Mainray Nominees Pty Ltd v Stoate - [2025] WASC 145

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   MAINRAY NOMINEES PTY LTD -v- STOATE [2025] WASC 145
CORAM:   GETHING J
HEARD:   1, 16 & 24 APRIL 2025
DELIVERED          :   30 APRIL 2025
FILE NO/S:   TRU 13 of 2024
BETWEEN:   MAINRAY NOMINEES PTY LTD
Plaintiff
AND
KATJA ELIZABETH STOATE
NEVE JENNIFER CAMPION
MANON YVONNE STOATE
JACK EDWARD CAMPION
BRONTE ELIZABETH CAMPION
First Defendants
JONATHON MICHAEL STOATE
MEREDITH NANCY CAMPION
Second Defendants

Catchwords:

Trusts - Trustees - Judicial advice - s 92 Trustees Act 1962 (WA) - Whether trustee justified in defending an action against it - Whether trustee can have recourse to trust assets to fund defence - Approach of the court where the parties consent to advice being provided

Legislation:

Trustees Act 1962 (WA) s 92

Result:

Application granted in part

Category: B

Representation:

Counsel:

Plaintiff	:	Mr M M Cuerden SC with Mr M Keating
First Defendants	:	Mr S Penglis SC with Mr N Gentilli
Second Defendants	:	Mr S Penglis SC with Mr N Gentilli

Solicitors:

Plaintiff	:	Pragma Lawyers
First Defendants	:	Jackson McDonald
Second Defendants	:	Jackson McDonald

Case(s) referred to in decision(s):

Application of Uncle's Joint Pty Ltd [2014] NSWSC 321
Attorney-General (Cth) v Breckler and Others (1999) 197 CLR 83; [1999] HCA 28
Australian Executor Trustee Ltd v Attorney-General (WA) [2015] WASC 439
Blatchford v Laine [2018] WASC 207
Boyle v Farano [2023] WASC 303
Browne v Bassett-Scarfe [2015] WASC 422
Cardaci v Cardaci [2023] WASCA 158
Equity Trustees Wealth Services Limited v The Attorney General of Western Australia [2024] WASC 324
Herbert v Blenkinsop [2018] WASC 369
In re Manisty's Settlement [1974] Ch 17
Karger v Paul [1984] VR 161
Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66
Marinko v O'Sullivan and Wilson as executors of will of Marinko [2023] WASC 180
Owies v JJE Nominees Pty Ltd [2022] VSCA 142
Plan B Trustees Ltd v Parker [No 2] [2013] WASC 216
Re Mary Donald Nominees Pty Ltd as trustee for The D J MacCormick Family Trust; ex parte Mary Donald Nominees Pty Ltd as trustee for the D J MacCormick Family Trust [No 2] [2024] WASC 284
Schmidt v Rosewood Trust Ltd [2003] 2 AC 709
Wood (as co‑executor and trustee of the will of the deceased) v Wood [No 4] [2014] WASC 393

GETHING J:

By originating summons filed 28 October 2024, Mainray Nominees Pty Ltd (Mainray) sought an order pursuant to Trustees Act 1962 (WA) (TA) s 92, alternatively in the inherent jurisdiction of the court, that it is justified in:
(a)defending Supreme Court of Western Australia proceedings CIV 1961 of 2024 (Campion Action); and
(b)using funds of the Talgarno Trust (Trust) for the purpose of that defence.
(Application)
It is convenient to begin by setting out the entities and the relationships of the parties involved in determining the Application. As there are multiple people with the same surname, for the purposes of clarity, and intending no disrespect, I will refer to the people involved by their first name.
The Trust was established on 15 March 2004 at the instigation of the late John Thorne Stoate. Mainray is the trustee of the Trust. Originally, John was the sole director and shareholder of Mainray and the sole guardian and appointor of the Trust.
The Trust owns all the shares in Anna Plains Cattle Co Pty Ltd (APCC). APCC in turn holds the Anna Plains Station pastoral lease (Station). The Station is roughly 3,000 sq km and is situated about 250 kms south of Broome. The shareholding in APCC is the Trust's principal asset.
John had 3 children:
(a)Jonathon Michael Stoate, born 26 May 1960;
(b)Meredith Nancy Campion, born 18 June 1962; and
(c)David Norman Stoate, born 2 May 1966.
John's wife, and the childrens' mother, died in March 1988. John never remarried.
Since 28 March 2020:
(a)David has been, and still is, the sole guardian of the Trust; and
(b)David and his daughter, Joanna Helen Stoate, have been, and still are, the joint appointor of the Trust.
Since 26 October 2020, David has been the sole director and secretary of Mainray, and still is. Since 2 November 2020 David has been, and still is, the sole shareholder in Mainray. David is married to Helen Campion.
John died on 17 March 2022.
The 'primary beneficiaries' of the Trust are John's seven grandchildren namely:
(a)Meredith's three children: Jack Edward Campion, Bronte Elizabeth Campion and Neve Jennifer Campion;
(b)Jonathon's two children: Manon Yvonne Stoate and Katja Elizabeth Stoate; and
(c)David's two children: Timothy David Stoate and Joanna.
John's grandchildren are now adults.
The general beneficiaries of the Trust consist of a much wider class. It includes Jonathon, Meredith and David. It also includes the Timjo Trust, a discretionary trust of which David and his wife Helen are the trustees, as well as being specified beneficiaries.
David deposes that, following discussions with John, in January 2006, he, Helen and their then young children moved from Sydney to the Station permanently, to live and work there with John. Since then, he and Helen have lived and worked at the Station. Their children grew up there, going to boarding school for their secondary education. Helen and David continue to be the managers of the Station, living there and working full time. Over time, they took on the managerial responsibility from John. David was appointed a director of APCC in October 2006 and as I have already noted, assumed other responsibilities from John as he got older.
David goes into some detail as to the operational history of the Station over the period he lived there. He describes a gradual improvement in the financial position of APCC over the following decade, albeit with significant levels of debt. For the first four years, he and Helen worked without drawing a wage, and then only drawing minimal wages (which appear to have been largely spent on boarding school fees for their children).
As to John, David deposes:[1]
From 2010 onwards John's age and failing eyesight prevented him managing the daily station activities, but he continued advising and guiding Helen and me on station management generally, and was involved in all major business decisions, such as major equipment purchases, upgrading buildings, locating new water points, and marketing cattle. Anna Plains was his life, his pride and his joy, and he was very clear to anyone who asked that he had no intention of leaving.
[1] Affidavit of David sworn 8 November 2024 (David's First Affidavit), par 53.
David describes over the 2010s APCC's business steadily improving with the debt level gradually coming down. It was not until the 2015/16 financial year that he and Helen began receiving substantial salaries (then only $52,000 each). It was not until the following year that APCC could pay any real dividend. APCC's long term growth was impacted by a cyclone in 2018 which, among other things, destroyed the homestead house. However, the long-term growth resumed in the financial years of 2018/19 and 2019/20, resulting in APCC being able to pay down a significant amount of debt and declare dividends. This growth has continued to the present date, with David describing the financial year of 2022/23 being the most profitable in APCC's history.
As to John, David deposes: [2]
Over the period 2020, 2021 and 2022, John's health had grown progressively worse. On January 2022, he deteriorated rapidly. John stayed in Broome Hospital until he passed away on 17 March 2022. He remained lucid until the end.
[2] David's First Affidavit, par 127.
Both David and Meredith go into some detail as to what I would neutrally describe as 'engagements' between family members, including John, in relation to his succession planning.[3] David also goes into the circumstances in which John's wills were signed by him.[4]
[3] For example: David's First Affidavit, pars 62, 63, 84 - 96, 103 - 119, 128, 135 - 137; Affidavit by Meredith affirmed 20 January 2025 (Meredith's Affidavit), pars 4 - 12.
[4] David's First Affidavit, pars 79 - 83, 97 - 102, 120 - 121.
The Campion Action was commenced by writ filed 14 August 2024. The plaintiffs are Jack, Bronte, Neve, Manon, Katja, Meredith and Jonathon (Plaintiffs). The defendants are Mainray, David, and David and Helen in their capacity as trustees of the Timjo Trust. Mainray is separately represented from the other defendants. The Campion Action is in abeyance pending the determination of the Application.
The respondents to the Application are each of the Plaintiffs to the Campion Action (Respondents). I accept that they are all persons who are interested in the application for the purposes of TA s 92(2). The following comments by Vaughan J in Blatchford v Laine are apposite to the present case:[5]
…it was appropriate that they be served with the proceedings and that they be heard on the application. They have been joined as defendants. Strictly speaking, however, they are not 'parties' in the usual sense. Rather they are 'permitted to be heard and allowed to participate in the proceeding, to some extent'.
The caveat on participation is because the primary function of TA s 92 is to create a procedure for the court to provide private advice to trustees.[6]
[5] Blatchford v Laine [2018] WASC 207 [53] (Vaughan J) (Blatchford).
[6] Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66 [65] (Macedonian Church) (Gummow ACJ, Kirby, Hayne and Heydon JJ).
Mainray read five affidavits:
(a)David's First Affidavit;
(b)a second affidavit of David sworn 21 February 2025 (David's Second Affidavit), with the exception of paragraph 3;
(c)the confidential affidavit of Matthew James Keating (a legal practitioner employed by Mainray's lawyers) sworn 28 October 2024 attaching the advice of senior counsel (Keating Confidential Affidavit);
(d)a second affidavit of Mr Keating sworn 27 March 2025 (Second Keating Affidavit); and
(e)a third affidavit of Mr Keating sworn 1 April 2025 (Third Keating Affidavit).
Counsel for Mainray filed detailed submissions on 19 February 2025 (Mainray Submissions) and submissions in reply on 25 March 2025 (Mainray Reply Submissions).
Counsel for Mainray sought an order that the Keating Confidential Affidavit be permanently restricted to all persons other than the presiding judge pursuant to Rules of the Supreme Court 1971 (WA) (RSC) O 67B r 5. The electronic lodgement system provides for a document which is filed with a request for confidentially to be subject to restricted access pending determination of the confidentiality application. An order of this kind is both routine and appropriate. At the hearing on 1 April 2025 I made this order.
I have received counsel's opinion on a confidential basis that maintains Mainray's client-legal privilege.[7] It was agreed across the bar table that the sole purpose of tendering the opinion of counsel was to demonstrate that Mainray had taken reasonable steps before approaching the court.[8]
[7] Blatchford [68].
[8] Blatchford [63], [67]; Boyle v Farano [2023] WASC 303 [87] (Boyle); Respondents' submissions in response filed 12 March 2025 (Respondent's Submissions) par 24; Mainray Reply Submissions, par 21.
The Respondents read four affidavits:
(a)Meredith's Affidavit;
(b)an affidavit of Sally Bruce (a legal practitioner employed by the Respondents' lawyers) sworn 11 March 2025 (Bruce Affidavit);
(c)an affidavit of Neil Philip Gentilli (a senior consultant employed by the Respondents' lawyers) sworn 28 March 2025 (Gentilli Affidavit); and
(d)a second affidavit by Mr Gentilli (Gentilli Second Affidavit).
The Respondents also relied on the Respondents' Submissions.
In addition, the following documents were tendered by consent:[9]
[9] Transcript dated 1 April 2025, pages 39 - 40.

Exhibit 1 The financial report for Jotim Trust, ending 30 June 2023.

Exhibit 2 The financial report for the Jotim Trust, ending 30 June 2024.

Exhibit 3 The discretionary trust deed, Jotim Trust, dated 22 June 2017.

In summary, the Respondents' position is that Mainray should remain neutral and allow David to be the contradictor, especially since, in their view, he has the funds to do so. They say that no order should be made at this stage that Mainray is justified in using the trust funds to defend the Campion Action, and that this issue should be left to the trial judge.
In the Mainray Reply Submissions, counsel for Mainray proposed a potential middle ground outcome by which the court directed that Mainray was justified in defending the Campion Action and was justified in paying out to the Timjo Trust certain unpaid present entitlements. These funds could then be used by David to fund the defence of the Campion Action.
The initial hearing on 1 April 2025 was adjourned to 16 April, and then to 24 April 2025 to allow for counsel to confer as to whether there was a middle ground proposal which was acceptable to all parties. At the hearing on 24 April 2025, after the Respondents gave certain undertakings, I made the following orders (April Orders).
1.The plaintiff as trustee of the Talgarno Trust (the Trust) is justified in defending Supreme Court of Western Australia action CIV 1961 of 2024 (Action).
2.The plaintiff is justified in paying to the Timjo Trust from monies of the Trust the unpaid present entitlement owing to the Timjo Trust in the sum of $590,499 (Timjo UPE), including (for the avoidance of doubt) for the purposes of enabling the plaintiff to defend the Action.
3.In making the order in paragraph 2, the Court expresses no view as to the validity or otherwise of the resolutions by the plaintiff which give rise to the Timjo UPE, which issue is reserved to the trial judge in the Action, save that any finding which might be made to the effect that all or any of those resolutions are invalid or ineffective will not alter the conclusion that the plaintiff was justified in making the payment in paragraph 2.
4.The plaintiff's costs of and incidental to the application be paid from the Trust on an indemnity basis, save and except to the extent that costs are unreasonable in their amount or unreasonably incurred, to be taxed without application of the scale limits, if not agreed (with notice of the taxation to be given to the other parties).
5.Without prejudice to the plaintiff's right to make further applications pursuant to Trustees Act s 92, the issue of the plaintiff's costs in the Action be reserved to the trial judge.
6.The balance of the application be dismissed.
7.Any application by the plaintiff for costs against the defendants or by the defendants for their costs to be paid from the Trust, be made within 14 days and be determined on the papers in accordance with a timetable to be agreed.
The April Orders were made with the consent of all parties to the Application. Notwithstanding their consent, I was required to make my own assessment that the April Orders were an appropriate exercise of the court's discretion pursuant to TA s 92. My reasons for coming to this conclusion are as follows.

Relevant law - TA s 92

TA s 92 provides:
92.Directions, trustee may ask Court for
(1)Any trustee may apply to the Court for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee.
(2)Every application made under this section shall be served upon, and the hearing thereof may be attended by, all persons interested in the application or such of them as the Court thinks expedient.
I am satisfied of three jurisdictional matters, being that:[10]
(a)Mainray has the power to take the action proposed;
(b)the direction sought in the Application relates to the exercise of a power or discretion vested in the Mainray; and
(c)the Application has been served on 'all persons interested in the application or such of them as the Court thinks expedient'.
[10] Re Mary Donald Nominees Pty Ltd as trustee for The D J MacCormick Family Trust; ex parte Mary Donald Nominees Pty Ltd as trustee for the D J MacCormick Family Trust [No 2] [2024] WASC 284 [27] (Solomon J) (MacCormick); Blatchford [57]; Australian Executor Trustee Ltd v Attorney-General (WA) [2015] WASC 439 [31], [34] (Martin CJ) (AET).
In AET, Martin CJ referred to the decision of the High Court in Macedonian Church which dealt with a broadly similar provision to TA s 92, and observed:[11]
All members of the High Court in the case to which I have referred considered that the powers conferred by provisions like s 92 of the Act should generally be exercised for the purposes for which they are conferred, which are the protection of the property of the trust and the protection of a trustee acting properly and in accordance with the directions of the court. Subject to conformity with those overarching purposes, the exercise of the powers conferred by such provisions is discretionary and will depend upon the particular facts and circumstances of each case, unconstrained by inflexible rules or prescriptive standards.
Nevertheless, the cases do provide some guidance with respect to the exercise of the discretion conferred upon the court… In exercising its powers, the court will generally endeavour to act in the best interests of the beneficiaries of the relevant trust and, where appropriate, will take account of the views of those beneficiaries. Further, ordinarily the court will not exercise its jurisdiction in such a way as to usurp the roles and responsibilities of trustees in relation to the making of commercial decisions or with respect to the conduct of litigation. Rather, the court will be concerned to ensure that the trustee has taken proper advice and given full consideration to all relevant matters before arriving at a reasoned and appropriate decision. If satisfied of those matters, in appropriate cases the court will give the directions sought and thereby confer protection upon a trustee taking action in accordance with those directions.
These observations have been endorsed in other decisions in this court.[12]
[11] AET [31] - [32] (reference omitted).
[12] See for example: Equity Trustees Wealth Services Limited v The Attorney General of Western Australia [2024] WASC 324 [29] (Seaward J) (Equity Trustees); Herbert v Blenkinsop[2018] WASC 369 [35] (Allanson J) (Blenkinsop).
A 'standard instance' in which the power in TA s 92 can be invoked is where a trustee who is a defendant to an action seeks a declaration that it is justified in defending the action and that it is entitled to be indemnified for its costs from the trust fund, including where the trustee is sued for breach of trust.[13] In relation to an application of this kind, in Blatchford Vaughan J summarised the relevant principles in the following terms:[14]
[13] Macedonian Church [70]; MacCormick [39] - [42]; Marinko v O'Sullivan [2023] WASC 180 [20] (Forrester J).
[14] Blatchford [57] - [58] (references omitted). Adopted in: MacCormick [27]. See also: Wood (as co‑executor and trustee of the will of the deceased) v Wood [No 4] [2014] WASC 393 [98] ‑ [139] (Kenneth Martin J); Plan B Trustees Ltd v Parker [No 2] [2013] WASC 216 [37] - [53] (Edelman J).
… in the context of an application for directions as to the position a trustee should take in relation to litigation, the relevant principles may be summarised as follows:
(1)There is a 'jurisdictional bar' under s 92(1). However, that is simply that the applicant must point to a question respecting the management or administration of trust property or a question respecting the interpretation of a trust instrument… The jurisdiction is enlivened when the question raised for directions is whether the trustee is justified in prosecuting or defending a particular claim…
(2)The court has a discretion as to whether to provide a direction under s 92(1). Advice does not have to be provided…
(3) The key question is to determine whether, on the material available, it would be proper for the trustee to prosecute or defend the proceedings…That in turn involves two issues. First, whether the legal issues are properly arguable. Second, whether there are sufficient prospects of success to warrant the trustee in proceeding with the litigation…These enquiries necessitate 'sufficient investigation' of the underlying issues…

(4) The judicial advice proceedings are not to be treated as a trial of the issues that are to be agitated in the principal proceedings… The process is meant to be a summary one…

(5)The court is not bound to investigate the evidence and make a finding as to whether the proposed proceedings would be successful. The question is whether the litigation is justified… The court is not finally resolving the merits of the underlying proceedings…
(6)Relevant overlapping considerations include: (a) the prospects of success; (b) the means of the other party to satisfy any judgment; (c) the potential for the litigation to deplete the trust estate; (d) the likely adverse costs if the litigation is unsuccessful and whether those costs are likely to be proportionate; (e) the likely irrecoverable costs; and (f) the nature of the case and issues raised and what will be gained if the trustee succeeds in the action…

It is important to emphasise that examination of the trustee's likely prospects in the litigation at an 'exhaustive level' is neither necessary nor appropriate… The assessment is made at a 'preliminary level'…. The court's role is not to try the issues themselves. The court's function is limited to being satisfied that the material before it is sufficient to determine the general range of the prospects of success; and determining whether it is appropriate to pursue the proceedings having regard to the prospects of success, the benefits of the litigation and the resources available… But there must be sufficient information before the court for it to be satisfied that the proposed action would be for the benefit of the beneficiaries as a whole and otherwise would be prudent to pursue…

I observe that slightly different considerations will apply when the decision of the trustee is whether to defend litigation as opposed to whether to commence or prosecute litigation.

A significant consideration is the impact of the litigation on the trust.[15]
[15] Boyle [95], [96].
In exercising the power under TA s 92, the court should not determine disputed issues of fact. As Allanson J observed in Blenkinsop of this type of application:[16]
These are not proceedings in which the court should determine disputed issues of fact. The application for judicial advice is, 'founded upon facts stated to the Court by the trustee, untested by adversarial procedure, and assumed by the Court to be true' - although 'only for the purpose of the application'. The advice is given on that basis. The trustee must fully and fairly disclose the facts known to him to the court. The protection afforded to the trustee is lost should he have been guilty of any fraud or wilful concealment or misrepresentation in obtaining the direction.
[16] Blenkinsop [75]; Equity Trustees [31].
Applying these principles, in the circumstances of the Applications, four issues arise for determination:
1.Are the legal issues raised in the Campion Action properly arguable?
2.Has Mainray taken proper advice and given full consideration to all relevant matters before arriving at a reasoned and appropriate decision to defend the Campion Action?
3.Does David have the capacity to pay for the defence of the Campion Action?
4.What orders are appropriate?

Are the legal issues raised in the Campion Action properly arguable?

Law in relation to decisions of trustees in a discretionary trust

It is instructive to begin the analysis by reviewing the law in relation to challenges to decisions of a trustee in a discretionary trust as this issue permeates all aspects of the issues in dispute in the Campion Action.
The principles which govern the circumstances in which the courts will review the past purported exercise of a discretion by the trustee of a discretionary trust are classically summarised in the following statement of general principle by McGarvie J in Karger v Paul:[17]
In my opinion the effect of the authorities is that, with one exception, the exercise of a discretion in these terms will not be examined or reviewed by the courts so long as the essential component parts of the exercise of the particular discretion are present. Those essential component parts are present if the discretion is exercised by the trustees in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred. The exception is that the validity of the trustees' reasons will be examined and reviewed if the trustees choose to state their reasons for their exercise of discretion.
[17] Karger v Paul [1984] VR 161, 163 - 164 (McGarvie J) (Karger).
McGarvie J went on to say:[18]
In my view, in this case it is open to the Court to examine the evidence to decide whether there has been a failure by the trustees to exercise the discretion in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred. As part of the process of, and solely for the purpose of, ascertaining whether there has been any such failure, it is relevant to look at evidence of the inquiries which were made by the trustees, the information they had and the reasons for, and manner of, their exercising their discretion. However, it is not open to the Court to look at those things for the independent purpose of impugning the exercise of discretion on the grounds that their inquiries, information or reasons or the manner of exercise of the discretion, fell short of what was appropriate and sufficient. Nor is it open to the Court to look at the factual situation established by the evidence, for the independent purpose of impugning the exercise of the discretion on the grounds the trustees were wrong in their appreciation of the facts or made an unwise or unjustified exercise of discretion in the circumstances. The issues which are examinable by the Court are limited to whether there has been a failure to exercise the discretion in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred. In short, the Court examines whether the discretion was exercised but does not examine how it was exercised.
[18] Karger (164).
In Cardaci v Cardaci the Court of Appeal observed that the principles explained in Karger have been cited with approval on many occasions, including by the High Court.[19]
[19] Cardaci v Cardaci [2023] WASCA 158 [203] (judgment of the court) (Cardaci CA).
In reviewing a discretionary decision of a trustee, the courts act with 'a very high degree of restraint, lest the court be seen to substitute its own decisions for those properly left to the trustee'.[20]
[20] Owies v JJE Nominees Pty Ltd [2022] VSCA 142 [83] - [84] (Kyrou, Niall and Walker JJA).
The bases on which a discretionary decision of a trustee may be impugned were also summarised by the High Court in Attorney‑General (Cth) v Breckler:[21]
Where a trustee exercises a discretion, it may be impugned on a number of different bases such as that it was exercised in bad faith, arbitrarily, capriciously, wantonly, irresponsibly, mischievously or irrelevantly to any sensible expectation of the settlor, or without giving a real or genuine consideration to the exercise of the discretion. The exercise of a discretion by trustees cannot of course be impugned upon the basis that their decision was unfair or unreasonable or unwise. Where a discretion is expressed to be absolute it may be that bad faith needs to be shown. The soundness of the exercise of a discretion can be examined where reasons have been given, but the test is not fairness or reasonableness.
[21] Attorney-General (Cth) v Breckler and Others (1999) 197 CLR 83; [1999] HCA 28 [7] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ) (citations omitted) (Breckler).
The following observations by Templeman J in In re Manisty's Settlement is also instructive:[22]
The court cannot insist on any particular consideration being given by the trustees to the exercise of the power. If a settlor creates a power exercisable in favour of his issue, his relations and the employees of his company, the trustees may in practice for many years hold regular meetings, study the terms of the power and the other provisions of the settlement, examine the accounts and either decide not to exercise the power or to exercise it only in favour, for example, of the children of the settlor. During that period the existence of the power may not be disclosed to any relation or employee and the trustees may not seek or receive any information concerning the circumstances of any relation or employee. In my judgment it cannot be said that the trustees in those circumstances have committed a breach of trust and that they ought to have advertised the power or looked beyond the persons who are most likely to be the objects of the bounty of the settlor. The trustees are, of course, at liberty to make further inquiries, but cannot be compelled to do so at the behest of any beneficiary. The court cannot judge the adequacy of the consideration given by the trustees to the exercise of the power, and it cannot insist on the trustees applying a particular principle or any principle in reaching a decision.
[22] In re Manisty's Settlement [1974] Ch 17, 25 (Templeman J).
The discretion is reviewed in the context of the particular trust. The relevant considerations include any statement of wishes by the person who established the trust[23] and the identification of who might be considered 'prime candidates for the exercise of the trustees' discretion'.[24]

Allegations raised in the Campion Action

[23] Cardaci CA [325].

[24] Schmidt v Rosewood Trust Ltd [2003] 2 AC 709, 726 [41] (Lord Walker of Gestingthorpe).

In the statement of claim annexed to the writ, the Plaintiffs begin with the background facts.[25] In the Mainray Submissions, counsel identifies a number of facts which Mainray disputes.[26] As set out above, I do not need to resolve any of these disputes. Nor would it be appropriate for me to do so. It is sufficient for me to find that the factual issues raised in the Mainray Submissions are properly arguable.
[25] Statement of Claim endorsed with the Writ of Summons filed 14 August 2024 (Campion SOC), pars 1 ‑ 8, 14 - 15.
[26] Mainray Submissions, pars 63 - 75.
The Campion SOC then identifies the duties which the Plaintiffs say Mainray owed as a trustee. The duties in part reflect what I have set out at [35] to [42]. Two of the duties specifically identified are a duty to act impartially and a duty on the trustee to inform itself. Counsel for Mainray submits that these duties as pleaded go beyond what is reflected in the case law.[27] I reiterate that judicial advice proceedings are not to be treated as a trial of the issues that are to be agitated in the principal proceedings. So, again, it is sufficient for me to find that the matters raised by counsel for Mainray are properly arguable.
[27] Mainray Submissions, pars 87 - 94.
The central allegations raised by the Plaintiffs in the Campion Action are that in making the resolutions in relation to distribution in each of the financial years ending 30 June 2017 to 30 June 2023 (Resolutions) Mainray breached its duties.[28] Specifically, it is alleged that in none of these financial years did Mainray:[29]
(a)make any request of any of the Plaintiffs regarding the circumstances or needs of any of them; or
(b)resolve that the Trust make a distribution of income to any of the Plaintiffs.
[28] Campion SOC, pars 16 - 22.
[29] Campion SOC, par 23.
The Plaintiffs allege six substantive breaches of duty by Mainray.
The first is that Mainray breached its duty to properly administer and/or the duty to consider and/or the duty to act impartially and/or the duty to inform itself and/or the income distribution duties, in that the Resolutions were made without Mainray seeking to be, and therefore not being, properly informed as to the financial position of, amongst others, the Plaintiffs.[30]
[30] Campion SOC, par 24.
The second is that, further, and alternatively, in breach of the duty to properly administer, the duty to act impartially and the income distribution duties, in making the Resolutions Mainray failed to give real and genuine consideration to the exercise of the distribution power in favour of the Plaintiffs.[31]
[31] Campion SOC, par 25.
The third is that, further, and alternatively, in breach of the duty to properly administer, the duty to act in good faith, the duty to act impartially and the income distribution duties, it is to be inferred that Mainray has determined to refuse and/or has failed to cause the distribution power to be exercised in favour of the Plaintiffs, and thereby has failed and refused to consider from time to time whether to exercise the distribution power in favour of the Plaintiffs and/or has closed 'his' mind to the possibility of doing so.[32] I interpose here to observe that the pleaded reference to 'his' mind should be referenced as 'its' mind, given that the trustee is a company.
[32] Campion SOC, par 26.
The fourth is that in breach of the duty to properly administer, the duty to act in good faith, the duty to act impartially and the income distribution duties, it is to be inferred that Mainray acquiesced in the decision of David, as a director and since 20 October 2020 the sole director of APCC, to cause APCC to resolve not to pay and/or pay to the Trust for a number of the financial years an amount greater than it did, or no dividend at all, so that Mainray could avoid having to make distributions to any of the Plaintiffs and/or avoiding or minimising the prospect of being sued by any of them for not doing so.[33]
[33] Campion SOC, par 27.
The fifth is that Mainray acquiesced in APCC obtaining a loan in January 2017 in the order of $1 million which funds were used by David and Helen to purchase a property in Subiaco of which they became registered proprietors on 23 January 2017. This is said to be in breach of Mainray's duty to properly administer and duty to act in good faith.[34]
[34] Campion SOC, pars 28 - 30.
The sixth is that Mainray has acquiesced in a decision by APCC to not discharge a mortgage over the Station entered into in May 2015, notwithstanding that it had the funds to do so. This is in the context of a deed between John and David which the Plaintiffs say was entered into in November 2020. Pursuant to this deed, the Plaintiffs say that David covenanted to pay, or cause Mainray to pay or distribute out of capital or net income of the Trust to trusts established for the benefit of each of Meredith and Jonathon the sum of $7 million by instalments of $200,000 annually after the death of John commencing on 1 October in the year in which the mortgage was discharged. This conduct of Mainray is said to be, and continues to be, a breach by Mainray of its duty to properly administer and duty to act in good faith.[35]
[35] Campion SOC, pars 31 - 36.
The primary relief sought by the Plaintiffs is an order removing Mainray as trustee of the Trust. This is on the basis that:[36]
(a)it is to be inferred that unless Mainray is removed as trustee from the Trust, it will continue to act in breach of the duties as pleaded, or at least there is a significant risk or likelihood of it doing so; and
(b)the relationship between David and Meredith and Jonathan has broken down and David has not spoken to his siblings for several years.
[36] Campion SOC, pars 37 - 39.
The Plaintiffs then seek an order that Mainray is not entitled to use or reimburse itself from Trust funds for its costs of defending the proceeding.[37]
[37] Campion SOC, par 40.
Finally the Plaintiffs seek to make David liable 'as an accessory'. The plea is in the following terms: [38]
David is, and all material times has been, a person who, as director of the first defendant and APCC, their controlling mind and knowing of all material facts, caused the first defendant and APCC to act as set out above and with knowledge, actual or imputed, that such conduct was in breach of one or more of the first defendant's duties as trustee of the Trust.
[38] Campion SOC, par 41.
The Plaintiffs seek various declarations and other relief, culminating in an order that an independent person be appointed as the trustee of the Trust.
Counsel for Mainray goes into considerable detail in the Mainray Submissions outlining the deficiencies in the Plaintiffs' case.[39] Among other points, some limitation issues are raised. Counsel also addresses the principles which the courts use to determine when it is appropriate to remove a trustee and the reasons why, in this case, Mainray has strong prospects of successfully resisting its removal as trustee.[40]
[39] Mainray Submissions, pars 94 - 160.
[40] Mainray Submissions, pars 161 - 187.
Likewise, counsel for the Respondents goes into considerable detail in the Respondents' Submissions, 'strongly taking issue' with the Mainray Submissions.[41]
[41] Respondent's Submissions, pars 21 - 22, Attachment A.
It is not necessary for me to go into any great detail to find that the allegations made in the SOC are 'properly arguable' by Mainray, nor would it be appropriate for me to do so. The primary issue at trial will be where on the dividing line identified by the High Court in Breckler, do the actions of Mainray fall. It is not sufficient for the Plaintiffs to show that the decisions of Mainray were unfair or unreasonable or even unwise. They must show that the decisions were made 'in bad faith, arbitrarily, capriciously, wantonly, irresponsibly, mischievously or irrelevantly to any sensible expectation of the settlor, or without giving a real or genuine consideration to the exercise of the discretion'. This is a high standard to meet. Mainray's position to the contrary is properly arguable.[42]

Has Mainray taken proper advice and given full consideration to all relevant matters before arriving at a reasoned and appropriate decision to defend the Campion Action?

Counsel's opinion

[42] Blatchford [57].

In seeking to persuade the court that the trustee 'has taken proper advice and given full consideration to all relevant matters before arriving at a reasoned and appropriate decision'[43] it is common, perhaps required, for a trustee seeking judicial advice to rely on the opinion of senior counsel.[44] As mentioned, I have received senior counsel's opinion on a confidential basis that maintains Mainray's client-legal privilege. There are cases in which counsel's opinion is not necessary.[45] This is not one of those cases.
[43] AET [33].
[44] Boyle [71] (Quinlan CJ); Blatchford[59] - [69]; Plan B [48] (Edelman J).
[45] Blatchford [66]; Marinko v O'Sullivan and Wilson as executors of will of Marinko [2023] WASC 180[38].
As to the contents of counsel's opinion, in Blatchford Vaughan J observed:[46]
A trustee who obtains a direction from the court to the effect that he or she would be acting properly and justifiably in commencing or defending litigation obtains significant protection. Before making application for directions it is expected that, among other things, the trustee will take reasonable steps to identify whether, and give proper consideration to whether, he or she has reasonable prospects of succeeding in the proposed litigation; and that the likely benefits to be obtained by the litigation exceed its likely costs - weighing in that mix the risk of loss and its attendant costs. Accordingly, in the normal case it will be necessary for the trustee to obtain a legal opinion - preferably from counsel - before approaching the court for directions. The opinion should address he prospects of success and merits of the proposed litigation. If that course is not undertaken the reason for choosing not to follow the usual course should be explained.
[46] Blatchford [67].
I have read the confidential opinion of senior counsel. I am readily satisfied that, in obtaining this opinion, Mainray had taken reasonable steps before approaching the court.[47]

Other matters relied on by Mainray

[47] Blatchford [63], [67]; Boyle [87]; Respondents' submissions, par 24; Mainray Reply Submissions, par 21.

On the basis of my conclusions at [59] and [62], I am of the view that there are sufficient prospects of Mainray successfully defending the Campion Action to warrant it doing so.[48]
[48] Blatchford [57].
As Mainray is a defendant, and there is no suggestion of a counterclaim, the issue of means of the Plaintiffs to satisfy a substantive judgment does not arise. I agree with the submission by counsel for Mainray that the costs involved in a trial will be significant, but not disproportionate to what is at stake. I also agree with the submission by counsel for Mainray that there is no reason to think that the Plaintiffs will not be able to meet a costs order against them, in particular Meredith, who is a partner in a law firm.[49]
[49] Mainray Submissions, par 193.
In David's First Affidavit, he outlines three further reasons why he believes it is in the interests of Mainray to defend the Campion Action.[50]
[50] David's First Affidavit, pars 138 - 160.
The first is that the Plaintiffs have not identified the independent person whom they want to be replacement trustee. Any replacement trustee would inevitably charge professional fees, an expense not currently being incurred by the Trust.
The second is that the role of the new trustee would not be limited to making distributions of the income which the Trust received from APCC. This is because the Trust is not merely a passive recipient of income generated by APCC but the sole shareholder of APCC. Accordingly, any new trustee would have to get across and the engage itself in the ongoing management of the Station and the financial management of APCC. David comments that he has no idea what these arrangements would mean for him and Helen. They would need to consider their position. He adds that neither Meredith or Jonathan have the experience, skills or inclination to manage the Station. Further, any full-time manager would be likely to demand a higher full-time salary than that which he and Helen draw.
The third is that neither he nor Helen have the funds available to defend the Campion Action. I return to this issue in the next section.
I add to this John's wishes and the arrangements he made for the benefit of Meredith and Jonathan. When preparing his second last will in June 2020, John prepared a 'wish list'.[51] The essence of this document is that he did not want the Station to be divided between all of his three children because it is the home of David, Helen and their children. Nor did he want the Station to be sold so that his other children can receive a share of my estate. Rather:
I have therefore structured my will such that David is able to pay, over time, the share I have left to each of Meredith and Johnathon through trusts and with the ability, if the Station has a profitable year, to pay extra if and when he can but otherwise, there is a minimum amount to be paid each year to both Meredith and Johnathon. It is certainly my preference and intention that the bequests to Meredith and Johnathon are paid as soon as they can be, and in lump sum wherever that is possible but not to the detriment of the Station and its ability to run and meet its other commitments and to provide a reasonable lifestyle for Helen and David.
[51] David's First Affidavit, pages 454 - 456.
The arrangement made by John in his last will is to the effect that each of Jonathon and Meredith were to be paid a total of $3.5 million in annual instalments of $100,000 in respect of each financial year following the year of John's death in which APCC makes a net operating profit after income tax of not less than $500,000, until such time as the loan secured by mortgage over the Station has been cleared, following which payments in the amount of $200,000 are to be made on 1 October each year. These arrangements amend an earlier deed on which I do not need to go in detail.[52] John sets out the reason for this amendment in his last will, which is in similar terms to his wishes document, emphasising that he wanted the Station to be preserved intact and continue operating.[53]
[52] David's First Affidavit, pages 588 - 610.
[53] David's Frist Affidavit, pages 595 - 596.
John's last will and the wish list were prepared by an independent lawyer in Broome directly engaged by John without the involvement of David.[54] In other proceedings in the Supreme Court in relation to what David says is John's last will, Meredith and Jonathon do not admit the will, but do not positively assert that it is invalid.[55]
[54] David's First Affidavit, pars 81 - 83.
[55] Meredith's Affidavit, page 18.
In my view, the decision by Mainray to actively defend the Campion Action gives effect to the wishes and intention of John.
As a result of my review of the evidence, I am satisfied that Mainray has taken proper advice, and given full consideration to all relevant matters, before arriving at a reasoned and appropriate decision to actively defend the Campion Action.

Does David have the capacity to pay for the defence of the Campion Action

Principles

There is an interrelationship between the issue of whether the trustee is justified in actively defending the action and whether it should be able to immediately recoup the costs of doing so. That interrelationship is seen in two decisions relied on by counsel for the Respondents, Application of Uncle's Joint Pty Ltd[56] and MacCormick.
[56] Application of Uncle's Joint Pty Ltd [2014] NSWSC 321 [26] (Brereton J) (Uncle's Joint).
Uncle's Joint was a family dispute case in which the trustee applicants for judicial advice sought orders that they were justified in defending an action claiming that they were not validly appointed as trustees, and, if so, that they were justified in using the resources of the relevant trust to do so. Brereton J declined to give the advice sought and dismissed the summons. This decision was notwithstanding his Honour's assessment that the applicants had standing to seek the advice of the Court, the defence had sufficient prospects of success and the estimated costs were not disproportionate. His Honour concluded:[57]
..in the context of a family dispute, where the trustees ought to be neutral, and those with a real interest in defending the appointment of the applicants are the appointors who appointed them and/or those of the beneficiaries who wish them to retain office, it would be unjust to permit the applicants to have recourse to the trust fund for the purposes of funding their defence before the conclusion of the proceedings.
[57] Uncle's Joint [37].
Brereton J had earlier considered the issue of the principles by which the court determined whether a trustee should be able to be immediately indemnified out of the assets of the trust. His Honour observed that 'the prevailing view is that a trustee who is exonerated or has acted properly in defending a claim made by a beneficiary against him or her is entitled to be indemnified out of the trust estate to the extent that a party/party costs order does not afford an adequate indemnity'.[58] The issue then becomes whether the trustee may only do so after the proceedings have been resolved in their favour, or are entitled to resort to trust assets to find their defence. In this regard, his Honour noted that the High Court in Macedonian Church 'recognised that it was open to trustees faced with an allegation of misconduct by a beneficiary to apply for judicial advice, pursuant to which they might be entitled to resort to trust assets for their defence'.[59]
[58] Uncle's Joint [23].
[59] Uncle's Joint [25].
Brereton J continued:[60]
Of course, that does not mean that they will invariably be given such advice. As Palmer J, at first instance, explained in St Petka (No 3), in a passage that received the endorsement of the High Court in [Macedonian Church] (at [84]), where a trustee seeks advice that it is justified in defending a claim against the trust estate by recourse to the trust assets for the costs of the litigation, the question is whether it is more practical and fair to leave the competing claimants to the beneficial interest to contest the litigation among themselves at their own risk as to costs, with the trustee a necessary but inactive party, or whether it is more practical and fair that the trustee be the active litigant, with recourse to the trust fund for the costs of the litigation. This judgment will depend on the particular circumstances of each case and relevant considerations may include whether the beneficiaries have a substantial financial interest in the defence of the proceedings, the financial means of the beneficiaries to fund it, the merits and strengths of the claim against the trust estate, the extent to which recourse to the trust estate for defence costs would deprive the successful claimant of the fruits of the litigation, and (If the trust is a charitable trust rather than a private trust) the public interest.
[60] Uncle's Joint [26].
Brereton J also noted authorities to the effect that the question of whether the trustee has the personal capacity to fund the defence of the trust proceedings is relevant, observing:[61]
Moreover, in [Macedonian Church], the High Court rejected (at [93]) the proposition that the financial position of the applicant was irrelevant, particularly where, as here, advice was sought that the trustee was entitled to have recourse to the trust property to pay its reasonable costs, endorsing Palmer J's view that in that context, the financial capacity of the parties in trust estate litigation was central to what is practical and fair and concluding (at [94]) that once it was decided that it was in the best interests of the trust for the proceedings to be defended, it would be vacuous to leave the matter there without considering how, in the then circumstances, the proceedings were to be defended as a matter of practicality.
For Brereton J, this issue was tied to the issue of whether it is in 'the interests of the trust as a whole that the trust proceedings be defended'.[62]
[61] Uncle's Joint [28].
[62] Uncle's Joint [30].
Counsel for the Respondent initially invited the court to come to the same conclusions as Brereton J did in the present case, that is, to decline to provide the advice sought by the trustee both as to whether it was justified in defending the action and whether it was justified in having immediate recourse to trust property for the purpose of funding its defence.
Counsel for the Respondents also relied on the decision in MacCormick. In that case, the trustee of a discretionary trust sought judicial advice that it was justified in defending a claim brought against it in which, among other orders, its removal was sought. Like this case, the substantive action was commenced by a discretionary beneficiary against both the trustee and another beneficiary who, in effect, controlled the trustee (a Mr MacCormick). The dispute centred on the validity of what purported to be minutes of a meeting of the trustee at which distributions were made for the year ending 30 June 2022. The relief sought was removal of the trustee for engaging in what was alleged to be a fraudulent and dishonest design. Mr MacCormick was alleged to have assisted the trustee in the fraudulent design. He was the second defendant. The plaintiff sought an order that he restore to the trust an amount which was contended to have been paid in breach of trust.
Solomon J accepted that the court had the power to give the advice sought and gave the first part of the advice sought:[63]
The substantive proceedings include an application for the removal of the Trustee where, on the evidence before me, the personalities behind the Trustee are central to the success of the Trustee's business. On the question of whether the legal issues are properly arguable, with sufficient prospects of success to warrant the Trustee in proceeding with the defence, having reviewed the privileged information and the evidence in this application, I am satisfied that standard is met. I consider it is appropriate that I make the order sought by the Trustee that it is justified in defending the substantive proceedings.
However, his Honour declined to make an order that the trustee was justified in having access to trust assets to fund the proceedings, referring to the decision of Brereton J in Uncle's Joint.[64] In MacCormick, the plaintiffs sought removal of the trustee, a factor which in the opinion of Solomon J weighed heavily in favour of an order for recourse to the trust fund to defend the action.[65] However, the trust and Mr MacCormick were jointly represented by the same law firm. His Honour declined to make the order sought, observing that the matter was 'finely balanced':[66]
The matter is finely balanced, but in these circumstances, the Trustee is not the only defendant to the substantive proceedings. Mr MacCormick is the first defendant to those proceedings, and there is a significant overlap of interest, certainly in the factual contest, between Mr MacCormick as first defendant and the Trustee as second defendant. Moreover, Mr MacCormick and the Trustee are represented by the same firm of solicitors and the same counsel.
In all the circumstances, it seems to me that the fair and practical thing to do is to leave the question of costs to the judge who will determine the substantive proceedings on the understanding that if the Trustee's position in respect of the application for removal is upheld, then it may well be that the judge in the substantive proceedings will be minded to order that to the extent that the Trustee has incurred costs in relation to the substantive proceedings, it ought to have recourse to the Trust for the reimbursement of those funds. However, there seem to me to be too many imponderables for me to consider the various contingencies as to what might occur. And as I say, in circumstances where Mr MacCormick, who, on the evidence before me at least, is not without substantial funds, and the Trustee are jointly represented and, in fact, have filed precisely the same joint defence, the fair and practical thing is, in my view, to defer the question of whether the Trustee is entitled to have recourse to the Trust fund to the judge in the substantive proceedings.
For those reasons, I will make orders that the Trustee is justified in defending the substantive proceedings, but that the issue of the Trustee's costs will be determined by the trial judge in the substantive proceedings.
[63] MacCormick [53].
[64] MacCormick [55] - [59].
[65] MacCormick [59].
[66] MacCormick [60] - [62].
A significant factor relied on by Solomon J was the fact that Mr MacCormick had the financial capacity personally to fund the defence of the action.
Counsel for the Respondent in this case initially invited the court to come to a different conclusion from Solomon J in relation to the first part of the advice, and the same conclusion in relation to the second part of the advice.

Helen's financial capacity

The Respondents submit that David and Helen are able to fund the defence of Campion Action.
David and Helen are the registered proprietors of a house in Subiaco. Between them they have cash of $155,000 and listed shares of $230,000. They have some superannuation, which I disregard for present purposes.[67]
[67] David's First Affidavit, par 159.
Both David and Helen receive a salary of $124,800 gross per annum.[68]
[68] David's First Affidavit, par 151.
The Respondents also place weight on the fact that Helen has two further assets which could be realised to fund the defence of the Campion Action. This first is that Helen is the beneficiary of the estate of a recently deceased uncle. She does not know when she will receive a distribution, but the executor has indicated that she is likely to receive approximately GBP 100,000.[69] The second is that Helen is the registered proprietor of a one-third owner interest in a property in City Beach which she inherited from her late mother. The house is currently on the market. On 22 March 2025 Helen and the other joint owners entered into a conditional sale contract for this property for a sale price of in the amount of $2,950,000.[70]
[69] David's Second Affidavit, par 10, page 32.
[70] David's Second Affidavit, par 10, page 32; Keating Second Affidavit, Keating Third Affidavit.
In my view, Helen's role in the Campion Action is minor compared to that of David. She is only joined as the trustee of the Timjo Trust who received the distributions impugned in the Campion Action. That being so, it would not be practical or fair to require her to use her assets to fund the defence by Mainray and David.

David's financial capacity

The Respondents primary contention is that David has available to him substantial funds by reason of being in control of the Timjo Trust.
The financial statements of the Timjo Trust record for the year ending 30 June 2023 a current asset of 'UPE -Talgarno Trust' (an unpaid present entitlement) of $590,489.
From the financial statements of the Trust for 30 June 2024, it appears that:[71]
(a)the Trust received dividends of $800,000 that financial year;
(b)it had retained undistributed profits of $349,225;
(c)it had a loan of $3,000,000 from ANZ, on which it paid interest of $193,275;
(d)it had a current liability of $590,489 by way of beneficiary loan account; and
(e)this beneficiary loan was to the Timjo Trust.
[71] David's Second Affidavit pages 16 - 22.
Being described as a current liability, I infer that the beneficiary loan is repayable within 12 months, and, in all likelihood, on call.
David deposes that the distributions to the Timjo Trust were not paid in cash or other assets.[72]
[72] David's Second Affidavit, par 9.
The Respondents assert that it is open to David to cause the Trust to, in effect, repay the loan to the Timjo Trust which could then in turn distribute it to David, who could then use the funds to fund the defence of the Campion Action.
Counsel for Mainray submits that David's wealth is tied up in the Station, including the unpaid present entitlements to the Timjo Trust. By contrast, the Plaintiffs have each spent their lives pursuing ventures entirely independent of the Station and the Trust, and have recourse to whatever (collective) wealth they have derived from them.

Determination

There are two legal problems with the approach suggested by counsel for the Respondents. The first is that in the Campion Action the Plaintiffs expressly seek to impugn the distributions to the Timjo Trust.
The second is that a decision by David as the sole director of Mainray to take out of the Trust around $600,000 through the beneficiary loan account to fund the defence of the Campion Action could itself be the subject of a later claim by the Plaintiffs.
In summary, David's financial capacity and that of the Trust are inexorably linked, and are in turn inexorably linked to the issues in dispute in the Campion Action.

What orders are appropriate?

It does not automatically follow from the finding in [73] that the court should provide the advice requested. One option is for the court to decline to do so, as Brereton J did in Uncle's Joint.
In determining this issue, I place weight on the fact that the Trust and APCC are the vehicles through which John, David and Helen have owned and operated the Station for the past nearly two decades. They have built the Station business up to be a profitable one. I accept David's point that the Trust is not merely a passive recipient of income, rather an active part of the financial and management arrangements for the Station. David and Helen's wealth, which they have built up over the past nearly two decades, is tied up in the value of the Station, which is ultimately held by the Trust. John's clearly expressed wish is for them to be able to continue to operate the Station, though with some carefully thought-out arrangements to share some of the wealth with Meredith and Jonathon on a basis that would not undermine the financial viability of the Station business. I agree with the submission by counsel for Mainray that the Plaintiffs in the Campion Action are seeking to change the essential character of the Trust from one controlled by a member or members of John's family who actively operate the Station, to one controlled by an independent third party.[73]
[73] Mainray Submissions, par 191.

I add to this the fact that the allegations made by the Plaintiffs in the Campion Action are properly arguable by Mainray.
Like the position in MacCormick, the Trust operates a business where the personalities behind the trustee (initially John, David and Helen, later David and Helen) are central to the success of the trustee's business.[74] The management of the Trust and the management of the Station by APCC are inexorably linked. This is illustrated by the fact that the fourth, fifth and sixth claims made by the Plaintiffs ([50] - [52]) are in substance challenges to the underlying commercial decisions of APCC, and David as its director. Mainray is more of a substantive defendant than a passive trustee who stands at arms-length from disputing beneficiaries, as was the case in Uncle's Joint.
[74] MacCormick [53].
In this context, in my view, Mainray is entitled to judicial advice that it is justified in defending the Campion Action.
In reaching this conclusion, I am not usurping the role and responsibility of Mainray as the trustee to decide whether it should defend the litigation. Rather I am making a decision as to whether it is appropriate, in the exercise of my discretion, to order that Mainray is justified in defending the Campion Action so as to give it the protection conferred by TA s 92. In my view, it is, and it is entitled to a declaration to that effect.
The next issue is whether, having opined that Mainray is justified in defending the Campion Action, it should be reimbursed from the assets of the Trust for its costs.
The nature of the right of a trustee to be indemnified for costs incurred in defending litigation brought against it was considered in some detail by the Court of Appeal in Cardaci CA. The court expressed the general principle in the following terms:[75]
A trustee is entitled, in equity, to be indemnified out of the trust estate against all of the trustee's proper costs, charges and expenses incident to the execution and proper administration of the trust…. The right of indemnity has received statutory recognition, which in this State appears in s 71 of the Trustees Act:
A trustee may reimburse himself for or pay or discharge out of the trust property all expenses reasonably incurred in or about the execution of the trusts or powers.
The general rule of indemnity has been described by the High Court as applying to costs reasonably and properly incurred by the trustee in connection with the administration of the trust… Costs for this purpose can include litigation expenses… The rationale for indemnification in respect of litigation expenses is that the trustee who has incurred the expense has not been acting for his or her own benefit, but for the benefit of the beneficiary or the trust estate in question…
…
What is 'proper' or 'improper' is to be assessed by reference to the particular circumstances and to the duty with which the trustee was required to comply or the power the trustee was intending to exercise…
If a trustee is sued by beneficiaries who complain of some act or omission by the trustee, the trustee is entitled to defend his or her conduct as an incident of their administration of the trust. If the trustee succeeds, he or she is entitled to an indemnity. Even if the trustee fails in the suit, he or she may be allowed his or her own costs out of the estate… The critical question remains whether the costs incurred by the trustee in defence of the suit were properly and reasonably incurred in the execution of the trusts…
In a suit where the trustee unsuccessfully resists his or her removal, the trustee may be denied indemnity even if there has been no proven misconduct in the management of the trust estate….
[75] Cardaci CA [568] - [572] (references omitted).
The court later observed:[76]
In deciding whether a trustee has acted reasonably in defending proceedings, it will be relevant to take into account whether the trustee has obtained judicial advice before incurring the costs.
[76] Cardaci CA [577].
The court also referred to the following passage from the judgment of the plurality in Macedonian Church:[77]
In short, provision is made for a trustee to obtain judicial advice about the prosecution or defence of litigation in recognition of both the fact that the office of trustee is ordinarily a gratuitous office and the fact that a trustee is entitled to an indemnity for all costs and expenses properly incurred in performance of the trustee's duties. Obtaining judicial advice resolves doubt about whether it is proper for a trustee to incur the costs and expenses of prosecuting or defending litigation. No less importantly, however, resolving those doubts means that the interests of the trust will be protected; the interests of the trust will not be subordinated to the trustee's fear of personal liability for costs.
[77] Macedonian Church [71]; Cardaci CA [579].
Having reached the decision that Mainray is justified in defending the Campion Action, ordinarily there are two alternatives in relation to its costs. The first is for the court to make a declaration that Mainray is justified in being reimbursed from the assets of the Trust for the costs it incurs as it incurs those costs. The second is for the court to decline to do so, and instead leave the question of costs to the judge who will determine the Campion Action. The principles the court applies in making this choice are dealt with in some detail by Brereton J in Uncle's Joint and Solomon J in MacCormick., which I discuss at [74] to [83].
In the present case, as mentioned, there was a middle ground. This was to make an order that Mainray is justified in paying to the Timjo Trust from monies of the Trust, the unpaid present entitlement owing to the Timjo Trust in the sum of $590,489 (Timjo UPE). This would place David in a similar position to Mr MacCormick in MacCormick. As Justice Solomon records in his decision, the trust in that case had within 12 months of the date of the decision distributed just over $4 million to Mr MacCormick and his sister who was the contravener in the application.[78]
[78] MacCormick [16] - [17].
The intent of this order is to allow David to use these funds for the purpose of enabling himself, Mainray and, to a minimal extent, Helen to defend the Campion Action, without the fear that the decision of Mainray to pay out the Timjo UPE would itself be the subject of later challenge by the Plaintiffs in the Campion Action. Hence, the April Orders make it clear that one purpose of paying out the Timjo UPE is to enable Mainray to defend the Campion Action.
The issue identified at [97] also needed to be dealt with. Any order I made needed to make clear that I was expressing no view as to the validity or otherwise of the resolutions by Mainray which give rise to the Timjo UPE, which issue is reserved to the trial judge in the Campion Action. I also made it clear that any finding which might be made to the effect that all or any of those resolutions are invalid or ineffective will not alter the conclusion that Mainray was justified in making the payment in paragraph [110].
There was a further nuance. The other persons who may potentially be affected by a finding that a distribution by Mainray was made in breach of trust are lawyers who received part of the funds distributed in payment of their legal fees. The lawyers may potentially be liable for knowingly receiving trust property tainted by a breach of trust. This scenario was specifically addressed in the April Orders by the Plaintiffs in the Campion Action (Respondents in the present Application) giving an undertaking to the court that they will not make any claim against any party not already a party to the Action in relation to Mainray paying out the Timjo UPE to Timjo from the monies of the Trust. A written undertaking in those terms was given to the court prior to making the April Orders, and is attached to those orders.
That left the issue of whether any direction should be given as regards Mainray being justified in using the funds of the Trust for the purpose of defending the Campion Action. Like Solomon J in MacCormick, I considered that no judicial advice should be given on this point and that the issue of Mainray's costs be left to be determined by the trial judge in the Campion Action. I made an order to this effect. There was a caveat. It may be that there is a need for Mainray to make a further application pursuant to TA s 92 in relation to the costs of the Campion Action. It should not be precluded from doing so, so the April Orders reserved to Mainray this right.
As to the costs of the Application, the position is conveniently summarised by Le Miere J in Cardaci v Cardaci;[79]
The court has a broad discretion in awarding costs in any proceedings brought under the Trustees Act. By s 97, the court may order the costs and expenses of and incidental to an application for an order under the Act to be raised and paid out of the trust property, or 'to be borne and paid in such manner and by such persons as the Court thinks fit'. The court's discretion is guided by the authorities and the rules of court.
A trustee who brings before the court a question arising in the course of the administration of the trust is generally entitled to have its costs out of the fund, either on a solicitor and client or an indemnity basis, if their conduct has been honest… Order 66 r 9(2) of the Rules, provides:
Where a person is or has been a party to any proceedings in the capacity of trustee ... he shall, unless the Court otherwise orders, be entitled to the costs of those proceedings, in so far as they are not recovered from or paid by any other person, out of the fund held by the trustee ...; and the Court may otherwise order only on the ground that the trustee ... has acted unreasonably, or ... has in substance acted for his own benefit rather than for the benefit of the fund.
[79] Cardaci v Cardaci [2022] WASC 166 [104] - [105] (Le Miere J) (reference omitted). See also: Browne v Bassett-Scarfe [2015] WASC 422 (Gething AM).
My view is that Mainray properly brought the Application and is entitled to have its costs paid out of the Trust on an indemnity basis, which is paragraph 4 of the April Orders.
The balance of the Application was then dismissed, save for some further costs issues, for which the parties will confer and seek programming orders.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
OB
Associate to the Hon Justice Gething
30 APRIL 2025

Exhibit 1	The financial report for Jotim Trust, ending 30 June 2023.
Exhibit 2	The financial report for the Jotim Trust, ending 30 June 2024.
Exhibit 3	The discretionary trust deed, Jotim Trust, dated 22 June 2017.