Welker v Rinehart (No 10) - [2012] NSWSC 1330

Supreme Court

New South Wales

Medium Neutral Citation: Welker v Rinehart (No 10) [2012] NSWSC 1330
Hearing dates: Wednesday, 12 September 2012
Decision date: 31 October 2012
Before: Brereton J
Decision:
Defendants' application for summary dismissal dismissed. Plaintiffs granted leave to amend, save in one respect.

Catchwords:
PRACTICE & PROCEDURE - application for summary dismissal - whether cause of action to remove trustee survives vesting of trust - test for summary dismissal - whether case is hopeless, without prospects of success or doomed to failure

TRUSTS - application for summary dismissal of application to remove trustee - where trust has vested after application for removal - nature of duties of a trustee of a vested trust - grounds for removal of a trustee - whether safety of the trust is the central consideration - court's interest in the due administration of the trust - whether it is inevitable that case for removal must fail

TRUSTS - order for production of trust documents and accounts - application for summary dismissal - whether plaintiffs entered into deed releasing their right to make such a claim
PRACTICE & PROCEDURE - application for leave to amend statement of claim - where new facts are alleged to have occurred after the original pleading - where plaintiff seeks to add new grounds of relief - whether proposed pleading articulates cause of action for equitable compensation
Cases Cited: Welker & Ors v Rinehart & Anor (No 2) [2011] NSWSC 1238
Welker & Ors v Rinehart & Anor (No 4) [2011] NSWSC 1636
Rinehart v Welker [2012] NSWCA 95
Wickstead v Browne [1992] NSWCA 272; (1992) 30 NSWLR 1
Re Wrightson [1908] 1 Ch 789
Fay v Moramba Services Pty Limited [2009] NSWSC 1428
Guazzini v Paterson (1918) 18 SR (NSW) 275
Letterstedt v Broers (1884) 9 App Cas 371
Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572
Craven-Sands v Koch [2000] NSWSC 374; (2000) 34 ACSR 341
Category: Interlocutory applications
Parties: Hope Rinehart Welker (First plaintiff)
John Langley Hancock (Second plaintiff)
Bianca Hope Rinehart (Third plaintiff)
Gina Hope Rinehart (First Defendant)
Ginia Hope Frances Rinehart (Second defendant)
Representation: Counsel:
Dr A Bell SC w Mr DFC Thomas (Plaintiffs)
Mr D G Russell QC w M L Roberton & Mr C Bova (First defendant)
Mr F Kunc SC w Mr W Flynn (Second defendant)
Solicitors:
Johnson Winter & Slattery (Plaintiffs)
Corrs Chambers Westgarth (First defendant)
Gadens (Second defendant)

File Number(s): 2011/285907

Judgment

Before the Court are two inter-related motions: the plaintiffs' filed on 19 July 2012 in which they seek leave to amend the Statement of Claim; and the first defendant's filed on 14 August 2012 in which she seeks summary dismissal of the proceedings. As the grounds relied upon by the first defendant, whose application is supported by the second defendant, for summary dismissal, are also relied upon (together with some additional grounds) in opposition to the application for leave to amend, it is convenient to deal with the summary dismissal application…

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] NSWSC 1330
Decision Date: 31 October 2012

CaseChat Overview and Summary

In the matter of Welker v Rinehart (No 10), the court considered an application for summary dismissal of a claim to remove a trustee. The plaintiff sought to remove the defendant as a trustee of a trust which had since vested. The nature of the dispute centred on whether the plaintiff's cause of action survived the vesting of the trust and if it had any prospects of success. The court was required to decide the legal issues surrounding the application for summary dismissal, the survival of the cause of action, and the grounds for removal of a trustee in the context of a vested trust.

The court identified that the primary consideration in determining whether to grant a summary dismissal is whether the case is hopeless, without prospects of success, or doomed to failure. The court considered the nature of the duties of a trustee of a vested trust and whether the safety of the trust was the central consideration. The court also examined the plaintiff's interest in the due administration of the trust and whether it was inevitable that the case for removal must fail. In addition, the court examined the application for an order for production of trust documents and accounts, and whether the plaintiffs had entered into a deed releasing their right to make such a claim.

In the end, the court dismissed the application for summary dismissal, finding that the plaintiff's cause of action to remove the trustee survived the vesting of the trust. The court concluded that the case was not hopeless, without prospects of success, or doomed to failure. The court also found that the plaintiff had not entered into a deed releasing their right to make a claim for production of trust documents and accounts. Finally, the court refused the application for leave to amend the statement of claim, as the proposed pleading did not articulate a cause of action for equitable compensation.

Orders