Maradval Pty Ltd v Admarval Pty Ltd - [2017] VSC 745

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY & PROBATE LIST

S CI 2017 00765

MARADVAL PTY LTD (ACN 616 314 222) (as trustee for the Admarval Discretionary Trust)	Plaintiff
v
ADMARVAL PTY LTD (ACN 119 834 543)	Defendant

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF RULING:	8 December 2017
CASE MAY BE CITED AS:	Maradval Pty Ltd v Admarval Pty Ltd
MEDIUM NEUTRAL CITATION:	[2017] VSC 745

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COSTS — Trustees — New trustee seeking trust documents from former trustee — Where former trustee provided documents after proceeding issued — Proceeding dismissed by consent — Where both trustees seek costs from the trust on a trustee basis — New trustee entitled to costs from the trust — Whether former trustee entitled to costs from the trust — Supreme Court Act 1986, s 24 — Nolan v Collie (2003) 7 VR 287 — Asta Development (Aust) Pty Ltd v Amasya Enterprises Pty Ltd [2016] VSCA 186.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S T Pitt	Lawson Hughes Peter Walsh
For the Defendant	Mr J D S Barber	Arnold Bloch Leibler

HER HONOUR:

Introduction

On 7 December 2016, the plaintiff was appointed trustee of the Admarval Discretionary Trust, established on 23 May 2006 (‘the trust’). The defendant is the former trustee of the trust.

In early January 2017, the defendant received a request from the plaintiff to deliver relevant documents relating to the trust and for the property of the trust to be vested in the plaintiff. On 1 February 2017, the plaintiff made a demand of the defendant to the same effect.

On 3 March 2017, the plaintiff issued this proceeding seeking delivery up of all of the assets of the trust fund, including but not limited to the property described in Schedule 1 to the statement of claim, as well as the books, documents, records and other property in relation to the trust. The plaintiff also sought damages and costs.

The substantive issues have now resolved between the parties and the remaining dispute concerns the parties’ costs of the proceeding. For the purposes of determining the dispute as to costs, the parties have provided an agreed bundle of correspondence of 120 pages and written submissions.

The plaintiff seeks orders that its costs of and incidental to the proceeding, including reserved costs, be paid out of the assets of the trust on a trustee basis, the defendant bear its own costs and the proceeding otherwise be dismissed.

The defendant seeks orders that its costs be paid out of the assets of the trust on a trustee or indemnity basis and, if that order is made, it does not oppose an order that the plaintiff‘s costs also be paid out of the assets of the trust on the same basis.

Factual background

Mariano Valmorbida and Adrian John Valmorbida were the original principals of the trust. On 12 February 2016, they resigned as…

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: [2017] VSC 745
Decision Date: 8 December 2017

CaseChat Overview and Summary

In the matter of Maradval Pty Ltd v Admarval Pty Ltd, the case concerned a dispute between two companies over trust documents. The former trustee, Maradval Pty Ltd, was sought by the new trustee, Admarval Pty Ltd, to provide documents related to the trust. The proceeding was dismissed by consent, and both parties sought costs from the trust on a trustee basis. The primary issue for the court was to determine whether the new trustee was entitled to costs from the trust, and if so, whether the former trustee was also entitled to costs from the trust.

The court considered the relevant legal principles and authorities, including the Supreme Court Act 1986, s 24, and the cases of Nolan v Collie and Asta Development (Aust) Pty Ltd v Amasya Enterprises Pty Ltd. The court held that the new trustee was entitled to costs from the trust as it was the prevailing party in the proceeding. However, the court also found that the former trustee was not entitled to costs from the trust as it had already provided the requested documents after the proceeding was issued.

The court further reasoned that the former trustee's entitlement to costs was limited to the costs incurred in providing the documents after the proceeding was issued, and that these costs should be paid by the new trustee. The court also noted that the parties had agreed to dismiss the proceeding by consent, and that this agreement should be respected in determining the costs order.

In conclusion, the court ordered that the new trustee pay the former trustee for the costs incurred in providing the trust documents after the proceeding was issued, and that the former trustee was not entitled to any further costs from the trust. The court also noted that the parties should endeavour to resolve any future disputes between them without resorting to litigation, and that the costs of the proceeding should be borne by the party that caused the proceeding to be issued.

Orders