Reda v Reda

[2025] NSWSC 847

Supreme Court

New South Wales

Medium Neutral Citation:

Reda v Reda [2025] NSWSC 847

Hearing dates:

29 July 2025

Date of orders:

29 July 2025

Decision date:

29 July 2025

Jurisdiction:

Equity - Real Property List

Before:

Pike J

Decision:

See [39]

Catchwords:

EQUITY – Trusts and trustees – Court’s supervision of – Appointment and removal of trustees – where three adjoining properties – where trustees appointed in respect of one property – whether to remove trustees in respect of the first property – whether to appoint trustees in respect of the other two properties

Legislation Cited:

Conveyancing Act1919 (NSW), s 66G

Trustee Act1925 (NSW), ss 70 and 71

Cases Cited:

Harb v Harb (2010) 17 BPR 33,295; [2010] NSWSC 1251

Miller v Cameron (1936) 54 CLR 572; [1936] HCA 13

Texts Cited:

Nil

Category:

Principal judgment

Parties:

2024/00232784
David Reda (Plaintiff)
Jawad Reda (Defendant)

2025/00188363
Jawad Reda (Plaintiff)
David Reda (First Defendant)
Joshua-Lee Robb (Second Defendant)
Jason Porter (Third Defendant)

2025/00208385
David Reda (Plaintiff)
Jawad Reda (Defendant)

Representation:

Counsel:
MW Young SC / Nicholas Simone (David Reda)
Damien Allen (Jawad Reda)
Michelle Painter SC (Joshua-Lee Robb and Jason Porter)

Solicitors:
Apex Law (David Reda)
Edmond Khoury Solicitors (Jawad Reda)
McInnes Wilson Lawyers (Joshua-Lee Robb and Jason Porter)

File Number(s):

2024/00232784; 2025/00188363; 2025/00208385

Publication restriction:

Nil

JUDGMENT (EX TEMPORE REVISED FROM TRANSCRIPT)

1. These sets of proceedings concern three properties - 10, 12 and 12A XXXX Street, Arncliffe.

2. They are essentially a dispute between two brothers - David Reda and Jawad Reda. Without intending any disrespect or informality, I will refer to each by their given names.

3. David and Jawad are registered as tenants in common in equal shares of number 10. At all material times David has resided in number 10 and, at least at the present time, lives there with his 25-year-old son.

4. On 6 December 2024, Peden J made orders pursuant to s 66G of the Conveyancing Act1919 (NSW) (CA) appointing Joshua-Lee Robb and Jason Porter (Trustees) as trustees for the sale of number 10. The orders made by Peden J on 6 December 2024 also included, relevantly:

4. Order that the Plaintiff/Cross-Defendant, being the occupant of the Land, deliver up vacant possession of the Land within 120 days of the making of this order.

...

8A. Trustee to determine when plaintiff is to vacate the Land and the Plaintiff to vacate when required.

…

13. Liberty to the parties, and to the Trustees, to apply on 3 days’ notice.

5. On 3 February 2025, order 4 as made by Peden J on 6 December 2024 was set aside.

6. Although appointed on 6 December 2024, the Trustees were not made aware of their appointment until 21 February 2025 and were not provided with a copy of the orders appointing them until 3 March 2025.

7. On 5 May 2025, McGrath J made orders by consent in proceedings commenced by David in which he contended that Jawad held 50% of his 100% ownership interest in both 12 and 12A on behalf of David. Consent declarations were relevantly made on 5 May 2025 that Jawad held on trust for David a 50% ownership interest in each of 12 and 12A XXXX Street.

8. Jawad is presently incarcerated and is likely to be so for a considerable period of time. It is not necessary to go into the details behind this. There has also been a complete breakdown in the relationship between David and Jawad and their immediate families. Again, it is not necessary to descend into the detail as to why this is so.

9. It is also not necessary to detail the various proceedings that have been commenced and motions filed by the parties that are returnable for hearing today. There are many.

10. In circumstances where Jawad is incarcerated and therefore cannot perform his role as trustee in respect of 12 and 12A XXXX Street, he seeks the appointment of replacement trustees. He also seeks an order that the Trustees appointed to sell number 10 be removed and replaced with his proposed appointees in relation to 12 and 12A.

11. David, in turn, seeks the appointment of the Trustees as trustees to sell 12 and 12A in addition to their appointment over number 10.

12. These competing positions of the parties are against the background, which appeared to be common ground today, that the same trustees should be appointed over all three properties. It also appeared to be common ground today that there is at least a prospect that the three properties may fetch more if they are sold together to one purchaser as opposed to separately, and that it should be up to whoever is appointed over the three properties to decide how the properties should be sold.

13. At the commencement of the hearing today, Mr D Allen - who appears as counsel for Jawad - candidly and quite properly conceded that the key issue is whether the Trustees should be removed as trustees of number 10, it being accepted that if they are not to be removed, it makes sense that they should also be appointed over number 12 and 12A. Conversely, if they are to be removed, they should not be appointed over number 12 and 12A, and Jawad’s appointees should be appointed over all three.

14. Mr MW Young SC and Mr N Simone appeared today for David and Ms M Painter SC appeared for the Trustees. Ms Painter quite properly did not take a position on whether the Trustees should be removed but rather confined her submissions to responding to the criticisms made by Jawad in relation to the Trustees’ conduct.

15. Each party read affidavit evidence. Ms Anaya Ali Saab, David and the Trustees were cross-examined. Prior to the hearing each party provided written submissions and each party addressed me orally after the conclusion of evidence.

16. I turn now to consider whether the Trustees should be removed from their appointment over number 10.

17. It is not in dispute that the Court has both the inherent jurisdiction and the power under s 70 of the Trustee Act1925 (NSW) (Trustee Act) to remove or replace the Trustees.

18. No general rule can be laid down for the removal of trustees from their office. In Miller v Cameron (1936) 54 CLR 572; [1936] HCA 13 at 580-581, Dixon J (with whom Evatt and McTiernan JJ agreed) stated:

The jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee. In deciding to remove a trustee the Court forms a judgment based upon considerations, possibly large in number and varied in character, which combine to show that the welfare of the beneficiaries is opposed to his continued occupation of the office. Such a judgment must be largely discretionary. A trustee is not to be removed unless circumstances exist which afford ground upon which the jurisdiction may be exercised. But in a case where enough appears to authorize the Court to act, the delicate question whether it should act and proceed to remove the trustee is one upon which the decision of a primary Judge is entitled to especial weight.

19. Two primary grounds were advanced by Mr Allen. I deal with each in turn.

20. First, it was contended that the Trustees had not performed what they were appointed to do - namely sell number 10 - because they had unilaterally decided not to do so.

21. Reference was made in this regard to what Brereton J said in Harb v Harb (2010) 17 BPR 33,295; [2010] NSWSC 1251 at [18]-[20], as follows:

[18]   Then, in Hughes v Egger (No 2) [2005] NSWSC 323, the Court said (at [15]):

At least from the time the order appointing trustees for sale under s 66G of the Conveyancing Act is registered, the land is vested in the trustees, and the rights of the parties are converted into a right to compel due performance of the trust and to share in the proceeds of sale in accordance with their beneficial interests.

[19] These cases demonstrate that, after trustees have been appointed pursuant to s 66G for sale of the property, the rights of the beneficial owners of the property become a right to have the trust for sale performed and to share in the proceeds of sale in accordance with their beneficial interests. They no longer have a beneficial interest in the real property itself.

[20] The trust upon which a s 66G trustee holds land is one to sell the land. The trustee is bound to give effect to that trust, unless removed by the Court. It may well be that, had the Harbs sought termination of the appointment of the trustee prior to his effecting a sale, the Court would have acceded to their application. However, a sale having been effected, the interests of a third party, namely the purchaser, Borvac, have now intervened. Borvac has itself incurred liabilities and expended funds – including on stamp duty in connection with its proposed purchase. As a result of the contract, Borvac is now the beneficial owner, and is a bona fide purchaser for value of the property. No basis upon which the trustee, as vendor, would be entitled to rescind or terminate the contract without Borvac’s consent – which has been obtained – is apparent.

22. Rather than sell number 10, it was contended that in about May 2025 the Trustees decided not to sell number 10 at the request of David’s lawyers, but rather decided not to proceed with the sale of number 10 pending the outcome of the applications of the parties in relation to number 12 and 12A. It was contended that if the Trustees did not propose to continue with the sale of number 10 the appropriate course was for the Trustees to approach the Court pursuant to the liberty to apply granted by Peden J on 6 December 2024.

23. I do not accept the criticisms levelled at the Trustees in this regard. The focus is on the conduct of the Trustees in May 2025. No criticism is now made of the conduct of the Trustees after they learned of their appointment in late February 2025 and were provided with a copy of the orders made in early March 2025.

24. It is to be remembered that on 5 May 2025, orders were made by McGrath J declaring that Jawad held 50% of numbers 12 and 12A on trust for David.

25. Shortly thereafter, David’s solicitors appear to have raised with the Trustees whether they would accept an appointment over 12 and 12A. One of the Trustees, Mr Joshua-Lee Robb gave evidence of seeking advice at or about this time as to whether it was likely that the three properties would fetch more if sold together. He was told by the agent that they would. It was at or about this time that Jawad filed his application in relation to the appointment of replacement trustees over 12 and 12A.

26. On 20 May 2025, Mr Robb sent the following email to Jawad’s solicitor:

I was contacted last week advising that there were discussions about the sale of 12 and 12A XXXX Street in conjunction with 10 XXXX Street, given potential price increase as a result of development opportunities that would arise from the sale of all 3 properties. I advised that I would hold off until the end of this week for confirmation that this would be the case, before executing the agency agreement and incurring unnecessary costs to be borne by both parties.

My understanding is that you lodged a notice of motion with the Court on Friday in relation to the sale of 12 and 12A XXXX Street.

If my understanding is not correct, please let me know.

27. On 26 May 2025, Jawad’s solicitor responded to the following effect:

We refer to your recent email to sell the property in one line our client does not wish to do that. Our client is concern you are appointed trustee in December 2024 and by the end of May 2025 you have done no more than obtain a valuation for the property. we anticipate instruction from our client to have you remove as trustee. As you are aware our client is seeking judicial advice in relation to the sale of the other two properties and we will forthwith seek to have that application expediated and to have you remove as trustee for the sale of No 10.

28. It was in these circumstances - and in particular the prospect of a higher return being received from the sale of all three properties together - that the Trustees, in the exercise of their discretion, decided not to press on blindingly with the sale of number 10 but rather to await the outcome of the issue of who was to be appointed to sell number 12 and 12A.

29. The Trustees are not to be criticised for adopting this course. There is a very real chance that they would have been criticised if they did not. The position that the three properties may fetch more if sold together is also now supported by expert valuation evidence. They also ought not be criticised for not filing their own application with the Court. This would have further crowded an already crowded playing field, increasing the costs and to no avail.

30. I thus reject the first criticism. The Trustees have not decided not to carry out their duty but simply to do it in a particular way.

31. Second, it was contended that the Trustees should have forced the issue with David as to whether he is to pay rent for continuing to reside in number 10. Mr Robb gave evidence that he did not do this but rather he decided to proceed in accordance with his usual practice of adjusting any occupation rent (if sought) at the time of the distribution of sale proceeds.

32. Again, I reject any criticism of the Trustees’ conduct in this regard. I do not regard their conduct as providing any basis for their removal. It is well within the bounds of the discretion afforded to the Trustees in carrying out their duty.

33. I thus reject the second criticism.

34. For completeness, I also reject any suggestion that the Trustees have been acting or are likely in the future to act, other than in an impartial way. The evidence identifies one instance of when David complained about the agent proposed to be appointed. That complaint was investigated and dealt with quite properly by the Trustees.

35. For these reasons I am not satisfied that there is any basis for the removal of the Trustees from their appointment as trustees over number 10. In the circumstances, it follows that they should be appointed over numbers 12 and 12A. I propose to so order. I do so under the power contained in the Trustee Act. I do not need to venture into the interesting question of whether David is a co-owner entitled to relief under s 66G of the CA.

36. [Counsel addressed on costs]

37. I am now dealing with the question of who should pay the costs of today.

38. As set out in the substantive reasons that I have just given, the essence of the dispute that has been agitated today boils down to whether the existing Trustees in relation to number 10 should be removed. On that issue Jawad has failed and as a result the Trustees over number 10 are to be appointed over number 12 and 12A. In these circumstances, it seems to me that the appropriate costs order is that Jawad pays the costs of all parties adverse to Jawad today, including the preparation for the hearing today. I propose to so order.

39. The orders of the Court are:

1. Order that pursuant to s 70 of the Trustee Act 1925 (NSW) that Joshua-Lee Robb and Jason Porter of SV Partners (Trustees) be appointed as new trustees of the two properties situated at 12 XXXX Street, Arncliffe NSW 2205 (more particularly described as Lot X in Deposited Plan X) and 12A XXXX Street, Arncliffe NSW 2205 (more particularly described as Lot X in Deposited Plan X) (the Properties) in substitution for the First Defendant.

2. Order pursuant to 54.3(3)(d) of the Uniform Civil Procedure Rules that the Trustees are to act in the administration of the trust upon which the Properties are held in the same fashion as trustees holding property on the statutory trust for sale referred to in s 66G of the Conveyancing Act 1919.

3. Order that pursuant to s 71 of the Trustee Act 1925 (NSW) the Properties are vested in the Trustees subject to encumbrances, if any, affecting the entirety of the Properties but free from encumbrances affecting any undivided share or shares therein.

4. Order that the Trustees are to cause the Properties to be sold by private treaty or by auction, including, at the Trustees’ discretion, collectively and together with the adjoining property situated at 10 XXXX Street, Arncliffe NSW 2205 (more particularly described as Lot X in Deposited Plan X).

5. Order that the Trustees may at their discretion appoint a solicitor or conveyancer of their choosing to assist with the conveyance of the Properties and prepare a contract for sale of land.

6. Order that the Trustees may at their discretion appoint a real estate agent for the sale of the Properties.

7. Order that the Trustees are authorised to charge at rates disclosed within their affidavits.

8. Order that either of the parties is entitled to purchase the Properties, whether individually or collectively and together with the adjoining property situated at 10 XXXX Street, Arncliffe, whether at auction or otherwise.

9. Order that the Trustees may retain, as required, independent representation in their capacity as trustee for the sale of the Properties as may arise and that such costs to be paid out of the proceeds of sale.

10. Order that the Trustees are to pay out of the proceeds of sale:

1. the Trustees’ professional fees and disbursements;

2. Council rates, water rates, Vendor’s duty, Land Tax and any other statutory duties or charges, if any;

3. the real estate agent’s commission and charges;

4. legal fees on the conveyance;

5. any other fees, charges, expenses or disbursements of or incidental to the sale;

6. half of the balance of the net proceeds of sale to each party;

7. from the plaintiff’s half-share of the net proceeds of sale, no more than a total sum of $25,000.00 in respect of its shared obligation with the defendant to payout the mortgage to Westpac Banking Corporation registered on the title pertaining to 12A XXXX Street, Arncliffe, with dealing number “X”; and

8. from the plaintiff’s half-share of the net proceeds of sale, the sum of $23,000.00 plus interest at Court rates from 5 May 2025 until the date on which settlement occurs, to the defendant.

11. Grant liberty to the parties, and to the Trustees, to apply on 3 days’ notice, setting out the relief sought.

12. Order the amended summons in proceedings 2025/188363 filed by Jawad Reda on 10 July 2025 be dismissed.

13. Order the notice of motion filed by Jawad Reda 2025/188363 dated 2 July 2025, and by order made on 4 July 2025 deemed to have been filed in 2024/232784, be dismissed.

14. Order pursuant to s 8 of the Court Suppression and Non-publication Orders Act 2010 that until 10 years from today’s date, on the ground that the order is necessary in the public interest, that the material set out below be suppressed and not published:

1. affidavit of David Reda sworn 23 July 2025; and

2. David Reda’s outline of submissions dated 24 July 2025.

15. Order Jawad Reda to pay David Reda’s costs and the Trustees’ costs of the proceedings listed today and their preparation.

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Decision last updated: 30 July 2025