Tomasevic v Jovetic

[2012] VSC 405

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 06404 of 2010

MIRKO TOMASEVIC & ANOR	Plaintiffs
v
DUSAN RAPHAEL JOVETIC & ORS	Defendants

- and -  No. 01819 of 2011

FREE SERBIAN ORTHODOX CHURCH-SCHOOL CONGREGATION OF ST PETER & PAUL WODONGA INC & ORS	Plaintiffs
v
MIRKO TOMASEVIC & ORS	Defendants

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JUDGE:	Sifris J
WHERE HELD:	Melbourne
DATE OF HEARING:	Written submissions filed by the parties
DATE OF JUDGMENT:	12 September 2012
CASE MAY BE CITED AS:	Tomasevic & Anor v Jovetic & Ors
MEDIUM NEUTRAL CITATION:	[2012] VSC 405

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TRUST – CHARITABLE TRUST – Removal of trustee – Removal not punitive – Inherent supervisory jurisdiction of the Supreme Court

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M.N.C. Harvey	Derek Norquay
For the Defendant	Mr I.W. Upjohn	Nunan & Bloom
For the Attorney-General	Mr R.J. McInnes	Victorian Government Solicitors Office

HIS HONOUR:

Introduction

1. On 4 June 2012, I published my reasons[1] for holding that the purported merger between the Free Serbian Orthodox Church – School Congregation St Peter and Paul Wodonga (“the First Church”) and the Serbian Orthodox Church (“the Second Church”) was invalid and ineffective.  I held further that the Free Serbian Orthodox Church - School Congregation of St Peter and St Paul Wodonga Inc (“the Incorporated Association”) was not the successor to the First Church.[2]

   [1]Tomasevic & Anor v Jovetic & Ors [2012] VSC 223.

   [2]Definitions and terms used in this judgment are the same as those used in the primary decision.  This judgment should be read together with the primary decision.

1. I held further that the Trustees of the property of the First Church (“the First Church Trust”) are and remain the following:

•Mirko Tomasevic (“Mr Tomasevic”);

•Petar Milutinovic (“Mr Milutinovic”);

•Dusan Jovetic (“Mr Jovetic”); and

•Slobodan Juzbasic (“Mr Juzbasic”).

1. Mr Tomasevic and Mr Milutinovic were plaintiffs in the main proceeding (2010/06404) and Mr Jovetic and Mr Juzbasic were defendants.  In the related proceeding brought by the Incorporated Association (2011/01819), Mr Jovetic and Mr Juzbasic (and Predag Milovanovic) were plaintiffs and Mr Tomasevic and Mr Milutinovic (and the Attorney-General for Victoria) were defendants.  The matters were heard together. 

1. Given the consequences of the various findings made by the Court I did not make any declarations or orders following the publication of my reasons other than to refer the proceedings to mediation.  The mediation was unsuccessful.  The remaining matter – in addition to the appropriate form of order, the removal of caveats lodged by Mr Juzbasic, and costs – concerns the application by Mr Tomasevic and Mr Milutinovic to remove Mr Jovetic and Mr Juzbasic as Trustees of the property of the First Church.  No cross application is made by Mr Jovetic and Mr Juzbasic.  I invited the parties to make written submissions on this aspect of the case and dispensed with an oral hearing.  The submissions sufficiently set out the respective position of the parties. 

Removal of Trustees

1. There is no dispute that the Court has the power to appoint new trustees[3] or remove one or more or all of the Trustees.  The power is both statutory and inherent[4] and extends to charitable trusts.[5]

   [3]Trustees Act 1958 (Vic), s 48.

   [4]Miller v Cameron (1936) 54 CLR 572, 580.

   [5]Metropolitan Peta v Mitreski [2005] NSWSC 330, [12].

1. In exercising its very considerable powers the Court must have regard to a number of matters including the interests of the beneficiaries, the security and integrity of the trust assets and the way in which the charitable trust is being administered in terms of efficiency and faithfulness to its purposes.[6]

   [6]Miller v Cameron (1936) 54 CLR 572, 580.

1. It must be stressed that removal of a trustee is not a punishment but rather a necessary protective step so far as the trust and its assets are concerned.[7]

   [7]Deutsch v Deutsch [2011] VSC 365, [13].

1. It was submitted that Mr Jovetic should be removed as trustee of the First Church Trust for the following reasons:

(a)His purported hostility to the First Church Trust – essentially his knowledge of the establishment of the Incorporated Association, asserting (incorrectly, as it was found) that it was the successor to the First Church, intending to transfer First Church property to the Incorporate Association, and failing to provide certain documents to Mr Tomasevic and Mr Milutinovic; and

(b)His purported lack of impartiality and objectivity in relation to the relationship between the Incorporated Association and the First Church and failing to approach the Court for advice on the issue.

1. It was submitted that Mr Juzbasic should be removed as trustee of the First Church Trust for the following reasons:

(a)His purported hostility to the First Church Trust – essentially by establishing the Incorporated Association, asserting (incorrectly, as it was found) that it was the successor to the First Church and his involvement in the attempt to transfer property to the association;

(b)He is impecunious, has unpaid creditors and is unable to manage his financial affairs; and

(c)His freezing of the bank account of the First Church, locking out of its members and an alleged misuse of a church building. 

1. Perhaps similar allegations can be made against Mr Tomasevic and Mr Milutinovic. However, what is clear is that the parties should not all remain as Trustees of the First Church Trust. The litigation between them was acrimonious and there is no evidence or reason to believe that there has been a sufficient healing so that they will be able to continue managing the trust efficiently and effectively. The intervention of the Court is required. The Court must ensure that decisions of the Trustees of the First Church Trust are made, as and when required, properly, efficiently, in accordance with the purposes of the trust and in a manner that complies with the Constitution and Declarations of Trust applicable to their important position.

1. On behalf of Mr Jovetic and Mr Juzbasic it was submitted that their conduct must be viewed in the context of an acrimonious dispute where each side took a position that was not vindicated by the Court.  It was submitted further that there was no intention to cause any detriment to the First Church Trust.  Rather, their intention was first and foremost to protect trust property and assets, it being conceded that in doing so some things were done that should not have been done and other things should have been done that were not.  Finally it was submitted that drastic action was not required but that the deadlock had to be addressed. 

1. Counsel for Mr Jovetic and Mr Juzbasic submitted that I could appoint another trustee to resolve the deadlock, remove one or more of the existing trustees or provide for a scheme of management for the First Church Trust. 

1. I propose to remove Mr Juzbasic pursuant to the Court’s inherent powers.  I do not propose to remove Mr Jovetic.  I do not propose to appoint a further trustee at this stage.  The court has continuing supervisory jurisdiction.  If it transpires that the situation is, for whatever reason, unworkable further consideration will be given to the matter.  Liberty to apply will be reserved.

1. The removal of Mr Juzbasic is not punitive. Rather, it is to provide for a more workable situation in relation to the functioning of the First Church Trust. That is, to ensure that the trust can now function in an efficient and satisfactory manner. Mr Jovetic is a solicitor and able to provide the necessary checks and balances against any potential breaches of trust. He has no doubt read the decision of the Court and is fully aware of the supervisory jurisdiction of the Court and that resort to this jurisdiction is preferable to any self help or unilateral action that would be bound to lead to disputation. The same may be said of Mr Tomasevic and Mr Milutinovic. No doubt they now have a heightened awareness of the need to comply with the Constitution and Declarations of Trust.

1. Given the importance of the office of Trustee and the conduct of all parties I urge the three remaining trustees to seek legal advice and any required clarification as to their duties and responsibilities.  The office of trustee is a relatively unforgiving office.  Equity is very protective of beneficiaries.  I have not found it necessary or desirable to make critical comments against one or more of the trustees.  It is to be hoped that this case is a wake up call so far as the conduct of the trustees is concerned.

Disposition and orders

1. I propose to make the following orders:

In these orders the following definitions apply:

“First Church” means the congregation in Wodonga known as the Free Serbian Orthodox Church – School Congregation, St Peter and Paul Wodonga;

“First Church Property” means the properties held on trust for the First Church located:

at the corner of Wilson and Leonard Streets, Wodonga (Certificate of Title V 7597 F123);

on High Street, Wodonga (Memorial Book 815 No 370); and

on Fern Street, Wodonga (Certificate of Title V 09021 F167).

“Incorporated Association” means the incorporated association known as Free Serbian Orthodox Church – School Congregation of St Peter & St Paul Wodonga Inc; and

“Second Church” means the congregation in Wodonga known as the Serbian Orthodox Church.

(1)Declare that the purported meeting of the First Church and the Second Church held on 2 January 2010 (and any resolution passed at such meeting) was invalid and of no effect;

(2)Declare that the Incorporated Association is not the successor organisation to the First Church;

(3)Order that, with effect from the date of this order, Mr Slobodan Juzbasic be removed as trustee of the First Church Property.  This Order is made to ensure the best continuing functioning and management of the trust over the First Church Property and not due to misconduct. 

(4)Order that the caveat placed on the First Church Properties by Mr Slobodan Juzbasic be removed.

(5)No order as to costs. 

(6)There is liberty to apply.

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CERTIFICATE

I certify that this and the 5 preceding pages are a true copy of the reasons for Judgment of Sifris J of the Supreme Court of Victoria delivered on 12 September 2012.

DATED this twelfth day of September 2012.

Associate