Wales v Wales (No 3) - [2015] VSC 151

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROBATE LIST

S CI 2012 01849

IN THE MATTER of the HN Wales 1954 Trust, the HN WALES 1963 Trust, the MEM Wales Trust and the BMR Hutchinson Trust GLADYS WALES, ROSLYN MATEAR and SUZANNE CASE (as Trustees for the HN Wales 1954 Trust, the HN WALES 1963 Trust, the MEM Wales Trust and the BMR Hutchinson Trust)	Plaintiffs
v
PERSEPHONE WALES (as the representative of the Estate of MURRAY WRIGHT WALES, deceased)	First Defendant
ROHAN WALES	Second Defendant
JULIAN WALES	Third Defendant
ASHLEY WALES	Fourth Defendant

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	14 November 2014
DATE OF JUDGMENT:	8 May 2015
CASE MAY BE CITED AS:	Wales v Wales (No 3)
MEDIUM NEUTRAL CITATION:	[2015] VSC 151

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COSTS — TRUSTEES —Where dispute between capital beneficiaries and trustees of four trusts concerning financial records and accounts of the trusts — Application made by trustees to Court to pass accounts and wind up trusts — Further dispute as to whether unpaid income to income beneficiary was a liability of the trusts — Where plaintiffs replaced as trustees after removal application made by some capital beneficiaries — Where proceeding dismissed by consent save for costs —Whether former trustees entitled to costs of the proceeding from the trusts other than costs of removal application — Whether costs of the income beneficiaries should be paid by the trustees personally

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C Archibald	HWL Ebsworth
For the first and second defendants	Mr R C Wells	Tolhurst Druce and Emmerson
Third defendant in person
For the fourth defendant	Dr J Glover	LAC Lawyers

HER HONOUR:

Introduction

Until their removal by orders made on 27 November 2013, the plaintiffs were the trustees of four trusts: the HN Wales 1954 Trust, the HN Wales 1963 Trust, the BMR Hutchison Trust and the MEM Wales Trust (‘the trusts’).

The income beneficiary of the trusts died on 3 September 2010. Upon the death of the income beneficiary, the remainder interests of the capital beneficiaries in the trusts vested in possession. The second and third plaintiffs and the first to fourth defendants are the capital beneficiaries of the trusts, with differing shares between the second and third plaintiffs and the first to fourth defendants.[1]
[1]Pursuant to the HN Wales 1954 Trust the distribution was, in fact, to be divided between the first defendant as to half and the two children of his brother, Geoffrey Wales, as to the remaining half. With the death of the first defendant on 2 April 2013, his children being the second, third and fourth defendants, became entitled to his half share of the HN Wales 1954 Trust. As to the other three trusts, the capital is to be distributed in equal shares between the second and third plaintiffs and the second, third and fourth defendants.

Under the will of income beneficiary, the first plaintiff was appointed as the executrix and trustee…

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.

Continue reading Wales v Wales (No 3)

Details

AGLC: Wales v Wales (No 3) [2015] VSC 151
Case: [2015] VSC 151
Decision Date: 8 May 2015

CaseChat Overview and Summary

The case of Wales v Wales (No 3) involved a dispute between capital beneficiaries and trustees of four trusts regarding the financial records and accounts of the trusts. The matter was before the court due to an application made by the trustees to have the accounts passed and the trusts wound up. A further dispute arose as to whether unpaid income to an income beneficiary was a liability of the trusts. The plaintiffs were subsequently replaced as trustees following a removal application made by some of the capital beneficiaries. The proceeding was dismissed by consent, except for the matter of costs. The central issues before the court were whether the former trustees were entitled to the costs of the proceeding from the trusts, excluding the costs of the removal application, and whether the costs of the income beneficiaries should be paid by the trustees personally.

The court examined the legal principles governing the costs of litigation in trust matters, particularly focusing on the discretion of the court to award costs. It was necessary to determine the extent to which the former trustees could claim costs from the trust assets and whether there were any circumstances under which the income beneficiaries' costs should be borne personally by the trustees. The court considered the specific circumstances of the case, including the nature of the disputes, the conduct of the parties, and the outcome of the proceedings. The court's reasoning involved a careful analysis of the trust deeds, relevant case law, and the equities of the situation.

The court concluded that the former trustees were entitled to the costs of the proceeding from the trust assets, excluding the costs associated with the removal application. The court found that the income beneficiaries' costs should not be borne personally by the trustees but rather should be paid out of the trust assets. The court exercised its discretion in a manner that it deemed fair and just, taking into account the overall conduct of the parties and the outcome of the litigation. The decision provided clarity on the allocation of costs in complex trust disputes, ensuring that the interests of all parties were fairly considered.

The final orders of the court were that the former trustees were entitled to recover their costs from the trusts, excluding the costs of the removal application, and that the costs of the income beneficiaries were to be paid out of the trust assets. The decision provided a resolution to the issue of costs in this protracted and complex trust dispute, offering guidance for similar future cases.

Orders