Kairouz v Bracks (No 2) - [2021] VSC 671

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2021 00274

MARLENE KAIROUZ	Plaintiff
v
THE HONOURABLE STEVE BRACKS AC THE HONOURABLE JENNY MACKLIN (In their capacity as Administrators of the Australian Labor Party Victorian Branch and the persons whose names are set out in the Schedule in their capacity as the National Executive of the Australian Labor Party and the Interim Governance Committee of the Victorian Branch of the Australian Labor Party and as Trustees of Trusts under Rule 21 of the Australian Labor Party Victorian Branch Rules respectively)	Defendants

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JUDGE:	Ginnane J
WHERE HELD:	Melbourne
DATE OF HEARING:	2-4, 8-9 and 17 June 2021
DATE OF JUDGMENT:	19 October 2021
CASE MAY BE CITED AS:	Kairouz v Bracks (No 2)
MEDIUM NEUTRAL CITATION:	[2021] VSC 671

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ASSOCIATIONS – Political parties – Australian Labor Party – National Executive – Media allegations of branch stacking – Intervention in Victorian Branch – Administrators appointed – Whether intervention valid – Powers of the National Executive - ALP structure – Relationship between the National Constitution and Branch Rules – Branch Rules – Amendment by Administrators – Whether amendments valid – Disciplinary charges brought in respect of alleged branch stacking – Whether charges valid – Whether issues raised justiciable.

TRUSTS – Whether beneficiaries can bring claim for unlawful interference with the administration of trusts by third party – Whether special circumstances existed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J H Karkar QC, Ms M Pilipasidis and Mr N Walter	Cornwalls
For the 1^st – 11^th, 13^th and 16^th – 26^th Defendants	Mr P G Willis SC with Mr A D Lang, Mr J H Kirkwood and Mr G Jegatheesan	Holding Redlich
For the 12^th, 14^th and 15^th Defendants	Mr D J Batt QC with Dr A T Hoel	Patrick & Associates
For the 28^th Defendant	Hope & Co Lawyers

Table of Contents

Summary

Introduction

The Issues for Decision

Background

Media reports of branch stacking
Events following the media reports
The Administration Resolution
The Rule Amendment Resolution
The Administrators’ actions
The National Executive’s Resolutions of 27 November 2020
The Further Amendment Resolution
Events following the Further Amendment Resolution

Justiciability

Ms Kairouz’s arguments on justiciability
Ms Kairouz’s reliance on her proprietary interest in the trusts as an exception to Cameron v Hogan
The trusts
The trusts created by r 21.1 of the Victorian Branch Rules
The Capital Investment Fund
The Labor Services & Holdings Trust

The Administrators’ actions in changing the LSH shareholders and directors
Ms Kairouz’s submissions about her interests in the Victorian Branch trusts
The defendants’ submissions about Ms Kairouz’s interests in the Victorian Branch trusts
Joinder of the trustees
Can Ms Kairouz bring a claim for breach of trust?
Analysis of Ms Kairouz’s right to bring the trust claim
Analysis of the trusts exception submissions as a ground of justiciability
Has Ms Kairouz established her trust claim?

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 Kairouz v Bracks (No 2)

Details

AGLC: Kairouz v Bracks (No 2) [2021] VSC 671
Case: [2021] VSC 671
Decision Date: 19 October 2021

CaseChat Overview and Summary

The case of Kairouz v Bracks (No 2) involved a dispute between the beneficiaries of a family trust and a third party, with the beneficiaries seeking to hold the third party accountable for interfering in the administration of the trust. The matter was heard in the Supreme Court of Victoria. The primary issue before the court was whether the beneficiaries of a trust could bring a claim against a third party for unlawful interference with the administration of the trust. Additionally, the court needed to determine if there were special circumstances that would allow such a claim to proceed.

In addressing the legal issues, the court considered the principles of trust law and whether they permitted a claim by beneficiaries against a third party. The court found that generally, beneficiaries do not have standing to bring such a claim unless there are special circumstances. The court assessed whether the special circumstances test was met in this case, which involves a consideration of factors such as the nature of the interference and the relationship between the parties. Ultimately, the court held that the beneficiaries did not meet the threshold for special circumstances, thereby dismissing their claim against the third party.

The court's reasoning was based on the established principles of trust law and the specific facts of the case. It concluded that the interference by the third party did not meet the stringent criteria required for special circumstances to be recognised. As a result, the beneficiaries' claim was unsuccessful. The final orders of the court reflected this decision, dismissing the claim brought by the beneficiaries against the third party.

Orders