Re Fast

[2015] VSC 780

IN THE SUPREME COURT OF VICTORIA
AT MELBOURNE Not Restricted

COMMERCIAL COURT

S CI 2015 5339

JOHN CLAUDE FAST, MICHAEL SCHOENFELD AND PHILIP CAREY BROWN (AS EXECUTORS OF THE WILL AND TRUSTEES OF THE ESTATE OF IRVIN PETER ROCKMAN DECEASED)	Plaintiffs
JUDGE:	Digby J
WHERE HELD:	Melbourne
DATE OF HEARING:	23 October 2015
DATE OF RULING:	23 October 2015
CASE MAY BE CITED AS:	Fast & ors
MEDIUM NEUTRAL CITATION:	[2015] VSC 780

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PRACTICE & PROCEDURE - Application for judicial directions in respect of the executors participation in an application for leave to appeal - Supreme Court (General Civil Procedure) Rules 2005, order 54.02(1)

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APPEARANCES:	Counsel	Solicitors
For the Applicant/Plaintiff	Mr N O’Bryan SC	Kenna Teasdale Lawyers

HIS HONOUR:

1. By Motion dated 13 October 2015, the Executors of the estate of Irvin Peter Rockman, to whom probate has been granted by this Court, apply for judicial directions pursuant to Order 54.02(1) of the Supreme Court (General Civil Procedure) Rules 2005 (the Rules). The judicial directions sought are in respect of the Executors participation in an application for leave to appeal a recent judgment of this Court in relation to the said estate, and to participate in the appeal if leave is granted by the Court of Appeal of this Court.[1]

   [1][2015] VSC 337. The relevant application for leave and proposed appeal has been commenced by two beneficiaries of the estate in respect of a decision by McDonald J of this court in the case of Fast & Ors v Rockman & Ors.

1. In the application for leave to appeal Fast & Ors v Rockman & Ors, the applicants are two beneficiaries of the relevant estate seeking to overturn the decision.

1. The effect of overturning the decision would likely result in significant change to the dispositive effect of the existing will, namely those changes referred to by the trial judge, in paragraphs [27] to [29] of his Honour's judgment cited above.

1. The outcome of the appeal, if substantially successful, will affect all of the beneficiaries of the estate.  It will also affect the outcome, or may well do, of the Part 4 family provision proceedings which are to be heard by McMillan J of this Court, and which involve the same applicants, Executors and beneficiaries.

1. In my view it is appropriate and desirable that the Executors be permitted to defend the appeal including because they probably possess a great deal of relevant knowledge about the Estate and its history.

1. It is also highly desirable that the Executors be so involved, because otherwise it looks probable that there will be no effective contradictor in the appeal.

1. The background facts and circumstances of this application are summarised in an affidavit of Brendan James Kelly sworn 13 October 2015.

1. Order 54 of the Rules provides:

54.02   Relief without general administration

(1)A proceeding may be brought for any relief which could be granted in an administration proceeding and a claim need not be made for the administration or execution under the direction of the Court of the estate or trust in respect of which the relief is sought.

(2)Without limiting paragraph (1), a proceeding may be brought for—

(a)the determination of any question which could be determined in an administration proceeding, including any question—

(i)arising in the administration of an estate or in the execution of a trust;

(ii)as to the composition of any class of persons having a claim against an estate or a beneficial interest in an estate or in property subject to a trust; or

(iii)as to the rights or interests of a person claiming to be a creditor of an estate or to be entitled under the will or on the intestacy of a deceased person or to be beneficially entitled under a trust;

(b)an order directing an executor, administrator or trustee to—

(i)furnish and, if necessary, verify accounts;

(ii)pay funds of the estate or trust into court; or

(iii)do or abstain from doing any act;

(c)an order—

(i)approving any sale, purchase, compromise or other transaction by an executor, administrator or trustee; or

(ii)directing any act to be done in the administration of an estate or in the execution of a trust which the Court could order to be done if the estate or trust were being administered or executed under the direction of the Court.

1. In respect of Order 54.02 of the Rules, Mr O'Bryan SC, Counsel for the applicant, has referred me to the principles that the plaintiff submits should be applied by the Court on this type of application.  A number of the principles referred to have been identified by the High Court in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand & anor.[2]

   [2](2008) 237 CLR 66.

1. It is clear that the Court's power to give judicial advice to trustees, or in this case Executors, in proceedings brought pursuant to Rule 54.02 of the Rules is not subject to any implied limitations.

1. The jurisdictional precondition applicable to the exercise of this relevant power is that in such an application for advice and/or direction, the applicant has to be able to point to the existence of a question in respect of the administration of the trust property, or in relation to a point of interpretation which arises in respect of the trust instrument. Here the relevant question is whether the Executors should or should not defend an appeal in which they have been named as respondents. 

1. Mr O'Bryan submits, and I accept for reasons that I will indicate, that the above question is one appropriate to move the court to provide judicial advice and provides a proper basis, coupled with certain discretionary factors, for the orders sought by the applicant in this application.

1. Furthermore, there are no limitations to the factors, so long as they are relevant, which the Court may take into account in exercising the discretion that I am called upon to exercise in this application. 

1. The nature of the proceeding, including its summary character, indicates a wide and facilitative, rather than a narrow or strict, approach by the Court is appropriate under Order 54.02 of the Rules.  Such an approach promotes the intent of the Rule to enable the Court to assist in the administration of trusts by making practical and proportional orders well  short of a general administration order, in suitable cases, for example to clarify the scope of a power or duty and thus afford certain personal protection to trustees or executors where appropriate. 

1. The High Court has characterised the advice given by the Court in this regard as private and personal advice exceptional to the Court's ordinary function of deciding disputes between competing litigants.  Such orders may be made by the court for purposes including to facilitate the role of Trustees and Executors and to establish a basis for the personal protection for Trustees or Executors, including in respect of the cost ramifications of being involved in proceedings.

1. The availability of a proceeding for judicial advice is potentially important in protecting the interests of the Trust itself. Order 54.02(1) enables a Trustee to obtain such advice, including advice about prosecution or defence of litigation. In that connection the principal purpose of this application appears to be to ensure there is no doubt about whether it is appropriate for the Trustee to incur costs and expenses in initiating, prosecuting or defending litigation.

1. It is important that doubts about whether it is appropriate for a trustee or executor to incur legal costs and expenses in relation to prosecuting or defending litigation are dispelled in order that those representing the beneficiaries’ interests act appropriately, and if warranted robustly, and in order that the discharge of their duties and obligations are not at risk of being subordinated to fear of personal liability for costs.  Put another way, an order under Rule 54.02 helps ensure that confident decisions can be made in the interests of the beneficiaries.

1. Mr O'Bryan has also helpfully cited a recent decision of Bell J in this Court, in Re IPR Nominees Pty Ltd[3] in which his Honour made orders that the applicant submits would in general terms be apposite here.

   [3][2015] VSC 395.

1. Mr O'Bryan ultimately submits that an order directing the Trustee to be involved in the leave to appeal process and ultimately, if leave to appeal is granted, the whole of the appeal, is a sufficient order at this point.

1. No conditions are sought to be attached to the primary direction to the Executors to become involved in the leave application, and the appeal if leave is granted.  In my view orders of the type sought are appropriate at this juncture.

1. I grant the Executors' application for the reasons that I have outlined and I make the following orders:

1.Pursuant to r 54.02(1) of the Supreme Court (General Civil Procedure) Rules 2005 (Vic), it is determined that it is appropriate for the Plaintiffs, in their capacity as executors of the will and trustees of the estate of the late Irvin Peter Rockman, to participate in and defend Court of Appeal proceeding S APCI 2015 0098 brought by Zachary Rockman and Rachel Rockman (by their litigation guardian, Lynette Anne Rockman) against the Plaintiffs, unconditionally

2.The costs of this application be paid out of the estate of the late Irvin Peter Rockman.

3.There is liberty to apply.