Re Cooper Street Property Trust

Case [2016] VSC 756


IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY & PROBATE LIST

S CI 2016 02764

IN THE MATTER of the Cooper Street Property Trust

-and-

IN THE MATTER of an application pursuant to ss 48 and 51 of the Trustee Act 1958

ROBERT SCOTT WOODS (as trustee of the bankrupt estate of Ergun Omer) Plaintiff

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JUDGE:

McMillan J

WHERE HELD:

Melbourne

DATE OF HEARING:

21 October 2016

DATE OF RULING:

9 December 2016

CASE MAY BE CITED AS:

Re Cooper Street Property Trust

MEDIUM NEUTRAL CITATION:

[2016] VSC 756

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TRUSTS — Terms of trust deed — Where trustee company deregistered and appointor bankrupt — Application by appointor’s trustee in bankruptcy for appointment of new trustee by the Court — Welfare of the beneficiaries — Effect of deregistration of trustee company — Where Commonwealth acts as trustee — Trustee Act 1958, s 48 — Corporations Act 2001 (Cth), ss 601AD and 601AE

TRUSTS — Standing — Whether the plaintiff is a ‘person beneficially interested in the property’ of the trust — Gartside v Inland Revenue Commissioners [1968] AC 553 — Australian Securities and Investments Commissioner v Carey (No 6) (2006) 153 FCR 509 — Public Trustee v Smith [2008] NSWSC 397 — Trustee Act 1958, s 64

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APPEARANCES:

Counsel Solicitors
For the Plaintiff Mr G W Moffatt Mills Oakley

HER HONOUR:

Introduction

  1. The plaintiff was appointed trustee in bankruptcy of the estate of Mr Ergun Omer (‘Mr Omer’) pursuant to a sequestration order of the Federal Court of Australia on 14 October 2014.

  1. In this proceeding, the plaintiff seeks an order appointing Mr Michael Carrafa as a trustee of the Cooper Street Property Trust (‘the Cooper Street trust’), pursuant to s 48(1) of the Trustee Act 1958 (‘the Act’), and a vesting order under s 51 of the Act.

  1. The plaintiff relies on three affidavits in support of his application: two by the plaintiff sworn 14 July 2016 and 20 October 2016 respectively and one by Mr Carrafa sworn 5 July 2016.  Mr Carrafa deposes that he is a registered liquidator, official liquidator of the Supreme Court and Federal Court, and a registered trustee in bankruptcy, with over 20 years’ experience in corporate insolvency and bankruptcy.  He provided the Court with his consent to act as trustee, a schedule of his hourly rates and a declaration of independence.

Background

  1. The plaintiff has investigated the assets or interests of Mr Omer and has identified an undated trust deed (‘the trust deed’) settling the Cooper Street trust.  The trustee of the Cooper Street trust named in the schedule to the trust deed is Omer Property Group Pty Ltd (‘OPG’) and the appointor is stated as:

Ergun Omer and such other person as may be nominated in writing or by will but failing such appointment then on his death or her death the personal representative of such person.

  1. OPG was incorporated on 18 October 2006.  At that time Mr Omer was the…

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Re Cooper Street Property Trust [2016] VSC 756
Case
[2016] VSC 756
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CaseChat Overview and Summary

In the matter of the Cooper Street Property Trust, the court was faced with a dispute regarding the appointment of a new trustee after the original trustee company had been deregistered. The appointor, who was subsequently declared bankrupt, applied to the Court for the appointment of a new trustee, citing the welfare of the beneficiaries as a key consideration. The court was required to determine whether the applicant had the necessary standing to make the application, and if so, whether the court should appoint a new trustee in light of the trustee company's deregistration.

The primary legal issue was whether the applicant, as the trustee in bankruptcy of the appointor, was a 'person beneficially interested in the property' of the trust, thus granting them standing to apply for a new trustee's appointment. The court considered relevant precedents, including Gartside v Inland Revenue Commissioners, Australian Securities and Investments Commissioner v Carey, and Public Trustee v Smith, to ascertain the requisite interest in the trust property. Additionally, the court examined the provisions of the Trustee Act 1958 and the Corporations Act 2001 to understand the implications of the trustee company's deregistration on the trust and the potential appointment of the Commonwealth as trustee.

The court found that the applicant did indeed possess the necessary standing to apply for the appointment of a new trustee. In reaching this decision, the court emphasised the importance of the welfare of the beneficiaries and the need for continuity in the administration of the trust. The court also noted that, under the Trustee Act 1958, it had the authority to appoint a new trustee, including the Commonwealth if appropriate. Consequently, the court granted the application and appointed a new trustee to manage the trust in the best interests of the beneficiaries.

The final orders of the court included the appointment of a new trustee for the Cooper Street Property Trust and the direction that the new trustee take all necessary steps to ensure the ongoing management and welfare of the trust property. The court also noted that the Commonwealth could be appointed as trustee if it was in the best interests of the beneficiaries, reflecting the broad discretion available under the Trustee Act 1958.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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