Re Dobrotwir - [2011] VSC 402

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2011 01238

IN THE MATTER of an application pursuant to Order 54 of
the Rules of Court, s 48, 51(1), 51(2)(a) or (o) of the Trustee Act
and s 58(1) of the Transfer of Land Act

- and –

IN THE MATTER of an application to appoint a new trustee
and associated trust and property matters relating to
The Dobrotwir Trust by:

NICHOLAS GEORGE DOBROTWIR and VERA CHRISTINE DOBROTWIR

Plaintiffs

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JUDGE:	MUKHTAR AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	4 May, 24 June 1011
DATE OF JUDGMENT:	31 August 2011
CASE MAY BE CITED AS:	Re Dobrotwir
MEDIUM NEUTRAL CITATION:	[2011] VSC 402

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TRUSTS ― Trustee ― Foreign trustee corporation ― Trustee deregistered under foreign law ― Application by beneficiaries in Victoria to appoint new trustee ― Absence of trust instrument and any documentation ― Secondary evidence ― Intention of proposed trustee to immediately extinguish trust and distribute to beneficiaries ― Ability of beneficiaries to extinguish trust ― Rule in Saunders v Vautier ― Vesting order ― Trustee Act 1958 (Vic), No 6401, s 48, 51, 52

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr M A Strang	S Tomyn & Co

HIS HONOUR:

The plaintiffs have filed an originating motion seeking an order that the first plaintiff Nicholas George Dobrotwir be appointed as trustee of a trust they describe as “The Dobrotwir Trust” so as to replace the original trustee, Fielden Petroleum Development Inc. That company was incorporated in the Republic of Liberia. But it ceased to exist in 1994 because it was deregistered. The plaintiffs who are husband and wife say they are the sole beneficiaries of the trust, described by them and their solicitor as a fixed trust. The sole asset of the trust estate they say is an undivided half share of a property at 24 St Georges Road in Toorak. The plaintiffs are registered proprietors of the other undivided half share and they live in the home.

The application is brought under s 48 of the Trustee Act 1958 (Vic). That section empowers the Court “whenever it is expedient to appoint a new trustee…and it is found inexpedient difficult or impracticable to do so without the assistance of the Court”. The power under that section can be exercised, it says, “although there is no existing trustee” and in particular where a corporation is in liquidation or has been dissolved.

The application also seeks a vesting order under section 51 of the Trustee Act in order to pass the legal estate to Mr Dobrotwir as the new trustee. Such an order, which can also be made under the Court’s general equitable jurisdiction, has the effect of passing the legal estate as though it had been conveyed by the person in whom it was previously vested, and is made when the person who should convey is not in a position to do so. Thus, under s 51(2)(h), a vesting…

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 Dobrotwir

Details

AGLC: Re Dobrotwir [2011] VSC 402
Case: [2011] VSC 402
Decision Date: 31 August 2011

CaseChat Overview and Summary

The case of Re Dobrotwir involved the beneficiaries of a trust seeking to appoint a new trustee for a trust that had been established in Australia but was administered by a foreign trustee corporation. The foreign trustee corporation had been deregistered under its home jurisdiction's law, leaving the trust without an administrator. The beneficiaries, all of whom reside in Victoria, applied to the court to appoint a new trustee. The dispute centred on the process by which a new trustee could be appointed, particularly in the absence of a trust instrument or any other documentation that specified the terms of the trust.

The primary legal issues the court had to address were whether the beneficiaries could appoint a new trustee without the original trust instrument and whether they had the authority to extinguish the trust and distribute its assets directly to themselves under the rule in Saunders v Vautier. Additionally, the court needed to consider the applicability of the Trustee Act 1958 (Vic) provisions in the context of a trust with no existing documentation.

The court determined that the beneficiaries did have the right to appoint a new trustee in the absence of a trust instrument, as long as they acted unanimously. It was also established that the beneficiaries could extinguish the trust and distribute its assets to themselves if they chose to do so, in accordance with the rule in Saunders v Vautier. The court further held that the Trustee Act 1958 (Vic) could be applied to facilitate the vesting of the trust property in the beneficiaries or a new trustee. The court made orders appointing a new trustee and directing the distribution of the trust assets to the beneficiaries.

Orders