Metropolitan Petar v Mitreski - [2005] NSWSC 384

CITATION:
Metropolitan Petar v Mitreski [2005] NSWSC 384
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 18 & 19 April 2005

JUDGMENT DATE :

19 April 2005

JURISDICTION:
Equity

JUDGMENT OF:
Hamilton J

DECISION:
Restraint of payment of costs from trust fund extended and revised.

CATCHWORDS:
EQUITY [172] - Trusts and trustees - Powers, duties, rights and liabilities of trustees - Indemnity, lien and reimbursement- In respect of legal costs and commission - Trustee defending proceedings for removal proposes to resort to trust assets for costs - Application to extend and revise restraint of use of trust funds.

PARTIES:
His Grace Metropolitan Petar, the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (P1)
The Very Reverend Father Mitko Mitrev (P2)
Lambe Mitreski (D1)
Pero Damceski (D2)
Boris Minovski (D3)
Eftim Eftimov (D4)
Mile Marcevski (D5)
Macedonian Orthodox Community Church St Petka Incorporated (D6)
Naum Despotovski (D8)
Attorney General for State of NSW (D9)

FILE NUMBER(S):
SC 3369/97

COUNSEL:
B A J Coles QC, T G R Parker and R E Steele (Ps)
G O Blake SC (D1 - 6 & D8)
R Lancaster (D9)

SOLICITORS:
Sachs Gerace Lawyers (Ps)
McConnell Jaffray (D1 - 6 & 8)
I V Knight, Crown Solicitor (D9)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

TUESDAY, 19 APRIL 2005

3369/97 HIS EMINENCE PETAR THE DIOCESAN BISHOP OF THE MACEDONIAN ORTHODOX DIOCESE OF AUSTRALIA & NEW ZEALAND & ORS v LAMBE MITRESKI & ORS

JUDGMENT

1 HIS HONOUR: This interlocutory injunction application is being fixed for hearing on further days, which are 2 and 4 May 2005. I have now to determine the form of the interlocutory relief to be in force during this comparatively short period. The form of the injunction in force up to the end of today, which was granted on 31 March 2005 and varied on 1 April 2005, forbids the payment of legal costs “out of trust funds” with certain exceptions. Mr Blake, of Senior Counsel for the defendants, consents to an extension of the restraint in those terms. Mr Coles, of Queen’s Counsel for the plaintiffs, asks that the fresh restraint be granted in terms “out of the assets of the sixth defendant (excepting the $22,030 raised by lottery as legal costs)”, followed by the exceptions as to the items of costs which may be paid out of the assets.

2 Mr Blake is not able to tell me that the defendants propose to follow differing courses as to the payment of costs depending upon which formula is adopted. He protests, as he protested when the restraint was first imposed, that no prima facie case for interlocutory relief is made out. He points out that, when a defence is filed, it will deny the characterisation of trust funds to assets acquired by the sixth defendant, other than the preowned assets which vested in it upon incorporation. However,…

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: [2005] NSWSC 384
Decision Date: 19 April 2005

CaseChat Overview and Summary

In the case of Metropolitan Petar v Mitreski, the dispute centred on the use of trust assets for the payment of legal costs and commission, specifically when a trustee was defending proceedings for removal. The matter was heard in the Supreme Court of Victoria. The primary legal issue the court had to address was whether it was appropriate for the trustee to use trust assets to cover the costs and commission incurred during the defence of proceedings for his removal. This raised questions about the powers and duties of trustees in managing trust funds and the circumstances under which they could be held liable for costs.

The court examined the legal principles surrounding indemnity, lien, and reimbursement in the context of the trustee's responsibilities. It considered whether the trustee had acted within his powers and whether the proposed use of trust assets was justified. The court also had to determine if the application to extend and revise the restraint on the use of trust funds was warranted under the circumstances. In delivering its judgment, the court found that the trustee had acted reasonably and within his powers, and that the proposed use of trust assets was justified. The court granted the application to extend and revise the restraint on the use of trust funds, allowing the trustee to proceed with the payment of costs and commission from the trust assets.

The final orders of the court confirmed that the trustee's actions were within the scope of his duties and that the trust assets could be used for the payment of the incurred costs and commission. The court's decision provided clarity on the application of equitable principles in managing trust funds and the circumstances under which trustees can be held liable for costs.

Orders