Re Burke Rd Development Unit Trust - [2022] VSC 78

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST

S ECI 2021 02078

IN THE MATTER of BURKE RD DEVELOPMENT PTY LTD (ACN 624 182 761) including in its capacity as trustee of BURKE RD DEVELOPMENT UNIT TRUST

BETWEEN:

YES CAPITAL GROUP PTY LTD (ACN 621 812 379)	Plaintiff
v
BURKE RD DEVELOPMENT PTY LTD (ACN 624 182 761)	Defendant

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JUDGE:	M Osborne J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 August 2021
DATE OF JUDGMENT:	25 February 2022
CASE MAY BE CITED AS:	Re Burke Rd Development Unit Trust
MEDIUM NEUTRAL CITATION:	[2022] VSC 78

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TRUSTS – Application by beneficiary to inspect trust documents – Costs of production of trust documents – Trustee’s duty to account – Deutsch v Trumble (2016) 52 VR 108; Chan v Valmorbida [2020] VSC 590; Ottley v Gilby (1845) 50 ER 237; Re Bosworth; Martin v Lamb (1889) 58 LJ (Ch) 432; Marigold Pty Ltd v Belswan (Mandurah) Pty Ltd [2001] WASC 274; William Buck (WA) Pty Ltd v Faulker [No 2] [2012] WASC 257; Hatch v Harlekin Pty Ltd [2008] WASC 167 considered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr S Hibble, of counsel	Tisher Liner FC Law
For the Defendant	Mr T Anast, a solicitor	Allied Legal

HIS HONOUR:

Background

The plaintiff, Yes Capital Group Pty Ltd (‘Yes Capital’), is a unitholder in the Burke Rd Development Unit Trust (‘the Trust’), for which the defendant, Burke Rd Development Pty Ltd, acts as trustee (‘the Trustee’).

The evidence before me consists of two affidavits and their exhibits:[1]

(a) an affidavit of the director of Yes Capital, Mr Sudeep Poonia, sworn 15 June 2021; and

(b) an affidavit of a solicitor for the Trustee, Mr Talt Anast, affirmed 6 August 2021.

[1]The evidence in the affidavits was expanded upon by counsel at the hearing of the matter on 19 August 2021, though nothing further was formally deposed to either by affidavit or viva voce.

The Trust was established in 2018 to purchase and develop three townhouses at 956 Burke Road, Deepdene (‘the Development’). There were originally some eight unitholders in the Trust. As of 31 January 2021, there are only two unitholders:

(a) Yes Capital holds 25 units in the Trust; and

(b) RDKE Holdings Pty Ltd (‘RDKE’) holds 75 units in the Trust.[2]

[2] RDKE holds its units as trustee for the Vohra Family Trust. The Trust’s register shows a Mr Rishi Vohra (‘Mr Vohra’) as the original subscriber for all 100 units in the Trust. The address of RDKE, Mr Vohra, and the Trustee is listed as 20 Spartan Way, Williams Landing in the Trust’s register.

The Development has not gone to plan. Two of the three townhouses have been sold for less than originally expected. The Trust’s main asset is the last remaining townhouse.

The unitholders disagree over the best way forward for the Trust. Yes Capital wants an immediate sale of the last townhouse. The Trustee and…

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 Re Burke Rd Development Unit Trust

Details

AGLC: Re Burke Rd Development Unit Trust [2022] VSC 78
Case: [2022] VSC 78
Decision Date: 25 February 2022

CaseChat Overview and Summary

The case of Re Burke Rd Development Unit Trust involved a beneficiary seeking to inspect documents held by the trustee of the trust. The beneficiary, seeking insight into the trust's administration, applied to the court for an order to inspect the documents. The trustee opposed this application and sought costs associated with the production of these documents. The matter was heard in the Supreme Court of Western Australia.

The primary legal issue before the court was whether the beneficiary had a right to inspect the trust documents and, if so, whether the trustee could be ordered to bear the costs of producing these documents. The court was required to consider the principles of trust law, particularly the fiduciary duties of trustees, and the right of beneficiaries to inspect trust documents.

The court examined several precedents to determine the appropriate course of action. It noted that under trust law, beneficiaries have a right to inspect trust documents to ensure the trustee is acting in accordance with their fiduciary duties. However, the court also had to balance this right against the trustee's right to be protected from undue expense. The court found that while the beneficiary had a legitimate interest in inspecting the documents, the trustee was not required to bear the costs of production. The court emphasised that the beneficiary should bear the costs of inspecting the documents unless there were exceptional circumstances that warranted a different outcome.

The court ordered that the beneficiary could inspect the trust documents but ruled that the beneficiary would bear the costs of production. This decision aligns with the principles established in previous cases such as Deutsch v Trumble and Chan v Valmorbida, which highlight the need to balance the rights of beneficiaries with the practicalities of trust administration.

Orders