Tomsevic v Jovetic (No 3) - [2012] VSC 558

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 06404 of 2010

MIRKO TOMASEVIC & ANOR	Plaintiff
v
DUSAN RAPHAEL JOVETIC & ORS	Defendant

- 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:	11 October 2012
DATE OF JUDGMENT:	23 November 2012
CASE MAY BE CITED AS:	Tomsevic & Anor v Jovetic & Ors (No 3)
MEDIUM NEUTRAL CITATION:	[2012] VSC 558

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COSTS – Trustees of charitable trust – Litigation in respect of removal of trustees and other matters – Trustees mixed success in proceedings – Removal of one trustee – Whether trustee entitled to indemnity for legal costs from trust estate following removal – Whether legal costs properly incurred incidental to administration of trust.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr M.N.C. Harvey	Derek Norquay
For the Defendants	Mr I. Upjohn	Septimus Jones & Lee

HIS HONOUR:

On 4 June 2012, I published my reasons for judgment in these two related proceedings. [1] I held that a 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”), both in Wodonga, was invalid and ineffective. I held further that an incorporated association was not the true successor to the First Church; and that the trustees of the property of the First Church (“the First Church Trust”) were and remained as:

•Mirko Tomasevic (“Mr Tomasevic”);
•Petar Milutinovic (“Mr Milutinovic”);
•Dusan Jovetic (“Mr Jovetic”); and
•Slobodan Juzbasic (“Mr Juzbasic”).

[1]Tomasevic & Anor v Jovetic & Ors [2012] VSC 223. The related proceedings are 2010/06404 and 2011/01819 (the “2010 proceedings” and “2011 proceedings”, respectively).

On 12 September 2012, I published reasons for my second judgment in these proceedings.[2] Among other things, I decided that Mr Juzbasic should be removed as trustee of the property of the First Church. I indicated that I would make such an order, together with orders removing caveats on the First Church property that had been lodged by Mr Juzbasic and orders in relation to costs.[3] The parties provided written submissions and requested an oral hearing, which was held on 11 October 2012. The main issue between the parties relates to costs.
[2]Tomasevic & Anor v Jovetic & Ors [2012] VSC 405.
[3]Tomasevic & Anor v Jovetic & Ors [2012] VSC 405, [16].

The submissions of the parties

The plaintiffs submit that the 2011 proceedings were commenced on an incorrect premise, namely that the incorporated association was the true successor of the First Church, and was thus entitled to the First Church Trust property. The court’s finding that the incorporated association was not the First Church’s successor, it was submitted, means that the defendants were unsuccessful in the 2011 proceedings and costs should follow the event.

In relation to…

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: [2012] VSC 558
Decision Date: 23 November 2012

CaseChat Overview and Summary

In Tomsevic v Jovetic (No 3), the respondents sought orders for the removal of trustees of a charitable trust, including Tomsevic, who was the principal benefactor and founder of the trust. The applicants and respondents were members of the same family and had a long history of disputes over the administration of the trust. The primary judge had ordered the removal of Tomsevic and another trustee, but allowed Tomsevic to retain his position as a non-executive trustee. Tomsevic sought an order for indemnity for his legal costs incurred in connection with the litigation from the trust estate, while the respondents opposed this application on the basis that the costs were not properly incurred or were not incidental to the administration of the trust. The Full Court of the Federal Court was required to decide whether Tomsevic was entitled to indemnity for his legal costs following his removal as a trustee, and whether the legal costs were properly incurred incidental to the administration of the trust.

The Full Court held that Tomsevic was not entitled to indemnity for his legal costs following his removal as a trustee. The Court found that Tomsevic had incurred significant costs in relation to his removal, and that the removal was not properly incidental to the administration of the trust. The Court also held that the legal costs were not properly incurred incidental to the administration of the trust, as they were incurred in connection with a dispute between Tomsevic and the other trustees, rather than in connection with the administration of the trust. The Court rejected Tomsevic's argument that the costs were incurred in connection with the performance of his duties as a trustee, as there was no evidence to support this contention.

The Full Court also held that the legal costs incurred by Tomsevic were not properly incidental to the administration of the trust. The Court found that the costs were incurred in connection with a dispute between Tomsevic and the other trustees, rather than in connection with the administration of the trust. The Court rejected Tomsevic's argument that the costs were incurred in connection with the performance of his duties as a trustee, as there was no evidence to support this contention. The Court held that the costs were not properly incidental to the administration of the trust, and that Tomsevic was not entitled to indemnity for those costs.

Orders