Robert Peter Campbell atf The Joan Macpherson Settlement Trust

[2016] NSWSC 1927

Supreme Court

New South Wales

Medium Neutral Citation:	Robert Peter Campbell atf The Joan Macpherson Settlement Trust [2016] NSWSC 1927
Hearing dates:	31 March 2016
Date of orders:	31 March 2016
Decision date:	31 March 2016
Jurisdiction:	Equity
Before:	Pembroke J
Decision:	See paragraph [15]
Catchwords:	TRUSTEE ACT – Section 63 – judicial advice – whether the trustee justified in commencing a construction suit – differences of opinion as to issues of construction – appropriate to give such advice
Cases Cited:	Alexander v Perpetual Trustee Company (2015) NSWSC 1815 Application of Perpetual Trustee Company (2003) NSWSC 1185
Category:	Principal judgment
Parties:	Robert Peter Campbell as trustee for The Joan Macpherson Settlement Trust and the Banandra Pastoral Settlement Trust
Representation:	Counsel: A J McInerney SC   Solicitors: MJF Legal Pty Ltd
File Number(s):	2015/345898

Judgment

1. This is an application by a trustee for judicial advice that it is justified in commencing a construction suit in this Court in order to resolve a difference of opinion between it and one of the beneficiaries for whom it is the trustee. The jurisdiction to give advice to a trustee is an exception to the Court’s ordinary function of deciding disputes between competing litigants.

2. An application for judicial advice is, in nature, essentially a request for private advice. It is an exceptional jurisdiction which enables directions to be given to those entrusted with the administration of property, with which they have no direct personal pecuniary interests, but in relation to which they have assumed the onerous obligation of administering it for the benefit of others.

3. In Application of Perpetual Trustee Company (2003) NSWSC 1185, Young CJ in Eq stated that the jurisdiction is concerned with a trustee ‘who is in a difficult situation because of his or her duties to hold the scales equally between the beneficiaries’. He added that:

If the trustee had sought proper advice and if the trustee had taken into account the relevant factors in making a decision, then it was appropriate for the court to protect the trustee by giving advice that the trustee would be justified in acting in the way in which it proposes.

4. He pointed out that historically such applications were usually made in chambers in private. This is usually because the application normally required the presentation of sensitive information which it would not be appropriate to disclose in circumstances where there were, for example, beneficiaries with different contentions and interests.

5. In any case where the trustee proposes to take a course of action and seeks advice in relation to it, the trustee must inform the Court of any difficulties in this case. It is usual to accompany the application with an advice by counsel and all relevant documents which may detract from the advice of counsel. It is important to observe that Section 63(4) provides, ‘Unless the Court otherwise directs, it shall not be necessary to serve notice of the application on any person.’

6. In some cases where the trustee seeks advice as to whether he should act on the basis of a particular construction of a document and the court thinks that it is appropriate to give that advice, the competing submissions of beneficiaries as to that question of construction may be received, see Alexander v Perpetual Trustee Company (2015) NSWSC 1815.

7. Often, however, when the central question is one of construction, it is better to allow the issue to be determined in a construction suit. On a judicial advice application the Court does not determine any issues, let alone a contentious construction issue. All it does is give advice to the trustee that he would be justified in acting in a certain way.

8. This case is a quintessential example of an application by a trustee which is appropriate for judicial advice. The trustee does not seek to act on the basis of the construction for which it contends. It simply seeks advice that it is justified in commencing separate proceedings to have that question resolved. Nothing could be more straightforward.

9. That is why I made clear to the legal representatives of one of the beneficiaries, who filed a notice of motion seeking to intervene, that I was troubled by the utility of its application. Of course, if there were relevant documents which the trustee did not propose to produce to the court, then it may have been appropriate to receive those documents.

10. In this case some additional documents were put forward at the insistence of the applicant and with the consent of the trustee, but they add nothing to the consideration by me of whether the trustee is justified in commencing proceedings to have the question of construction resolved. They barely support the construction for which the applicant contends but, to the extent that they do so at all, they simply reinforce the need for there to be a construction suit to enable a final determination of the issue to be made.

11. I have had the benefit on this application of a very extensive and clearly reasoned memorandum of advice from senior counsel. I have also received a statement of facts which has been carefully prepared, together with a large number of documents. They all go to demonstrate that there is a live issue between one of the beneficiaries, Andrew Macpherson, and the trustee, as to the proper construction of a deed of settlement dated December 2013.

12. There is an issue as to the meaning of the phrase ‘2010 account’; there is an issue as to the meaning of Clause 9.5 of the deed of settlement, dealing with a dispute resolution mechanism; and there is an issue as to whether the debt said to be owing by Andrew Macpherson is time barred.

13. The contentions in relation to each of those issues are all comprehensively examined in the memorandum of advice. That advice satisfies me that the contention by the trustee is reasonable and justified, having regard to the documents and the sequence of events. That is not to say that I have concluded that it is right, although it may well be. It is simply to say that the contention by the trustee is reasonable and soundly based.

14. I am not so sure that the contentions by Andrew Macpherson are as well‑grounded but, given his intransigent position and the advice which the trustee has served, there is no sensible course other than that which the trustee has proposed that is, that it should commence a construction suit to have these matters resolved once and for all.

15. For those reasons, I will give the advice sought in prayer 1A of the summons, as amended by me, and make order 2 in the summons. The question of the plaintiff’s entitlement to an indemnity out of the assets of trust property and any recourse to the assets of the trust property for the costs of the contemplated proceedings, are matters for the trial judge.

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Decision last updated: 14 February 2018