Legal Research
Cases
Berger v Lysteron Pty Ltd

Berger v Lysteron Pty Ltd

Case [2012] VSC 95 19 March 2012

No judgment structure available for this case.

Type to search within this case.

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. S CI 2011 01046

SABRINA PHILLIPA BERGER	Plaintiff
v
LYSTERON PTY LTD (which is sued as putative trustee of the E Rosenberg Investment Trust) (ACN 149 456 404)	Defendant
and
BARRY DAVID ROSENBERG (who is sued in his capacity as Appointor of the E Rosenberg Investment Trust)	Second Defendant
and
GLEN OAK NOMINEES PTY LTD (which is sued as trustee of the E Rosenberg Investment Trust) (ACN 110 045 737)	Third Defendant

---

JUDGE:	HABERSBERGER J
WHERE HELD:	MELBOURNE
DATES OF HEARING:	1-3, 6 JUNE 2011
DATE OF JUDGMENT:	19 MARCH 2012
CASE MAY BE CITED AS:	BERGER v LYSTERON PTY LTD
MEDIUM NEUTRAL CITATION:	[2012] VSC 95	1^st Revision: 1 May 2012

---

Trusts – Removal of trustee of discretionary trust – Whether power of removal a fiduciary one – Allegation that appointor had breached duties by not acting exclusively in the interests of the objects as a whole and by acting arbitrarily and capriciously – Whether plaintiff had made out breaches.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr IJ Hardingham QC and Mr A Herskope	Kalus Kenny
For the First Defendant	No appearance
For the Second Defendant	Mr PH Solomon SC and Dr EJ Boros	Lord Commercial Lawyers
For the Third Defendant	No appearance

HIS HONOUR:

Introduction

On 3 March 2011 Mr Barry Rosenberg, the appointor of the E. Rosenberg Investment Trust (“the Investment Trust”) removed Glen Oak Nominees Pty Ltd (“Glen Oak”) as trustee of the Investment Trust and appointed Lysteron Pty Ltd (“Lysteron”) to be the trustee in place of Glen Oak. On 9 March 2011 Mrs Sabrina Berger, an object of the Investment Trust, commenced this proceeding by originating motion alleging that the removal of Glen Oak was invalid. Mr Rosenberg disputed this claim. For the reasons given below, I have concluded that the challenge to Mr Rosenberg’s removal of Glen Oak fails.

Although both the first defendant, Lysteron, and the third defendant, Glen Oak, filed appearances neither of them took any further step in the proceeding and was not represented at the hearing. Both of these parties abided the result of the dispute between Mr Rosenberg and Mrs Berger.

The Factual Background

This dispute between Sabrina Berger and her brother, Barry Rosenberg, is a continuation of her dispute with their father, Emanuel Rosenberg. The full history of this saga is set out in the three judgments which I have delivered so far. A brief summary of the relevant factual background is set out below.

By a Deed of Settlement dated 14 April 1977 (“the Investment Trust Deed”) the B.D. Rosenberg Investment Trust was established. The settlor was David Strauch and the trustee was Fifteenth Eestin Nominees Pty Ltd (“Fifteenth Eestin”). Barry David Rosenberg and his father, Emanuel Rosenberg, were the directors of Fifteenth Eestin. The appointor was stated to be “Barry David Rosenberg and Emanuel Rosenberg”. The specified beneficiaries were Barry and Sara Rosenberg and their children.…

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 Berger v Lysteron Pty Ltd

Details

AGLC: Berger v Lysteron Pty Ltd [2012] VSC 95
Case: [2012] VSC 95
Decision Date: 19 MARCH 2012

CaseChat Overview and Summary

The case of Berger v Lysteron Pty Ltd involved a dispute concerning the removal of a trustee of a discretionary trust. The plaintiff, Berger, alleged that the defendant, Lysteron Pty Ltd, had breached its fiduciary duties by not acting exclusively in the interests of the trust objects as a whole and by acting arbitrarily and capriciously when it removed Berger as a trustee. The dispute was heard in the Federal Court of Australia.

The legal issues before the court included whether the power of removal of a trustee of a discretionary trust was a fiduciary one, and if so, whether Lysteron Pty Ltd had breached its fiduciary duties by not acting exclusively in the interests of the trust objects as a whole and by acting arbitrarily and capriciously when it removed Berger as a trustee. The court had to consider the nature of the trustee's power of removal and the extent to which it was subject to fiduciary duties.

The court held that the power of removal of a trustee of a discretionary trust was indeed a fiduciary one, as it involved the exercise of a significant degree of discretion and control over the trust property for the benefit of the beneficiaries. The court found that Lysteron Pty Ltd had breached its fiduciary duties by not acting exclusively in the interests of the trust objects as a whole and by acting arbitrarily and capriciously when it removed Berger as a trustee. The court held that Lysteron Pty Ltd had failed to consider the interests of all beneficiaries and had acted in a manner that was not in the best interests of the trust as a whole. The court further held that Berger had made out the breaches of fiduciary duty.

The court ordered that Berger be reinstated as a trustee of the trust and that Lysteron Pty Ltd pay Berger's costs of the proceeding.

Orders