Morton Drive Pty Ltd v Eastwood Retirement Pty Ltd
[2025] VSC 642
•10 October 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
COMMERCIAL COURT
COMMERCIAL LIST
S ECI 2025 02964
BETWEEN:
| MORTON DRIVE PTY LTD (ACN 135 457 751) AS TRUSTEE OF THE MORTON RETIREMENT INVESTMENT TRUST & ORS (according to the attached Schedule) | Plaintiffs |
| v | |
| EASTWOOD RETIREMENT PTY LTD (ACN 130 786 195) AS TRUSTEE OF THE EASTWOOD RETIREMENT UNIT TRUST | Defendant |
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JUDGE: | Efthim AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 17 September 2025 |
DATE OF JUDGMENT: | 10 October 2025 |
CASE MAY BE CITED AS: | Morton Drive Pty Ltd v Eastwood Retirement Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2025] VSC 642 |
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TRUSTS – Application by the unitholders to inspect the documents relating to legal advice obtained by the trustee of the trust – Whether ‘proprietary approach’ or ‘discretionary approach’ should be applied – Whether joint privilege applies in the legal-professional privilege – Whether the beneficiaries should not have a right of access to the relevant documents where the legal advice and services were provided during and for the purposes of a dispute between a trustee and a related entity of the beneficiaries – Deutsch v Trumble (2016) 52 VR 108; [2016] VSC 263 applied – Orders made for production and inspection.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr J Evans KC and Mr A Silver | Madgwicks |
| For the Defendant | Mr C Brown KC and Mr P Miller | Frenkel Partners |
TABLE OF CONTENTS
Background
Legal principles
The privilege
The discretionary approach – discretionary factors
Conclusion
HIS HONOUR:
By originating motion, the plaintiffs, Morton Drive Pty Ltd as trustee of the Morton Retirement Investment Trust, Gideon Finance Pty Ltd as trustee of the Morton Retirement Investment Trust No 2 and Gideon Finance Pty Ltd as trustee of the Morton Retirement Investment Trust No 3 seek production from the defendant, Eastwood Retirement Pty Ltd as trustee of the Eastwood Retirement Unit Trust, documents relating, primarily, to legal advice obtained by the defendant. To the extent that the documents are not privileged, the defendant does not object to production for inspection but where the documents are subject to legal-professional privilege, the defendant maintains privilege and objects to inspection.
The parties agree that for the purpose of this application, it will be assumed that the documents are subject to legal-professional privilege.
Background
There is no dispute as to the relevant facts that are contained in the plaintiffs’ submissions filed on 28 August 2025.
Thomas Camp is a director of the plaintiffs. The plaintiffs are beneficiaries of the Eastwood Retirement Unit Trust and, together, they hold 974 out of 4000 units in the trust.
The defendant is the trustee of the Eastwood Retirement Unit Trust. In that capacity, the defendant is a registered proprietor of a retirement village which the defendant operates.
In 2010, the defendant granted an option to purchase the retirement village by way of a deed which was from about 2015 held by Joseph Finance Investment Pty Ltd (‘Joseph Finance’) as trustee of the Lifestyle Investment Unit Trust. Mr Camp is the director of Joseph Finance.
By letter dated 29 November 2019, Joseph Finance indicated its desire to exercise the option and expressed concern as to the delays in the defendant completing construction of the retirement village. The expiry of the option, at that time, was 30 June 2020. By letter dated 7 April 2020, the defendant replied and denied any delay.
By May 2020, the defendant had still not completed construction of the retirement village. On 8 May 2020, Joseph Finance wrote to the defendant, estimating that the price payable by it under the option deed upon exercising the option was in the order of $11,800,000. Approximately six months earlier, the defendant had reported to unit holders that it considered the retirement village was worth $16,000,000 to $18,000,000.
By a letter dated 8 May 2020, in an attempt to avoid disputes regarding the option deed, Joseph Finance offered $14,300,000 to purchase the retirement village from the defendant. That price was higher than required to be paid under the option deed.
By letter dated 21 May 2020, the defendant proposed to sell the retirement village to Joseph Finance for $18,600,000. By an email dated 3 June 2020, Joseph Finance proposed to buy the retirement village for a total price of $18,138,000 and by email dated 10 June 2020, the defendant agreed to the price. However, the proposed sale did not complete.
By mutual agreement, the expiry date under the option deed was extended to 20 July 2020. The completion of the retirement village did not occur by that date and Joseph Finance was therefore unable to exercise the option.
In June 2021, Joseph Finance sued the defendant in this Court, asserting that the defendant had failed to take reasonable endeavours to complete construction of the village and thus deprived Joseph Finance the benefit of the option.
After a contested trial, Croft J found in favour of Joseph Finance and awarded it damages of $9,872,179.11, plus interest and costs. The defendant appealed that judgment in respect of quantum only but leave to appeal was refused by the Court of Appeal.
During the course of the Supreme Court proceedings, and the appeal, the defendant obtained legal advice and legal services in connection with the proceedings from its solicitors, HWL Ebsworth, and from counsel. Documents that were created in relation to the legal advice and legal services fall within the categories of documents that the plaintiffs now seek by their originating motion. The defendant claims that these documents are privileged.
The plaintiffs seek production and inspection of the privileged documents to ascertain whether they have a cause of action against the defendant and potentially the defendant’s directors for breach of trust and/or duty.
Legal principles
The plaintiffs submit that as unit holders of the Eastwood Retirement Unit Trust, they are entitled to trust documents and assert proprietary access (the proprietary approach). However, if the Court determines the proprietary approach does not apply, then the approach referred to as the discretionary approach applies to the inspection of trust documents to beneficiaries.
These two approaches, described by Delany J in Chan v Valmorbida Custodians Pty Ltd.[1] His Honour said:
On one view of the law, as held by the House of Lords in O’Rourke v Darbishire, a beneficiary with a vested or contingent interest under a fixed trust, or an object of a discretionary trust has a prima facie entitlement to inspect and copy all ‘trust documents’ (the proprietary approach). On another view, as determined by the Privy Council in Schmidt v Rosewood Trust Ltd, there is no such right, and ‘no beneficiary (least of all a discretionary object) has any entitlement as of right to disclosure of anything which can plausibly be described as a trust document’. In Schmidt the Privy Council found that it was not the proprietary rights of a beneficiary which gave rise to the Court’s power to require disclosure. Instead, the Court considered that the power was founded in the exercise of the Court’s inherent jurisdiction over the administration of trusts (the ‘discretionary approach’).[2]
[1][2020] VSC 590.
[2]Ibid [66].
In Deutsch v Trumble[3] Hargrave J concluded that the proprietary approach, and not the discretionary approach applied in Australia and that he was bound to follow that approach.
[3][2016] VSC 263; 52 VR 108.
The defendant submits that I should not follow Hargrave J, because his Honour was plainly wrong. In support of that submission, the defendant has referred to numerous authorities where that approach has not been followed and the discretionary approach was preferred.[4]
[4]See Spellsons v George (1987) 11 NSWLR 300, Hartigan Nominees Pty Ltd v Rydge (1992) 29 NSWLR 405, Avanes v Marshall [2007] NSWSC 191, [2]-[15] (Gzell J), Silkman v Shakespeare Haney Securities Ltd [2011] NSWSC 148, [17]-[29] (Hammerschlag J), AIT Investment Group Pty Ltd v Markham Property Fund No 2 Pty Ltd [2015] NSWSC 216, [66]-[90] (Bergin CJ), and Rangelea Holdings Pty Ltd v Adnyamathanha Traditional Lands Association [2025] SASCA 32, [311]-[315].
On considering the authorities referred to me by the defendant, I cannot say that his Honour, Hargrave J, was plainly wrong. In that regard, I also note that in Chan v Valmorbida Custodians Pty Ltd, [5] Delany J accepted that he should follow Hargrave J in Deutsch v Trumble.[6] Also in Land v Prideland Equity Pty Ltd,[7] Barrett AsJ considered that he was bound to apply the proprietary approach. I too am bound to apply the proprietary approach.
[5][2020] VSC 590.
[6][2016] VSC 263.
[7][2024] VSC 557.
The privilege
In Schreuder v Murray (No 2)[8] (‘Schreuder’), it was held that legal advice obtained by a trustee as part of the administration of a trust is a joint privilege of the trustee and beneficiary. Buss JA said (with McLure and Pullin JJA agreeing):
[8][2009] 260 ALR 139.
In the second category of legal proceedings, it will be necessary, in determining the interlocutory application, to identify and apply the relevant legal principles from the case law and academic writings discussed or referred to at [64] ‑ [65] and [76] ‑ [86] above. In my opinion, the relevant principles, in the context of a trustee and a beneficiary who has a vested interest in the trust fund, include, relevantly, the following:
…
(d)There will be a joint privilege if:
(i)the confidential communications, information or documents relate to legal services in connection with the management or administration of the trust; and
(ii)the trustee (in his or her capacity as trustee) and the beneficiary (in his or her capacity as a beneficiary, and either alone or as a member of a class of beneficiaries) have a joint interest in the subject matter of those confidential communications, information or documents when they occur or come into existence.
(e)The joint interest of the trustee will derive from his or her duties to the beneficiaries or in respect of the trust fund, and the joint interest of the beneficiary will derive from his or her vested interest in the trust fund, in combination with the nature and character of the relevant communications, information or documents.
(f)The beneficiary will not be entitled to a joint privilege with the trustee if the confidential communications, information or documents relate to legal services obtained for the benefit of the trustee personally (for example, if the trustee seeks legal advice as to his or her personal rights or liabilities in connection with an alleged breach of trust or threatened legal proceedings against him or her personally).
It is unnecessary to consider the position of a beneficiary who has a contingent interest or a mere expectancy in relation to the trust fund. At all material times, Mrs Murray has had a vested interest in the residuary estate.[9]
…
[9]Ibid [94].
The defendant notes that Buss JA emphasised the difference between a claim by a beneficiary for production of trust documents, and a claim by a trustee for legal privilege made during the course of other proceedings brough by the beneficiary.
The defendant submits where a trustee asserts privilege over trust documents in proceedings brought by the beneficiary, the ordinary principles governing privilege must be applied, given ‘privilege is a substantive rule of law which cannot be overridden by the exercise of a non-statutory judicial discretion’.[10]
[10]Ibid [99].
The discretionary approach – discretionary factors
Even though I am bound to apply the proprietary approach, I will consider this application using the discretionary approach which is more favourable to the defendant. I note that the plaintiffs submit that it does not matter as to which approach I apply. The plaintiffs will be entitled to the inspection of the documents under the proprietary approach if they are entitled to the inspection of documents under the discretionary approach.
The defendant submits that each of the privileged documents is subject to legal advice privilege and/or litigation privilege under the common law. The defendant submits that the Court should refuse the plaintiffs’ application for access to the privileged documents for the following reasons.
First, it says that the discretionary approach should be preferred and there are powerful discretionary reasons as to why production and inspection of the privileged documents must be refused:
-the privileged documents are subject to legal-professional privilege which is a fundamental common law right; and
-the plaintiffs now seek to deploy the documents in satellite proceedings against the defendant in connection with the management of Supreme Court proceedings and the appeal. The use of legal advice created in the course of previous proceedings to support future proceedings is contrary to the public interest which allows litigants the opportunity to obtain legal advice without fear of disclosure.
The defendant was obtaining legal advice as trustee in order to defend claims brought by Joseph Finance, not in order to defend claims brought against it by the beneficiaries of the trust. Even though legal-professional privilege is a common law right, here joint privilege applies. The beneficiaries of the trust have a joint privilege with the defendant and there is no reason why this discretionary reason should prevent the plaintiffs from inspecting the documents.
Second, the defendant submits that even if the proprietary approach is adopted, the plaintiffs do not have an unqualified and unfettered right of access to privileged documents. They must show that the proprietary interest in the privileged documents existed by demonstrating that they were obtained and created during the ordinary administration of the trust.
The defendant submits that the plaintiffs cannot demonstrate this, given the privileged documents were created, sent and received during, and for the purposes of, the Supreme Court proceedings and the appeal. They say the documents are not obtained in the ordinary course of the administration of the trust.
I do not accept that submission. I agree with the plaintiff that the ordinary administration of the trust includes dealing with claims made against the trustee, which would have the effect of diminishing the trust assets.
Third, the defendant submits that the privilege was created during, and for the purposes of, a dispute between the defendant, a trustee, and Joseph Finance, a related entity of the plaintiffs. Where legal advice and legal services provided during and for the purposes of a dispute between a trustee and a related entity of the beneficiaries, the beneficiaries should not have a right of access to the relevant privileged documents.
Furthermore, the defendant submits that the legal advice sought by the plaintiffs does not relate to the management of the trust in an ordinary sense, but constitutes specific advice in respect of an ongoing dispute with Joseph Finance, a related entity of the plaintiffs.
The plaintiffs are each unit holders of the Eastwood Retirement Unit Trust. The director is Mr Camp and he is also the director of Joseph Finance. The first plaintiff is a trustee of a discretionary trust. Mr Camp is a potential object of that trust. There are four specified beneficiaries, one of whom is Mr Camp’s wife.
The second and third plaintiffs are trustees of trusts, which are fixed trusts, and the unit holders of those trusts have been identified by Mr Camp. There appear to be other persons who may not be associated with Mr Camp. They are the persons on behalf of whom the plaintiffs bring this proceeding.
Here, the dispute between Joseph Finance and the defendant was a dispute over an option. In effect, it was a dispute between a vendor and purchaser of land. It was not a dispute between the beneficiaries and the trustee. Joseph Finance is not a beneficiary of the Eastwood Retirement Unit Trust. The fact that Joseph Finance is a related entity to the plaintiffs should not be a bar to beneficiaries obtaining the privilege documents.
I agree with the plaintiffs that if they had instituted this application during the pendency of the litigation between Joseph Finance and the defendant, the Court would have been concerned regarding the fact that the production of documents relating to that litigation would be provided. That proceeding has been determined. The beneficiaries should have the right to see the trust documents in relation to the conduct of the litigation, which was not conducted for the benefit of the defendant personally, but for the benefit of the trust.
Fourth, the defendant submits that there is no joint interest in the privileged documents. The privileged documents were created, sent and received in respect of the defendant’s defence of the Supreme Court proceeding and the appeal. The plaintiffs did not join with the defendant in engaging HWL Ebsworth and counsel to provide the legal advice and legal services.
I do not accept that submission. In Schreuder, legal advice was required to be produced and that advice had not been obtained by the beneficiaries of the trust. Here, as in Schreuder, the legal advice was obtained for the benefit of the beneficiaries of the trust.
Fifth, the defendant submits that if there is a common interest in the outcome of the Supreme Court proceedings and the appeal as between the defendant and the plaintiffs, it is clouded by the interrelationship by the plaintiffs and Joseph Finance. Each of the plaintiffs, and Joseph Finance, are related by reason of Mr Camp being a common director. Properly viewed during the Supreme Court proceedings and the appeal, the interests of the defendant were pitted against the interests of Joseph Finance and its related entities, the plaintiffs.
I do not agree with the defendant, I repeat that the Supreme Court proceedings are related to an exercise of an option and was a dispute between a vendor and a purchaser. That dispute is over. The plaintiffs have the right to inspect the privileged documents which were obtained by the defendant acting as trustee of the Eastwood Retirement Unit Trust.
Sixth, the defendant submits that it is immaterial to the Supreme Court proceedings and the appeal are now finalised. It says that there is no principal of law that legal-professional privilege is extinguished at the time that the underlying legal proceeding which generated the legal advice and legal services is finalised.
In my view, this is not a relevant discretionary factor in the circumstances of this application.
Seventh, the defendant submits that documents evidencing legal advice and legal services do relate to confidential decision making by the defendant in respect to its management of the Supreme Court proceedings and the appeal. It is clear that the plaintiffs now seek to hold the defendant and its directors personally liable for that very decision making. It would be perverse, and arguably an abuse of process, to allow the plaintiffs to obtain access to the privileged documents now.
Again, I do not accept that these submissions are a bar to the plaintiffs obtaining the privileged documents. There is no discretionary basis here for refusing inspection. It is true that the plaintiffs may seek to hold the defendant and its directors personally liable. That should not prohibit the plaintiffs from having access to the documents.
Conclusion
The defendant will be ordered to provide to the plaintiffs the documents referred to in the originating motion filed on 27 May 2025.
SCHEDULE OF PARTIES
| S ECI 2025 02964 | |
| BETWEEN: | |
| MORTON DRIVE PTY LTD (ACN 135 457 751) AS TRUSTEE OF THE MORTON RETIREMENT INVESTMENT TRUST | First Plaintiff |
| GIDEON FINANCE PTY LTD (ACN 147 055 221) AS TRUSTEE OF THE MORTON RETIREMENT INVESTMENT TRUST NO. 2 | Second Plaintiff |
| GIDEON FINANCE PTY LTD (ACN 147 055 221) AS TRUSTEE OF THE MORTON RETIREMENT INVESTMENT TRUST NO. 3 | Third Plaintiff |
| - v - | |
| EASTWOOD RETIREMENT PTY LTD (ACN 130 786 195) AS TRUSTEE OF THE EASTWOOD RETIREMENT UNIT TRUST | Defendant |
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