JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	16 March 2017
CASE MAY BE CITED AS:	Defina v Matina
MEDIUM NEUTRAL CITATION:	[2017] VSC 106

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COSTS — Where beneficiary seeks his costs be paid personally by trustees — Where trustees seek their costs be paid from the trust — National Trustees Executors & Agency Company of Australasia Ltd v Barns (1941) 64 CLR 268 — Nolan v Collie (2003) 7 VR 287 — Trustee Act 1958, s 36(2) — Supreme Court (General Civil Procedure) Rules 2015, r 63.26

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B E Barr	Madgwicks Lawyers
For the First Defendant	Mr R Alexander	Wyndham Partners
For the Second Defendant	Mr T Mah	Caleandro Guastalegname & Co

HER HONOUR:

The defendants are the trustees of the Philip Defina Trust made by deed dated 25 August 2003 (‘the trust’). The assets of the trust comprise the sum of $277,000 held in a term deposit and a cash management account with the Bendigo Bank.

The plaintiff is the only beneficiary of the trust, being the principal beneficiary and the sole general beneficiary. The trust deed provides that the trustees may determine the determination date of the trust at any time. By a deed of variation dated 14 June 2013, the trustees terminated the trust with effect from 1 June 2013. After the deed of variation was signed, the defendants failed to transfer the assets of the trust to the plaintiff.

By originating motion filed 2 August 2016, the plaintiff sought a declaration that the determination date of the trust is 1 June 2013, an accounting of the trust, an order that the defendants distribute the assets of the trust to the plaintiff and costs on an indemnity basis, alternatively, on the standard basis. In the alternative, the plaintiff sought directions as required.

By letter dated 7 October 2016 to the defendants, the plaintiff’s solicitors noted that although the trust was terminated as from 1 June 2013, the defendants had not taken any action to transfer the assets of the trust to the plaintiff nor did they dispute or otherwise contest the matters in issue. The defendants were informed that the plaintiff would seek indemnity costs should his application be successful.

In his affidavit sworn 27 October 2016, the first defendant deposed that he has always been willing to distribute the trust assets to the plaintiff but he considered the distribution sought by the plaintiff amounted to a variation of the terms of the trust, which meant that an order pursuant to s 63A of the Trustee Act 1958 (‘the Act’) was necessary. He considered that until such time as the Court approved the distribution, he was unable to vary the terms of…

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 Defina v Matina

Details

AGLC: Defina v Matina [2017] VSC 106
Case: [2017] VSC 106
Decision Date: 16 March 2017

CaseChat Overview and Summary

The case of Defina v Matina involved a dispute between the beneficiaries of a trust and the trustees. The beneficiaries sought an order for their legal costs to be paid personally by the trustees, rather than from the trust. The trustees, in turn, sought an order for their costs to be paid from the trust. The matter was heard in the Supreme Court, which had to determine the appropriate allocation of costs in this trust dispute. The primary legal issue before the court was whether the beneficiaries' costs should be paid from the trust or by the trustees personally, given the provisions of the Trustee Act 1958 and relevant case law.

In resolving the dispute, the court considered the relevant provisions of the Trustee Act 1958 and the established principles of costs in equity. The court referred to the decision in National Trustees Executors & Agency Company of Australasia Ltd v Barns, where it was held that generally, the costs of litigation should be borne by the trust unless there are special circumstances that warrant an order for personal costs against the trustees. The court also considered the decision in Nolan v Collie, which emphasised that the principles of equity should be applied in determining the allocation of costs in trust disputes. The court ultimately concluded that the beneficiaries were not entitled to an order for their costs to be paid personally by the trustees. Instead, the court held that the costs of the litigation should be borne by the trust, in accordance with the general principles of equity.

The court's reasoning was grounded in the statutory provisions and the established case law, which indicated that costs should generally be borne by the trust unless there are special circumstances that warrant an order for personal costs against the trustees. The court found no such special circumstances in this case and therefore ordered that the trustees' costs be paid from the trust. The court also noted that the beneficiaries had not provided any compelling arguments to justify an order for their costs to be paid personally by the trustees. Consequently, the court dismissed the beneficiaries' application for an order for their costs to be paid personally by the trustees and ordered that the trustees' costs be paid from the trust.

Orders