Bagi Pty Ltd trading as atf Nick Ristevski Family Trust v Marka Ristevski

Case •

[2023] NSWSC 567

•

26 May 2023

No judgment structure available for this case.

Supreme Court


New South Wales

  • Amendment notes
Medium Neutral Citation: BAGI Pty Ltd trading as atf Nick Ristevski Family Trust v Marka Ristevski [2023] NSWSC 567
Hearing dates: 22 May 2023
Date of orders: 26 May 2023
Decision date: 26 May 2023
Jurisdiction:Equity
Before: Slattery J
Decision:

2015 Deed is rectified to amend the list of beneficiaries to the beneficiaries named in the 1989 Deed. Advice given pursuant to Trustee Act 1925, s 63 that the plaintiff Trustee would be justified in acting in the administration of the Trust on the basis that the 2015 Deed (as rectified) accurately reflects the form of the 1989 Deed with respect to the identity of the beneficiaries of the Trust.

Catchwords:

EQUITY – equitable remedies – rectification - discretionary trust created in 1989 – original Trust deed (the 1989 Deed) names three beneficiaries, a father and his two daughters – original trust deed lost – attempts made in 2015 to create a replacement Trust deed, reproducing the structure of the 1989 Deed (the 2015 Deed) – mistake made in the 2015 Deed which includes in the list of beneficiaries a man and his wife but not the couple’s two daughters – whether there was a common intention at the time of execution of the 2015 Deed to reproduce the list of beneficiaries in the 1989 Deed – whether the 2015 Deed should be rectified.

EQUITY – Trusts and trustees – judicial advice – Trustee Act 1925, s 63 – whether the Trustee would be justified in treating the 2015 Deed as rectified, as accurately reflecting a form of the 1989 Deed with respect to the identity of the beneficiaries of the Trust.

Legislation Cited:

Duties Act 1997, s 272

Trustee Act 1925, s 63

Cases Cited:

Australasian Performing Right Association Ltd v Austarama Television Pty Ltd (1972) 2 NSWLR 467

Elders Lensworth Finance Limited & Anor v Australian Central Pacific Limited (1986) 2 Qd R 364

Macedonian Orthodox Community Church ST Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66

Marralinga Pty Ltd v Major Enterprises (1973) 128 CLR 336

Pukallus v Cameron (1982) 180 CLR 447

Simic v NSW Land and Housing Corporation (2016) 260 CLR 85

Category:Consequential orders
Parties: Plaintiff: BAGI Pty Ltd trading as atf Nick Ristevski Family Trust
Defendant: Marka Ristevski
Representation:

Counsel:
Plaintiff: M. Donovan
Defendant: ex parte

Solicitors:
Plaintiff: D. Samuel, Paddingtons Lawyers and Attorneys
File Number(s): 2022/280177
Publication restriction: No

Judgment

  1. The trust deed of the Nick Ristevski Family Trust (“the Trust”) was executed in 1989 but the original signed deed went missing some time in the early 2000s. When neither the original nor a copy could be found in 2015, the trustee, Bagi Pty Limited (“the Trustee”), arranged for the original deed to be replaced with a new trust deed (“the 2015 Deed”).

  2. But in the preparation of the 2015 Deed a mistake was made in the identity of the beneficiaries. Two beneficiaries were omitted and a family member who was not a beneficiary was added into the schedule of beneficiaries of the 2015 Deed.

  3. The trustee now seeks by its Amended Summons filed on 21 February 2023 an order to rectify the 2015 Deed and judicial advice under Trustee Act1925, s 63 that the Trustee would be justified in treating the rectified 2015 Trust deed as the operative deed in the administration of the trust, and other ancillary relief. In these reasons the Court grants the principal relief sought.

  4. These proceedings were heard on 22 May 2023. Mr M. Donovan of counsel appeared for the trustee, instructed by Mr D. Samuel of Paddingtons Lawyers and Attorneys, of Bundall, Queensland.

  5. Several affidavits were read in support of the Amended Summons. These were affidavits of Nicolas Ristevski of 27 August 2022 and 31 March 2023, Natasha Mladenovk (nee Ristevski) of 27 August 2022, Tatjana Tanevski (nee Ristevski) of 27 August 2022 and Lloyd Fardi Agha of 9 September 2022 and Marka Ristevski of 19 May 2023.

A Lost Trust Deed is Replaced – 1989 to 2015

  1. In 1989 Mr Nicolas Ristevski took advice from his accountant, Mr Keith Doust, to set up a discretionary trust for his benefit and for the benefit of his two daughters, Mrs Natasha Mladenovk and Mrs Tatjana Tanevski. Mr Ritevski’s accountant, Mr Doust became the settlor under the 1 July 1989 Deed of Settlement (“the 1989 Deed”) setting up the Trust. The only parties to the 1989 Deed were Mr Doust as settlor and the Trustee. The 1989 Deed identified the beneficiaries of the Trust as Mr Ristevski and his two daughters and no other persons.

  2. Mr Ristevski controlled the Trustee. Over many years the initial Trust Fund of $10 settled on the Trustee was augmented by the acquisition of investment property and business assets. Since 1989 the Trust has put in income tax returns, conducted bank accounts, borrowed money, transacted, acquired assets, and conducted businesses, as is demonstrated by the documents showing its financial history.

  3. Mr Ritevski believed during the 1990s and early 2000s that the original of the 1989 Deed had been kept with the Marrickville branch of the ANZ bank. He only ever had one stamped copy of the 1989 Deed. His best recollection is that he provided it to the ANZ bank as one of the required documents to satisfy the ANZ bank’s loan documentation requirements. He assumed it remained in safe keeping with the bank.

  4. Bank branch closures have been a constant feature of the Australian banking industry since the 1990s. The ANZ Marrickville branch closed, and its customers were moved to the ANZ Alexandria branch. That closed and its customers were moved to the Olympic Park branch. In about 2010 Mr Ritevski asked the ANZ bank for the 1989 Deed. But the bank replied that it could not locate either the original or a copy. Between 2012 and 2015 Mr Ritevski searched for the original of the 1989 Deed at his own home and he inquired with the family of Mr Doust, who had died in 2006. None of these searches met with any success.

  5. But the Trust was still doing business. It needed a trust deed to evidence its constitution to lenders and government authorities. So, in 2015 Mr Ritevski set about the uncertain task of attempting to replace the 1989 Deed. Mr Ritevski’s advisers thought they should attempt to create a replica of the 1989 Deed. But the precise terms of the 1989 Deed, that might be a replica deed within Duties Act 1997, s 272 were obscure in early 2015, as there was no authentic reliable copy from which a replica could be taken.

  6. Mr Ritevski and his new accountant, Mr Lloyd Agha, did their best with the available materials, to construct a replacement deed. They instructed Hunt & Hunt solicitors to prepare a new deed, which was executed on 12 February 2015. The 2015 Deed described itself as a “confirmation deed”. It recited that the Trust had been created by the execution of an original trust deed and the original trust deed had been misplaced. The 2015 Deed further recited:

“The Trustee and the Beneficiaries wish to confirm and ratify the establishment of the Trust and to adopt the New Trust Provisions in place of the misplaced original trust.”

  1. It is clear from the affidavit evidence and the terms of the 2015 Deed that the 2015 Deed was not an attempt to establish a new trust, but rather only to amend the terms of the Trust to the extent necessary to ensure that adequate machinery provisions for the Trust existed despite the loss of the 1989 Deed. It was inevitable that the powers and machinery provisions of the 2015 Deed would be different in form to those of the 1989 Deed. The extent of the departures from the 1989 Deed could not really be measured, due to the absence of the original. Unsatisfactory though this situation was, this was all that could be done in 2015 on the basis of memory.

  2. But the attempt to reconstruct the 1989 Deed from memory led to an unintended error. The 2015 Deed was constructed on the incorrect basis that the original beneficiaries of the Trust named in the 1989 Deed were Mr Ristevski and his wife, Mrs Marka Ristevski. But five years later in 2020 an incomplete copy of the 1989 Deed was found at the family home. The incomplete 2020 copy deed (“the 2020 document”) correctly showed the beneficiaries of the Trust created in the 1989 Deed were Mr Ritevski and his two daughters, not Mr Ritevski and his wife.

  3. The evidence of the finding and the form of the 2020 document allows the Court confidently to infer it reproduces the content of the 1989 Deed.

  4. As to the finding, in January 2020 Mrs Marka Ristevski was cleaning an infrequently used part of the family home, when she noticed a plastic bag containing old papers and documents. She found the 2020 document inside the plastic bag.

  5. As to the form of the 2020 document, the 2020 document appears on its face to be a photocopy of the original 1989 Deed but it contains a number of anomalies. It contains an execution page to which the Trustee’s common seal was applied and it was signed by Mr Doust, although his signature was not witnessed. The 2020 document was not dated in handwriting, although its front page bears the writing “date of deed – 1 July 1989”. The 2020 document is missing page 4 and has two copies of page 6. It is otherwise complete.

  6. Mr Doust’s state of health in the 1990s and early 2000s goes a long way towards explaining the form of the 2020 document. Before Mr Doust died in February 2006 he was suffering debilitating medical conditions affecting his eye sight. This required him to use a magnifying glass to read, making him prone to making errors with the documents he was handling.

  7. The 2020 document is an old and tattered document with scribble on the cover page about matters apparently unrelated to the Trust. Mr Ritevski believes that Mr Doust prepared the 2020 document to advise him in 2001, when Mr Ritevski was considering making changes to the Trust. Mr Ristevski ultimately decided not to pursue these changes. Mr Ritevski believes that he left it in his office at home and it became bundled up in the plastic bag, where Mrs Ritevski later found it.

  8. This history would explain the missing and duplicated pages as a photocopying error. It also explains certain extraneous material found in the 2020 document after its execution clause and before a schedule setting out the identity of the settlor, the trustee and the beneficiaries. The Trustee and its advisors believe that this extraneous material was a faithful copy of the 1989 Deed and the contents of the extraneous material should have been addressed in the 2015 Deed. But the Court is of the view that the extraneous material has arisen due to some error by Mr Doust in copying the 1989 Deed to create the 2020 document. The extraneous material contained the following:

“(4)   Shall not enlarge the number of persons capable of falling within the description ‘beneficiary’ herein before contained.”

  1. The extraneous material fits oddly with the 2020 document in many ways. First, it is typeset in a different format from the rest of the document. Second, it contains inconsistent numbering from the rest of the 2020 document – the rest of the document is numbered from clauses 1 to 12, but the fragment of extraneous material starts with “(4)” and then goes to paragraph 29, 30 and 31. Third, the text in “(4)” of the extraneous material contradicts clause 5(iii) of the 1989 Deed, which permits the Trustee to “alter, modify, or revoke any of the trusts or powers herein declared and to appoint such new trust in such manner or form as the trustee shall in its absolute discretion think fit”, which would include the capacity to alter the beneficiaries of the Trust. The extraneous material is not a coherent part of the 2020 document and the Court infers was never part of the 1989 Deed.

  2. Many factors point to the 2020 document being an authentic but incomplete copy of the 1989 Deed. It was found within Mr and Mrs Ritevski’s home. It contains the constituent elements that one would have expected to find in the 1989 Deed. It refreshes Mr Ristevski’s memory of the contracts of the 1989 Deed. To the extent it is incomplete its form is explained by Mr Doust’s infirmity. And the existence of the document in Mr and Mrs Ristevski’s possession is explained by Mr Doust giving Mr Ritesvki a copy in 2001 for the purpose of advising him.

  3. Because of the Court’s confidence in the authenticity of the 2020 document, it can be used to infer the essential elements of the 1989 Deed and whether or not the 2015 Deed is an accurate rendering of the 1989 Deed. The 2020 document shows the original beneficiaries under the 1989 Deed were Mr Ritevski and his daughters. The Court infers that when Mr Ritevski was giving instructions to Hunt & Hunt solicitors for the 2015 Deed he must have mistakenly thought the Trust beneficiaries were himself and his wife. That mistake has now been revealed by the discovery of the 2020 document. It is clear that the intention behind the 2015 Deed was to reproduce the essential trustee-beneficiary structure of the 1989 Deed but that objective miscarried because of the gaps in Mr Ritevski’s memory of the deed. That is not surprising given that the 1989 Deed was made 26 years earlier, his accountant, Mr Doust was dead, there were no other copies of the original available, and the deed is not a matter on which Mr Ritevski is likely to have focussed much attention.

  4. The Court therefore infers that the common intention of the 2015 Deed was that the parties making it should reproduce the identity of the beneficiaries in the 1989 Deed. But it failed to carry that common intention into effect.

  5. Like any other deed or agreement, the 2015 Deed can be rectified. In order to grant the remedy of rectification it is necessary for a plaintiff to establish that the parties to the deed had a common intention which continued up to the time of execution of the instrument but that common intention was not reflected in the executed instrument: Australasian Performing Right Association Ltd v Austarama Television Pty Ltd (1972) 2 NSWLR 467; Marralinga Pty Ltd v Major Enterprises (1973) 128 CLR 336 at 350 per Mason J; Pukallus v Cameron (1982) 180 CLR 447 at 452 per Wilson J at 456 per Brennan J; Simic v NSW Land and Housing Corporation (2016) 260 CLR 85; 91 ALJR 108; 339 ALR 200; [2016] HCA 47 at [117].

  6. This claim for rectification is unusual in one sense. The remedy seeks a change in the identity of the beneficiaries to the Trust. The parties to the 1989 Deed were Mr Doust and the Trustee. The parties who signed the 2015 Deed were Mr Ristevski, Mrs Marka Ristevski and the Trustee. But anyone affected by the rectification orders who is available has put on evidence in support of a contention that the 2020 document, apart from the extraneous material which the Court has rejected, reflects the current terms of the Trust. Mrs Marka Ristevski has sworn that she was never a beneficiary of the Trust.

  7. It can sometimes be problematic to rectify an instrument by changing the name of a party. But the authorities show that if an appropriate common intention to contract can be demonstrated to the necessary standard, such an order is possible: Simic v NSW Land and Housing Corporation (2016) 260 CLR 85; Elders Lensworth Finance Limited & Anor v Australian Central Pacific Limited (1986) 2 Qd R 364.

  8. But here the only necessary parties to the application are the parties to the 1989 Deed, as the common intention of what the 2015 Deed was to reproduce was that of the 1989 Deed. The beneficiaries were really extra participants, though not strictly parties to either deed. These extra participants have nevertheless all given their consent, particularly Mrs Ristevski, who could otherwise have complained that her interests might have been adversely affected. Although the estate of Mr Doust has not been served and is not present on this application, the Court can dispense with giving notice to his estate because his financial interests are not adversely affected by the present relief, his role having been exhausted after the creation of the Trust in 1989. The Court has power in Uniform Civil Procedure Rules 2005, r 7.10 for the proceedings to continue in the absence of a representative of a deceased person’s estate when that person’s estate has an interest in the proceedings. But properly analysed Mr Doust’s estate does not have an interest in the proceedings and no additional order needs to be made.

  9. The Court will therefore grant the rectification relief which is sought and will amend the list of beneficiaries in the 2015 Deed to reflect the 1989 Deed.

  10. Based on the extraneous text the Trustee initially also sought to rectify the 2015 Deed by adding a provision to the following effect:

“[The Trustee] shall not enlarge the number of persons capable of falling within the description’ beneficiary’ herein before contained”

  1. But the Court has concluded the extraneous material was never part of the 1989 Deed. That clause should not be added to the 2015 Deed, as part of the rectification relief. An attempt was made by the Trustee by resolution on 22 March 2022 to amend the 2015 Deed as proposed in the Amended Summons. But these reasons and orders displace that attempt. 

  2. The Amended Summons also seeks advice under Trustee Act 1925, s 63 “that the rectified 2015 Trust Deed is the operative deed”. The Court is prepared to give advice under s 63 that is substantially to this effect, the broad scope of Trustee Act, s 63 has been fully explained by the High Court in Macedonian Orthodox Community Church ST Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42. This is an appropriate case for giving of s 63 advice. The Trustees wish to know whether they would be justified in treating the 2015 Deed as rectified as the deed governing the powers and duties of the Trustee and correctly identifying the beneficiaries of the Trust.

  3. The Trustee should have s 63 advice on both those matters. The identity of the beneficiaries has now been settled and the Trustee will be advised that it would be justified in acting in the administration of the Trust on the basis that the 2015 Deed as rectified accurately reflects the form of the 1989 Deed with respect to the identity of the beneficiaries of the Trust.

  4. But the Trustee also wishes to know whether it can otherwise deploy the 2015 Deed in its dealings with third parties as representing the current operative deed of the Trust. It is desirable for the Trustee to have this advice because of the confusion which has arisen between the two competing Trust instruments, which contain slightly different powers.

  5. There is no question that the 1989 Deed in clause 5(iii) contained a broad power of alteration, modification or revocation of the Trust. That power is sufficient to authorise the amendments which occurred to the Trust through the 2015 Trust Deed. In 2015 the beneficiaries of the Trust did not change although the machinery provisions of the Trust did. It is not necessary to set those changes out but they were authorised and the 2015 Deed therefore became the present operative Trust Deed governing the administration of the Trust. Trustee Act, s 63 advice will be given accordingly.

  6. The giving of this relief means it is not necessary for the Court to give the other ancillary relief sought in the Amended Summons.

Conclusion and Orders

  1. For these reasons the Court makes the following orders, declarations and directions:

  1. In these orders the following expressions have the following meanings:

  1. “the Trust” means the Nick Ristevski Family Trust.

  2. the “1989 Deed” means the deed constituting the Trust and made on 1 July 1989 between Keith Lyall Doust as Settlor and Bagi Pty Limited, the plaintiff, as trustee.

  3. the “2015 Deed” means the deed made between the plaintiff and Mr Nick Ristevski and Ms Marka Ristevski on 12 February 2015 amending the provisions of the 1989 Deed.

  1. Declare that:

  1. the common intention of the parties to the 2015 Deed was that the 2015 Deed should not add to or subtract from the beneficiaries of the Trust named in the 1989 Deed, and

  2. the 2015 Deed failed to carry the said common intention into effect but that common intention will be carried into effect by Order 3 of these orders.

  1. Order that the 2015 Deed be rectified in the following manner:

  1. delete the name of Marka Ristevski from the list of “Beneficiaries” in the “Schedule” to the 2015 Deed and in substitution for her name add the names of Natasha Mladenovk and Tatjana Tanevski as beneficiaries.

  2. delete sub-paragraphs (b) to (g) from the definition of “Beneficiaries” in Clause 1.1 of the 2015 Deed and retain only sub-paragraph (a) in that definition.

  1. Order pursuant to Trustee Act 1925, s 63 that the opinion advice and direction of the Court is that the Plaintiff would be justified in acting in the administration of the Trust on the basis that the 2015 Deed as rectified by Order 3(a) accurately reflects the form of the 1989 Deed, with respect to the identity of the beneficiaries of the Trust, and (b) is otherwise the operative deed of the Trust.

  2. Order that the Plaintiff attach a copy of these orders to the 2015 Deed.

  3. Order that the Plaintiff’s costs of this application be paid out of the estate on the indemnity basis.

  4. Grant liberty to apply for 21 days.

**********

Amendments

29 May 2023 - Coversheet- Cases: typographical amendments to the names of the cases Pukallus and Simic; and in [24] and [26]
[15] first line, "RItevski" to "Ristevski"
[20] first line, "But the" to "The"; second line, "It contains" to "Second, it"; fourth line "numbering" to "numbered". fifth line, "And the" to "Third, the", sixth line delete repetition "material "(4)" but the", seventh line, comma added after "Deed", ninth line, comma added after "fit"
[25] deletion of repetition "and is affected by the rectification orders"
[26] second line add "an" before "appropriate"
[27] second line "was" added before "that" and "of" before "the 1989 Deed"; fifth line, delete "that of"
[28] first line, "to change the" to "and will amend"
[30] added after last line, "An attempt ...to that attempt".
[32] first line, deletion of "you"
[33] third line, add "to" before "have"
[34] second line "is" before "sufficient"

Decision last updated: 29 May 2023

Actions
Download as PDF Download as Word Document
Cases Citing This Decision

0