Piscopo v Hill & Ors (No.3)
[2010] FMCA 153
•12 March 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PISCOPO v HILL & ORS (No.3) | [2010] FMCA 153 |
| BANKRUPTCY – Third further amended interim application – application for the Examination to be discharged – application for certain subpoenas to be set aside – application pursuant to s.179 of the Bankruptcy Act 1966 (Cth) to inquire into the conduct of the Trustee in relation to the administration of the bankruptcy of Terry Donald Hill – seeking the removal of the Trustee from that office. PRACTICE & PROCEDURE – Application in a Case to reopen proceedings – whether the availability of fresh evidence warrants reopening – power to grant leave for further evidence in chief to be adduced after trial of proceedings has concluded and judgment reserved. |
| Bankruptcy Act 1966 (Cth), ss.149, 179, Part X Evidence Act 1995 (Cth) s.135 Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth), r.6.05 |
| BDT Holdings v Piscopo (No 2) [2009] FCA 1126 Gulf Pacific Pty Ltd v Londish [1992] FCA 502 Hawthorn Glen Pty Ltd v Aconex Pty Ltd (No 1) [2007] FCA 2010 Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 McCartney v McIntyre [2000] FCA 1250 Murray v Figge (1974) 4 ALR 612 Silver Fox Co Pty Ltd as Trustee for the Baker Family Trust v Lenard’s Pty Ltd (No 2) [2004] FCA 1310 Smith v New South Wales Bar Association (1992) 176 CLR 256 The Movie Network Channels Pty Ltd v Optus Vision Pty Ltd [2009] NSWSC 132 Urban Transport Authority of NSW v Nweiser (1992) 28 NSW LR 471 |
| Applicant: | SAMUEL PISCOPO |
| First Respondent: | TERRY DONALD HILL |
| Second Respondent: | ELENA ROSE |
| Third Respondent: | MICHAEL O’NEILL |
| File Number: | SYG 344 of 2008 |
| Judgment of: | Lloyd-Jones FM |
| Hearing date: | 15 February 2010 |
| Delivered at: | Sydney |
| Delivered on: | 12 March 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr D Allen |
| Solicitors for the Applicant: | J Kekatos of Proctor & Associates |
| Counsel for the Respondent: | Mr Gleeson |
| Solicitors for the Respondent: | NOT Lawyers |
ORDERS
The Application in a Case to reopen the proceedings is granted.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 344 of 2008
| SAMUEL PISCOPO |
Applicant
And
| TERRY DONALD HILL |
First Respondent
| ELENA ROSE |
Second Respondent
| MICHAEL O’NEILL |
Third Respondent
REASONS FOR JUDGMENT
Interim application
The proceedings
Mr Piscopo is a Trustee in the bankrupt estate of Terry Donald Hill. The proceedings before this Court concern the examination of the affairs of Mr Hill. The imposed examinees are Mr Hill, Elena Rose (Mr Hill’s wife) and their two solicitors, Michael O’Neill and Nicholas Eddy. An application for summons to examine relevant persons or examinable persons was filed on 13 February 2008 with the supporting affidavit of Mr Piscopo. Summons of examination were filed in respect of each examinee on the same date.
The summonses of examination have been served on Messrs Hill and Neil and Eddy. On 6 May 2008 Registrar Hedge made an order pursuant to r.6.05 of the Federal Magistrates Court (Bankruptcy) Rules 2006 (Cth) (“FMC Bankruptcy Rules”) that the summons addressed to Ms Rose may be served by delivering it to Jacqueline Cole of NOT Lawyers, solicitors for Mr Hill. A third further amended interim application was filed by Mrs Rose, Mr O’Neil and Mr Hill on 20 March 2009 seeking that the examination summons issued to her and Messrs Hill, O’Neil and Eddy be discharged. Further orders sought to set aside the subpoenas issued to the proper officers of Westpac Banking Corporation, Provident Capital Ltd, Bovis Lend Lease Ltd, G. E. Mortgage (sic) Solutions Ltd and the Secretary of R.L. Kremnizer & Co.
The interim application was heard on 19, 20, 26 March 2009 and the judgment is currently reserved. Pursuant to s.179 (1) of the Bankruptcy Act 1966 (Cth) (“the Act”), the Court may inquire into the conduct of Mr Piscopo in relation to the bankruptcy of Mr Hill and the removal of Mr Piscopo for that office.
At the hearing, Mr Allen sought leave to file, for the purpose of this interim application, and read the affidavit of Jim Kekatos signed 9 November 2009 and tendered an exhibit to the affidavit marked “JK 1”- exhibited to me at the time of swearing this affidavit is a bundle of documents marked “JK1”. Leave was also sought to tender a Defence and Amend a Cross Claim from the Federal Court of Australia NSW proceedings 528 of 2008.
Notice of Motion
On 21 December 2009, Mr Allen for Mr Piscopo approached the Court seeking to obtain directions for the filing of a Notice of Motion in respect to reopening the proceedings that were currently reserved. There was no appearance on behalf of Mr Hill. The matter was listed for hearing on 15 February 2010.
Mr Allen advised the Court that Mr Hill’s bankruptcy was extended. Mr Hill entered into a Personal Insolvency Agreement on 27 July 2005 and Peter Rodgers was appointed his Trustee under Part X of the Act. The bankruptcy was due to be automatically discharged on 2 August 2009 pursuant to s.149 of the Act. Although Mr Hill lodged an objection the Official Trustee, dealt with, in some detail, numerous complaints made against Mr Piscopo all of which were dismissed except one and the decision to extend the bankruptcy was confirmed. In respect of separate proceedings in the Federal Court BDT Holdings v Piscopo (No 2) [2009] FCA 1126, Mr Piscopo obtained leave to defend his claim and assert parties in New Zealand. The reason for the ventilation of these proceedings is because there are matters before this Court that advance the proposition that Mr Piscopo is a mere puppet of Messrs Brooks and James and is undertaking some form of vendetta against Mr Hill.
Application for reopening – relevant principles
The Court has the power to grant leave for further evidence in chief to be produced after the trial of the proceedings has concluded and while the judgment is reserved. In Murray v Figge (1974) 4 ALR 612 Muirhead J set out tests he determined were applicable to applications for reopening where fresh evidence sought to be admitted. These included whether the evidence was so material that the interests of justice required that it be admitted, whether the evidence, if believed, would have affected the result, and whether the evidence could not have by reasonable diligence, been discovered before: Gulf Pacific Pty Ltd v Londish [1992] FCA 502, Urban Transport Authority of NSW v Nweiser (1992) 28 NSW LR 471, Smith v New South Wales Bar Association (1992) 176 CLR 256, McCartney v McIntyre [2000] FCA 1250, Inspector – General in Bankruptcy v Bradshaw [2006] FCA 22, Hawthorn Glen Pty Ltd v Aconex Pty Ltd (No 1) [2007] FCA 2010.
In Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 Her Honour Kenny J at [24] summarises the circumstances in which a Court will permit further evidence to be adduced after the conclusion of the hearing and while the matter is reserved.
[24] The authorities indicate that, broadly speaking, there are four recognised classes of case in which a court may grant leave to re-open, although these classes overlap and are not exhaustive. These four classes are (1) fresh evidence (Hughes v Hill [1937] SASR 285 at 287; Smith v New South Wales Bar Assn [No 2] (1992) 108 ALR 55 at 61–2); (2) inadvertent error (Brown v Petranker (1991) 22 NSWLR 717 at 728 (application to recall a witness); Murray v Figge (1974) 4 ALR 612 at 614 (application to tender answers to interrogatories); Henning v Lynch [1974] 2 NSWLR 254 at 259 (application to re-open); (3) mistaken apprehension of the facts (Urban Transport Authority of NSW v NWEISER (1992) 28 NSWLR 471 (“UTA”) at 478; and (4) mistaken apprehension of the law (UTA at 478). In every case the overriding principle to be applied is whether the interests of justice are better served by allowing or rejecting the application for leave to re-open: see UTA at 478; also The Silver Fox Co Pty Ltd as Trustee for the Baker Family Trust v Lenard’s Pty Ltd (No 2) [2004] FCA 1310 (“Silver Fox”) at [22] and [25].
Applicant’s submissions
Mr Allen submits that leave be sought to put before the Court matters that have happened since the last hearing date when the judgment was reserved. It is acknowledged that what has happened does assist Mr Piscopo’s position because it does demonstrate that he has been conducting the bankruptcy administration properly. It is submitted that Mr Piscopo has been conducting the matter in circumstances of having an uncooperative bankrupt and in those circumstances Mr Piscopo should be entitled to examine Mr Hill on the examination summons and not be removed as Trustee.
In relation to the Federal Court proceedings these contain a claim pleaded that Mr Hill was the holder of the beneficial interest in the shares in a New Zealand company: Hill International Wines and Vintage Wine and Spirits. In order to propound the claim of the Federal Court, Mr Piscopo, after serving the application in New Zealand, had to show a prima facie case for establishing that beneficial interest. In the judgment BDT Holdings Pty Ltd v Piscopo (No 2) (supra) His Honour Rares J at [29] stated:
[29] I am satisfied that on the material before me, there is a sufficient prima facie case of:
• active involvement by Mr Hill in the affairs of the various corporations in respect of which Mr Piscopo claims his estate has an interest;
• Mr Hill’s beneficial ownership of the shares in Hill International Wines and Vintage Wine and Spirits.
In His Honour’s judgment, he deals with the issue of complaint that there has been non-disclosure of a second letter written by Mrs Walker before she resigned from her position of Trustee. It is submitted by Mr Allen that the claim that the examination summons be set aside failed because that was not a material non-disclosure. His Honour Rares J stated that an inference can be drawn that Mrs Walker had written that letter simply as a response to what she had been advised by NOT Lawyers. His Honour’s observations were:
[23] Then on 18 December 2006 Ms Walker wrote a letter to Ms Piscopo which she said was further to her letter of 26 April 2006 to Mr Rogers. She said that in the previous correspondence she had incorrectly stated that the beneficial owner of the shares in Hill International Wines was Mr Hill, and that she wished to confirm that that shareholding was in fact beneficially held for Ms Rose.
[24] I infer that Ms Walker wrote this letter after seeing the material from NOT Lawyers, but without any personal knowledge of the underlying transactions upon which her assertions as to the effect of assignments were based. That inference of course may well be affected by actual evidence from Ms Walker at a trial. But, for the purposes of satisfying myself as to the existence of a prima facie case on this motion, I am satisfied that the information provided by Ms Walker to Mr Rogers was based on instructions she had taken from Mr Hill. The inference is readily open on the material now before me that Mr Hill gave the instructions to her to liquidate Hill International Wines. This stands in contrast to the position where, if the purported assignment of 1 June 2002 were true, Mr Hill had no beneficial interest in those shares when he gave Ms Walker her instructions three years later.
Mr Allen submits that Mr Piscopo is of the opinion that the bankrupt has not been cooperative and that he was obliged to file an objection to the discharge of the bankruptcy in accordance of the provisions of ss.149B, 149C and 149D of the Act.
The relevant sections state:
s.149B Objection to discharge
(1) Subject to the following provisions of this Subdivision, at any time before a bankrupt is discharged from bankruptcy under section 149, the Trustee may file with the Official Receiver a written notice of objection to the discharge.
(2) The Trustee of a bankrupt's estate must file a notice of objection to the discharge if the Trustee believes:
(a) that doing so will help make the bankrupt discharge a duty that the bankrupt has not discharged; and
(b) that there is no other way for the Trustee to induce the bankrupt to discharge any duties that the bankrupt has not discharged.
s.149C Form of notice of objection
(1) A notice of objection must:
(a) set out the ground or each of the grounds of objection, being a ground or grounds set out in subsection 149D(1) but not being a ground or grounds of a previous objection to the discharge that was cancelled; and
(b) refer to the evidence or other material that, in the opinion of the Trustee, establishes that ground or each of those grounds; and
(c) state the reasons of the Trustee for objecting to the discharge on that ground or those grounds.
(1A) Paragraph (1)(c) does not apply to a ground specified in paragraph 149D(1)(ab), (d), (da), (e), (f), (g), (h), (ha), (k) or (ma).
(2) A notice of objection is not invalid merely because it does not state the ground or grounds of objection precisely as set out in subsection 149D(1) provided that the ground or grounds can reasonably be identified from the terms of the notice.
The basis of Mr Piscopo’s objection to the discharge are the following grounds of objection provided for in s.149D.
Grounds of objection
(1) The grounds of objection that may be set out in a notice of objection are as follows:
(a) …
(aa) any transfer is void against the Trustee in the bankruptcy because of section 120 or 122;
(ab) any transfer is void against the Trustee in the bankruptcy because of section 121;
On 2 June 2009, Mr Piscopo filed with the Insolvency and Trustee Services Australia a Notice of Objection to Mr Hill’s discharge setting out numerous grounds of dispute that occurred during the bankruptcy. On 30 July 2009 NOT Lawyers responded to the Inspector General of the Insolvency and Trustee Service in respect of the alleged breach of these grounds.
On 29 September 2009 the Inspector General advised NOT Lawyers that it had confirmed all the grounds of objection except one relating to s.149D(1)(c). Within that letter (Exhibit “JK1”, pp. 24-28) the Official Receiver deals with the first ground which relates to the New Zealand shares. In summary the Official Receiver held that the shares were the property of the estate and it was appropriate to extend the bankruptcy to ensure Mr Hill’s compliance with the obligation. Mr Allen submits that the contents of this document go to show that the bankruptcy as far as Mr Piscopo has been concerned has been conducted appropriately.
Respondent’s submissions
Mr Gleeson, appearing for Mr Hill, submits that the first issue to be decided of whether leave should be granted to allow proceedings to reopen. Mr Gleeson refers the Court to the decision in The Movie Network Channels Pty Ltd v Optus Vision Pty Ltd [2009] NSWSC 132 per Einstein J set out a convenient summary at [4]-[8] of the principles in respect to reopening.
[4] In every case the overriding principle to be applied is whether the interests of justice are better served by allowing or rejecting the application to re-open [Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 at [24]; Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471 at 478]. An application to re-open is subject to various degrees of scrutiny depending on the stage of the proceedings when the application is made. The test of what is 'just' at this stage of the proceedings is akin to the considerations applicable where leave to rely on fresh evidence is sought on appeal. That is, the evidence must be credible, highly probative and not previously obtainable by reasonable diligence [Jesseron Holdings Pty Ltd v Middle East Trading Consultants Pty Ltd (No 2) (1994) 122 ALR 717 at 719 per Young J; Ritchies at [51.51.50]; Australasian Meat Industry Employees' Union (WA Branch); Ex parte Ferguson (1986) 67 ALR 491 at 493–494 per Toohey J; Murray v Figge (1974) 4 ALR 612; Betts v Whittingslowe (No 1) [1944] SASR 163; Hughes v Hill [1937] SASR 285; Watson v Metropolitan (Perth) Passenger Transport Trust [1965] WAR 88].
[5] Naturally the principles which inform the exercise of the discretion to re-open are to be read against the general background of the obvious public interest in the finality of litigation: cf Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 per Mason CJ at 302–303.
[6] In Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 Kenny J identified at [24] certain recognised classes of cases in which a court may grant leave to re-open as including where:
(a) Fresh evidence becomes available [Granitgard Pty Ltd v Termicide Pest Control Pty Ltd (No 3) [2009] FCA 82 (evidence from a 'whistle blower' became available after the conclusion of the hearing)];
(b) There is inadvertent error; [Telecom Vanuatu Ltd v Optus Networks Pty Ltd (No 2) [2009] NSWSC 33];
(c) There is a mistaken apprehension of the facts [Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471; Autodesk Inc]; or
(d) There is a mistaken apprehension of the law [Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471].
[7] In Smith v NSW Bar Association (1992) 176 CLR 256 at 266 a majority of the High Court found that:
If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application." [See also: Barker v Furlong [1891] 2 Ch 172 at 184; Hughes v Hill [1937] SASR 285 at 287; Multicon Engineering Pty Ltd v Federal Airports Corporation (NSWSC, Cole J, 10 December 1993, unreported)].
[8] In ASIC v Rich (2006) 235 ALR 587 at [18] per Austin J listed the factors that he agreed were relevant to the exercise of the discretion as follows:
i. The nature of the proceeding [See also Woolworth Ltd v Olson [2004] NSWSC 871];
ii. Whether the occasion for calling the further evidence ought reasonably to have been foreseen;
iii. The consideration of fairness that the defendant is entitled to know all of the evidence he has to meet in taking forensic decisions as to cross-examination and the nature and extent of the evidence he will himself adduce on the matters in question;
iv. The extent to which the plaintiff has embarked upon calling evidence on the issue in question in its case in chief;
v The importance of the issue on which the further evidence is sought to be adduced to the pleaded issues in the case;
vi. The degree of relevance and the probative value of the further evidence sought to be adduced and its potential to involve an undue waste of time;
vii. The prejudice to the defendant in terms of delay in the completion of the proceeding and the consequential costs;
viii. The public interest in the conclusion of litigation [See also Hawthorn Glen Pty Ltd v Aconex Pty Ltd (No 1) [2007] FCA 2010 at [48]]; and
ix. What explanation is offered by the plaintiff for not having called the evidence in chief.
Mr Gleeson accepts that the material such as the judgment of Rares J together with the Notice of Objection and the response were not in existence at the time of the hearing. However Mr Gleeson submits that they are not sufficiently highly probative to warrant reopening. Referring to the extract above at paragraph [5] Einstein J refers to the background principles of public interest in the finality of the litigation.
Paragraph [8] sets out nine factors that are relevant to the exercise of discretion. Of significance in this application is factor seven which is the degree of relevance and probative value with further evidence and has potential to involve an undue waste of time. Mr Gleeson argues that although the tender document provides a large amount of material only a very small part of that material focuses on the facts relevant to this application.
Mr Gleeson submits that the application to remove Mr Piscopo is essentially based on his relationship with Messrs Brooks and James. The argument was that Mr Piscopo lacked independence because he relied on both of these individuals for financial and technical assistance to undertake the administration.
It was submitted that if new material is to be allowed then Mr Hill should be entitled through his lawyers to investigate and consider the relationship and involvement between Messrs Piscopo, Brooks and James. It was argued that this would be an undue waste of time and involved delay and costs which would not warrant the reopening. Further in respect of the public interest in finality the reopening would not satisfy the test as being insufficiently probative and in the interests of justice to warrant the reopening.
Mr Gleeson referred to the first paragraph of Mr Kekatos’ affidavit where he advances one of the reasons for the application to reopen which was the way in which Mr Piscopo has conducted the administration and relies upon the judgment by Rares J to resolve the issue of Mr Piscopo’s failure to disclose the second letter of Ms Walker. Mr Gleeson argues that the matter before His Honour Rares J was in a different Court with some parties other than the ones involved in the proceedings in this Court. Although it was held that there was a prima facie case it is not relevant or sufficiently probative for the decision before this Court as it was not put in issue that there was not an arguable basis for examination but rather the issue that there had been a material non-disclosure.
Mr Gleeson refers to the conclusion drawn by His Honour Rares J in paragraph [35] which states:
[35] Of course, these reasons reflect only the conclusions that might be available from a reading of documents tendered effectively by only one side, although BDT has opposed the grant of leave and has, itself, tendered some evidence. At a final hearing, a large number of possible, factual outcomes will be available. Nothing that I have said in these reasons should be taken as an indication of any state of mind I have other than a view that a sufficient prima facie case has been established solely on the basis of the test stated from Ho 24 ACLC 1526 and Beluga 251 ALR 620.
Mr Gleeson argues that the evidence relevant to the proceedings in this Court was presented last year based on the question of non-disclosure and the matter before His Honour Rares J added nothing to this issue.
Mr Gleeson submits that in respect to the argument that the outcome in BDT Holdings Pty Ltd v Piscopo (No 2) (supra) supports a wide inference that Mr Piscopo is conducting the bankruptcy appropriately is not sufficiently probative to any facts or issues before this Court. The arguments advanced in this Court did not concern the issue that there was no sufficient basis for the examination summons but rather that there had been a non-disclosure and the non-disclosure warranted the discharge of the summons.
The second major submission made by Mr Gleeson was that if the application to reopen is granted and his client was entitled to consider in detail the relationship between Messrs Piscopo, Brooks and James, this would result in an undue waste of costs and time. The substantial part of the affidavit of Mr Kekatos and the Exhibit “JK1” relate to the New Zealand Shares. The court was directed to relevant sections of the ITSA document to establish an inference that Mr Piscopo was conducting the bankruptcy appropriately. The ITSA decision affirms all grounds apart from one relied upon by Mr Piscopo in his objection to the discharge of the bankruptcy. However, in the absence of Mr Piscopo providing evidence before this Court does not establish a situation which is sufficiently probative to warrant the reopening.
Mr Gleeson asserts that the material in the tendered documents may prejudice Mr Hill and it would be appropriate to seek the removal of these documents from evidence pursuant to s.135 of the Evidence Act 1995 (Cth).
Consideration
The authorities set out above indicate that broadly speaking there are four recognised classes of cases in which a court may grant leave to reopen, although these classes overlap and are not exhaustive. The matter that is before this Court is not a case of inadvertent error, mistaken apprehension of the facts or a mistaken apprehension of the law. This is a matter of fresh evidence: Smith v New South Wales Bar Association (1992) 108 ALR 55 at 62 their Honours Brennan, Dawson, Toohey and Gaudron JJ stated:
It is again necessary to distinguish between the considerations which may bear on a decision to re-open and the processes involved in reconsideration once a case has been re-opened. If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application.7 But assuming that that hurdle is passed, different considerations may apply depending on whether the case is simply one in which the hearing is complete,8 or one in which reasons for judgment have been delivered.9 It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side.10 In the latter situation the appeal rules relating to fresh evidence may provide a useful guide as to the manner in which the discretion to re- open should be exercised. But those considerations bearing on re-opening are not decisive of the question whether, a matter having been re-opened by reason of error, further evidence can be called.
7 Baker v Furlong [1891] 2 Ch D 172, at 184; Hughes v Hill [1937] SASR 285, at 287.
8 As, for example, in Watson v Metropolitan (Perth) Passenger Transport Trust [1965] WAR 88 Murray v Figge (1974) 4 ALR 612.
9 As, for example, in Re Scott and Alvarez's Contract [1895] 1 Ch 596.
10 As suggested by Sheppard J in Joyce v GIO (NSW) reported in Ritchie's, op cit, vol 2, pp 8551–2. But cf Watson v Metropolitant (Perth)_Passenger Transport Trust; Murray v Figge Hughes v Hill.
Clearly the evidence that Mr Allen wishes to place before the Court was not in existence at the time of the original hearing. Both the judgment in BDT Holdings Pty Ltd v Samuel Piscopo (No 2) (supra) and the findings of the Inspector General of the Insolvency and Trustee Services Australia have occurred subsequently to the reserving of my decision on 26 March 2009.
The overriding principle to be applied is whether the interest of justice is better served by allowing or rejecting the application for leave to reopen: Silver Fox Co Pty Ltd as Trustee for the Baker Family Trust v Lenard’s Pty Ltd (No 2) [2004] FCA 1310 at [22] and [25].
I am satisfied that this material tendered by Mr Allen is new and was not previously avoided on tactical grounds. There is nothing to suggest that the decision was made for practical reasons based on a mistaken misapprehension of the law or perhaps the case is one that is more appropriately considered as one which the application has resulted from an error of Counsel. This material clearly did not exist at the time of the hearing in March 2009.
Apart from the matter of costs and further delay the respondent has not identified any prejudice to them if leave was granted with the condition that time was allowed for investigation on their part of the various roles that may or may not have existed between Messrs Piscopo Brooks and James. I agree with the submission that an appropriate time to carry out this investigation and appropriate opportunity to ventilate these issues before the Court is an essential element in the decision in determining whether a reopening should be permitted. The issue as to whether Mr Piscopo has acted appropriately and whether that action warrants his dismissal is core to the issue before this Court and should be fully ventilated with sufficient oral evidence from the appropriate parties.
When reviewing the conduct of a particular Trustee in regards to these actions the Court should have regard to not only the subjective intention of the Trustee in carrying out of the actions, but also to look at the matter objectively to determine whether a particular Trustee’s conduct constitutes a breach of trust, or, in the absence of breach, whether it nevertheless constitutes conduct that warrants a Trustee’s removal. A breach of trust that evidences the likelihood that the administration will not be properly executed in the interests of the beneficiaries will justify the removal of a Trustee. However, a Trustee will not automatically be removed for any breach of trust such as making a mistake during a bona fide attempt to carry out his duties.
In the circumstances that if the Court finds evidence that the welfare of the beneficiaries is in danger, the Court may remove a Trustee who has not actually committed a breach of trust. This is particularly important when the duty to act independently is impacted upon by circumstances which may place the Trustee in a position of conflict. In acting independently all Trustees should act cautiously and just as a reasonable prudent business person would in managing their own property and affairs. A professional Trustee must exercise a higher duty of care than a non professional Trustee.
In exercising its discretion, the Court needs all the available information concerning these activities of the Trustee in making this determination. Consequently the new information that is now available should be ventilated before this Court and subject to probative examination by the other party. In these circumstances I grant leave for the matter to be reopened to hear this new evidence.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM
Associate:
Date: 12 March 2010
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