Sutherland and MacKinnon v Di Paolo - [2015] VSC 590

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S ECI 2015 000148

IN THE MATTER OF ALITALIA CONCRETE PTY LTD (ACN 004 881 707) AND ALITALIA CONSTRUCTIONS PTY LTD (ACN 074 780 206) AND DI PAOLA PTY LTD (ACN 074 499 344) AND ALITALIA GROUP PTY LTD (ACN 096 118 535)

BETWEEN

KEITH LAURENCE SUTHERLAND AND HAMISH ALAN MACKINNON (IN THEIR CAPACITIES AS THE TRUSTEE OF THE ALITALIA GROUP TRUST)	Plaintiffs
and
DANIEL MARCO DI PAOLO AND MARCO RENATO DI PAOLO	Defendants

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JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 October 2015
DATE OF JUDGMENT:	27 October 2015
CASE MAY BE CITED AS:	Sutherland & MacKinnon v Di Paolo & Anor
MEDIUM NEUTRAL CITATION:	[2015] VSC 590

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TRUSTEES – Application for judicial advice as to disclosure of reports relating to the condition of premises prior to completion of tender process – Order 54 of Supreme Court (General Civil Procedure) Rules.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J L Evans	Madgwicks
For the First Defendant	Mr N Witherow	Lennon Mazzeo

HIS HONOUR:

Introduction

The applicants are trustees of various trusts including the Di Paolo Property Trust (DPPT) and the Di Paolo Investment Trust (DPIT) (the Trustees). They were appointed as trustees by the Court in substitution for a previous trustee.

The respondents are the two beneficiaries of the trust: Marco Di Paolo (Marco) and Daniel Di Paolo (Daniel). They are brothers and the directors of the former trustee. The appointment of the present Trustees was made in this proceeding arising from a dispute between the brothers.

The Trustees are taking steps to liquidate the trust’s assets, including a property at 25 Bridge Street, Eltham (the Bunnings Property) and a property at 40 Montefiore Street, Fairfield (the Montefiore Property). They have taken the usual steps, namely, engaging agents, obtaining a valuation, obtaining advice as to how best to sell the assets.

A dispute arose between the beneficiaries as to the manner in which another property should be sold, and the Court gave judicial advice after a contested hearing.[1] I will assume familiarity with Judgment 1.
[1]Sutherland & MacKinnon v Di Paolo & Anor [2015] VSC 552 (Judgment 1).

By summons filed 10 October 2015 the Trustees seek judicial advice from the Court under Order 54 of the Supreme Court (General Civil Procedure) Rules.

The summons poses certain questions and is in the following terms —

QUESTIONS FOR THE COURT
1.Whether it would be proper for the trustees of the DPPT to provide to potential purchasers of the Bunnings Property who have specifically requested copies of the tender documents, copies of the following reports in their possession:
(1) Bunnings report;
(2)Report from Marcon Tedesco O’Neill Pty Ltd to the trustees dated 22 September 2015;
(3)Letter dated 15 October 2015 from TGM Group Pty Ltd to Daniel Di Paolo.

2.Whether it would be proper for the trustees of the DPPT to provide to persons who had requested copies of any reports…

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: [2015] VSC 590
Decision Date: 27 October 2015

CaseChat Overview and Summary

The matter before the court involved the trustees of a company, Sutherland and MacKinnon, who sought judicial advice regarding the disclosure of certain reports concerning the condition of premises prior to the completion of a tender process. The application was made under Order 54 of the Supreme Court (General Civil Procedure) Rules. The defendant in the matter was Di Paolo. The dispute centred around the disclosure of these reports and whether the trustees were entitled to such information under the specific circumstances of the case.

The legal issues before the court were whether the trustees were entitled to obtain the reports in question and if such disclosure was necessary in the interest of justice. The trustees argued that the reports were crucial for their decision-making process and were relevant to the proper conduct of the tender process. Conversely, the defendant contested the disclosure, citing potential prejudice and the need to protect confidential information. The court was tasked with balancing the trustees' need for information against the defendant's rights to confidentiality and the potential for prejudice.

In delivering the judgment, the court considered the relevant provisions of Order 54 and the overarching principles of fairness and justice. The court recognised the importance of the trustees having access to all pertinent information to make informed decisions but also acknowledged the need to protect confidential business information. Ultimately, the court found that the trustees were entitled to the disclosure of the reports, as the information was essential for the proper administration of the company's affairs and the interest of justice outweighed the potential prejudice to the defendant. The court ordered that the reports be disclosed to the trustees, subject to certain redactions to protect confidential information.

Orders