ("the Trustee") is the trustee of the George and Annie Cork Memorial Trust. The Trust was established under the will of the late Cyril David Cork who died on 6 November 2007.
The Trust has assets in the order of some $6.2 million. It has no significant liabilities.
By the terms of the Trust, its income and capital is to be applied for the benefit of the "Beneficiaries" who are defined, relevantly, to be:

“Such persons...residing in or otherwise carrying on business in Dorrigo in New South Wales or surrounding areas as defined by postcode 2453...as the Trustees shall before the vesting date appoint in writing to be beneficiaries...”.

Mr Nicholas Wright resides in and carries on business in the Dorrigo area. He has not, however, been appointed in writing by the Trustee as a beneficiary.
On 7 July 2016, Mr Wright commenced proceedings in this Court, numbered 2016/206770 (“the Proceedings”) against the Trustee, seeking orders that:

the Trustee provide him with information about the assets, the beneficiaries and the financial position of the Trust; and

the Trustee verify, file and pass accounts of the Trust.

The Trustee seeks the Court's advice under s 63 of the Trustee Act 1925 (NSW) as to whether or not she is warranted in:

defending the Proceedings;

pursuing a Notice of Motion that she filed in the Proceedings on 15 August 2016 seeking to have the Proceedings dismissed under r 13.4 of Uniform Civil Procedure Rules 2005 (NSW); and

drawing on funds of the Trust to pay her legal costs of defending the Proceedings and pursuing the Motion.

The Trust also seeks an order that she be indemnified from the Trust for the costs of this application.
I have had the benefit of reading an opinion of senior and junior counsel as to the merits of Mr Wright's claim in the Proceedings.
I am not asked to express any opinion as to whether a valid trust has been created. Indeed, Mr Wright's claim seems to assume the Trust is valid.
Based on the opinion of counsel and my own consideration of the…

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.

Continue reading Application by Stevens

Details

AGLC: Application by Stevens [2016] NSWSC 1523
Case: [2016] NSWSC 1523
Decision Date: 26 October 2016

CaseChat Overview and Summary

The matter before the court involved an application by a trustee, Stevens, seeking advice on various actions in relation to trust proceedings. A non-beneficiary had brought proceedings against Stevens, seeking information concerning the trust and an order that Stevens pass the trust accounts. Stevens was concerned about the potential financial implications of these proceedings, including whether she would be justified in drawing on trust funds to pay her costs and pursuing a motion for summary dismissal of the proceedings.

The primary legal issues before the court were whether Stevens would be justified in defending the proceedings brought by the non-beneficiary, whether she could draw on trust funds to cover her costs, and whether she could pursue a motion for summary dismissal. The court considered these issues in the context of the trustee's duties and the potential impact on the beneficiaries of the trust.

The court determined that Stevens would be justified in defending the proceedings, as the non-beneficiary's claims did not appear to have merit and were likely an abuse of process. Regarding the use of trust funds to cover costs, the court held that Stevens would not be justified in drawing on trust funds for this purpose unless it was necessary to protect the trust assets or the interests of the beneficiaries. Lastly, the court found that Stevens could pursue a motion for summary dismissal if the non-beneficiary's claims were clearly without merit and there was no genuine issue for trial.

The court's final orders included advice that Stevens was justified in defending the proceedings and pursuing a motion for summary dismissal, but she should not draw on trust funds to cover her costs unless absolutely necessary. This decision provided clarity for Stevens in managing the proceedings and her fiduciary duties.

Orders