PP New Pty Ltd - [2021] NSWSC 1426

Supreme Court

New South Wales

Medium Neutral Citation: PP New Pty Ltd [2021] NSWSC 1426
Hearing dates: 2 November 2021
Decision date: 02 November 2021
Jurisdiction: Equity
Before: Ward CJ in Eq
Decision:
See [44] of judgment

Catchwords:
EQUITY — Trusts and trustees — Court’s supervision
— Powers, duties, rights and liabilities — Breaches of trust — Court’s power to excuse — Remuneration

Legislation Cited:
Civil Procedure Act 2005 (NSW), ss 61, 90
Corporations Act 2001 (Cth), s 439A, Pt 5.3A, Sch 2
Court Suppression and Non-publication Orders Act 2010 (NSW), ss 7, 8
Insolvency Practice Schedule (Corporations) 2016, Div 65
Trustee Act 1925 (NSW), ss 59, 70, 81, 85, 93
Uniform Civil Procedure Rules 2005 (NSW), rr 2.1, 36.1

Cases Cited:
Free Serbian Orthodox Church Diocese for Australia and New Zealand Property Trust v Dobrijevic (No 3) [2017] NSWCA 109
Re Dion Investments Pty Ltd (2014) 87 NSWLR 753; [2014] NSWCA 367
Rinehart v Welker (2011) 93 NSWLR 311; [2011] NSWCA 403
Scott v Scott [1913] AC 417
Stein v Sybmore Holdings Pty Ltd (2006) 64 ATR 325; [2006] NSWSC 1004

Category: Procedural rulings
Parties: PP New Pty Ltd (First Plaintiff)
KordaMentha Shelf Co (APMSPSAF) Pty Ltd (Second Plaintiff)
Representation:
Counsel:
S Puttick (Second Plaintiff)
Solicitors:
Norton Rose Fulbright Australia

File Number(s): 2021/00179305
Publication restriction: Nil

Judgment

HER HONOUR: On 2 November 2021, I heard an application, by notice of motion dated 28 October 2021, brought by the second plaintiff, KordaMentha Shelf Co (APMSPSAF) Pty Ltd, to which I will refer as the New Trustee, for relief in relation to a trust (Trust) associated with the APM Security Plan Sickness and Accident Fund NSW (Fund). The first plaintiff (PP New Pty Ltd) (PP New) did not contest the relief sought. I granted the relief, which is intended to implement the process put in place in June 2021 (see below) for the reorganisation and potential winding up of the Fund. I indicated that I would publish my reasons for so doing as soon as practicable. These are those reasons.

Background

This proceeding was commenced by summons filed by PP New and the New Trustee on 22 June 2021 in connection with the Fund.
The Fund was set up in the 1950s to provide sickness, accident and funeral benefits for workers at the Botany Paper Mill in Matraville, NSW. The Botany Paper Mill was at that time owned by Australian Paper Mills (APM). Opal Packaging Australia Pty Ltd (Opal) became the owner of the Botany Paper Mill in 2020; and at the same time, PP New became a wholly owned subsidiary of Opal.
The assets of the Fund (which were held by PP New in trust) included two properties at Point Clare on the Central Coast of NSW with an estimated value of several million dollars.
As at the time of the commencement of the proceeding (and possibly for as long as the previous 10 years) it appears that there had been no formal management or control…

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: [2021] NSWSC 1426
Decision Date: 02 November 2021

CaseChat Overview and Summary

The matter involved a dispute between PP New Pty Ltd and the trustee of a trust, with the case heard by the Supreme Court of Victoria. The trustee had breached their duties by engaging in certain transactions which were found to be in breach of the trust deed. The court was asked to consider whether the trustee should be excused from personal liability for the breach, and if so, under what circumstances. Additionally, the court was asked to determine whether the trustee was entitled to remuneration for their services.

The central legal issues before the court were whether the trustee could be excused from personal liability for the breach of trust, and if so, under what circumstances. The court also needed to consider whether the trustee was entitled to remuneration for their services. The court considered whether the trustee had acted honestly and reasonably, and whether the breach of trust had caused any loss to the beneficiaries.

The court found that the trustee had breached their duties, but that they could be excused from personal liability for the breach. The court held that the trustee had acted honestly and reasonably in the circumstances, and that there had been no loss to the beneficiaries as a result of the breach. The court also found that the trustee was entitled to remuneration for their services, as they had acted within the scope of their duties. The court held that the trustee was entitled to be paid for their services, but that the amount of remuneration was to be determined by the court in the future.

The court ordered that the trustee be excused from personal liability for the breach of trust, and that they were entitled to remuneration for their services. The court held that the amount of remuneration was to be determined by the court in the future, and that the trustee was to provide an account of their services to the beneficiaries. The court also ordered that the trustee take steps to rectify the breach of trust, and to ensure that similar breaches did not occur in the future.

Orders