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Dulhunty v Dulhunty

Dulhunty v Dulhunty

Case [2010] NSWSC 1465 17 December 2010

Distribution of Trust Assets

Trusts & Equity

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CITATION: Dulhunty v Dulhunty [2010] NSWSC 1465

HEARING DATE(S): 15 November 2010

JUDGMENT DATE :
17 December 2010

JUDGMENT OF: Slattery J at 1

CATCHWORDS: EQUITY - Trusts and trustees - applications to the Court for advice - proceedings between trustees and beneficiaries or third parties - power in trust deed of discretionary trust for trustees to act by majority - agreement between trustees to distribute trust assets and wind up trust - majority of trustees seek orders against minority to enforce agreement - minority trustee obtains Trustee Act, s 63 judicial advice that he is entitled to defend the proceedings and to do so using trust assets - judicial advice obtained without notice to majority - majority refuse to authorise disbursement of trust funds - minority seeks orders for disbursement from trust - whether all trustees should be joined on Trustee Act, s 63 application for advice - whether majority can and should now be ordered to disburse funds - HELD - order for disbursement made - costs on present application reserved.

LEGISLATION CITED: Civil Procedure Act 2005, ss 14, 26
Trustee Act 1925 (NSW), ss 59(4), 63
Uniform Civil Procedure Rules 2005, Rule 7.11(2)

CATEGORY: Principal judgment

CASES CITED: Dulhunty v Dulhunty [2010] NSWSC 1307
Fay v Moramba Services Pty Ltd [2008] NSWSC 424
In the Estate of William Just, Deceased (No. 1) (1973) 7 SASR 508
Lewis v Nobbs (1878) 8 Ch. D 591
Luke v South Kensington Hotel Company (1879) 11 Ch D 121
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
Pelham v Pelham & Braybrook (1955) SASR 53
Re Billington (deceased); Union Trustee Company of Australia Ltd v Billington [1949] St. R. Qd. 102
Re Butlin’s Settlement Trusts; Butin v Butlin [1976] Ch 251
Re Mayo [1943] Ch 302
Re Stephenson’s Settled Estates (1906) 6 SR (NSW) 420
Re Whiteley; Bishop of London v Whiteley [1910] 1 Ch 600
Sky v Body & Anor (1970) 92 WN (NSW) 934
Watsons Bay & South Shore Ferry Co Ltd v Whitfeld (1919) 27 CLR 268

TEXTS CITED: Heydon J D and Leeming M J Jacobs’ Law of Trusts in Australia, (7th edition), Lexis Nexis, Butterworths, 2006, at paragraph 1614

PARTIES: First Plaintiff-Peter Wellesley Dulhunty
Second Plaintiff- Jinks Amber Dulhunty
Defendant- Roger Venour Dulhunty

FILE NUMBER(S): SC 2010/269851

COUNSEL: Plaintiffs- Mr S. Epstein SC
Defenadnt- Mr J.E. Lazarus

SOLICITORS: Plaintiffs- Peter Richard James, James Legal Pty Ltd
Defendant-Andrew Bruce Thorpe, McLachlan Thorpe Partners

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

SLATTERY J

FRIDAY, 17 DECEMBER 2010

2010/269851 PETER WELLESLEY DULHUNTY & ANOR v ROGER VENOUR DULHUNTY

JUDGMENT

1 HIS HONOUR: The point at issue in these reasons arises from an adjournment application. The parties, the three siblings Peter Wellesley Dulhunty, Jinks Amber Dulhunty and Roger Venour Dulhunty, are all the co-trustees of the Alina Dulhunty Family Trust (“the Trust”). Without any disrespect to any…

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 Dulhunty v Dulhunty

Details

AGLC: Dulhunty v Dulhunty [2010] NSWSC 1465
Case: [2010] NSWSC 1465
Decision Date: 17 December 2010

CaseChat Overview and Summary

In the case of Dulhunty v Dulhunty, the dispute involved trustees of a discretionary trust. The majority of the trustees sought orders to enforce an agreement to distribute trust assets and wind up the trust. In opposition, a minority trustee had obtained judicial advice under section 63 of the Trustee Act, which allowed him to defend the proceedings and use trust assets for this purpose. The majority trustees refused to authorise the disbursement of trust funds for the minority trustee's legal costs. The minority trustee subsequently sought orders for the disbursement of trust funds to cover his legal costs.

The primary legal issues before the court were whether all trustees should have been joined in the application for advice under section 63 of the Trustee Act and whether the majority trustees could and should be ordered to disburse trust funds for the minority trustee’s legal costs. The court had to determine whether the minority trustee’s right to obtain judicial advice without notice to the majority trustees affected the majority’s ability to control the disbursement of trust funds.

The court found that the minority trustee was entitled to seek judicial advice under section 63 of the Trustee Act and that he could defend the proceedings using trust assets. Despite the majority trustees' refusal to authorise the disbursement of trust funds, the court determined that the minority trustee was entitled to have his legal costs covered by the trust. The court made an order for the disbursement of trust funds for the minority trustee’s legal costs, reserving costs on the present application for further consideration. This decision highlights the interplay between the rights of trustees under a discretionary trust and the protection afforded to beneficiaries through the Trustee Act.

Orders