Willmington Investments Pty Ltd v Sarich
[2023] WASC 191
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: WILLMINGTON INVESTMENTS PTY LTD -v- SARICH [2023] WASC 191
CORAM: ACTING MASTER MCDONALD
HEARD: 27 APRIL 2023
DELIVERED : 2 JUNE 2023
FILE NO/S: CIV 1331 of 2023
BETWEEN: WILLMINGTON INVESTMENTS PTY LTD
Plaintiff
AND
KAREN LEE SARICH
First Defendant
PHILIP MATTHEW SARICH
Second Defendant
Catchwords:
Trusts - Application by trustee under s 92 of the Trustees Act 1962 (WA) - Original trust deed lost - Power to order trustee justified in using a copy deed -Turns on own facts
Legislation:
Trustees Act 1962 (WA), s 92
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | M Audit |
| First Defendant | : | In person |
| Second Defendant | : | In Person |
Solicitors:
| Plaintiff | : | JNC Legal |
| First Defendant | : | In person |
| Second Defendant | : | In Person |
Cases referred to in decision:
Bacardi Holdings Pty Ltd v Greenteak Pty Ltd & Ors [2005] WASC 160
Brewster v Sewell (1820) 3 B & Ald 296; 106 ER 672
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Crisp v Anderson 171 ER 394
Crowther v Solomons 136 ER 1446
Godfrey v Woolworths (WA) Pty Ltd (1998) 103 A Crim R 336
Hart v Hart (1841) 1 Hare 1
Herbert (as trustee for the Blenkinsop Family Trust (as trustee for the Blenkinsop Family Trust No 2)) v Blenkinsop (No 2) [2019] WASC 389
Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66
Maks v Maks (1986) NSWLR 34
Mantovani v Vanta Pty Ltd (No 2) [2021] VSC 771
Pooley v Goodwin 111 ER 722
Re Adam John Dove Pty Ltd [2022] VSC 625
Re Cleeve Group Pty Ltd [2022] VSC 342
Sutton v NRS(J) Pty Ltd [2020] NSWSC 826
Vanta Pty Ltd v Mantovani & Anor [2023] VSCA 53
Wood (as Co-Executor and trustee of the will of the deceased) v Wood (No 4) [2014] WASC 393
Yap v Lee [2019] VSC 743
ACTING MASTER MCDONALD:
The plaintiff is the trustee of the Sarich Family Trust (the Trust). The Trust was established by a Deed of Settlement in 1976 between the Settlor and Trustee (Original Deed). The Original Deed has been lost. The plaintiff is seeking orders that it is justified in administering the Trust on the basis that a scanned copy of the Original Deed (the scanned copy) is a true copy of the Original Deed.
Application
The application was brought by originating summons filed 3 April 2023 seeking directions under s 92 of the Trustees Act 1962 (WA) (the Act).
The application is supported by the affidavit of Philip Matthew Sarich, a former director of the plaintiff, filed 3 April 2023 (Mr Sarich's Affidavit); the affidavit of Karen Lee Sarich, the sole director of the plaintiff, filed 3 April 2023 (Ms Sarich's Affidavit); and, the affidavit of Moashka Audit, the legal representative of the plaintiff, filed 2 May 2023 (Ms Audit's Affidavit).
Both Ms and Mr Sarich are the only Specified Beneficiaries of the discretionary Trust. They are named as the first and second defendants respectively, although neither appear to have any interest in the action other than, in Ms Sarich's case, as director of the plaintiff. In any event the defendants support the application made by the Trustee.
Background
In 1976, Mr Robert Aynsley Firth as settlor and the plaintiff as trustee established the Trust by way of the Original Deed.[1] The scanned copy is simply dated 1976 on the first and second pages. Both Mr and Ms Sarich surmise that given the vesting date is 13 May 2056, the date of the Original Deed is likely to be 13 May 1976.
[1] Ms Sarich's Affidavit [3]; Mr Sarich's Affidavit [3] - [4].
The plaintiff is an Australian Proprietary Company that was registered on 22 January 1976.[2]
[2] Ms Audit's Affidavit 'MA1' (3).
Ms Sarich was appointed as a director of the plaintiff on 16 August 2007 and is currently its sole director.[3] Mr Sarich was previously a director of the plaintiff, having been appointed on 16 August 2007 and resigning from that role on 16 December 2022.[4]
[3] Ms Audit's Affidavit 'MA1' (4 - 5), Ms Sarich's Affidavit [1].
[4] Ms Audit's Affidavit 'MA1' (5); Ms Sarich's Affidavit 'KLS3' (30); Mr Sarich's Affidavit [1], 'PMS1' (6).
Mr and Ms Sarich are siblings.[5] Their father, Donald Thomas Sarich, was the director of the plaintiff company at the time that the Original Deed was executed.[6] Donald Thomas Sarich passed away on 12 December 2010.[7]
[5] Ms Sarich's Affidavit 'KLS2'.
[6] Ms Audit's Affidavit 'MA1' (5).
[7] Ms Sarich's Affidavit [12].
The Original Deed was lost at some point in time unknown to both the first and second defendants.[8] Both defendants depose that for many years they acted on the basis that the Trust was constituted and subsists in accordance with the scanned copy in their possession.[9] They have both used the scanned copy to carry out transactions on behalf of the Trust.[10]
[8] Ms Sarich's Affidavit [7]; Mr Sarich's Affidavit [7].
[9] Ms Sarich's Affidavit [8]; Mr Sarich's Affidavit [8].
[10] Ms Sarich's Affidavit [11]; Mr Sarich's Affidavit [11].
A copy of the scanned copy is annexed to each of the defendants' affidavits.[11]
[11] Ms Sarich's Affidavit 'KLS1'; Mr Sarich's Affidavit 'PMS2'.
Mr and Ms Sarich depose that in the administration of the Trust they have encountered a number of occasions where authorities have not accepted the scanned copy and insisted that the Original Deed be produced, including:[12]
(a)on 21 November 2016 the ANZ Bank rejected the Trustee's claim for a refund of unclaimed monies from the Australian Securities and Investments Commission (ASIC);[13]
(b)on 18 February 2020 Morgan Stanley Wealth Management requested a certified copy of the Original Deed in relation to the Trust's share portfolio to allow access to the shares held by the Trust;[14]
(c)on 9 February 2023 the ANZ Bank advised that the bank had closed an inactive Trust account with a balance of $133,249.01 and deposited the unclaimed monies with ASIC.[15]
[12] Ms Sarich's Affidavit [23]; Mr Sarich's Affidavit [23].
[13] Ms Sarich's Affidavit 'KLS6'.
[14] Ms Sarich's Affidavit [23], 'KLS7', 'KLS8'.
[15] Ms Sarich's Affidavit [23], 'KLS9'.
Issues
The questions raised by the application are:
(a)is this a direction that can be made pursuant to s 92 of the Act;
(b)has the Original Deed been lost; and
(c)is the scanned copy a true copy of the Original Deed to which there have been no subsequent amendments?
Legal Principles
Section 92 of the Trustees Act
This application is brought under s 92 of the Act which provides:
92.Directions, trustee may ask Court for
(1) Any trustee may apply to the Court for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee.
(2) Every application made under this section shall be served upon, and the hearing thereof may be attended by, all persons interested in the application or such of them as the Court thinks expedient.
Section 92 of the Act is in similar terms to s 63 of the Trustees Act 1925 (NSW) (the NSW Act). Section 63 was described by the plurality of the High Court in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66 (Macedonian Orthodox) as a discretionary power that is confined only by the 'subject-matter, scope and purpose' of the NSW Act.[16] The only jurisdictional bar to be satisfied is that the applicant must point to a 'question respecting the management or administration of the trust property or a question respecting the interpretation of the trust instrument'.[17]
[16] Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 [59] - [60].
[17] Macedonian Orthodox [56] - [58]. In relation to s 92 o the Act see Wood (as Co-Executor and trustee of the will of the deceased) v Wood (No 4) [2014] WASC 393 [103(b)].
An application for judicial advice is founded upon facts stated to the court by the trustee, untested by adversarial procedure, and assumed by the court to be true for the purpose of the application. The advice is given on that basis. The trustee must fully and fairly disclose the facts known to him or her to the court. The protection afforded to the trustee by the process for judicial direction is lost should the trustee have been guilty of any fraud or wilful concealment or misrepresentation in obtaining the direction.[18]
[18] Herbert (as trustee for the Blenkinsop Family Trust (as trustee for the Blenkinsop Family Trust No 2)) v Blenkinsop (No 2) [2019] WASC 389 [75].
In Sutton v NRS(J) Pty Ltd [2020] NSWSC 826, Parker J dealt with an application for a declaration that a photocopy of the trust deed was a true copy of the original which had been lost. Parker J found that declaratory relief of the type sought was not available and decided that the appropriate relief was a direction under s 63 of the NSW Act. Parker J held: [19]
The Court can give advice under the Trustee Act 1925 (NSW), s 63, as to the administration of the Presumed Trust. In my view, an appropriately worded advice which will enable the trustees to treat the photocopy Trust Deed (unless the original ever turns up) as the Trust's constituting document would be an entirely apt use of the s 63 power.
[19] Sutton v NRS(J) Pty Ltd [23].
The Supreme Court of Victoria has also relied r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), to give directions permitting the administration of a trust in circumstances where the original trust deed has been lost.[20] Rule 54.02 is not in identical terms to s 92 of the Act, but permits the determination of any question arising in the administration of an estate or in the execution of a trust.
Proof of loss of document and its contents
[20] Re Adam John Dove Pty Ltd [2022] VSC 625; Re Cleeve Group Pty Ltd [2022] VSC 342.
Where the original of a document cannot be found after due search, its contents may be proved by secondary evidence.[21] The requirement as to due search will be satisfied in different ways according to the differing circumstances of each case.[22]
[21] J D Heydon Cross on Evidence (LexisNexis: Online) [39060].
[22] Brewster v Sewell (1820) 3 B & Ald 296; 106 ER 672; Godfrey v Woolworths (WA) Pty Ltd (1998) 103 A Crim R 336 at 342.
In terms of the relevant standard which the secondary evidence must satisfy, the Victorian Court of Appeal in Vanta Pty Ltd v Mantovani & Anor [2023] VSCA 53 recently disagreed with a number of cases at first instance which held that there must be clear and convincing proof not only of the existence of the lost document but also of the evidence of its contents.[23] The Victorian Court of Appeal considered that this test was inconsistent with that applicable to civil proceedings in s 140(1) of the Evidence Act 2008 (Vic), namely that the case has to be proved on the balance of probabilities.[24] Section 140 of the Evidence Act 2008 (Vic) adopts the common law standard of proof in civil cases.[25]
[23] Mantovani v Vanta Pty Ltd (No 2) [2021] VSC 771; Maks v Maks (1986) NSWLR 34; Yap v Lee [2019] VSC 743. See also Re Adam John Dove Pty Ltd [2022] VSC 625.
[24] Vanta Pty Ltd v Mantovani & Anor [83].
[25] Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 362.
Where an instrument has been lost or destroyed, there is a presumption that it has been duly stamped, unless some evidence to the contrary is given.[26]
[26] Bacardi Holdings Pty Ltd v Greenteak Pty Ltd & Ors [2005] WASC 160 [14] referring to Hart v Hart (1841) 1 Hare 1; Crisp v Anderson 171 ER 394; Pooley v Goodwin 111 ER 722; Crowther v Solomons 136 ER 1446.
The circumstances that arise in this application are not dissimilar to that which arose in Sutton v NRS(J) Pty Ltd. For many years Mr Sutton and his advisors acted on the basis that a trust was constituted and subsisted in accordance with a photocopy of the original deed.[27] The original trust deed could not be found. The settlor of the trust deed died over a decade before the proceedings began.[28] One of the trust's bank accounts was frozen until the original trust deed could be produced.[29]
[27] Sutton v NRS(J) Pty Ltd [1] - [3].
[28] Sutton v NRS(J) Pty Ltd [5].
[29] Sutton v NRS(J) Pty Ltd [11].
Parker J was satisfied in that case that the photocopy was a true copy of the original trust deed based on the fact that the parties concerned had always acted as if the copy set out the terms of the original trust deed together with the discovery of an identical copy held by the solicitors who had originally prepared the deed in 1972. Parker J held:[30]
In these circumstances, the Court should assist those responsible for the administration of the presumed trust by ensuring that they can continue to administer it as if the photocopied Trust Deed were the trust's constituting document.
[30] Sutton v NRS(J) Pty Ltd [19].
In Re Adam John Dove Pty Ltd an application was made for advice and directions by Mr Dove, the director of the trustee company, when he became aware that copies of the trust deed for the Dove Family Trust were incomplete, missing one of the sequentially numbered pages.[31] Searches for both the original trust deed and any complete copies were unsuccessful.[32]
[31] Re Adam John Dove Pty Ltd [1] - [2].
[32] Re Adam John Dove Pty Ltd [8].
A legal clerk/accountant who worked for Mr Dove's former solicitors in the 1990's gave evidence that Mr Dove gave instructions for the drafting of a trust deed, worked on the file and had a conversation with Mr Dove's accountant about the executed Deed.[33] He also gave evidence that the photocopy of the trust deed in Mr Dove's possession was in the same form as the precedent used by his former firm at the time when the trust was established.[34]
[33] Re Adam John Dove Pty Ltd [7].
[34] Re Adam John Dove Pty Ltd [11(b)].
Moore J was satisfied that the contents of the missing page in the photocopy of the trust deed held by Mr Dove were consistent with the precedent used by Mr Dove's former solicitors at the time.[35] The court found the plaintiff was justified in managing and distributing the Dove Family Trust according to the held photocopy, citing Sutton v NRS(J) Pty Ltd.[36]
[35] Re Adam John Dove Pty Ltd [12].
[36] Re Adam John Dove Pty Ltd [15] - [19].
Further, in Re Cleeve Group Pty Ltd [2022] VSC 342 the Supreme Court of Victoria gave directions that a trustee was justified in managing and administering a trust by reference to an unexecuted trust deed prepared by a law firm, where neither the signed original nor copies of a signed original trust deed could be found.[37]
[37] Re Cleeve Group Pty Ltd [58].
Evidence
Mr and Ms Sarich depose that they have made thorough searches to locate the Original Deed.[38]
[38] Ms Sarich's Affidavit [13]; Mr Sarich's Affidavit [13].
Mr Sarich sent two emails dated 4 October 2016 and 19 October 2016 to Mr Robert Lim, the accountant who took over the accounts for the Sarich Family Trust. No response was received to these emails.[39]
[39] Ms Sarich's Affidavit [15] - [16]; Mr Sarich's Affidavit [15] - [16].
Mr Sarich deposes that he then telephoned Mr Lim who informed him that he had no documentation pertaining to the Sarich Family Trust and further stated that they should contact the widow of Mr Serge Desveaux, who was the former accountant of the Trust.[40]
[40] Mr Sarich's Affidavit [17] - [18].
On or about December 2016 Mr Sarich was given permission by Mr Desveaux's widow to go through Mr Desveaux's files to try to locate the Original Deed. Mr Sarich undertook a search through all the archive boxes and 'all of Mr Desveaux's paperwork' and was unable to find the Original Deed.[41]
[41] Mr Sarich's Affidavit [20] - [21].
On 7 October 2019 Mr Sarich contacted by email E. W. Nielson, the solicitors who drafted the Original Deed, seeking assistance in relation to locating the Original Deed.[42] Both Mr and Ms Sarich depose that the solicitors responded stating that they did not have the Original Deed.[43]
[42] Ms Sarich's Affidavit 'KLS5', Mr Sarich's Affidavit 'PMS5'.
[43] Ms Sarich's Affidavit [22], Mr Sarich's Affidavit [22].
The terms of the Original Deed, as they appear in the scanned copy, provide for the establishment of a discretionary trust with classes of beneficiaries to whom income and assets might be distributed.[44] The specified beneficiaries named are the defendants.[45]
[44] Ms Sarich's Affidavit [5], 'KLS1'.
[45] Ms Sarich's Affidavit [6], 'KLS1' (7), (28).
The scanned copy also reproduces:[46]
(a) the signature of Robert Aynsley Firth executing as settlor;[47]
(b)the common seal of the plaintiff;[48]
(c)the signature of the late Donald Thomas Sarich as director of the plaintiff;[49] and
(d) what is said to be a stamp indicating that the Original Deed was duly endorsed by the Office of State Revenue.[50] However, the endorsement is unclear on the scanned copy attached to the affidavits.
[46] Ms Sarich's Affidavit [9] - [10], Mr Sarich's Affidavit [9] - [10].
[47] Ms Sarich's Affidavit 'KLS1' (21).
[48] Ms Sarich's Affidavit 'KLS1' (21).
[49] Ms Sarich's Affidavit 'KLS1' (21).
[50] Ms Sarich's Affidavit 'KLS1' (7).
Both Mr and Ms Sarich depose that no amendments were made to the Original Deed since 1976.[51]
[51] Plaintiff's submissions filed on 2 May 2023 [2.3].
The ASIC current and historical organisation extract for the plaintiff dated 1 May 2023 reveals that from 1 April 1976 to 8 November 2016 the defendants' mother, Elizabeth Merle Sarich, was a director of the company. The defendants' father, Donald Thomas Sarich, was a director from 1 April 1976 to 30 July 1993 and again from 8 June 1999 to 16 February 2016.[52] Ms Sarich was appointed as director during the gap left by Donald Thomas Sarich between 30 July 1993 and 8 June 1999. As referred to earlier in these reasons Ms Sarich was appointed as a director of the plaintiff on 16 August 2007 and is currently its sole director.[53] Mr Sarich was a director from 16 August 2007 to 16 December 2022.[54] There have been no other directors of the trustee.[55]
[52] Notwithstanding the late Donald Sarich passed away in 2010.
[53] Ms Audit's Affidavit 'MA1' (4 - 5), Ms Sarich's Affidavit [1].
[54] Ms Audit's Affidavit 'MA1' (5); Ms Sarich's Affidavit 'KLS3' (30); Mr Sarich's Affidavit [1], 'PMS1' (6).
[55] Ms Audit's Affidavit, 'MA-1' (5) - (6).
Disposition
I am satisfied I have the power to make the order sought pursuant to s 92 of the Act.
In the present application I find:
(a) the scanned copy is a photocopy of a document that has been signed by the parties to the trust;[56]
(b) the scanned copy of the Original Deed appears to be a copy of the complete document;[57]
(c) the scanned copy appears to have been stamped although the details are indecipherable. However, there is no evidence to displace the presumption that the Original Deed has been duly stamped;
(d)Mr Sarich conducted a thorough search of the possible locations of the Original Deed or copies of the same by which a comparison could be made of the scanned copy in their possession;
(e) the searches have been unsuccessful;[58]
(f)the Trustee has acted as if the scanned copy is the Trust's constituting document;
(g)the settlor of the Original Deed predeceased the commencement of proceedings and is therefore not able to give evidence.
[56] Cf Re Cleeve Group Pty Ltd (where orders were made that an unexecuted trust deed was sufficient to show the applicant was just in administering a trust).
[57] Cf Re Adam John Dove Pty Ltd (where a page was missing in all discoverable copies of the Original trust deed, and a law firm precedent was referred to).
[58] Cf Sutton v NRS(J) Pty Ltd [14] - [15].
I am satisfied to the requisite standard of the balance of probabilities that there is clear and convincing evidence that the Original Deed has been lost and the scanned copy is a copy of the Original Deed.
It is therefore appropriate to give a direction under s 92 of the Act to enable the Trustee in these proceedings to treat the scanned copy in its possession as the Original Deed and as the Trust's constituting document.
Orders
I propose to make the following order:
1.The trustee of the Sarich Family Trust settled by Robert Aynsley Firth by Deed of Settlement dated 1976 between Robert Aynsley Firth and Willmington Investments Pty Ltd is justified in administering the trust on the basis that the document annexed to these orders and marked "A" is a true copy of that Deed.
I will hear the parties as to the appropriate order in relation to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TM
Court Officer
2 JUNE 2023
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