Vernon v Sixty Third Octex Pty Ltd - [2024] VSC 599

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST

S ECI 2023 03173

BETWEEN:

VALENTINE SHRAGA VERNON & ORS (according to the attached Schedule)	Plaintiffs
v
SIXTY THIRD OCTEX PTY LTD (ACN 006 176 334) & ANOR (according to the attached Schedule)	Defendants

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JUDGE:	Irving AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	18 July 2024
DATE OF JUDGMENT:	26 September 2024
CASE MAY BE CITED AS:	Vernon v Sixty Third Octex Pty Ltd
MEDIUM NEUTRAL CITATION:	[2024] VSC 599

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PRACTICE AND PROCEDURE — Pleadings — Plaintiffs’ application to amend statement of claim, joinder and particular discovery — Rule 9.06 and r 29.08 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — Plaintiffs’ claim that trust deed varied without acting in good faith, upon a real and genuine consideration; and in accordance with, and taking into account, the purpose for which the discretion to vary trust deed was conferred— Joinder of sole director and secretary of trust — Application granted in part.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr D McAloon of counsel	B2B Lawyers
For the Defendants	Mr I Upjohn KC with Mr D Sanders of counsel	Webb Korfiatis Family Law

TABLE OF CONTENTS

Introduction................................................................................................................................... 1
Material relied upon..................................................................................................................... 2
The amendment and joinder applications................................................................................. 2
The discovery application.......................................................................................................... 16
Conclusion.................................................................................................................................... 32

HIS HONOUR:

Introduction

The plaintiffs were previously specified as the beneficiaries of two trusts, the Raoul Vernon Family Trust (RV Family Trust) and the Vernons Property Trust (Property Trust). The defendants are the respective trustees of those trusts. Ms Nunziatina Russo is the sole director of the defendants and sole appointor of each trust.

On or around 10 March 2022, while the defendant trustees were under the control of Raoul Vernon (now deceased), the trust deeds governing the operation of both the RV Family Trust and the Property Trust were purportedly varied to remove the plaintiffs as beneficiaries and to replace the plaintiffs and some other beneficiaries with Ms Russo and her children.

In this proceeding the plaintiffs allege that in executing the variation deeds the defendant trustees acted in breach of their duties as trustees by failing to:

(a) act in good faith;

(b) act upon a real and genuine consideration of the plaintiffs’ circumstances or needs; and

(c) take proper account of the purpose for which discretion was conferred upon the defendant trustees.

On 15 March 2024 the plaintiffs filed a summons seeking orders:

(a) granting leave to the plaintiffs to file and serve an amended statement of claim substantially in the form exhibited to the affidavit of Matthew Dominic Sweeney sworn 14 March 2024;

(b) joining Nunziatina Russo to the proceeding as the third defendant; and

(c) for particular discovery under r 29.08 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules).

For the reasons that follow, I have decided to:

(a) grant the plaintiff’s leave to file and serve an amended statement…

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: [2024] VSC 599
Decision Date: 26 September 2024

CaseChat Overview and Summary

Vernon commenced proceedings against Sixty Third Octex Pty Ltd, seeking to amend the statement of claim, join the sole director and secretary of the trust as defendants, and obtain further discovery. The dispute centred on the claim that the trust deed had been varied without good faith, genuine consideration, and in accordance with the purpose for which the discretion to vary the trust deed was conferred. The matter was heard in the Supreme Court of Victoria. The primary legal issue was whether the plaintiffs were entitled to amend their statement of claim, join additional defendants, and obtain further discovery of documents. The court considered the relevant rules of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), including Rule 9.06, which governs amendments to pleadings, and Rule 29.08, which relates to joinder of parties. The court also examined whether the proposed amendments and joinder of additional defendants would cause an injustice or delay in the proceedings.

The court held that the plaintiffs were entitled to amend their statement of claim to clarify their allegations and to join the sole director and secretary of the trust as defendants. The court found that the joinder would not cause an injustice or delay in the proceedings, and that the plaintiffs had demonstrated a sufficient basis for the allegations against the additional defendants. However, the court denied the application for further discovery of documents, as the plaintiffs had not shown that the documents were necessary for the determination of the case or that they had not already been provided. The court also noted that the plaintiffs' claims against the additional defendants were speculative and required further particulars.

In conclusion, the court granted the plaintiffs' application to amend their statement of claim and join the sole director and secretary of the trust as defendants. The court denied the application for further discovery of documents. The case will now proceed with the amended statement of claim and the additional defendants joined as parties. The court will continue to monitor the progress of the case to ensure that it proceeds efficiently and fairly.

Orders