Zubcic & Zubcic (No. 2)

In the matter of *Zubcic & Zubcic (No. 2)*, Rees J of the Family Court of Australia considered an application by the First and Second Applicants, acting as trustees, for their discharge from office. The dispute arose from the trustees' assertion that the quantum of their expenses and remuneration was reasonable, a claim challenged by the husband and wife, who contended the charges were excessive.

The court was required to determine whether the trustees were justified in retaining funds as security for potential legal proceedings against them, and the conditions under which they would be discharged from their duties. A key issue was whether the husband and wife had provided sufficient evidence to demonstrate that the trustees' claimed expenses and remuneration were unreasonable, thereby justifying a challenge to their charges.

Rees J reasoned that the trustees are permitted to retire once the funds under their control have been distributed. The court found that the mere assertion by the husband and wife that the trustees' expenses and remuneration were too high did not constitute evidence capable of demonstrating that the charges were unreasonable. The trustees relied on an affidavit detailing their expenses and remuneration, supported by extensive documentation. The onus was on the husband and wife to rebut this evidence of reasonableness, which they failed to do by adducing expert evidence or pointing to specific unreasonable charges. Consequently, the court held that the trustees would be justified in retaining a portion of the funds as security for the costs of any proceedings brought against them.

The court ordered that upon distribution of all funds, the trustees be discharged from office. The trustees were authorised to retain $200,000 as security for costs, and would be released from all claims unless proceedings were instituted within four months of the distribution. If no proceedings were commenced within that period, the retained amount was to be distributed according to prior court orders. The responses filed by the wife and husband seeking different outcomes were dismissed. The court also made specific orders regarding payments to the husband's former solicitors and to the Commissioner for Taxation, as well as authorising payments to Mr B Zubcic and the wife.