Vovi International Pty Ltd v Vovi Australia Charity Association Incorporated
[2024] QSC 38
•15 March 2024
SUPREME COURT OF QUEENSLAND
CITATION:
VOVI International Pty Ltd v VOVI Australia Charity Association Incorporated [2024] QSC 38
PARTIES:
VOVI INTERNATIONAL PTY LTD ACN 085 287 467
(Plaintiff)
v
VOVI AUSTRALIA CHARITY ASSOCIATION INCORPORATED
(Defendant)
FILE NO/S:
714 of 2022
DIVISION:
Trial
PROCEEDING:
Claim
ORIGINATING COURT: Supreme Court of Queensland at Cairns
DELIVERED ON:
15 March 2024
DELIVERED AT:
Cairns
HEARING DATE:
13-14 March 2024
JUDGE:
Henry J
ORDERS:
1. It is declared that the plaintiff is the sole trustee of the VOVI Charitable Trust.
2. The defendant will pay the plaintiff’s costs to be assessed on the standard basis if not agreed.
CATCHWORDS:
PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY – DECLARATIONS – GENERALLY
EQUITY – TRUSTS AND TRUSTEES – APPLICATION TO COURT FOR ADVICE AND AUTHORITY – where the plaintiff seeks a declaration confirming they remain as trustee of the VOVI charitable trust – where the defendant claims they replaced the plaintiff as trustee of the VOVI charitable trust – where the power to remove and appoint trustees under the deed is held by the Spiritual Leader of the VOVI religion – where the former Spiritual Leader died – whether the person who purported to remove the plaintiff as trustee was the Spiritual Leader for the time being of the VOVI religion
Federal Commissioner of Taxation v Trustee for the Michael Hayes Family Trust (2019) 273 FCR 567, 580 – 583
Trusts Act 1973 (Qld) s 80
Uniform Civil Procedure Rules 1999 (Qld) r 681
COUNSEL:
C Ryall for plaintiff
SOLICITORS:
WGC Lawyers for plaintiff
Anh Vo, secretary of VOVI Australia Charity Association Incorporated appeared self-represented for defendant
Some members of the VOVI religion are in dispute as to whether the plaintiff company has been replaced as trustee of the VOVI Charitable Trust. The defendant says the plaintiff was replaced and the defendant is now trustee. The plaintiff says it remains trustee and seeks a declaration confirming it is the trustee.
Under the deed of settlement establishing the trust, the trustee became the plaintiff company. The power of removal and appointment of trustees under that deed is, in summary, held by the so-called “appointor” or, if there is no such person, the trustee. The term “Appointor”, used in cl 13, is defined in a schedule to the deed as:
“Si Hang Luong, the Spiritual Leader of the VOVI religion, or in the event of his death the Spiritual Leader for the time being of the VOVI religion.”
Si Hang Luong, known as “the Master”, died on 22 October 2009. Subsequently, Ms Khuu Thi Pham, claiming to be the Spiritual Leader for the time being of the VOVI religion, purported to remove the plaintiff as trustee and appoint a new trustee and effect further removals and replacements. She tried to do so via deeds of 19 July 2018, 8 October 2018 and 1 August 2019. The trustee, most recently, purportedly so appointed was the defendant, whose secretary, Mr Vo, represented it at trial. None of those purported removals and appointments of trustees could have had any effect if Ms Khuu Thi Pham was not an “appointor” as described in the deed of settlement.
The determinative question in the present claim therefore is:
Was Khuu Thi Pham the “appointor”, that is, “the Spiritual Leader for the time being of the VOVI religion”, within the meaning of those words in the deed of settlement, when she purported to remove and appoint trustees?
If the answer is “no” the declaration sought by the plaintiff should be made, as there is no suggestion of any other purported removal of the plaintiff. If the answer is “yes” the plaintiff’s claim should be dismissed. For the reasons which follow, the answer is “no”.
What is the effect of the deed’s removal and appointment clause?
The starting point is cl 13 of the deed, headed “Removal and Appointment of Trustee and Appointor Provisions”, particularly cl 13.1 which provides:
“13.1 The Appointor for the time being or in the event of there being no Appointor the legal representatives of the last surviving Appointor who was an individual and who died whilst he was Appointor (and if there be different legal personal representatives in respect of different parts of his estate then the legal personal representatives nominated for the purpose in any will of such survivor and in default of such nomination the legal personal representatives who obtained first in point of time probate or other [sic - otherwise] the legal right to administer any part of the estate of the survivor) shall be entitled by instrument in writing at any time and from time to time -
(a) to remove any Trustee thereof;
(b) to appoint any additional Trustee or Trustees;
(c) to appoint a new Trustee or Trustees in the place of any Trustee who was removed who resigns his trusteeship or ceases to be a Trustee by operation of law;
PROVIDED THAT:
(d) if there is no Appointor named in the Schedule or if at any time there is no-one entitled to exercise the power of the Appointor hereinbefore conferred the statutory and other rights of removing and appointing Trustees hereof may be exercised by the Trustee or by the legal personal representatives of the last surviving Trustee or (if the Trustee is a corporation) the liquidator.”
Who are the potential holders of the power to remove and appoint per cl 13?
It is not in dispute that the “appointor”, within the meaning of that term, whilst the Master was alive, was the Master. On the evidence adduced in this proceeding, he is the last surviving appointor unless, as the defendant contends, Ms Khuu Thi Pham subsequently became “the Spiritual Leader for the time being of the VOVI religion”.
If she did not, then pursuant to cl 13.1 the next contender for the role of appointor would be “the legal personal representatives of the last surviving Appointor”, that is, the legal personal representatives of the Master. Lily Ong, a solicitor who advised Mr Vo and his associates, in a letter (ex 10) sent care of Mr Vo, identified the need to find such a legal personal representative. However, no evidence has been adduced as to the finding or existence of any legal personal representatives of the Master, let alone that such a legal personal representative has exercised the power of removal of the trustee conferred by cl 13.1.
In the absence of that occurrence, and if Ms Khuu Thi Pham did not become the Spiritual Leader for the time being of the VOVI religion and thus the appointor within the meaning of cl 13, then the power of removal and appointment of the trustee would fall to the trustee pursuant to cl 13.1(d). It is not suggested that the plaintiff has purported to replace itself as trustee. Indeed by this claim the plaintiff seeks a declaration that it is the sole trustee of the VOVI Charitable Trust.
What is meant by “the Spiritual Leader for the time being of the VOVI religion”?
The determination of whether Ms Khuu Thi Pham became the Spiritual Leader of the VOVI religion is informed by the meaning of the terms “Spiritual Leader” and “VOVI religion”. Those terms are not defined by the deed of settlement.
Some contextual interpretative assistance is provided by clause A of the deed’s recitals and cl 4 of the deed. Clause A provides:
“A. The VOVI religion has as it’s central objectives achieving closeness to God through the science of meditation and adoption of Buddhist principles throughout the world.”
Clause 4 provides:
“The trust fund must be used for the following purposes.
(a) Advancing and promoting the VOVI religion in Australia.
(b) Providing and building places of worship and meditation for members of VOVI religion.
(c) Providing and building places of congregation for members of the VOVI religion.
(d) Providing and building places where members of the VOVI religion may meet with their Spiritual Leader.”
From this it may be gleaned the VOVI religion of which the deed spoke was founded in the practice of Buddhist principles and meditation, as well as worship involving a spiritual element, consistent with it having a Spiritual Leader. As much was confirmed by the evidence adduced at trial about the nature of the religion and the role of its Spiritual Leader. It is uncontroversial such evidence of the surrounding circumstances known to the parties was admissible to aid in determining the meaning of “Spiritual Leader” and “VOVI religion”.[1]
[1]See for example Federal Commissioner of Taxation v Trustee for the Michael Hayes Family Trust (2019) 273 FCR 567, particularly the analysis and authorities discussed at 580-583.
It was clear from that evidence that the Master emerged as Spiritual Leader, travelling to various countries where those who became followers of the VOVI religion would congregate at workshops and conferences, often in great numbers, to hear what was variously described as the Master’s preaching, teaching or instruction. Much of his preaching, teaching or instruction was recorded, and since his death such recordings evidently remain available for the continued guidance of those seeking to practise the VOVI religion.
There was some divergence among witnesses as to whether the Master was teaching a religion. It is unnecessary to resolve that debate. The focus of his teaching went to the spirit of individuals - their determination and enlightenment - through their practise of meditation. In that sense the system of beliefs and practices which spread to various countries and became known as the VOVI religion, involved an element of spirituality.The movement of people who adopted that system of beliefs and practices as preached and taught by the Master, evidently regarded the Master as their Spiritual Leader.
The Master’s role as the VOVI religion’s “Spiritual Leader” explains why he was expressly so named in the definition of “Appointor” within the deed of settlement. However, the deed of settlement did not name a successor to that role in the event of the Master’s death.
The deed’s definition of “Appointor” seemed to implicitly contemplate that someone would succeed the Master, in the event of his death, as the Spiritual Leader of the VOVI religion. However, that the deed contemplated that prospect does not mean it materialised. Indeed, the deed contemplated it might not happen by effectively assigning the power as appointer in reserve to the trustee. Further, there is no evidence that any part of the teachings of the religion dealt with who, if anyone, should become the Spiritual Leader of the religion on the passing of the Master. In short, neither the deed nor any aspect of the evidence adduced in this proceeding about the VOVI religion provided any guidance or recognised means of ascertaining whether anyone, and if so whom, became the Spiritual Leader for the time being of the VOVI religion subsequent to the Master’s death.
Importantly, the definition of “Appointor” refers to the “Spiritual Leader” of the VOVI religion, not to the “Organisational leader” or “Administrative leader” or “Financial leader”. It appears likely the Master had an influential involvement in the organisational, administrative and financial arrangements of the VOVI religion and exercised some leadership in those fields. But he was evidently described and regarded as the religion’s “Spiritual Leader” because of his role in teaching and preaching the VOVI religion.
Further, he and his potential successor on death were each referred to in the deed as “the” Spiritual Leader, not “a” Spiritual Leader”, suggesting there could not be more than one such person at a time. It is likewise noteworthy the deed refers to “the Spiritual Leader for the time being of the VOVI religion”. It does not refer to the Spiritual Leader for the time being of the VOVI religion “in Australia”.
Was Ms Khuu Thi Pham “the Spiritual Leader for the time being of the VOVI religion”?
That latter point warrants emphasis because the amended defence, in response to the plaintiff’s pleading that Ms Khuu Thi Pham was not and never has been the Spiritual Leader of the VOVI religion, denied the allegation “because Khuu Thi Pham was the Spiritual Leader of the VOVI religion in Australia since the date of Luong Si Hang’s death”. Even if, hypothetically, Ms Khuu Thi Pham was the Spiritual Leader of the VOVI religion in Australia, that would not make her the Spiritual Leader of the VOVI religion unless of course there was evidence, which there is not, that she was also the Spiritual Leader of the religion where it practised throughout the world.
Ms Khuu Thi Pham or others who wanted to displace the plaintiff as trustee, sought to represent Ms Khuu Thi Pham was the Spiritual Leader of the VOVI religion. This they attempted to do by creating a so-called deed of confirmation of appointor (ex 7), executed by her and two purported directors of the plaintiff, stating in its final paragraph:
“Thi Pham Khuu being the Spiritual Leader of the VOVI religion on the passing of Si Hang Luong is confirmed as the current Appointor from the date of death to the current date.”
The validity of the execution of the deed on the plaintiff’s behalf by two purported directors is doubtful. The evidence adduced, particularly correspondence between solicitors of the interested parties at that time (ex 11 and 12), strongly suggests ASIC were wrongly informed five serving directors had ceased as directors, with the result that the execution of the deed on behalf of the plaintiff was unauthorised.
It is unnecessary to express a concluded view about that. The purported deed of confirmation of appointor did not purport to vary the terms of the deed of settlement or add new terms and conditions to it, as could occur if the terms of cl 18 of the deed of settlement dealing with such changes were complied with. It merely purported to assert as a fact that Ms Khuu Thi Pham became the Spiritual Leader of the VOVI religion on the passing of the Master. Even the defendant’s representative, Mr Vo, conceded that was incorrect. On one view of his evidence he appeared to suggest Ms Khuu Thi Pham became the Spiritual Leader of the VOVI religion once the purported deed of conformation was executed. But whether Ms Khuu Thi Pham became the Spiritual Leader of the VOVI religion is a question of fact to be resolved by the state of the evidence. Merely asserting it to be a fact in a deed does not make it so.
The only evidence of any role of Ms Khuu Thi Pham in respect of the VOVI religion suggests at the highest that she performs an organisational role in Australia, with elements of financial or administrative management. For example, she used to help accommodate the Master when he visited Australia, she has facilitated the processing of substantial donations and she arranges venues and catering for congregations of followers of the VOVI religion in Australia.
No evidence was adduced to suggest that she is recognised as or reputed to be the Spiritual Leader among followers of the VOVI religion. No evidence was adduced of her performing any form of spiritual leadership role, such as preaching or teaching. There is no evidence she is a spiritual leader, let alone “the Spiritual Leader, of the VOVI religion.
It follows Ms Khuu Thi Pham was not the “Appointor”, that is, she was not “the Spiritual Leader for the time being of the VOVI religion”, within the meaning of those words in the trust’s deed of settlement, when she purported to remove and appoint trustees.
What orders should be made?
The consequence of that finding is that the plaintiff is the sole trustee of the VOVI Charitable Trust.
The relief sought by the plaintiff’s claim is a declaration that the plaintiff is the sole trustee of the VOVI Charitable Trust. There is utility in making such a declaration. It is apt to quell the controversy over whether the purported removal and replacement of trustees by Ms Khuu Thi Pham could have had any legal effect. The making of the declaration will demonstrate it could not have.
I am conscious the declaration does not quell the entirety of the controversy between the parties prevailing in the background of this case. It became clear during the trial that there is another action on foot relating to real property associated with the religion at Mareeba and that Mr Vo is distressed about the management of that asset. However, those matters were not relevant to the determination of this case.
Further, the amended defence of the defendant in this case contained a response to a pleading in the alternative in the amended statement of claim, catering for a potential finding that the schedule definition of “Appointor” was so uncertain as to be void and of no effect. I have not so concluded. The debate in the alternative within the pleadings is thus academic. However, because that debate may have given rise to lay misunderstanding in a case where the defendant was not legally represented at trial, a little more should be said on this topic.
The pleading in the alternative within the amended defence at para 16 pleaded the plaintiff is not a desirable entity to be trustee and that it should exercise its power to appoint the defendant as a new trustee, the defendant being the most appropriate entity to be the trustee. This culminated in a pleading at para 16(d) that:
“...if the plaintiff refuses to exercise the power to appoint a trustee, the defendant seeks an order under section 80 of the Trusts Act 1973 or the court’s inherent jurisdiction to appoint the defendant as the trustee of the VOVI Charitable Trust”.
As I explained to Mr Vo during the trial, such a pleading is inadequate to enliven the Court’s intervention to remove and appoint a trustee in the context of the present case. Firstly, the pleading was only made to cater for an alternative event that has not manifested, for I have not found the meaning of the words in the schedule definition of “Appointor” to be void. Secondly, the Court’s intervention, essentially to replace the existing trustee with the defendant, was not sought in a form of relief identified through a counterclaim or application filed in the proceeding. As much was clearly indicated by the plaintiff’s reply, which pleaded the defendant had not made any application or counterclaim for relief pursuant to s 80 Trusts Act 1973 (Qld) or upon an exercise of the Court’s inherent jurisdiction.
It is arguable these difficulties might potentially have been solved by, at the outset of the hearing, making an oral application for the Court’s intervention to replace the trustee, accompanied by reasonable advance notice to the plaintiff of an intention to do so. That course was not taken but, in any event, it was no solution because of a third difficulty. In a case like the present, as was also explained to Mr Vo during the trial, there exist a variety of potentially interested persons beyond the plaintiff and they would not have been served with or otherwise had notice of a hearing of an application seeking the court’s intervention to replace a trustee. It was not suggested any such process of notification had been undertaken. It cannot be assumed such persons would not wish to be heard about the court’s potential intervention.
For all of those reasons, this trial was therefore confined to determining whether the relief sought by the plaintiff should be granted.
Finally, as to whether the losing side should pay the other’s costs, the general rule contained in r 681 Uniform Civil Procedure Rules 1999 (Qld) is that costs should follow the event. Mr Vo’s submissions emphasised that the defendant is a charity and those behind it are admirably motivated in their work on behalf of the charity. That provides no reasoned basis to depart from the general rule. It does not alter the equation that the defendant is a legal entity which chose to contest the claim. It did not have to. It could have conceded Ms Khuu Thi Pham’s purported removal of the plaintiff as trustee was ineffective because she was not in fact the Spiritual Leader of the VOVI religion. It did not. It maintained its position, putting the plaintiff to the costs of litigating a contested claim.The plaintiff should have its costs.
Orders
My orders are:
1. It is declared that the plaintiff is the sole trustee of the VOVI Charitable Trust.
2. The defendant will pay the plaintiff’s costs to be assessed on the standard basis if not agreed.
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