Legal Research
Cases
Fay v Moramba Services Pty Ltd

Fay v Moramba Services Pty Ltd

Case [2010] NSWSC 725 2 July 2010

No judgment structure available for this case.

Type to search within this case.

CITATION: Fay v Moramba Services Pty Ltd [2010] NSWSC 725

HEARING DATE(S): 7 June 2010

JUDGMENT DATE :
2 July 2010

JURISDICTION: Equity Division

JUDGMENT OF: Brereton J

DECISION: Orders for costs paras 61-63

CATCHWORDS: EQUITY - trusts and trustees - powers, duties, rights and liabilities of trustees – indemnity – where trustees successfully defend application by some beneficiaries for removal – EQUITY - trusts and trustees - applications to the court on originating process – EQUITY - trusts and trustees - applications to the court for advice and authority – whether trustee of discretionary trust would be justified in funding defence of proceedings to which it was not a party – whether burden should be borne by plaintiff beneficiaries in context of discretionary trust - whether advice that certain approach to future distributions would be justified should be given, absent knowledge of all relevant circumstances when discretion falls to be exercised – EQUITY - trusts and trustees - proceedings between trustees and beneficiaries or third parties – costs – where beneficiaries’ claim against trustees dismissed – ordinary position – whether hardship to beneficiaries justifies departure from ordinary rule

LEGISLATION CITED: (NSW) Contracts Review Act 1980
(NSW) Trustee Act 1925, s 59(4)
(NSW) Uniform Civil Procedure Rules 2005, r 42.1, r 42.25

CATEGORY: Consequential orders

CASES CITED: Bovaird v Frost [2009] NSWSC 917
Drummond v Drummond [1999] NSWSC 923
Emanuel Management Pty Ltd (in liq) v Emanuele (2002) 83 SASR 501
Fay v Moramba Services Pty Ltd [2008] NSWSC 424
Fay v Moramba Services Pty Ltd [2009] NSWSC 1428
In Re Llewellin; Llewellin v Williams (1887) 37 Ch D 317
Leerac Pty Ltd v Garrick E Fay [2008] NSWSC 1082
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
Miller v Cameron (1936) 54 CLR 572
National Trustees Executors and Agency Co of Australasia v Barnes (1941) 64 CLR 268
National Trustees Executors and Agency Co of Australasia v Dwyer (1940) 63 CLR 1
Oshlack v Richmond River Council (1998) 193 CLR 72
Porter v GIO Australia Ltd [2002] NSWSC 668
Whitlam v National Roads and Motorists Association Ltd (2006) 58 ACSR 370

TEXTS CITED: GE Dal Pont, Law of Costs, 2nd edition (2009)
I R Ramsay, Liability of Directors for Breach of Duty and the Scope of Indemnification and Insurance, (1987) 5 C&SLJ 129

PARTIES: 07/255520
Garrick E Fay (first plaintiff/first cross defendant)
Dallas Fay (second plaintiff)
Lisa Fay (second cross defendant)
Moramba Services Pty Ltd (defendant/cross claimant)
06/258884
Garrick E Fay (first plaintiff/first cross defendant)
Dallas Fay (second plaintiff/second cross defendant)
Justinthyme Pty Ltd (third plaintiff/third cross defendant)
Henry Kai Tong Au (first defendant/first cross claimant)
Hugh Edward Halliday (second defendant/second cross claimant)
Allan Ni Kwan Kwok (third defendant/third cross claimant)
Stephen Thomas Pollitt (fourth defendant/ fourth cross claimant)
08/282225
Leerac Pty Ltd (plaintiff)
Garrick E Fay (first defendant)
Dallas Fay (second defendant)
Sioned Fay (third defendant)
Louisa Fay (fourth…

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 Fay v Moramba Services Pty Ltd

Details

AGLC: Fay v Moramba Services Pty Ltd [2010] NSWSC 725
Case: [2010] NSWSC 725
Decision Date: 2 July 2010

CaseChat Overview and Summary

In the case of Fay v Moramba Services Pty Ltd, the applicants, who were beneficiaries of the Moramba Family Discretionary Trust, sought various declarations and orders against the respondent, the trustee of the trust, in the Supreme Court of New South Wales. The applicants were in dispute with the trustee over the future distributions of trust assets. They sought declarations and orders to compel the trustee to fund their litigation against third parties, to provide advice on future distributions, and for costs of the proceedings.

The legal issues before the court included whether the trustee would be justified in funding the defence of proceedings to which it was not a party, whether the burden of funding litigation should be borne by the beneficiaries in the context of a discretionary trust, and whether the court should provide advice on future distributions when it did not have knowledge of all the relevant circumstances when the discretion falls to be exercised. The court also considered whether the hardship to the beneficiaries justified a departure from the ordinary rule regarding costs in proceedings between trustees and beneficiaries or third parties.

The court held that the trustee was not required to fund the applicants' litigation against third parties, as it was not a party to those proceedings and was not involved in any wrongdoing. The court also held that it was not appropriate to provide advice on future distributions, as the exercise of the discretion was a matter for the trustee and not the court. The court further held that, in the absence of any special circumstances, the ordinary rule was that the costs of proceedings between trustees and beneficiaries or third parties should be borne by the party who initiated the proceedings. However, in this case, the court found that the applicants' claims against the trustee were unsuccessful and that there was no special circumstance to justify a departure from the ordinary rule.

The final orders of the court were that the trustee was not required to fund the applicants' litigation against third parties, the court would not provide advice on future distributions, and the applicants were to pay the trustee's costs of the proceedings.

Orders