Re Rosewood Research Pty Ltd (No 2) - [2014] NSWSC 1226

Supreme Court

New South Wales

Medium Neutral Citation: Re Rosewood Research Pty Ltd (No.2) [2014] NSWSC 1226
Hearing dates: 22 August 2014
Decision date: 04 September 2014
Jurisdiction: Equity Division
Before: Darke J
Decision:
The Court orders:
(1) Pursuant to s 63 of the Trustee Act1925, the Court advises the Trustees:
(a) that they are justified in defending the claims made in the main proceedings (being proceedings number 2013/152562) as set forth in Parts 3 and 4 of the pleading (being the Statement of Claim and subsequent amended versions of it) to the extent of defending allegations 1, 2, 3, 4 and 6, as described in the Supplementary Statement of Facts dated 14 July 2014, insofar as such allegations involve the interpretation and application of the constituent documents of the trusts the subject of the proceedings; and
(b) that they are justified in having recourse to the trust funds to pay their reasonable costs of so defending those allegations.
(2) That the Trustees' costs of these proceedings (except for the costs of providing information to the Attorney-General and the Objectors after 20 September 2013 in clarification of the position in relation to the payment of the $92,752.01 out of the trust funds) may be paid out of the trust funds.
(3) That the Objectors are released from the implied undertaking in respect of the documents appearing at pages 7 to 26 inclusive and 31 to 39 inclusive of annexure A to the Applicants' Further Submissions dated 21 October 2013, to the extent necessary to permit the use of such documents in proceedings number 2013/152562.
(4) That the Objectors' Notice of Motion filed on 6 December 2013 is otherwise dismissed.
(5) That the Objectors pay the Trustees' costs of the said motion, and the Directors' costs of the said motion.
(6) That the Attorney-General's Notice of Motion filed on 6 December 2013 is dismissed.
(7) That the Attorney-General pay the Trustees' costs of the said motion, and the Directors' costs of the said motion.
(8) That the Objectors' application for their costs to be paid out of the trust funds is refused.

Catchwords:
EQUITY - trusts and trustees - applications to court for advice - charitable trusts - proceedings against trustees for breach of trust - proceedings raise issues as to terms of the trusts - whether trustees justified in defending allegations of breach of trust insofar as they involve the interpretation and application of constituent documents of trusts
COSTS - costs of judicial advice proceedings - whether trustees should be ordered to bear portion of costs - incomplete information provided by trustees
Legislation Cited: Civil Procedure Act 2005 (NSW) s 98(1)
Corporations Act 2001 (Cth) s 197
Trustee Act 1925 (NSW) s 63
Cases Cited: Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66
Re Perrot Mill Pty Ltd (No.2) [2013] VSC 428
Re Rosewood Research…

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.

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Details

Case: [2014] NSWSC 1226
Decision Date: 04 September 2014

CaseChat Overview and Summary

In the matter of Rosewood Research Pty Ltd (No 2), the court was presented with a dispute concerning the interpretation and enforcement of trust documents, specifically in relation to a charitable trust. The trustees of the trust, who were also the applicants, sought the court's advice on their obligations under the trust deed and whether they were justified in defending allegations of breach of trust, which required the court to interpret and apply the constituent documents of the trust. The applicants sought an order for directions and declarations, along with a costs order against the other parties involved in the litigation.

The primary legal issues before the court were whether the trustees had acted within the scope of their powers under the trust deed and whether they were justified in defending allegations of breach of trust to the extent that such defence required the court to interpret and apply the constituent documents of the trust. The applicants argued that they were acting within their powers and were justified in defending the allegations, while the other parties contended that the trustees had acted outside their powers and were not justified in their defence.

The court found that the trustees had acted within their powers under the trust deed and were justified in defending the allegations of breach of trust, as the defence required the court to interpret and apply the constituent documents of the trust. The court held that the trustees were entitled to seek judicial advice to clarify their obligations under the trust deed and that the applicants were justified in defending the allegations of breach of trust. The court also found that the trustees had not provided complete information to the court, and as a result, ordered the trustees to bear a portion of the costs of the judicial advice proceedings.

Orders