His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2)

This case concerned an appeal regarding the costs of litigation involving the Macedonian Orthodox Community Church St Petka Inc (the Association), acting as a trustee, and His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (Bishop Petar) and Father Mitrev. The dispute centred on whether the Association, as the unsuccessful trustee, was entitled to be indemnified out of trust assets for its own costs and the costs it was ordered to pay to the successful appellants, or if it should bear these costs personally.

The primary legal issues before the Court of Appeal were whether sections 93(2) and (3) of the Trustee Act 1925 (NSW) applied to the question of a trustee's indemnification for costs, or if this was governed by section 59(4) of the Trustee Act and Part 42 rule 25 of the Uniform Civil Procedure Rules 2005 (NSW). The court also had to determine if sections 93(2) and (3) were limited by Part 42 rule 25, and, assuming Part 42 rule 25 applied, whether the Association had acted unreasonably in seeking judicial advice or for its own benefit rather than for the benefit of the trust.

The court held that sections 93(2) and (3) of the Trustee Act, which concern costs awarded in litigation involving trustees, governed the present issue, rather than the more general provision of section 59(4). The court found that the Association was entitled to be reimbursed out of the trust property for the balance of its costs incurred in the appeal, after accounting for any monies received under the Suitors' Fund Act 1951 (NSW). However, the Association was ordered to pay the costs of Bishop Petar and Father Mitrev in relation to the appeal. The matter was remitted to the trial judge to determine the costs of the trial and any other related costs.