Kellett v Schriever (No 2) - [2020] SASC 178

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
KELLETT v SCHRIEVER (No 2)
[2020] SASC 178
Judgment of The Honourable Justice Blue
24 September 2020
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL MATTERS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - COSTS OUT OF FUND OR PROPERTY
EQUITY - TRUSTS AND TRUSTEES - APPOINTMENT, REMOVAL AND ESTATE OF TRUSTEES
Consideration of final orders including as to costs following delivery of reasons for judgment in Kellett v Schriever [2020] SASC 96 upholding a claim by the applicant that dispositions of the Heathcote farming property by Brimmage Pty Ltd as trustee of the Schriever Family Trust to the first respondent and then to the second respondent were in breach of trust and the Property must be returned to the Trust.
The applicant seeks costs on an indemnity basis, or alternatively a party/party basis, against the respondents and that any deficit in recovered costs be paid out of the Trust. The respondents seek an order that the costs of all parties be paid out of the Trust.
The applicant seeks an order appointing him as trustee of the Trust or alternatively William De Garis and him or alternatively William De Garis. The respondents propose that Greg Arthur be appointed as trustee of the Trust.
Held:
1. Costs should follow the event and the applicant should recover his costs of action on a party/party basis against the respondents (at [17], [23]).
2. The applicant’s costs on a solicitor/client basis, to the extent not otherwise recovered, should be paid out of the assets of the Trust (at [28]-[30]).
3. The respondents should not recover their costs of action out of the assets of the Trust (at [32]).
4. William De Garis should be appointed trustee of the Trust (at [54]-[56], [70]).
Trustee Act 1936 (SA) ss 36, 37; Uniform Civil Rules 2020 (SA) r 191.1, referred to.

KELLETT v SCHRIEVER (No 2)
[2020] SASC 178
Civil
BLUE J:

I previously delivered reasons for judgment[1] upholding the claim by the applicant, Michael Kellett (Michael), that the disposition of a farming property known as the Heathcote property (the Property) by Brimmage Pty Ltd (Brimmage) as trustee of the Schriever Family Trust (the Trust) in favour of the first respondent, Alan Schriever (Alan), was made in breach of trust. I upheld the applicant’s claim that the second respondent, Dean Schriever (Dean), to whom Alan had almost immediately transferred the Property, was obliged to return the Property to the Trust.
[1] Kellett v Schriever [2020] SASC 96.
The grant of relief was complicated by the fact that the respondents, as directors of Brimmage, had caused the company to be deregistered not long after the transfers. In my reasons for judgment, I determined that Michael was entitled to seek an order under sections 36 and 37 of the Trustee Act 1936 (SA) (the Trustee Act) for the appointment of a trustee of the Trust and for the return of the Property by Dean to the trustee of the Trust.
I subsequently granted the following declarations:
1. It is declared that the applicant is entitled to an order that the purported vesting of the land comprised in Certificate of Title Register Book Volume 10794 Folio 147 and Volume 10587 Folio 697 (Heathcote Property) from Brimmage Pty Ltd … as trustee for the Schriever Family Trust to Alan Jeffrey Schriever and the transfer from Alan Jeffrey Schriever to Dean Jeffrey Schriever be set aside.
2. It is declared that the applicant is entitled to an order that the estate and interest of Dean Jeffrey Schriever both at law and in equity in the Heathcote Property be vested in the Schriever Family Trust.
I deferred the making of substantive orders for the return by Dean of the Property to the Trust pending hearing the parties on the identity of the trustee. I deferred the making of orders as to costs pending hearing the parties on costs issues.
I subsequently heard argument on costs as between the parties.
I subsequently made orders for the joinder as interested parties of those potential beneficiaries (beneficiaries) of the Trust who were children or grandchildren (of or over the age of 18) of Alan or Mae Schriever (Mae) (excluding Dean’s children and Ross Schriever and his children). Some of those interested parties conveyed their attitude to the Court in relation to the issues of the identity of the trustee and whether the costs of any party should be paid out of the assets of the Trust. I subsequently heard argument on those issues.
These reasons for judgment address three matters:
1costs as between the applicant and respondents;
2applications by the applicant and respondents that, to the extent not otherwise recovered, their costs of action be paid out of the assets of the Trust; and
3the identity of the trustee to be appointed of the Trust.
Costs as between the parties
Michael seeks an order that Alan and Dean pay his costs of action. He seeks that the costs be awarded on an indemnity basis or, in the alternative, on a party/party basis.
Alan and Dean seek an order that the costs of action of each party, on a party/party basis, be paid out of the assets of the Trust or, in the alternative, that they bear their own costs and Michael’s costs of action be paid out of the assets of the Trust. In the further alternative, they contend that an order should only be made that Alan, and not Dean, pay Michael’s costs of action. They oppose any costs being awarded on an indemnity or solicitor/client basis.
Costs order
Although costs are in the unfettered discretion of the Court, generally costs follow the event. Hence generally the successful applicant obtains an order that the unsuccessful respondent pays the applicant’s costs of action. There are established circumstances in which a successful party might not recover costs or might recover less costs, such as when they have lost on a substantial separate issue, unreasonably rejected a settlement offer or engaged in misconduct in, or in relation to, the action that caused, or increased, the incurring of costs. No such circumstances apply in the present case. There is no reason why the respondents should not pay the applicant’s costs of action.
The question whether the respondents should pay the applicant’s costs should be determined before the question whether the costs of any party should be paid out of the assets of the Trust. In any event, an order should not be made that the respondents’ costs, or the costs of the applicant that should be paid by the respondents, be paid out of the assets of the Trust for the reasons given below.
Dean contends that no order should be made against him to pay costs because, in my reasons for judgment, I said that “I accept that Dean did not have actual notice that Alan was not a beneficiary of the Schriever Trust” and that “It appears that Dean relied to a large extent on advice from Mr Westley and Mr Evans that it was appropriate for Brimmage to distribute the property to Alan for the purpose of Alan transferring it to Dean”.[2]
[2] Kellett v Schriever [2020] SASC 96 at [267] and [269].
These passages from my reasons for judgment are taken out of context. First, Michael did not contend that Dean had actual notice and hence this was not in issue. Secondly, the question whether Dean had notice (actual or constructive) was irrelevant because I had found that Dean did not provide valuable consideration for the transfer of the Property. Thirdly and most importantly, I found that Dean had constructive notice because he ought to have made enquiries and failed to do so.
In any event, a cost liability is imposed on the unsuccessful respondent in an action because that party unsuccessfully defended the action. It is not imposed because the Court assesses the degree of moral blameworthiness of the respondent in respect of the subject matter of the action. The fact that Dean did not have actual notice that Alan was not a beneficiary is irrelevant to the question of the cost liability.
Dean contends that no order should be made against him to pay costs because Bill DeGaris, Alan and Mae’s solicitor, had sent letters to Stephen Evans, the Schriever family’s accountant, in May 2008 incorrectly referring to Alan as being a beneficiary, which was a mistake on Mr DeGaris’ part. This is equally irrelevant to costs.
Dean seeks to rely on an observation by a Judge in reasons for judgment at an earlier, interlocutory, stage of this action that Alan swore an affidavit that he did not execute the third deed of variation. First, Alan’s affidavit was not tendered at the trial of this action and is therefore irrelevant. Secondly, it was common ground at trial that the third deed of variation was not executed and hence its non-execution is irrelevant. Thirdly, again, this is in any event irrelevant to costs.
It is appropriate to order that both Alan and Dean pay Michael’s costs of action.
Costs scale
Michael seeks that the costs be awarded on an indemnity or solicitor/client basis.
The first ground advanced for such an award is that Michael contends that, if properly advised, the respondents should have appreciated that their defence had no prospect of success. Merely because a respondent fails in defending an action does not entail that they should have appreciated that their defence had no prospect of success. This is not one of those rare and exceptional cases where there was no serious issue to be tried.
The second ground advanced for such an award is that the respondents behaved badly by their dealings in the trust property. However, it is well established that “misconduct” for the purpose of making a costs order other than the ordinary order must relate to conduct in or in relation to the litigation and does not refer to the anterior conduct of the respondent the subject of the action.
The third ground advanced is that Dean was an unimpressive witness. This is not a ground for making an indemnity or solicitor/client costs order. It cannot be said that the quality of Dean’s evidence increased costs incurred in the action in a manner justifying an indemnity or solicitor/client costs order.
The fourth ground advanced is that Michael made a Calderbank offer on 14 May 2019 to compromise the action on terms and Michael ultimately achieved a better result by judgment than the offer. I reject that contention. The offer was that the respondents pay $800,000 into a new trust settled in the same terms as the Trust, with the respondents specifically excluded as beneficiaries and Michael named as the sole appointor of the new trust, and that the respondents pay $100,000 as a contribution to Michael’s costs. Michael has not proved that the value of the Property at that stage exceeded $800,000, nor has he proved that his party/party costs would have been taxed in May 2019 at or above $100,000. In addition, the letter was silent as to an essential matter, being the identity of the trustee. If Michael had been named sole appointor of the new trust, it would have given him the power to replace the trustee and effectively give him power to control distributions out of the Trust. The letter in which the offer was made advanced no ground on which Michael should be appointed sole appointor. Most importantly, Michael brought the action as a derivative action exercising rights otherwise exercisable by the trustee but the offer he made was to resolve the action in his own personal interest.
It is not appropriate to order that the respondents pay Michael’s costs of action on an indemnity or solicitor/costs basis.
Costs paid out of trust assets
Each of Michael and the respondents seek orders that their own costs (to the extent not otherwise recovered) be paid out of the assets of the Trust.
Michael and the respondents tendered documents in which the interested parties conveyed their views concerning the issues of costs being paid out of the assets of the Trust and the identity of the trustee.
The interested parties express differing views concerning this issue. Some support an order in favour of Michael but not in favour of Alan and Jeffrey. Some support an order that the costs of Michael, Alan and Jeffrey all be paid out of the Trust. There is no clear preponderance of views. I have had regard to the reasons advanced by the interested parties for their respective views. However, ultimately, it is necessary to decide the questions by reference to established principles.
Michael’s costs
Michael seeks an order that, to the extent not recovered from the respondents, his costs of action, on an indemnity or solicitor/client basis, be paid out of the assets of the Trust.
If Brimmage had not been controlled by the respondents and had not been deregistered, it would have been the appropriate applicant to bring the action to recover the trust property transferred out of the Trust in breach of trust. Michael brought a derivative action on behalf of the Trust because there was no trustee in existence. If he had not brought the action, there would have been no property in the Trust to be distributed to the beneficiaries. In the circumstances, the reasonable costs incurred by Michael in bringing the action should be borne by the Trust, except to the extent that Michael recovers those costs from the respondents.
The difference between solicitor/client and indemnity costs is the onus of proof or persuasion. If a solicitor/client costs order is made, the onus is on the person entitled to payment of costs to show that they have been reasonably incurred in the proceeding.[3] If an indemnity costs order is made, the onus is on the liable party to show that the costs claimed have been unreasonably incurred.[4] The onus in each case relates both to the scale on which the costs are charged and the reasonableness of the incurring of each item of costs incurred.
[3] Uniform Civil Rules 2020 (SA) r 191.1 (definition of solicitor/client basis).
[4] Uniform Civil Rules 2020 (SA) r 191.1 (definition of indemnity basis).
Because the costs are payable out of the Trust assets, Michael should be required to justify the costs that he recovers as having been reasonably incurred. It follows that it is appropriate to order costs on a solicitor/client basis rather than an indemnity basis. Michael should also be required to first exhaust his entitlement to recover costs from the respondents before recovering any difference from the Trust assets.
Alan’s and Dean’s costs
In contrast to the prosecution of the action by Michael, the defence of the action by Alan and Dean did nothing to increase the assets of the Trust distributable to the beneficiaries. On the contrary, their defence of the action had the effect of depleting the assets of the Trust to the extent that Michael is to recover his differential costs under the costs order to be made in accordance with the previous paragraph.
There is no basis for making an order that the Trust bear the respondents’ costs of action.
Identity of trustee
Michael proposes that he be appointed as the trustee of the Trust. In the alternative, he seeks an order that he and Mr DeGaris jointly be appointed trustees or that Mr DeGaris alone be appointed as trustee.
The respondents propose that Greg Arthur be appointed as trustee of the Trust.
The interested parties who expressed a view on this issue expressed differing views concerning the identity of the trustee. Several support Michael’s proposals. Two support the respondents’ proposal. Some did not express a view. I have had regard to the reasons advanced by the interested parties for their respective views.
No party suggests that an application should be made for the re-registration of Brimmage and that it should be appointed as trustee of the Trust. No person has taken any steps to seek re-registration of Brimmage.
No issue is raised by any party concerning the power of the Court to resurrect the Trust, or appoint a new trustee to it, given the deregistration of the Brimmage. Apart from this Court’s powers as a court of equity in respect of trusts, sections 36 and 37 of the Trustee Act relevantly provide:
36—Power of the Court to appoint new trustee
(1)     The Supreme Court may, on the application of a person referred to in subsection (1c), make—
(a)     an order removing one or more of the trustees of a trust; or
(b)     an order replacing one or more of the trustees of a trust; or
(c)     an order appointing a trustee or trustees, or an additional trustee or trustees,         of a trust; or
(d)     any other order that in its opinion is necessary or desirable.
(1a)   The Court may make the order if it is satisfied that the order is desirable—
(a)     in the interests of the persons (whether identified or not) who are to benefit          from the trust; or
(b)     to advance the purposes of the trust.
…
(1c)   The following persons may apply for an order under this section:
(a)     the Attorney-General; or
(b)     a trustee of the trust; or
(c)     a beneficiary of the trust; or
…
(e)     any other person who satisfies the Court that he or she has a proper                   interest in the trust.
…
37—Vesting order as to land
(1)     In any of the following cases, namely:
(a)     where the Supreme Court appoints or has appointed a trustee or where               a trustee has been appointed out of court under any statutory or express              power; and
…
the Supreme Court may make an order (in this Act called a vesting order) vesting the land in any such person in any such manner and for any such estate as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct.
(2)     However—
(a)     where the order is consequential on the appointment of a new trustee the             land shall be vested for such estate as the court may direct in the persons             who on the appointment are the trustees;
…
Potential appointment of Michael
Michael contends that he is lawfully the sole appointor of the Trust and the Court should appoint him as trustee because he would otherwise have power as appointor to change the trustee to himself.
Under the original Trust Deed, Alan and Mae were jointly the “Original Appointor”. However, by virtue of the amendments to the Trust Deed, Alan was removed and Mae became the sole appointor.
Clause 2 defines “Appointor” to mean “any person or persons for the time being having the power to remove or appoint the Trustee under clause 18”.
Clause 18.2 empowers the Appointor to remove any Trustee, appoint a new Trustee in their place or appoint an additional Trustee. It provides that the Original Appointor is the first Appointor.
Clause 18.4 provides, amongst other things:
An Appointor may appoint one or more successors each of whom will have the power as an Appointor or to remove and appoint Trustees and to appoint a successor.
On 15 May 2008 Mae made a will appointing Michael, Dean and Mr Evans as executors and trustees of her will. The will provided that any power of appointment exercisable by her in the Trust was given to Michael together with the trustees of her will, subject to a proviso that the appointors must ensure that Helen, Debra, Terry and Joanne receive $20,000 each, after which the trustees must resign as appointors in favour of Michael absolutely.
On 16 June 2010 Mae made a new will appointing Michael, Dean, Mr Evans and Michael Palm as executors and trustees of her will. The will provided that Mae gave her power of appointment in the Trust and the Spot‑On Trust to the trustees of her will and directed that they exercise the powers to appoint a new trustee and appointor of the trusts as follows:
As to the Schriever Family Trust I GIVE the power of appointment UNTO MICHAEL JOHN KELLETT to the intent that he shall be solely entitled to exercise the discretions in relation to the distribution of the corpus and income of that Trust in favour of himself, his family, children and remoter issue as he and his (or his nominated successor) shall determine.

Subsequently Alan, Mae, Michael, Dean and Mr Evans executed a “Deed of Retirement & Appointment of New Appointors” (the Retirement Deed) bearing the typewritten date 30 June 2010. I found in my previous reasons for judgment that this document was not created or executed until June 2011.[5] The Retirement Deed provided:
1. [Alan and Mae] appoint as successors to themselves the said DEAN JEFFREY SCHRIEVER, MICHAEL JOHN KELLETT and STEPHEN WILLIAM JOHN EVANS as the joint Appointors of the Trust.
2. Simultaneously with the appointment of the new Appointors the said ALAN JEFFREY SCHRIEVER and LOUISE MAE SCHRIEVER retire as the Appointors of the Trust.
[5] Kellett v Schriever [2020] SASC 96 at [100].
When the Retirement Deed was executed, Alan was not in fact an appointor and Mae was the sole appointor. It is evident that Mae and Alan believed that they were both appointors at the time.
Michael advances three propositions. First, he contends that the Retirement Deed is void or inoperative on two grounds. The first ground is that Alan did not and could not retire as appointor as provided by clause 2 of the Retirement Deed because he was not an appointor. Clause 2 provides that the retirement of Alan and Mae is simultaneous with the appointment by clause 1 of Dean, Michael and Mr Evans as joint appointors; and it follows that the appointment of the new appointors and retirement of Mae as an appointor do not operate. The second ground is that Alan’s involvement in the Retirement Deed was an integral part of it and cannot be severed leaving the balance to operate.
Michael’s second proposition is that, on the premise of the first proposition that Mae was, until her death, the sole appointor of the Trust, that power of appointment passed to Michael on her death pursuant to the terms of her June 2010 will.
Michael’s third proposition is that, if on the premise of the first and second propositions he is sole appointor of the Trust, there is no utility in the Court appointing any trustee other than himself because he could immediately exercise his power of appointment to replace that trustee with himself.
In relation to Michael’s first proposition, I reject Michael’s first ground. The clear intent and effect of clauses 1 and 2 read together is that the existing appointors are replaced by the new appointors. The mere fact that Alan was not in fact an existing appointor does not render clauses 1 and 2 inoperative.
Michael’s second ground is that the making of the Retirement Deed by Alan as an existing appointor and his retirement as an appointor was an integral part of the Retirement Deed which cannot be severed, leaving the balance of the Retirement Deed to operate by the retirement of Mae alone and the appointment by Mae alone of new appointors. It is common ground that this issue involves the application of severance principles and that the question is to be determined objectively rather than by reference to the subjective intent of Mae. However, Michael does not cite any authority in relation to the principles applicable to this issue or their application to a case in which two parties execute a deed on the premise that joint execution is required when in fact only one of the parties has power to do so.
The second ground raises a difficult issue. On the one hand, it might be argued that, objectively assessed, it was the intent of Mae to retire as appointor and that Michael, Dean and Mr Evans become the appointors and the mere fact that Alan was not a joint appointor with Mae and that his execution of the Retirement Deed was ineffective does not detract from Mae’s objective intention to achieve that result. On the other hand, it might be argued that, merely because two persons (such as husband and wife) agree on a particular course in the belief that they must both concur to make any decision, it does not follow that one of those persons alone would not have decided on a different course. For the reasons given below, it is not necessary to reach a conclusion on this question.
In relation to Michael’s second proposition, it is not technically accurate. Mae, by her June 2010 will, gave her power of appointment to her trustees (Michael, Dean, Mr Evans and Mr Palm) and she directed that those trustees appoint Michael as sole appointor in their place. Accordingly, Michael is not presently the appointor because he has not called on the trustees to appoint him in their place and they have not done so. I will assume that, if the trustees declined to appoint Michael as appointor in their place, he could compel them by an action in this Court to do so. However, the fact remains that this has not occurred.
In relation to Michael’s third proposition, section 36 of the Trustee Act requires the Court to be satisfied that an order appointing a trustee is desirable in the interests of the persons who are to benefit from the Trust or to advance the purposes of the Trust. I consider that it is desirable in the interests of the beneficiaries of the Trust that a person other than a beneficiary be appointed as trustee of the Trust. I consider that it is not desirable in the interests of the beneficiaries that Michael, as a beneficiary, be appointed trustee. I do not consider that appointment of Michael as trustee is desirable to advance the purposes of the Trust.
In addition, Michael did not join as parties to the action the other executors and trustees of Mae’s will, being Mr Evans and Mr Palm (and Mr Evans also as a party to the Retirement Deed). It is not appropriate to determine the legal issue whether Michael is sole appointor of the Trust other than in the context of a properly constituted action. If Michael subsequently establishes that proposition in a properly constituted action, he will have the power to replace the trustee who is now to be appointed by the Court. I do not know whether that will occur and it is not appropriate to speculate about it. The Court should not make an appointment of a trustee that would not otherwise be made on the merits merely because it is contended that there would be no utility in doing so if Michael could subsequently exercise a power of appointment to replace that trustee.
If any potential beneficiary were appointed as trustee, that person would obviously have the power to distribute the net assets of the Trust to themselves, members of their immediate family or other potential beneficiaries of their choosing. I do not consider that this is desirable in the interests of all beneficiaries. It is preferable that a non-beneficiary, such as one of the solicitors otherwise nominated by the parties, be appointed as trustee.
Appointment of Mr DeGaris or Mr Arthur
Michael tendered a consent by Mr DeGaris to be appointed as trustee of the Trust in which Mr DeGaris said that he was not aware of any conflict of interest or duty that would make it inappropriate for him to act as trustee.
Michael also tendered a letter from Mr DeGaris setting out his experience. He has been a legal practitioner since 1975. He has acted as executor and trustee of many deceased estates, both solely and jointly. He has acted as a director of corporate trustees which are trustees of discretionary trusts, superannuation trust funds and public charitable trusts and is currently a director of five such corporate trustees. He has professionally advised clients, executors and trustees in relation to trust matters.
Mr DeGaris indicated that, if appointed as trustee, he would charge in accordance with the Supreme Court scale.
The respondents adduced oral evidence from Mr Arthur. Mr Arthur consented to being appointed as trustee of the Trust. He has been a legal practitioner since 1977 and has practised primarily in commercial trusts, estate and succession planning. He has acted as executor and trustee of a significant number of deceased estates, both solely and jointly. The only discretionary trust of which he has been appointed trustee is his own family trust. Otherwise, his work as a trustee has always been as a trustee following on from appointment as an executor under a will. Mr Arthur indicated that, if appointed as trustee, he would charge an hourly rate $30 above the hourly rate contained in the Supreme Court scale.
The respondents expressed concern whether Mr DeGaris should be regarded as independent on two grounds. The first ground is that he was called by Michael to give evidence at the principal trial. The second ground is that he admitted making a mistake in May 2008 by incorrectly referring to Alan as a beneficiary.
In relation to the first ground, Mr DeGaris was merely a witness and was compellable by subpoena, if necessary, to give evidence. He never acted as a solicitor for Michael and, on the contrary, acted as solicitor for Alan and Mae and the Trust. He only gave evidence of historical facts. This does not render him unsuitable to act as trustee of the Trust.
In relation to the second ground, Mr DeGaris made an honest mistake. This has no relationship with, and is incapable of having an effect on, the exercise of judgment or discretion by him if appointed as trustee.
Mr Arthur said that his firm acts as town agent for Westley DiGiorgio Norcock and he described his relationship with Peter Westley as being friends. Westley DiGiorgio Norcock and Mr Westley are the solicitors in the action for the respondents and have acted more generally for them over the last few years.
I do not consider that either Mr DeGaris or Mr Arthur would have a conflict of interest if appointed as trustee of the Trust.
There are two primary tasks that the new trustee will be required to undertake. First, it will be necessary to make decisions concerning the marketing and sale of the Property, including setting a reserve or asking price, and for that purpose to appoint and deal with a land agent and a conveyancer. In this respect, there are advantages in appointing Mr DeGaris because he is situated in, and familiar with, the South East and because of his lower charge out rate.
Secondly, it will be necessary to decide on distribution of the net proceeds of sale of the Property. In this respect, there are advantages in appointing Mr DeGaris because he has considerable experience as a director of trustee companies required to exercise discretions; whereas Mr Arthur lacks such experience.
In addition, there is potentially a third primary task that the new trustee will be required to undertake. Dean has foreshadowed that he might make a claim against the Trust for the value of improvements undertaken to the Property since March 2013. Michael has foreshadowed that, particularly if Dean makes such a claim, he might invite the trustee to make a counterclaim against Dean for the value of his use of the Property since March 2013. It is not possible to assess the likelihood of the trustee needing to consider or deal with such claims. Amongst other things, I do not know what cause of action Dean might seek to assert, the value of improvements he undertook or the value of his use of the Property. It may well be that the net value of any claims/counterclaims as between Dean and the Trust is relatively small, the legal costs associated with pursuing them would be disproportionate and they are not ultimately advanced or pursued.
If the trustee is required to consider such claims or counterclaims, there are advantages in appointing Mr DeGaris because he is situated in the South East and because of his lower charge out rate.
On balance, it is in the best interests of the Trust and the potential beneficiaries that Mr DeGaris be appointed as the new trustee.
Conclusion
Subject to hearing from the parties, I propose to make the following orders:
1Orders resurrecting the Trust and appointing Mr DeGaris as trustee of the Trust.
2An order that the respondents pay the applicant’s costs of action on a party/party basis to be taxed if not agreed, save as to the issue in respect of the identity of the trustee to be appointed.
3An order that, after the applicant has recovered costs from the respondents pursuant to order 2, the applicant recover out of the assets of the Trust his costs of action on a solicitor/client basis to be taxed, less the recovered costs.
4An order that Dean either transfer the Property to the Trust or authorise the trustee to market and sell the Property and receive the sale proceeds.
I will hear the parties concerning the terms of the orders to be made and concerning the costs of the issue as to the identity of the trustee.