Pelerman v Pelerman - [1998] QSC 21

IN THE SUPREME COURT

OF QUEENSLAND

No. 2847 of 1998

Brisbane

Before Chief Justice de Jersey

[Pelerman v. Pelerman]

BETWEEN:

VIVIENNE HARRIET JOSEPH
First Plaintiff

AND:
MORDECHAI YEHUDA JOSEPH
Second Plaintiff

AND:
DAVID JOSEPH
Third Plaintiff

AND:
BRETT JOSEPH
Fourth Plaintiff

AND:
  THE PELERMAN GROUP PTY LTD
  (as Trustee for THE REUBEN PELERMAN TRUST
  and THE PELERMAN HOSPITAL UNIT TRUST)
  First Defendant

AND:
REUBEN PELERMAN
Second Defendant

AND:
ROBERT PELERMAN
Third Defendant

AND:
BCCM PTY LTD
Fourth Defendant

JUDGMENT de JERSEY CJ
Judgment delivered 22 April 1998

I am asked to appoint a receiver of the first defendant.
It is important first to identify the attitude of those interested in the trusts of which the first defendant is trustee. The first defendant has two directors, the second defendant Reuben Pelerman and his son, Brian. There is ample material that there is no relationship of trust at all between Reuben and Brian. Reuben seeks the appointment of a receiver, although Brian opposes it. Reuben and Brian’s company, the fourth defendant, are the only capital beneficiaries of the trusts of which the first defendant is trustee.
The other, income beneficiaries, are the plaintiffs and the third defendant. The third defendant has played no part in the litigation. All of the plaintiffs support the appointment of a receiver. While the plaintiffs’ interests are discretionary, their attitude is still significant, although less so obviously than that of the capital beneficiaries in whom the trust property will vest in 2006. In summary therefore, we see that one of the two capital beneficiaries supports the appointment of a receiver, as does the substantial majority of the discretionary income beneficiaries.
The attitude of Brian and his company, the fourth defendant, is related to events in 1997, including most significantly for the present, an agreement appointing the fourth defendant, on 18 September 1997, as manager of the trusts. The validity of that agreement was earlier challenged in this Court. Reuben had sought the appointment of a receiver, and contended that the agreement involved an impermissible delegation by the first defendant of its obligation as trustee. Reuben sought a summary determination of that issue on the basis that it was one solely of construction. Before the matter finally came before Dowsett J, the parties had agreed on mutual undertakings designed to minimise difficulties with the fourth defendant’s continuing management of the trusts pending a speedy trial of the action. As his Honour said, Reuben may be taken to have agreed to that in anticipation of an early determination of the validity of the management agreement. His Honour considered, however, that the issue of the validity of the agreement should go to trial, albeit with the benefit of a speedy trial certificate.
Because Dowsett J did not apparently consider, and certainly did not rule on, the issues of management pressed before me, as grounding the application for the appointment of a receiver, and because, as he said, Reuben’s agreement to the regime established by the undertakings assumed an early…

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: [1998] QSC 21
Decision Date: 22 April 1998

CaseChat Overview and Summary

In the Supreme Court of Queensland, the case of Pelerman v Pelerman involved multiple plaintiffs seeking the appointment of a receiver for the first defendant, The Pelerman Group Pty Ltd. The plaintiffs were Vivienne Harriet Joseph, Mordecai Yehuda Joseph, David Joseph, and Brett Joseph. They sought the intervention of the court to address concerns about the management of the trust assets held by the first defendant, which acted as trustee for The Reuben Pelerman Trust and The Pelerman Hospital Unit Trust. The defendants included The Pelerman Group Pty Ltd, Reuben Pelerman, Robert Pelerman, and BCCM Pty Ltd. The primary dispute centred on the appropriateness of the current management of the trusts by BCCM Pty Ltd and the potential jeopardy of trust property due to mismanagement.

The central legal issue was whether the appointment of a receiver was necessary to safeguard the trust property given the concerns over the current management practices of BCCM Pty Ltd. The court had to determine if the plaintiffs had sufficiently demonstrated that the trust property was at risk due to the management by BCCM Pty Ltd. Additionally, the court needed to assess whether the balance of convenience favoured the appointment of a receiver, considering the potential losses to the beneficiaries versus the impact on BCCM Pty Ltd's management rights.

The court found that the plaintiffs had established a sufficient case for the appointment of a receiver. There were serious doubts about the propriety and competence of BCCM Pty Ltd's management, particularly concerning budget preparations, profit forecasts, uncommercial employment agreements, and the use of trust funds for personal legal costs. The court also noted the lack of trust between the directors of the first defendant and the validity of the management agreement being seriously questioned. Given the substantial support from the beneficiaries for the receivership and the potential for significant losses if the current management continued, the court concluded that the balance of convenience favoured the appointment of a receiver. The court was not satisfied that damages would be an adequate remedy given the complexity and magnitude of the businesses involved. The court ordered the appointment of receivers and restrained BCCM Pty Ltd from exercising any management powers pending the trial. The decision was made on the basis of the undertakings provided by the plaintiffs and Reuben Pelerman regarding damages.

Orders