Teo v Buckeridge - [2016] WASC 164

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: TEO -v- BUCKERIDGE [2016] WASC 164

CORAM: MASTER SANDERSON

HEARD: 12 MAY 2016

DELIVERED : 12 MAY 2016

PUBLISHED : 27 MAY 2016

FILE NO/S: CIV 1109 of 2016

BETWEEN: ANDREW BOON SAN TEO as Trustee of THE BUCKERIDGE FAMILY TESTAMENTARY TRUST, THE ANDREW BUCKERIDGE TRUST, THE SAMUEL BUCKERIDGE TRUST, THE KOH FAMILY TESTAMENTARY TRUST and THE BUCKERIDGE GRANDCHILDREN TRUST
Plaintiff
AND
LISE FRANCES BUCKERIDGE
First Defendant
RACHEL JANE BUCKERIDGE
Second Defendant
ANDREW BENJAMIN BUCKERIDGE
Third Defendant
SAMUEL CONRAD BUCKERIDGE
Fourth Defendant
JOSHUA ANTHONY BUCKERIDGE
Fifth Defendant
JULIAN THEODORE ROSSLYN AMBROSE
Sixth Defendant
SIOK PUAY KOH
Seventh Defendant
JUDITH CAROLINE LYON
Eighth Defendant
ESPERANCE JOY CATHERINE STEPHEN
Ninth Defendant
ALBA MAY STEPHEN by her guardian ad litem DR JENNY HUNT
Tenth Defendant
ANNA CELESTE BUCKERIDGE
Eleventh Defendant
ESTHER LARA BUCKERIDGE
Twelfth Defendant
HUAN CHE LIN BUCKERIDGE
Thirteenth Defendant
ALICIA BEATRICE BUCKERIDGE
Fourteenth Defendant
THOMAS AMBROSE
Fifteenth Defendant
ORSON LEONARD ROSSLYN AMBROSE
Sixteenth Defendant
SAMUAL CONRAD BUCKERIDGE as Trustee of THE SAMUEL BUCKERIDGE TRUST, THE BUCKERIDGE FAMILY TESTAMENTARY TRUST and THE BUCKERIDGE GRANDCHILDREN TRUST
Seventeenth Defendant
ANDREW BENJAMIN BUCKERIDGE as the Trustee of THE ANDREW BUCKERIDGE TRUST
Eighteenth Defendant
JULIAN AMBROSE BUCKERIDGE as Trustee of THE BUCKERIDGE GRANDCHILDREN TRUST
Nineteenth Defendant
SIOK PUAY KOH as Trustee of THE KOH FAMILY TESTAMENTARY TRUST
Twentieth Defendant

Catchwords:

Trustees - Application by joint trustees for approval of separate representation

Legislation:

Family Provision Act 1972 (WA)
Trustees Act 1962 (WA)

Result:

Directions given for separate representation

Category: A

Representation:

Counsel:

Plaintiff:     Mr J A Thomson SC
First Defendant             :     Mr D P Bristol
Second Defendant         :     Mr L A Tsaknis
Third Defendant           :     Mr T M Retallack
Fourth Defendant          :     Mr T M Retallack
Fifth Defendant            :     Mr A P Hershowitz
Sixth Defendant            :     Mr M N Solomon SC
Seventh Defendant        :     No appearance
Eighth Defendant          :     No appearance
Ninth Defendant           :     No appearance
Tenth Defendant           :     No appearance
Eleventh Defendant      :     Mr T M Retallack
Twelfth Defendant        :     Mr T M Retallack
Thirteenth Defendant     :     Mr T M Retallack
Fourteenth Defendant     :     Mr T M Retallack
Fifteenth Defendant      :     No appearance
Sixteenth Defendant      :     No appearance
Seventeenth Defendant :     Mr A M Prime
Eighteenth Defendant     :     Mr T M Retallack
Nineteenth Defendant    :     No appearance
Twentieth Defendant     :     No appearance

Solicitors:

Plaintiff:     Corrs Chambers Westgarth
First Defendant             :     Rowe Bristol Lawyers
Second Defendant         :     Kott Gunning
Third Defendant           :     Culshaw Miller
Fourth Defendant          :     Culshaw Miller
Fifth Defendant            :     Gibson Lyons
Sixth Defendant            :     Murcia Pestell Hillard
Seventh Defendant        :     No appearance
Eighth Defendant          :     No appearance
Ninth Defendant           :     No appearance
Tenth Defendant           :     No appearance
Eleventh Defendant      :     Culshaw Miller
Twelfth Defendant        :     Culshaw Miller
Thirteenth Defendant     :     Culshaw Miller
Fourteenth Defendant     :     Culshaw Miller
Fifteenth Defendant      :     No appearance
Sixteenth Defendant      :     No appearance
Seventeenth Defendant :     MDS Legal
Eighteenth Defendant     :     Culshaw Miller
Nineteenth Defendant    :     No appearance
Twentieth Defendant     :     No appearance

Case(s) referred to in judgment(s):

Gaunt v Taylor (1840) 2 Beav 346
Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66
Re Spurling's Will Trusts; Philpot & Philpot [1966] 1 All ER 745

MASTER SANDERSON: By originating summons filed 21 January 2016 the plaintiff in his capacity as Trustee of certain Trusts sought directions under s 92 of the Trustees Act 1962 (WA). After hearing submissions on behalf of the plaintiff and submissions from other parties opposed to the making of the orders I indicated I would make the directions as sought. I said I would publish reasons for my decision. These are those reasons.
The late Mr Leonard Buckeridge left an estate valued for probate purposes at around $2.5 billion. The main asset of the estate comprises shares in BGC Ltd. These shares to be placed in five separate Trusts. Four of those Trusts have two Trustees. For instance the Samuel Buckeridge Trust has as its Trustees Mr Samuel Buckeridge and the plaintiff. There are then certain specified beneficiaries. In the case of the Samuel Buckeridge Trust they are Samuel Buckeridge, Anna Buckeridge, Esther Buckeridge and any other children of Samuel Buckeridge. In the case of the Buckeridge Grandchildren Trust the Trustees are Samuel Buckeridge, Julian Ambrose and the plaintiff. The grandchildren of the deceased are then named as specified beneficiaries of the Trust.
The plaintiff is named as a Trustee of each of the five Trusts. He has no beneficial interest in any of the Trusts nor does he otherwise benefit under the terms of the will. He is the one independent party and presumably it was for that purpose he was included as a Trustee.
Proceedings have been brought under the Family Provision Act 1972 (WA) by various parties. Each of the Trusts, through the Trustees, have been named as defendants in those proceedings. Given the size of the estate there is a great deal at stake. The matter is set down for a mediation in July 2016. It would be in everyone's interests if the matter was settled. The plaintiff intends quite properly to take part in the mediation and in doing so he will have duties as a trustee in relation to the five separate Trusts.
Against that background he sought the following directions:
Preliminary orders
1.Pursuant to section 17 of the Service and Execution of Process Act 1992 (Cth) the time for entry of an appearance in this proceeding by the First Defendant, Second Defendant, Fifth Defendant, Ninth Defendant and Tenth Defendant be abridged to 10 days after service of the originating process on him or her.
Directions under the Trustees Act
Pursuant to section 92 of the Trustees Act 1962 (WA):
2.The Plaintiff is justified and acting properly and reasonably in obtaining separate legal representation in relation to Supreme Court of Western Australia proceedings CIV 1960 of 2015 and CIV 2094 of 2015, from his co-trustees of:
(a)the Buckeridge Family Testamentary Trust;
(b)the Andrew Buckeridge Trust;
(c)the Samuel Buckeridge Trust;
(d)the Koh Family Testamentary Trust; and
(e)the Buckeridge Grandchildren Trust.
3.The Plaintiff is justified and acting properly and reasonably in keeping any legal advice that he receives in relation to Supreme Court of Western Australia proceedings CIV 1960 of 2015 and CIV 2094 of 2015 confidential from his co trustees and from the beneficiaries of each of the trusts listed in paragraph 2 above.
4The Plaintiff is entitled to an indemnity, and is justified and acting properly and reasonably in reimbursing himself, in respect of the costs of the separate legal representation referred to in paragraph 1 out of the estate of each of:
(a)the Buckeridge Family Testamentary Trust;
(b)the Andrew Buckeridge Trust;
(c)the Samuel Buckeridge Trust;
(d)the Koh Family Testamentary Trust; and
(e)the Buckeridge Grandchildren Trust.
The court's power under s 92 of the Trustees Act should be exercised for the protection of the property of a trust and the protection of a trustee acting properly in accordance with the directions of the court. Subject to conformity with these overarching purposes the exercise of the power is discretionary and will depend upon the particular facts and circumstances of each case: see Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 [55] ‑ [58]. Proceedings under s 92 are not adversarial in character. They are private proceedings designed to assist trustees in the administration of their estate responsibilities. Having said that a number of parties made submissions opposing the making of the orders sought. There is nothing improper in that - they were entitled to bring all relevant matters to the attention of the court. But it is important to emphasise the hearing was not a contest in the usual sense. The aim was to flesh out all relevant matters to ensure only appropriate orders were made.
The co‑trustees of a private trust are generally required to act unanimously and defend the proceedings jointly. However there are circumstances where separate legal representation may be appropriate. Most of the authorities which deal with this issue date from the late 19th or early 20th Centuries. However, there is one English case which deals with the issue and in which Justice Ungoed‑Thomas reviewed in some detail the authorities. That is the decision of Re Spurling's Will Trusts; Philpot & Philpot [1966] 1 All ER 745. His Honour begins his review of the law by quoting from the judgment of Lord Langdale MR in Gaunt v Taylor (1840) 2 Beav 346. His Lordship said:
Where several persons are made defendants in respect of a joint fiduciary character only, or if the beneficial interest which any of them may have in the matters of the suit is in no way conflicting with their other duty, they certainly ought to answer and defend together; if they do not, and there are no special circumstances, then, according to the settled rule of the court, they will be allowed one set of costs only. On the other hand, if one has a personal interest which conflicts with his duty as trustee, or if one of several trustees can admit facts which the others believe not to be true, it then becomes impossible for them with prudence to answer together. Whether they are entitled to two sets of costs depends on the circumstances of each particular case. If a party creates unnecessary expense it is just that he should be deprived of his costs; and if several trustees unnecessarily sever their defences, it is right that one set of costs only should be allowed: the question always is, whether there was reasonable ground for them to sever (347).
His Honour then went on to consider a number of other authorities but they really do not add much to what was said in Gaunt v Taylor. Counsel for the plaintiff submitted there were three circumstances where it was appropriate for trustees to engage separate legal representation. First, when one of the trustees has a personal interest which conflicts with his or her duty as a trustee. Second, when one trustee can admit facts which the trustees believe not to be true. Third, when allegations of fraud or improper conduct are made against one trustee but not others.
It seems to me that formulation of the position accords with the authorities. That being the case this is not a situation where the plaintiff falls easily into one or other of the categories. It may perhaps be possible to squeeze the plaintiff into the first category but it must be acknowledged that it is not a comfortable fit.
Two things may be said about the plaintiff's position. First, the categories established by the cases when separate legal representation may be appropriate are not closed. Accordingly the fact the plaintiff's position does not fit neatly within any of the established categories is not fatal to his claim. Second, it is important to remember the next step in the Family Provision Act proceedings is a mediation. All of these old cases deal with separate representation of trustees at a contested hearing. During the cut and thrust of what is certain to be a vigorous mediation a person in the position of the plaintiff should have access to independent legal advice. Apart from anything else he needs to be sure that in conducting the negotiations he is not compromising his position as a trustee of the different Trusts. If he has access to that advice then it is reasonable to assume that there will be a greater prospect of success with the mediation. A nervous trustee uncertain of his own position and uncertain whether he is at risk of compromising the interests of the beneficiaries of the various trusts might well provide a stumbling block to a settlement.
Counsel for the plaintiff in his written and oral submissions went to some lengths to explain the difficulties facing the plaintiff. In my view the point was well made. But really it is only necessary to set out the fact that the plaintiff is the trustee of five Trusts to demonstrate the difficulties that he faces.
Two of the parties made submissions which were to the effect that the plaintiff should take little or no part in any mediation and if the matter was resolved at mediation he could then seek a direction from the court. In my view that argument was seriously flawed. The fact is the plaintiff is a trustee of all five Trusts. As such he owes fiduciary duties to the beneficiaries of the Trusts. He cannot simply abrogate those responsibilities and leave it to the beneficiaries to negotiate their own settlement. He would run the risk of being accused of a breach of trust by not taking an active part in the negotiations. Furthermore, empowering the plaintiff to seek separate legal advice provides him with a degree of comfort which as I have mentioned might well facilitate a settlement. It may be, were a settlement to be reached, the plaintiff would seek further directions from the court as to whether it would be appropriate for him to implement the settlement. That remains to be seen. But for the present the plaintiff is entitled in my view to be protected as far as possible.
The second order really follows on from the first. If the plaintiff is to receive legal advice he should be entitled to keep it confidential. It would defeat the purpose of the exercise if when requested to do so he was forced to disclose the advice to his fellow trustees. There is nothing in the authorities collected by Ungoed‑Thomas J which suggests the normal rules of legal professional privilege would not operate as between trustees who are separately represented. Accordingly the order allowing for confidentiality is appropriate. So too is the order as to costs. The plaintiff has no interest in the outcome of this litigation and it would be unfair and unreasonable if he was put to personal expense when taking legal advice.
For these reasons I made orders as sought by the plaintiff.