Wilson v Indigenous Services Pty Ltd
[2021] WASC 56
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: WILSON -v- INDIGENOUS SERVICES PTY LTD [2021] WASC 56
CORAM: ALLANSON J
HEARD: 2 MARCH 2021
DELIVERED : 3 MARCH 2021
FILE NO/S: CIV 1043 of 2021
BETWEEN: TERRENCE KIM WILSON
First Plaintiff
URSULA WILSON
Second Plaintiff
MAVIS WESTERMAN
Third Plaintiff
LESLEY RHONDA THORNHILL
Fourth Plaintiff
KAREN BEASLEY
Fifth Plaintiff
AND
INDIGENOUS SERVICES PTY LTD
First Defendant
ATTORNEY GENERAL OF WESTERN AUSTRALIA
Second Defendant
NJAMAL COMMUNITY CORPORATION PTY LTD
Third Defendant
Catchwords:
Trusts - Charitable trust - Where plaintiffs challenge the validity of the appointment of the Trustee - Where plaintiffs seek an interim payment out of the Trust Fund for their legal costs - Whether such an order within the power of the court
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
| First Plaintiff | : | Mr C Stokes |
| Second Plaintiff | : | Mr C Stokes |
| Third Plaintiff | : | Mr C Stokes |
| Fourth Plaintiff | : | Mr C Stokes |
| Fifth Plaintiff | : | Mr C Stokes |
| First Defendant | : | Mr L Christensen |
| Second Defendant | : | Ms M J Elliott |
| Third Defendant | : | No appearance |
Solicitors:
| First Plaintiff | : | Chris Stokes & Associates |
| Second Plaintiff | : | Chris Stokes & Associates |
| Third Plaintiff | : | Chris Stokes & Associates |
| Fourth Plaintiff | : | Chris Stokes & Associates |
| Fifth Plaintiff | : | Chris Stokes & Associates |
| First Defendant | : | CX Law |
| Second Defendant | : | State Solicitor for Western Australia |
| Third Defendant | : | No appearance |
Case(s) referred to in decision(s):
Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29; (2019) 93 ALJR 1007
Re Buckton; Buckton v Buckton [1907] 2 Ch 406
Wareham v Marsella [No 2] [2020] VSCA 118
ALLANSON J:
Introduction
The plaintiffs commenced these proceedings by originating summons filed 25 January 2021. The plaintiffs seek relief, including declarations that the first defendant, Indigenous Services Pty Ltd, has been removed as the trustee of the Njamal Peoples Trust, and Njamal Community Corporation Pty Ltd has been validly appointed and remains the validly appointed trustee of the Trust.
The Attorney General of Western Australia is named as the second defendant to the application, and is a proper party because the Trust is a charitable trust.
The plaintiffs seek an order that they be indemnified out of the Trust Fund in respect of their costs of the proceedings. In a minute of proposed orders, filed 18 February 2021, the plaintiffs sought, as interim relief, that the Trustee pay to them the sum of $80,000 from the Trust Fund in respect of their legal costs of this application.
After a short hearing on 2 March 2021, I dismissed the application for interim relief, with reasons to be published. These reasons are concerned solely with the interim application.
The evidence
The plaintiffs relied on the affidavit of Terrence Kim Wilson, filed in support of the originating summons and sworn 18 January 2021; and affidavits of Mr Wilson and Sharon Westerman, both sworn 24 February 2021, in support of the interim application.
The first defendant filed an affidavit of Kathryn Bates, a director of Indigenous Services, sworn 25 February 2021.
The Attorney General adduced no evidence.
The Njamal Peoples Trust
The Njamal Peoples Trust was established by deed, dated 29 October 2003. The Trust Deed was varied on 17 November 2010, and varied again on 2 April 2012. The amendments are not material to the interim application.
Indigenous Services (then named Esplanade Holdings Pty Ltd) was appointed as Trustee on 12 May 2016.
The beneficiaries of the Trust are the Njamal People (Primary Beneficiaries); and other persons of Aboriginal descent living in the Claim Area, and the spouses and children of Njamal People who are not themselves Njamal People (Additional Beneficiaries).[1] The terms 'Njamal People' and Claim Area are defined by reference to the claim group and area of a native title determination application.[2]
[1] Cl 3.
[2] Cl 1.1.
The Trust is a discretionary trust, with no individual beneficiary or group of beneficiaries having any vested interest in or entitlement to any of the Trust Fund.[3]
[3] Cl 3.
The objects of the Trust are set out in cl 4.1, with the primary object and purpose being 'the relief of poverty, sickness, suffering, distress, misfortune or destitution of the Primary Beneficiaries'. Secondary objects and purposes include the advancement and education of the Beneficiaries, the advancement of the culture and religion of the Beneficiaries, 'and other purposes beneficial to the community of the Beneficiaries'. In applying or distributing the Trust Fund, the Trustees are to give priority and preference to the primary objects and purposes set out in cl 4.1.[4]
[4] Cl 4.2.
The powers of the Trustee are set out in cl 6, with the Trustee to have 'the ultimate decision making power in all matters relating to the Trust'.[5]
[5] Cl 6.3.
The Trust Deed provides for an Advisory Committee, the powers of which include the power to terminate the appointment of a Trustee and appoint a replacement Trustee.[6] The Trust Deed provides for the Trustee to consult with and obtain the recommendation of the Advisory Committee, but the Trustee is not bound to act on any recommendation or advice.
[6] Cl 5.4.
Clause 10 provides for the Trust Fund and the administration of the Trust Fund. By cl 10.4, the Trustees have discretion from time to time as to when, how, and for which individual Beneficiaries the Trust Fund is to be applied.
The claim for costs
Mr Wilson, in his affidavit of 24 February 2021, sets out evidence relating to the financial position of the plaintiffs, all of whom are on Centrelink benefits. He refers to legal costs incurred by the Trust over the last three years, and contends that Indigenous Services will use the Trust Funds to meet its legal costs of defending these proceedings. He refers also to the comparative advantage of the directors of Indigenous Services in dealing with the legal system, so that the plaintiffs have to rely more heavily on their legal representatives.
The plaintiffs further say that the validity of the appointment of Indigenous Services as Trustee, and the validity of the appointment of the current members of the Advisory Committee, have been in question since 2018 or 2019. They brought these proceedings where, despite the challenge to its position as Trustee, Indigenous Services has taken no action to have the court determine the validity of its continued appointment.
In her affidavit, Ms Westerman refers to proceedings she brought against various persons, including members of the Njamal Community. She says that the costs of those people were met out of the Trust Funds and contends that they had no greater entitlement to have their costs paid than any other member of the Njamal Community.
There seems to be no question about either the capacity of the Trust Fund to meet the proposed payment, or the power of the Trustee to advance funds from the Trust Fund for legal expenses.
Costs in trust matters
The principles relating to the award of costs in trust matters are well known. In an action brought seeking directions from a court to determine a question of law arising in the administration of an estate, costs will generally be determined in accordance with the classifications set out in Re Buckton.[7]
[7] Re Buckton; Buckton v Buckton [1907] 2 Ch 406, 414 (Kekewich J).
Those principles may apply in litigation in which a party seeks the removal of a trustee, although the trustee may be ordered to pay costs personally. The position was recently summarised by the Victorian Court of Appeal in Wareham v Marsella [No 2]:
It has long been the case that trustees who are in breach of trust can be ordered to pay the costs of proceedings to remove them. As with every costs discretion, each case depends on its particular circumstances. However, it will always be relevant, and often critical, to decide whether the litigation in which removal is sought is in substance adversarial or whether it raises a question as a matter of administration of the trust in question. This is an instance of the larger principle that a trustee can only be indemnified out of the trust against costs and expenses properly incurred for the benefit of the trust. The onus is on the trustee in that regard.[8]
[8] Wareham v Marsella [No 2] [2020] VSCA 118 [18].
The present application raises a different question: whether the court has power to order the Trustee to exercise its discretion to make a particular payment from the Trust Fund. The order sought is not an order for costs.
Costs are a creature of statute.[9] The source of the court's power to award costs, including costs out of a fund or property, is in s 37 of the Supreme Court Act 1935 (WA). But that is not the power upon which the plaintiffs must now rely: the order sought is not an order for costs.
[9] See Bell Lawyers Pty Ltd v Pentelow[2019] HCA 29; (2019) 93 ALJR 1007 [33], [59].
The court has broad powers under s 21 of the Charitable Trusts Act 1962 (WA), to make orders in respect of any property, money or income subject to a trust for charitable purposes. The court may make orders including an order that a trustee to carry out the trusts upon which the property is held, requiring a trustee to meet its liability for any breach of trust, and giving directions in respect of the administration of the trust. The parties' research had not identified any authority regarding the authority that the court, relying on such powers, to make an order of the kind sought by the plaintiffs. I am not aware of any relevant authority. In my opinion, the terms of the section do not extend to authorising the court to make an order of the kind now sought.
I have also considered the powers available under the Trustees Act 1962 (WA), and do not believe that the court is authorised by that Act to make an order of the kind sought. The plaintiffs referred to s 94 of the Trustees Act, but have no standing to apply under that section.
The plaintiffs could identify no other relevant source of power for the court to either compel the Trustee to exercise its discretion in a particular way, or for the court to itself make an order for payment out of the Trust Fund.
For those reasons the application was dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MG
Associate to the Honourable Justice Allanson
3 MARCH 2021
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