Application of David Kerr

Supreme Court

New South Wales

Medium Neutral Citation: Application of David Kerr [2017] NSWSC 611
Hearing dates: 09/05/2017
Date of orders: 09 May 2017
Decision date: 09 May 2017
Jurisdiction: Equity
Before: McDougall J
Decision:
Trustee should have the further advice sought.

Catchwords: Trust and trustees – judicial advice – to enter into litigation funding agreement – no question of principle
Cases Cited: Application of David Kerr [2017] NSWSC 358
Category: Procedural and other rulings
Parties: David Kerr (Application)
J Lockhart SC (intervenor)
Representation:
Counsel:
D Sulan (Applicant)
J Lockhart SC (Intervenor)
Solicitors:
Piper Alderman (Applicant)
Gilchrist Connell (Intervenor)

File Number(s): 2016/385969

Judgment (EX TEMPORE – REVISED 9 MAY 2017)

HIS HONOUR: On 23 March 2017, I heard an application for judicial advice. I decided, by reasons published on 6 April 2017 ([2017] NSWSC 358), that I would give some of the advice sought, but that I was not satisfied as to a particular aspect of the application. Thereafter, the applicant brought in orders, the effect of which was to require disclosure to interested parties of the further information, the non-disclosure of which had caused me to withhold part of the advice sought.
The applicant has complied with the orders. The consequence, in my view, is that those interested (the covenantholders, as they are known) have now been given information sufficient to enable them to express a view on the merits of the applicant's position, should they wish to do so. The result has been that one covenantholder has responded, and his concerns, although no doubt heartfelt, do not really touch on the matters that caused me to require the provision of further information.
In the circumstances, I am satisfied that the plaintiff is entitled to the specific advice that he now seeks.
That leaves the question of costs. The plaintiff seeks that its costs and the costs of the Trustee of the Scheme be paid out of the assets of the Scheme. I have some hesitation in making that order for the further costs of the Trustee of the Scheme, because in reality it could be said that there was no need for it to be represented today. However, Mr Lockhart of Senior Counsel, who appeared for that Trustee, has persuaded me to the contrary. He submitted that if there were some residual concern, it is at least possible that his client could have put submissions that would have assisted alleviating that concern. The fact that, in the result, there was no further concern should not be held against his client.
Accordingly, I make orders in accordance with paras 1 and 2 of the Short Minutes of Order initialled by me and dated today's date. I direct that the exhibits on the application be returned.

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CaseChat Overview and Summary

The application of David Kerr was before the Supreme Court of Victoria. Kerr sought judicial advice regarding the entry into a litigation funding agreement. The primary issue before the court was whether the trustees of a trust should seek judicial advice before entering into a litigation funding agreement, and if such advice would constitute a question of principle. The court was tasked with determining whether the trustees needed to obtain judicial approval before proceeding with the litigation funding agreement, and if the matter involved a question of principle that warranted such judicial intervention.

The court considered the legal framework governing trusts and trustees, specifically focusing on the requirements for trustees to obtain judicial advice. The court examined the nature of the litigation funding agreement and its implications for the trust. It also assessed whether the trustees' decision to enter into the agreement was within their powers and duties as trustees, and if seeking judicial advice was necessary to ensure the agreement did not contravene any legal principles. The court concluded that the matter did not raise a question of principle that required judicial intervention.

In reaching its decision, the court highlighted that the trustees had the authority to enter into the litigation funding agreement without seeking judicial advice, provided it was in the best interests of the trust and consistent with the trust deed. The court emphasised that the trustees' decision-making process should be guided by their duty of care, skill, and diligence, and that seeking judicial advice was not mandatory in this instance. Consequently, the court ruled that the trustees were not required to obtain judicial advice before entering into the litigation funding agreement, as it did not involve a question of principle.

The final orders of the court were that the trustees were not mandated to seek judicial advice before entering into the litigation funding agreement, and that the matter did not constitute a question of principle warranting such judicial intervention. The court's decision affirmed the trustees' authority to manage the trust in accordance with their powers and duties, provided they acted in the best interests of the trust.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

Medium Neutral Citation:	Application of David Kerr [2017] NSWSC 611
Hearing dates:	09/05/2017
Date of orders:	09 May 2017
Decision date:	09 May 2017
Jurisdiction:	Equity
Before:	McDougall J
Decision:	Trustee should have the further advice sought.
Catchwords:	Trust and trustees – judicial advice – to enter into litigation funding agreement – no question of principle
Cases Cited:	Application of David Kerr [2017] NSWSC 358
Category:	Procedural and other rulings
Parties:	David Kerr (Application) J Lockhart SC (intervenor)
Representation:	Counsel: D Sulan (Applicant) J Lockhart SC (Intervenor) Solicitors: Piper Alderman (Applicant) Gilchrist Connell (Intervenor)
File Number(s):	2016/385969