Application of Rinehart: 2020/142504 (No 2)

The case involved an application by the trustee of a trust, seeking to set aside variation orders that altered the original undertakings provided by the applicant. The dispute was heard in the Supreme Court of New South Wales. The original undertakings had been made on the basis that the applicant would not bring legal proceedings without obtaining judicial advice. The trustee subsequently applied for orders varying these undertakings, which the applicant now sought to have set aside.

The primary legal issues before the court were whether the necessary parties were before the court, the finality of the original undertakings, and the grounds upon which these undertakings may be modified. Additionally, the court had to consider whether "variation" of the undertakings was permissible, or whether a discharge was required. The applicant argued that the variation orders were not permissible as they effectively discharged the original undertakings without proper process, and that the court lacked the jurisdiction to make such orders without the presence of all necessary parties.

The court found that the original undertakings were not final and absolute but were conditional upon the applicant not bringing legal proceedings without judicial advice. As such, the court had the inherent jurisdiction to modify these undertakings when it was in the interests of justice to do so. The court held that the variation orders did not effectively discharge the undertakings but rather modified them to accommodate a change in circumstances. Furthermore, the court determined that the necessary parties were not required to be before the court to modify the undertakings, as the applicant was the only party directly affected by the orders. Consequently, the application to set aside the variation orders was dismissed.

No further orders were made by the court, as the variation orders were upheld. The court's decision confirms that the court has the inherent jurisdiction to modify undertakings in trust administration proceedings when it is in the interests of justice, and that the presence of all necessary parties is not required to do so.