Tomsevic v Jovetic (No 3)

The case of Tomsevic v Jovetic (No 3) was before the Federal Court of Australia. The primary parties involved were the trustees of a charitable trust, with Tomsevic and Jovetic as key figures. The dispute centred around the removal of trustees, with Tomsevic seeking the removal of Jovetic and other related matters. The case also examined whether a trustee, following removal, was entitled to an indemnity for legal costs from the trust estate, as well as whether these costs were properly incurred as part of the trust's administration.

The central legal issues before the court were whether the costs incurred by a trustee in defending their position and seeking the removal of another trustee were recoverable from the trust estate, and if such costs could be considered part of the trust's ordinary administration. The court had to determine the scope of a trustee's entitlement to reimbursement for legal costs and whether these costs were incidental to the administration of the trust. Additionally, the court needed to consider the balance of the interests of the trustees and beneficiaries in the context of the trust's governance.

The court held that the costs incurred by the trustees in their litigation efforts were not properly incidental to the administration of the trust. The court reasoned that the trustees' actions were more aligned with personal disputes rather than activities directly related to the trust's administration. Consequently, the trustees were not entitled to reimbursement from the trust estate for these costs. The court also found that the costs incurred in the litigation were not properly incurred in the administration of the trust, thereby limiting the trustees' ability to seek reimbursement. This decision underscored the need for trustees to distinguish between personal disputes and the administration of the trust when incurring legal costs.

The final orders of the court reflected the reasoning above, disallowing the trustees' claims for reimbursement of legal costs from the trust estate. The court's decision provided clarity on the circumstances under which trustees can seek reimbursement for legal costs and reinforced the principle that personal disputes among trustees should not be funded from the trust estate.