2. As was made clear in Macedonian Orthodox Community Church St Petka... [2015] VSC 395 | Case summary

Supreme Court of Victoria|2015-08-05|Before: Bell J

TRUSTS - trustees - judicial advice - whether trustee should defend legal proceeding brought on behalf of minority beneficiaries in respect of trust - whether trust should so advise trustee - Supreme Court (General Civil Procedure) Rules 2005 (Vic).

IPR Nominees Pty Ltd is the trustee of The 1965 Irvin Peter Rockman Trust. In proceeding S CI 2015 01263, two of six of the late Mr Rockman's children, by their litigation guardian, have sought relief against IPR in relation to the trust. In the application currently before me under rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic), IPR seeks advice from the court as to whether it should defend that proceeding. Consistently with rule 54.03(c), the beneficiaries under the trust are not parties to the application.

As can be seen, the relief and remedy sought is wide ranging and would affect, in a fundamental way, both the administration of the trust and the distribution of its benefits between the beneficiaries.

In my view this is clearly a case in which IPR should be advised that it is appropriate for it to defend the proceeding. In reaching this conclusion, I have particularly taken into account the following considerations:
- IPR is a necessary and appropriate defendant and the only present defendant. The proceeding would probably go undefended if IPR did not participate, which is highly undesirable for many reasons. Even if the other beneficiaries were to become defendants, they do not have the knowledge and capacity to defend that IPR possesses.
- The relief and remedy sought is wide ranging and fundamental, as I have indicated.
- The relief and remedy sought appear to raise issues of fact concerning the administration of the trust and the exercise of the powers of IPR as the trustee which are within IPR's knowledge in that capacity. Moreover, removal of IPR as the trustee is sought. In that connection, it appears likely that allegations will be made against IPR. It has a legitimate interest in defending those allegations.
- The relief and remedy sought appear to raise issues of law concerning the administration of the trust and the exercise of the power of IPR as the trustee in respect of which IPR has a direct and legitimate interest in that capacity.
For those reasons, pursuant to rule 54.02(1), the court determines that it is appropriate for IPR to defend the substantive proceeding unconditionally. There will be an order accordingly. There should be an order, too, that the costs of the application herein be paid out of the funds of the trust.

[1] [2008] HCA 42; (2008) 237 CLR 66, 93-4 [71]-[72] (Gummow ACJ, Kirby, Hayne and Heydon JJ) ('Macedonian Orthodox Community Church').

Court (General Civil Procedure) Rules 2005

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