Legal Research
Cases
Ludwig v Jeffrey (No. 3)

Ludwig v Jeffrey (No. 3)

Case [2021] NSWSC 23 27 January 2021

No judgment structure available for this case.

Type to search within this case.

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Ludwig v Jeffrey (No. 3) [2021] NSWSC 23
Hearing dates: Decision made in chambers on the papers.
Date of orders: 27 January 2021
Decision date: 27 January 2021
Jurisdiction: Equity
Before: Slattery J
Decision:
Orders made providing for the payment of some funds out by the independent solicitor. Directions made for the fixing of a specified gross sum instead of assessed costs. Plaintiffs must elect whether they will raise issues concerning Trustee Act 1925, s 100A.

Catchwords:
EQUITY – Trusts and trustees – Powers, duties, rights and liabilities – Indemnity of trustee – the plaintiffs and the defendant were registered proprietors as joint tenants of certain real property – the defendant held his one third interest as joint tenant in the property on trust for the plaintiffs – the property sold and the net proceeds held pending the outcome of these proceedings – pursuant to orders of the Court part of the proceeds were applied by the plaintiffs to acquire another property – the defendant incurs costs, expenses and tax liabilities as the trustee of his legal interest in the property – the maximum quantum of that indemnity in relation to the defendant’s costs and expenses are fixed – the defendant’s potential liability to capital gains tax and other taxes appears to be zero or very low – what orders should now be made with respect to the payment out of money which is held by an independent solicitor – should a cost assessment now take place or should a gross sum costs order be made – new issue raised as to whether Trustee Act 1925, s 100A may modify the amount paid out of the fund held by the independent solicitor.
CIVIL PROCEDURE – Costs orders – Civil Procedure Act 2005, s 98(4)(c) – small trust estate – dispute about the quantum of costs – much of the estate already consumed by legal costs – whether a specified gross sum should be fixed instead of assessed costs.

Legislation Cited:
Civil Procedure Act 2005, ss 60, 98(4)(c)
Justice Legislation Amendment Act (No 2) 2019
Legal Profession Uniform Law Application Act 2014
Trustee Act 1925, ss 100A, 100A(2), 100A(4)
New South Wales Law Reform Commission, Report 144 (2018): Laws Relating to Beneficiaries of Trusts, Recommendation 2.1

Cases Cited:
Australian Securities and Investments Commission v Letten (No 17) (2011) 286 ALR 346
Causley v Countryside Pty Ltd (No 3) (Unreported, NSWCA, 2 September 1996)
Fraser or Robinson v Murdoch (1881) 6 App Cas 855
Hamod v New South Wales [2011] NSWCA 375
Hardoon v Belilios [1901] AC 118
Harrison v Schipp (2002) 54 NSWLR 738
JW Broomhead (Vic) Pty Ltd (in liquidation) v JW Broomhead Pty Ltd [1985] VR 891
Ludwig and Jeffrey [2019] NSWSC 1550
Ludwig v Jeffrey (No. 2) [2020] NSWSC 1677
Matthews v Ruggles-Brise [1911] 1 Ch 194
Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99

Texts Cited:
H A J Ford,…

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 Ludwig v Jeffrey (No. 3)

Details

AGLC: Ludwig v Jeffrey (No. 3) [2021] NSWSC 23
Case: [2021] NSWSC 23
Decision Date: 27 January 2021

CaseChat Overview and Summary

The case of Ludwig v Jeffrey (No. 3) involved the plaintiffs and the defendant as joint tenants of certain real property. The defendant held his one-third interest in the property on trust for the plaintiffs, and following the sale of the property, the net proceeds were held pending the outcome of the proceedings. The plaintiffs used part of the proceeds to acquire another property, while the defendant incurred costs, expenses, and tax liabilities as the trustee of his legal interest in the property. The court had to determine the maximum quantum of indemnity for the defendant's costs and expenses, as well as address the potential tax liabilities. The case also raised a new issue regarding whether section 100A of the Trustee Act 1925 could modify the amount paid out of the fund held by an independent solicitor.

The court had to decide on the appropriate orders for payment from the fund held by the independent solicitor, considering whether a cost assessment should take place or if a gross sum costs order should be made. Given that much of the estate had already been consumed by legal costs, the court considered if a specified gross sum should be fixed instead of assessed costs. This decision was guided by section 98(4)(c) of the Civil Procedure Act 2005, which allows for a different approach to costs in small trust estates. The court also had to consider whether section 100A of the Trustee Act 1925 could impact the amount paid out of the fund.

The court held that given the small size of the trust estate and the fact that much of it had already been consumed by legal costs, a gross sum costs order was appropriate. The court fixed the maximum quantum of indemnity for the defendant's costs and expenses. The potential tax liabilities for the defendant were considered to be zero or very low, and no modification was made under section 100A of the Trustee Act 1925. The court ordered that a specified gross sum be paid from the fund held by the independent solicitor to the defendant, covering his costs and expenses.

The final orders of the court were that the specified gross sum would be paid to the defendant from the fund held by the independent solicitor, covering his costs and expenses. The court did not make any modification to this amount under section 100A of the Trustee Act 1925. The court also determined that a gross sum costs order was appropriate, rather than a cost assessment, given the circumstances of the case.

Orders