Mantovani v Vanta Pty Ltd (No 3) - [2022] VSC 357

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S ECI 2019 00733

IN THE MATTER of an application by GIOVANNI ALFREDO MANTOVANI pursuant to Rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015

GIOVANNI ALFREDO MANTOVANI	Plaintiff
v
VANTA PTY LTD (ACN 005 190 965) (as trustee of the MANTOVANI FAMILY TRUST) and OTHERS (according to the schedule)	Defendants

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	24 June 2022
CASE MAY BE CITED AS:	Mantovani v Vanta Pty Ltd & Ors (No 3)
MEDIUM NEUTRAL CITATION:	[2022] VSC 357

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COSTS – Where plaintiff successful in trust dispute – Where defendants unreasonably protracted dispute – Award of indemnity costs – Whether trustee had right to an indemnity from trust assets – Trustee held to have no entitlement to an indemnity.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Barrett	Cornwalls
For the First Defendant, Second Defendant and Third Defendant (in his personal capacity)	Mr PG Cawthorn QC and Mr H Kirimof	SMR Legal Pty Ltd
For the Third and Fourth Defendants (in their capacity as executors of the will of Teresa Mantovani)	Cassidys Morrison & Teare

SCHEDULE OF PARTIES

BETWEEN:
GIOVANNI ALFREDO MANTOVANI	Plaintiff
- and -
VANTA PTY LTD (ACN 005 190 965) (as trustee of the MANTOVANI FAMILY TRUST)	First defendant
- and -
NICOLA MANTOVANI	Second defendant
- and -
SALVATORE ROCCO MANTOVANI (personally and as executor of the will of TERESA MANTOVANI)	Third defendant
- and -
CARMINE VINCENZO MANTOVANI (personally and as executor of the will of TERESA MANTOVANI)	Fourth defendant

HER HONOUR:

Introduction

The Mantovani Family Trust (‘the family trust’) was established by Teresa Mantovani (‘Teresa’) in 1976. At some time prior to the commencement of the proceeding in 2019, the original deed of settlement for the family trust (‘the deed’) was lost. The only document remaining in the possession of the parties is a schedule to the original deed (‘the schedule’), which sets out some basic information about the family trust.

The plaintiff and the second, third and fourth defendants are the adult children of Teresa. The schedule names each of them, along with Teresa and any of their children and grandchildren, as the beneficiaries of the family trust. The schedule also names the first defendant, Vanta Pty Ltd (‘Vanta’), as trustee. Vanta was incorporated in 1976 and has since been controlled by members of the Mantovani family. The second and third defendants are the current directors and shareholders of Vanta.

Following Teresa’s death in 2015, the plaintiff and the defendants fell into dispute as to their entitlements to the assets of the family trust held by Vanta, the consequences of the loss of the deed, and the distribution of Teresa’s estate. The plaintiff contended that, as a result of the loss of the deed, the family trust had failed for uncertainty, with the result that Vanta held all trust assets…

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.

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Details

Case: [2022] VSC 357
Decision Date: 24 June 2022

CaseChat Overview and Summary

In the Federal Court of Australia, Mantovani brought a case against Vanta Pty Ltd, seeking resolution of a trust dispute. The plaintiff argued that the defendants had unreasonably prolonged the litigation, leading to significant costs. The court was tasked with determining whether the trustee was entitled to an indemnity from the trust assets for the costs incurred.

The central legal issue was whether the trustee, who had successfully defended the trust, was entitled to be reimbursed from the trust's assets for the legal costs incurred during the dispute. The court considered whether the trustee's right to indemnity extended to costs associated with defending the trust from the defendants' claims. Additionally, the court examined whether the defendants' actions justified the award of indemnity costs to the plaintiff.

The court held that the trustee did not have an entitlement to an indemnity from the trust assets. It reasoned that the trustee's role in defending the trust did not automatically entitle them to reimbursement from the trust's resources. Furthermore, the court found that the defendants' conduct had unreasonably prolonged the dispute, warranting the award of indemnity costs to the plaintiff. The court balanced the need to protect the trust assets against the necessity of fairly compensating the plaintiff for the additional costs incurred due to the defendants' actions.

The court ordered that the defendants pay the plaintiff's indemnity costs. It explicitly stated that the trustee was not entitled to an indemnity from the trust assets. This decision underscores the importance of distinguishing between the rights of the trustee and the trust beneficiaries in such complex litigations.

Orders