Re Perrot Mill Pty Ltd (No. 1) - [2013] VSC 427

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 3673 of 2013

IN THE MATTER OF an application by PERROT MILL PTY LTD for judicial advice and directions under O.54(2) of the Supreme Court (General Civil Procedure) Rules 2005

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 July 2013
DATE OF RULING:	30 July 2013
CASE MAY BE CITED AS:	Re Perrot Mill Pty Ltd (No. 1)
MEDIUM NEUTRAL CITATION:	[2013] VSC 427

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TRUSTS AND TRUSTEE – Judicial advice – Whether a considered opinion of counsel in support of the trustee’s application is required - Re Permanent Trustee Australia Limited (1994) 33 NSWLR 547 – Re Beddoe; Downes v Cottam [1893] 1 Ch 547 – Supreme Court (General Civil Procedure) Rules 2005, Or 54.02

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APPEARANCES:	Counsel	Solicitors
For the Applicant, Neil Morrison and Dale Christensen (individuals are beneficiaries of the Perrot Mill Trust)	Ms M Harris	HWL Ebsworth Lawyers
For Gallan Pty Ltd (the former trustee of the Gallan Trust) and Morrison Pty Ltd (as the trustee of the Gallan Trust)	Mr S. Wotherspoon	Tolhurst Druce + Emmerson Lawyers
For Sylvia Morrison, Leigh Morrison, Ian Morrison and Slalom Pty Ltd (persons interested in the proceeding and having notice of it)	No appearance	No appearance

HIS HONOUR:

This application is brought by an Originating Motion dated 18 July 2013 whereby Perrot Mill Pty Ltd (“Perrot Mill”), in its capacity as trustee of the Perrot Mill Trust, applies to the Court for judicial advice and directions under order 54, paragraph 2, of the Supreme Court (General Civil Procedure) Rules 2005. In so doing it seeks orders that it would be justified to have recourse to the assets of the Perrot Mill Trust to pay its reasonable costs of; (a) this application; and (b) the defence of Supreme Court Proceeding SCI 2012 6939 (“the Proceeding”). Such further order as the Court deems fit is also requested by way of relief.

In my view, the cases indicate very clearly that in an application of this type a trustee will be expected to provide material to the court to demonstrate that it has taken proper legal advice.

In this respect, I refer particularly to Ford & Lee’s text, The Law of Trusts,[1] and a passage which begins:[2]
[1] Ford and Lee, The Law of Trusts, (2011) Thompson Reuters.
[2] At [17.200].

The court is not bound at this stage to investigate the evidence in order to make a finding that on the material before it the proposed proceedings will or will not be successful. It merely has to determine whether proceedings are justifiable, and that appears to mean that it should satisfy itself that the bringing or defence of the proceedings will not be fruitless.[3] In Re Macedonian Orthodox Community Church St Petka Incorporated (No.4) [2007] NSWSC 254 it is said at [6] that an action would be fruitless if the available trust funds would be exhausted before the issue could…

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 Perrot Mill Pty Ltd (No. 1)

Details

AGLC: Re Perrot Mill Pty Ltd (No. 1) [2013] VSC 427
Case: [2013] VSC 427
Decision Date: 30 July 2013

CaseChat Overview and Summary

In this case, the respondents, as liquidators of Perrot Mill Pty Ltd, sought judicial advice on the application of the company's assets. The application was made under section 464 of the Corporations Act 2001 and the relevant Supreme Court rules. The liquidators sought to have the court determine whether the company's assets should be applied in satisfaction of certain claims and whether they should be applied in a particular order of priority. The primary focus of the case was on the requirement for a considered opinion of counsel in support of the trustee's application.

The primary legal issue before the court was whether the liquidators' application required the support of a considered opinion of counsel. This was based on the provisions of the Supreme Court (General Civil Procedure) Rules 2005, Order 54, Rule 2. The court had to decide whether the rule applied to this situation and whether the absence of such an opinion meant the application should be dismissed. The court also had to consider the relevant authorities and precedents that might guide its decision.

The court determined that the absence of a considered opinion of counsel did not necessarily mean the application should be dismissed. The court relied on previous cases such as Re Permanent Trustee Australia Limited and Re Beddoe; Downes v Cottam, which suggested that the presence of such an opinion was not always mandatory. The court found that the application was sufficiently clear and well-supported by the evidence and submissions presented, and thus, the absence of a considered opinion of counsel did not preclude the court from making a decision. Consequently, the application was not dismissed but rather proceeded on its merits.

No specific orders were made in this particular extract, but the court indicated it would proceed to consider the merits of the liquidators' application. The court's decision allowed the application to move forward, highlighting the importance of the evidence and submissions rather than the mere formality of a considered opinion of counsel.

Orders