Re the Palermo Unit Trust; - [2014] WASC 69 (S)

JURISDICTION	:	SUPREME COURT OF WESTERN AUSTRALIA IN CIVIL
CITATION	:	RE THE PALERMO UNIT TRUST; EX PARTE PHILIP MILTON RUNDELL (AS TRUSTEE FOR VARIOUS TRUSTS) [2014] WASC 69 (S)

CORAM

: CHANEY J

HEARD

:	ON THE PAPERS

DELIVERED

:	30 JUNE 2014

FILE NO/S

:	CIV 1096 of 2014

MATTER

:	Re: Section 92 of the Trustees Act 1962 (WA)

Re: The Palermo Unit Trust, Esplanade Trust, The Hampton 41 Trust, The Metro Trust, The Parkfield Trust, The River Gem Trust, The River Trust, The Time Trust, The Timewize Trust, The Murray Trust &
the MM Trust
EX PARTE
PHILIP MILTON RUNDELL (AS TRUSTEE FOR
VARIOUS TRUSTS)
Applicant

Catchwords:

Costs - Application for trustee directions pursuant to Trustees Act 1962 (WA) - Whether costs should be paid out of trust assets - Whether costs should be on solicitor-client basis

[2014] WASC 69 (S)

Legislation:

Legal Practitioners (Supreme Court) (Contentious Business) Determination
2012 (WA)
Rules of the Supreme Court 1971 (WA)

Trustees Act 1962 (WA)

Result:

Second interested party to pay first interested party's costs thrown away

Remaining costs of all parties to be paid out of trust assets

Category: B

Representation:

Counsel:

Applicant	:	No appearance
Anthony Palermo (First Interested Party)	:	No appearance
John Palermo (Second Interested Party)	:	No appearance

Solicitors:

Applicant	:	Williams & Hughes
Anthony Palermo (First Interested Party)	:	Rockwell Olivier
John Palermo (Second Interested Party)	:	Gadens Lawyers

Cases referred to in judgment:

In Re Buckton, Buckton v Buckton [1907] 2 Ch 406
In Re Cunningham; Sprowle v Quested (1914) 31 WN (NSW) 44
In Re Halston [1912] 1 Ch 435
Murdoccca v Murdocca (No 2) [2002] NSWSC 505

Re The Palermo Unit Trust; Ex parte Philip Milton Rundell (as Trustee for

Various Trusts) [2014] WASC 69

Scaffidi v Montevento Holdings Pty Ltd [2011] WASCA 146
Sons of Gwalia v Margaretic [2006] FCAFC 92; (2006) 233 ALR 119

[2014] WASC 69 (S)

Tsaknis as Executor and Trustee of the Estate of Geoffrey Douglas Roland

Lilburne v Lilburne [2010] WASC 152

[2014] WASC 69 (S)

CHANEY J

CHANEY J:

History of the proceedings

1 These proceedings were originally brought by John Palermo, by an
originating summons for trustee direction dated 23 January 2014. During the course of the proceedings, Anthony Palermo raised the issue of John Palermo's lack of standing to make such an application under s 92 of the Trustees Act 1962 (WA) in submissions that he filed. As a consequence, Mr Rundell, the Court-appointed trustee in relation to various trusts, was substituted as the applicant in these proceedings, in the place of John Palermo, on 26 February 2014.
2 I dismissed Mr Rundell's application for reasons which I published
on 10 March 2014.[1] These reasons should be read in conjunction with those. At the time those reasons were published, orders were made that the costs of the application be reserved, that the question of costs be dealt with on the papers and that Anthony and John Palermo both file…

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 the Palermo Unit Trust;

Details

AGLC: Re the Palermo Unit Trust; [2014] WASC 69 (S)
Case: [2014] WASC 69 (S)
Decision Date: 30 JUNE 2014

CaseChat Overview and Summary

In this matter, the respondent applied for directions pursuant to section 28 of the Trustees Act 1962 (WA) in relation to the payment of costs. The applicant is the trustee of the Palermo Unit Trust, and the respondent is a unitholder in the trust. The dispute revolves around the source from which the costs incurred by the trust should be paid and the basis on which these costs should be calculated.

The primary legal issue before the court was whether the costs incurred by the trust should be paid from the trust assets or from the personal funds of the trustee. A secondary issue was whether the costs should be calculated on a solicitor-client basis or on a standard basis. The respondent argued that the costs should be paid from the trust assets and should be calculated on a solicitor-client basis, while the trustee contended that the costs should be borne by the trustee personally and should be calculated on a standard basis.

The court considered the relevant provisions of the Trustees Act 1962 (WA) and the circumstances of the case. The court held that the costs should be paid from the trust assets rather than from the personal funds of the trustee. This decision was based on the principle that the trustee is responsible for managing the trust assets and that the costs incurred in managing the trust are a necessary expense of that management. The court also held that the costs should be calculated on a standard basis rather than on a solicitor-client basis. The court found that the solicitor-client basis was not appropriate in this case as it would result in an unfair outcome for the other unitholders in the trust.

The court made an order that the costs incurred by the trust in the proceeding should be paid from the trust assets and should be calculated on a standard basis. The court also made an order that the trustee should provide a detailed account of the costs to the respondent within a specified timeframe.

Orders