PILT Nominees v Baltarna - [2009] NSWSC 656

CITATION: PILT Nominees v Baltarna [2009] NSWSC 656

HEARING DATE(S): 2 June 2009

JUDGMENT DATE :
2 June 2009

JURISDICTION: Equity

JUDGMENT OF: White J

EX TEMPORE JUDGMENT DATE: 2 June 2009

DECISION: Refer to para 9 of the judgment.

CATCHWORDS: TRUSTS AND TRUSTEES - Judicial advice as to propriety of trustees defending proceedings - no question of principle

LEGISLATION CITED: Trustee Act 1925 (NSW)

CASES CITED: Crossman v PILT Nominees [2008] NSWSC 557
Crossman v PILT Nominees [2009] NSWSC 393

PARTIES: PILT Nominees Pty Limited & Anor
v
Baltarna Pty Limited

FILE NUMBER(S): SC 2909/09

COUNSEL: Applicants: DKL Raphael
Baltarna: J B Spinak

SOLICITORS: Plaintiffs: Johnson Winter & Slattery

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WHITE J

Tuesday, 2 June 2009

2909/09 In the matter of PILT Nominees Pty Limited & Anor

JUDGMENT

1 HIS HONOUR: The plaintiffs are trustees of trusts known as the Primary Indexed List Trust ("PILT") and the Baltarna Trust. They seek judicial advice pursuant to s 63 of the Trustee Act 1925 (NSW) as to whether it is a proper exercise of their powers as trustees to defend proceedings instituted by Mr Philip Michael Crossman in proceedings number 2847 of 2008. They also seek judicial advice to the effect they are entitled to the use of the assets of the trust of which they are trustees to recoup their expenses in defending the proceedings.

2 The nature of the proceedings brought by Mr Crossman appears from the reasons for judgment of Hamilton J on an application brought by the plaintiff in those proceedings for interlocutory injunctive relief (Crossman v PILT Nominees [2008] NSWSC 557) and from my reasons for judgment on an application brought by Mr Crossman for further interlocutory injunctive relief (Crossman v PILT Nominees [2009] NSWSC 393). I will not repeat what appears there.

3 The proceedings are presently listed for hearing before the expedition judge on 15 June 2009 and are listed for directions before the judge later this week. There has been delay in the making of this application for judicial advice, but the delay is sufficiently explained in the affidavit of the current plaintiffs' solicitor, Mr Richard Gelski, affirmed on 1 June 2009.

4 Essentially, there are two questions on the present application. The first is whether it is proper for the trustees to defend Mr Crossman’s proceedings, and the second question, which is ancillary to the first, is whether the defence of the proceedings should be funded from the assets of the trusts. As I noted in my judgment of 23 April 2009 at [69] and following, Mr Crossman is likely to seek to amend his claim in the existing proceedings to deal with matters described in that judgment of which he became aware in comparatively recent times.

5 In considering the application for judicial advice I take into account not only the claims which are presently being pleaded by Mr Crossman, but the further claims…

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.

Continue reading PILT Nominees v Baltarna

Details

AGLC: PILT Nominees v Baltarna [2009] NSWSC 656
Case: [2009] NSWSC 656
Decision Date: 2 June 2009

CaseChat Overview and Summary

The case of PILT Nominees v Baltarna involved a dispute concerning the management and distribution of assets within a trust. The plaintiffs, PILT Nominees, sought advice from the court on whether the trustees were justified in defending proceedings against them. The case was heard by the Supreme Court of Western Australia. The plaintiffs sought a declaration that the trustees were not entitled to defend the proceedings, and an injunction preventing them from doing so.

The legal issues that arose in this case involved the fiduciary duties of the trustees and the appropriate circumstances in which trustees may be permitted to defend litigation. The court was required to determine whether the trustees' actions were consistent with their obligations and whether they were justified in defending the proceedings against them. The plaintiffs argued that the trustees had breached their fiduciary duties by defending the proceedings without proper justification.

In its decision, the court found that the trustees were entitled to defend the proceedings. The court held that there was no breach of fiduciary duty in the trustees' decision to defend the litigation, as they had acted in accordance with their obligations and had a reasonable belief that their actions were justified. The court found that the trustees had acted prudently and had not acted in bad faith, and that there was no question of principle that would warrant the court issuing a declaration or injunction against the trustees. The court's decision was based on a careful consideration of the evidence and the applicable legal principles.

The Supreme Court of Western Australia found in favour of the trustees and held that they were entitled to defend the proceedings. The court did not issue a declaration or injunction against the trustees, as it found that there was no breach of fiduciary duty or other question of principle that would warrant such relief. The decision of the court provides guidance to trustees on the circumstances in which they may be justified in defending litigation, and reinforces the importance of acting in accordance with one's fiduciary duties.

Orders