Application of Murray Irrigation Ltd - [2024] NSWSC 186

Supreme Court

New South Wales

Medium Neutral Citation: Application of Murray Irrigation Ltd [2024] NSWSC 186
Hearing dates: 29 February 2024
Date of orders: 29 February 2024
Decision date: 29 February 2024
Jurisdiction: Equity
Before: Hmelnitsky J
Decision:
(1) Pursuant to s 70 of the Trustee Act 1925 (NSW), Riverina Sustainable LWMP Pty Ltd (Riverina Sustainable) shall be appointed as trustee of any funds referrable to the implementation of the NSW Murray Irrigation District Landholder Association Land and Water Management Plan 2022 (2022 LWMP) in substitution for the plaintiff, the existing trustee thereof;
(2) Pursuant to s 71 of the Trustee Act 1925 the funds referrable to the 2022 LWMP shall vest in Riverina Sustainable;
(3)   The plaintiff’s costs of the summons shall be paid out of the funds referrable to the 2022 LWMP on the indemnity basis and on a pro-rata basis as between the balance of funds standing to the credit of:
(a)   the Berriquin Community's Land and Water Management Plans;
(b)   the Cadell Community's Land and Water Management Plans;
(c)   the Denimein Community's Land and Water Management Plans; and
(d)   the Wakool Community's Land and Water Management Plans.
(4)   Reserve to the plaintiff liberty liberty to apply for further or consequential orders in relation to the summons.

Catchwords:
EQUITY — Trusts and trustees — Court’s supervision of — Appointment and removal of trustees — Application under s 70 of Trustee Act 1925 (NSW) for replacement of trustee of trust — no question of principle

Legislation Cited:
Corporations Act 2001 (Cth)
Trustee Act 1925 (NSW) ss 63, 70-71
Uniform Civil Procedure Rules 2005 r 7.12(2)
Water Management Act 2000 (NSW) s 122

Cases Cited:
Dulhunty v Dulhunty [2010] NSWSC 1465
Re Estate of Roberts (1983) 20 NTR 13

Texts Cited:
JD Heydon and MJ Leeming (eds), Jacob’s Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths)

Category: Principal judgment
Parties: Murray Irrigation Ltd (Applicant)
Representation:
Counsel:

M Condon SC/W Liu (Applicant)

Solicitors:
Horne Legal (Applicant)

File Number(s): 2023/465552

JUDGMENT

By summons filed on 22 December 2023, Murray Irrigation Ltd (the plaintiff) seeks:

an order pursuant to s 70 of the Trustee Act 1925 (NSW), or the Court's inherent jurisdiction, that Riverina Sustainable LWMP Pty Ltd (Riverina Sustainable) be appointed as trustee of any funds referrable to the implementation of the NSW Murray Irrigation District Landholder Association Land and Water Management Plan 2022 (2022 LWMP) in substitution for itself (i.e., MIL), the existing trustee thereof;

an order pursuant to s 71 of the Trustee Act 1925 (NSW) that the funds referrable to the 2022 LWMP vest in Riverina Sustainable;

an order that the plaintiff’s costs of the summons be paid out of the funds referrable to the 2022 LWMP on an indemnity basis and on a pro-rata basis as between the balance of funds standing to the credit of:

the Berriquin Community's Land and Water Management Plans;

the Cadell Community's Land and Water Management Plans;

the Denimein Community's Land and Water Management Plans;

the Wakool Community's Land and…

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: [2024] NSWSC 186
Decision Date: 29 February 2024

CaseChat Overview and Summary

Murray Irrigation Ltd applied to the Supreme Court of New South Wales for the appointment of a new trustee of a trust established for the benefit of water users. The current trustee was alleged to be incapable of properly discharging their duties. The court was asked to consider whether the application met the criteria for the removal and replacement of the trustee under section 70 of the Trustee Act 1925 (NSW). The central legal issue was whether the application provided sufficient grounds to justify the court's intervention in the management of the trust.

The court found that the application adequately demonstrated the trustee's incapacity to manage the trust effectively. The evidence presented included the trustee's failure to comply with the terms of the trust deed, mismanagement of trust assets, and a lack of communication with beneficiaries. The court held that these factors were sufficient to warrant the appointment of a new trustee in place of the current one. The court noted that while the application did not raise any novel legal principles, it did meet the statutory criteria for the court's intervention.

In light of the findings, the court granted the application for the replacement of the trustee. The new trustee was directed to take over the management of the trust immediately. The court emphasised that the appointment was necessary to protect the interests of the beneficiaries and ensure the proper administration of the trust. The court also ordered that the new trustee would be responsible for reviewing the trust's financial records and taking appropriate action to rectify any mismanagement.

Orders