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Re Perrot Mill Pty Ltd (No 2)

Re Perrot Mill Pty Ltd (No 2)

Case [2013] VSC 428 16 August 2013

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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; 9, 16 August 2013
DATE OF RULING:	16 August 2013
CASE MAY BE CITED AS:	Re Perrot Mill Pty Ltd (No. 2)
MEDIUM NEUTRAL CITATION:	[2013] VSC 428

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TRUSTS AND TRUSTEES – Judicial advice – Trustee’s duty to obtain expert opinion in support of its application for judicial advice – Court’s consideration of advice – Re Atkinson [1971] VR 612 - Marley v Mutual Security Merchant Bank [1991] 3 All ER 199 (PC) – Failure of counsel’s opinion to consider all immediately and potentially relevant issues – New issues identified in correspondence already known to parties – Supplementary counsel’s opinion required – Application for judicial advice granted – Costs – Trustee’s right to indemnification from trust assets – Trustee’s right to indemnification reduced – Re Beddoe; Downes v Cottam [1893] 1 Ch 547 – Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 – Supreme Court (General Civil Procedure) Rules 2005, O 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) (30 July 2013, 9 August 2013)	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 relation to applications of this type, I repeat by way of background the observations of Gillard J in Re Atkinson,[1] where his Honour said:[2]
[1][1971] VR 612.
[2]At 615.

On an originating summons seeking such direction, the court is not bound 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 is…

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 2)

Details

AGLC: Re Perrot Mill Pty Ltd (No 2) [2013] VSC 428
Case: [2013] VSC 428
Decision Date: 16 August 2013

CaseChat Overview and Summary

In the case of Re Perrot Mill Pty Ltd (No 2), the dispute involved the trustees of the Perrot Mill Trust seeking judicial advice to aid in their management of the trust. The Supreme Court was called upon to determine whether the trustees had adequately fulfilled their obligations in seeking this advice. The court was also tasked with assessing whether the trustees were entitled to indemnification from trust assets for the costs associated with obtaining the advice, and if so, the extent of such indemnification.

The central legal issues before the court were whether the trustees had properly sought expert opinion to support their application for judicial advice, and whether the advice provided was sufficiently comprehensive. The court examined the trustees' duty to consider all relevant issues when seeking expert opinion, referencing previous cases such as Re Atkinson and Marley v Mutual Security Merchant Bank. Furthermore, the court had to consider the implications of the trustees' failure to include certain issues in their initial counsel's opinion and the necessity of obtaining a supplementary opinion.

The court found that while the trustees had made a prima facie case for seeking judicial advice, their initial counsel's opinion did not encompass all immediately and potentially relevant issues. The court noted that new issues, which were already known to the parties, were identified in subsequent correspondence. As a result, the court deemed it necessary to require a supplementary counsel's opinion. The application for judicial advice was granted, but the trustees' right to indemnification was reduced in light of their failure to consider all relevant issues initially. The court referred to precedents such as Re Beddoe and Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar to determine the appropriate extent of indemnification.

The final orders of the court mandated that the trustees obtain a supplementary counsel's opinion addressing all relevant issues and that the trustees' right to indemnification from trust assets for the costs of obtaining judicial advice be reduced to reflect the shortcomings in the initial opinion. The court also directed the parties to comply with the Supreme Court (General Civil Procedure) Rules 2005, O 54.02 in managing the trust and its assets.

Orders