Camperdown Prime Pty Ltd - [2018] NSWSC 106

Supreme Court

New South Wales

Medium Neutral Citation: Camperdown Prime Pty Ltd [2018] NSWSC 106
Hearing dates: 13 February 2018
Date of orders: 13 February 2018
Decision date: 13 February 2018
Jurisdiction: Equity
Before: Pembroke J
Decision:
Summons dismissed

Catchwords: TRUSTEE ACT – Section 63 – judicial advice sought regarding the commercial choices which the trustee may adopt – advice not appropriate – advice refused
Cases Cited: Application by Perpetual Trust Services Limited [2012] NSW SC 758
Application of Perpetual Trustee Company [2003] NSWSC 1185
Auspac Corporate Managers Pty Ltd v J Noble Pty Ltd [2003] NSWSC 54
Harrison v Mills [1976] 1 NSWLR 42
Macedonian Church v Eminence Petar (2008) 237 CLR 66
Robert Peter Campbell as trustee for The Joan Macpherson Settlement Trust [2016] NSWSC 1927
Category: Principal judgment
Parties: Camperdown Prime Pty Ltd – plaintiff
No defendant
Representation:
Counsel:
A C Bridge SC with D Hughes – for the plaintiff
No defendant
Solicitors:
Davidson Legal, Consulting, Advisory – for the plaintiff
No defendant

File Number(s): 2017/360154

Judgment

This is an application by a trustee for judicial advice pursuant to s 63 of the Trustee Act. The High Court of Australia has comprehensively explained the basis of the jurisdiction to give such advice in Macedonian Church v Eminence Petar (2008) 237 CLR 66 at [54]-[76]. Among other things, the applicant must point to the existence of a question respecting the management or administration of the trust property or a question respecting the interpretation of the trust instrument. The effect of s 63(2) is to preclude any trustee who acts in accordance with the advice of the court from being held liable for breach of trust in the event of a later claim against it.
There are circumstances where it may not be appropriate to give advice to a trustee but the discretion is confined only by the subject matter, scope and purpose of the legislation and there are no implied limits that make some factors more significant or controlling than others: Macedonian Church at [59].
What is clear, however, is that the purpose of the jurisdiction is to provide protection to a trustee. The need for protection usually arises because there is a conflict between beneficiaries or because there is a suggestion, sometimes only faint, that there may be an alleged breach of trust if the trustee adopts a certain course of action. The conflict between beneficiaries or the possible breach of trust must arise out of some ‘question’ respecting the management or administration of the trust or in relation to the interpretation of the trust instrument. The advice which the court gives is ‘private’ because its function is to give protection to a trustee in those circumstances – in advance of, and having regard to the possibility of a claim against it for breach of duty.
It is normal to accompany the application for advice with an opinion by experienced counsel who practises in the jurisdiction. The opinion should set out the facts, explain the dilemma…

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 Camperdown Prime Pty Ltd

Details

AGLC: Camperdown Prime Pty Ltd [2018] NSWSC 106
Case: [2018] NSWSC 106
Decision Date: 13 February 2018

CaseChat Overview and Summary

The case of Camperdown Prime Pty Ltd involved a dispute where the trustee of a company sought judicial advice regarding the commercial choices available to them. The trustee was facing a decision about whether to sell or continue operating the company, and sought advice from the court to guide their decision-making. The court was asked to provide guidance on whether the trustee could rely on judicial advice to make commercial choices.

The central legal issue before the court was whether it was appropriate to provide the trustee with judicial advice regarding the commercial choices they could adopt. The court had to determine if the trustee's request for advice was appropriate and whether it was within the scope of the court's powers to provide such advice.

The court found that the trustee's request for advice was not appropriate, as it was essentially seeking guidance on commercial choices rather than legal advice. The court held that the Trustee Act did not permit the court to provide advice on commercial decisions, and that the court's role was limited to providing legal advice. The court refused to provide the trustee with the requested advice, emphasizing the importance of maintaining the distinction between legal and commercial decision-making.

The court's decision in Camperdown Prime Pty Ltd highlights the importance of distinguishing between legal and commercial decision-making in corporate insolvencies. The court refused to provide the trustee with advice on commercial choices, emphasizing the need for the trustee to make their own commercial decisions. This case serves as a reminder that courts should not be used as a substitute for commercial judgment, and that trustees must be responsible for making their own commercial choices.

Orders