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[2026] NSWSC 826
Supreme Court of NSW
2026-07-14
Parker J
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Bremner v French (No 6) [2026] NSWSC 826
Hearing dates: 16 March, 8 May, 26 June 2026
Date of orders: 12 May; 14 July 2026
Decision date: 14 July 2026
Jurisdiction: Equity
Before: Parker J
Decision: See [171]-[172]
Catchwords: TRUSTS AND TRUSTEES — order appointing trustee for sale provides for remuneration at firm’s standard rate at the time — later application to increase rates retrospectively — power to increase rates retrospectively — functus officio — UCPR r 36.16(2)(b) — inherent power in equity — whether discretion should be exercised in trustee’s favour — application refused
COSTS — application by court-appointed trustee for sale for increased remuneration — objection taken by beneficiary — whether proceedings adversarial — costs follow the event — lump sump costs order — order refused — whether inter partes costs should be made in favour of beneficiary — indemnity of estate — trustee’s prima facie entitlement to indemnity displaced where acting in substance in own interests — indemnity confined to costs incurred before contest became adversarial — whether beneficiary’s solicitor-client costs payable out of fund where objection produced saving estate — additional order refused
Original judgment source is linked above.
Legislation Cited: Bankruptcy Act 1966 (Cth), Part X
Conveyancing Act 1919, s 66G(6)
Property Law Act 1958 (Vic), s 231(4), Part 4
Uniform Civil Procedure Rules 2005, r 36.16(2)(b)
Cases Cited: Bainbrigge v Blair (1845) 50 ER 231
Chapman v Chapman [1954] AC 429
Drummond v Drummond [1999] NSWSC 923
Hamod v State of New South Wales [2011] NSWCA 375
James v James (No 2) [2019] NSWSC 116
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
Marshall v Holloway (1820) 36 ER 681
Miller v Cameron (1936) 54 CLR 572
Perpetual Trustee Company Ltd v Attorney General (NSW) [2018] NSWSC 1456
Re Dion Investments Pty Ltd [2014] NSWCA 367
Re Duke of Norfolk’s Settlement Trusts [1982] Ch 61
Sanderson v Sakr (2017) 93 NSWLR 459
Vlahos v Vlahos [2025] NSWSC 1612
Waters v PC Henderson (Australia) Pty Ltd [1994] NSWCA 338
Woods v Sheriff of Queensland (1895) 6 QLJ 163
Texts Cited: J D Heydon and M J Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis)
Category: Consequential orders
Parties: Second Cross-Claim filed 7 October 2015
Christopher Julian Piers Bremner (Cross-Claimant)
Andrew Boyd French (First Cross-Defendant)
Frank Lo Pilato (Third Cross-Defendant)
Kerr William Stephen Neilson (Sixth Cross-Defendant)
Notice of Motion filed 15 September 2025
Jason Stone (Applicant)
Christopher Bremner (First Respondent)
Andrew Boyd French (Second Respondent)
Frank Lo Pilato (Third Respondent)
Kerr William Stephen Neilson (Fourth Respondent)
Representation: Counsel:
Second Cross-Claim filed 7 October 2015
A Spencer (Third Cross-Defendant)
D A Pittavino (Fourth Cross-Defendant)
Notice of Motion filed 15 September 2025
J Simpkins (Applicant)
A Spencer (Third Respondent)
D A Pittavino (Fourth Respondent)
Solicitors:
Second Cross-claim
Matthews Folbigg Lawyers (Third Cross-Defendant)
Esplins Lawyers (Fourth Cross-Defendant)
Notice of Motion
Harris Carlson Lawyers (Applicant)
Matthews Folbigg Lawyers (Third Respondent)
Esplins Lawyers (Fourth Respondent)
Self-represented:
Second Cross-Claim filed 7 October 2015
Christopher Julian Piers Bremner (Cross-Claimant)
Andrew Boyd French (First Cross-Defendant)
Notice of Motion filed 15 September 2025
Christopher Julian Piers Bremner (First Respondent)
Andrew Boyd French (Second Respondent)
File Number(s): 2014/101136
Publication restriction: Nil
In October 2019, the Court appointed Mr Jason Stone (“the Sale Trustee”) as trustee for the sale of five rural properties in Victoria. The sales of the five properties have now been completed. The Sale Trustee applies, by notice of motion, for orders fixing his remuneration at $303,239.
At the time the appointment was made, the properties were registered in the names of Mr Andrew Boyd French and Dr Christopher Piers Julian Bremner. There were lengthy and complex Commercial List proceedings between Mr French and Dr Bremner which I heard in 2019. My conclusions and the reasons for them are set out in French v Bremner; Bremner v French [2019] NSWSC 1033 (“J1”). My orders (including the orders concerning the sale of the relevant properties, to which I will refer as the “Sale Orders”) and the reasons for those orders are set out in French v Bremner; Bremner v French (No 2) [2019] NSWSC 1504 (“J2”).
The Sale Orders were made on the application of Dr Bremner in a cross-claim in the proceedings (the second cross-claim). Dr Bremner is the cross-claimant and Mr French is the first cross-defendant.
There was no progress in the sale of the properties for several years. In 2023, Mr French, who was facing bankruptcy proceedings, entered into a personal insolvency arrangement (“PIA”) under Part X of the Bankruptcy Act 1966 (Cth). Pursuant to the PIA, he purported to transfer a half share in three of the five properties to Mr Frank Lo Pilato (“the PIA Trustee”) for division among his creditors, retaining his half share of the other two for himself.
I say “purported” because the effect of the Sale Orders had been to convert Mr French’s ownership interest in the properties into a right to receive the proceeds as a beneficiary of the trust established by those Orders. It was therefore questionable whether the PIA conferred any interest on the PIA Trustee in the properties themselves. Nevertheless the PIA Trustee was later joined as the third cross-defendant to the cross-claim proceedings.
By mid-2023, the properties remained unsold. The Sale Orders had fixed a date for completion of the sale of the properties which had long since passed. Disputes arose about whether the time for selling them should be extended, and about other terms of the Sale Orders. In September and October 2023 I made orders extending the time for sale and varying other terms of the Sale Orders: Bremner v Frenc**h; French v Bremner (No 3) [2023] NSWSC 1488 (“J3”).
By mid-2024, the sale process was at last in train. But as a result of dealings between the PIA Trustee and some third parties (“the Aesthete Companies”), the Companies claimed to have acquired the PIA Trustee’s “interest” in the three properties the subject of the PIA. They applied for orders obliging the Sale Trustee to co-operate with them on the sale of those properties. Their applications were unsuccessful: Bremner v French (No 4); Aesthete 101 Pty Ltd v Stone [2024] NSWSC 793 (“J4”) and Bremner v French (No 5); Aesthete 101 Pty Ltd v Stone (No 2) [2024] NSWSC 835 (“J5”).
As already mentioned, the sale of the five properties has now been completed. There remain issues, or potential issues, as between Mr French and the PIA Trustee with respect to the division of Mr French’s ultimate share of the proceeds of sale. This question is the subject of a further cross-claim (the third cross-claim) which has been filed for the PIA Trustee against Mr French.
Something similar has happened so far as Dr Bremner is concerned. Kerr William Stephen Neilson has filed a cross-claim (the fourth cross-claim) in which he claims that he is entitled to a security interest over Dr Bremner’s proceeds as security for advances made to finance Dr Bremner’s conduct of the proceedings. This claim may not actually be contested by Dr Bremner, who has been named as the first cross-defendant. But the solicitors who formerly acted for Dr Bremner, Aitken Partners Pty Limited, also claim an interest. It has been joined as a third cross-defendant in the proceedings (the Sale Trustee is the second cross-defendant).
None of the disputes, or potential disputes, which arise from the third or fourth cross-claims need to be determined at this point. The primary objective is to decide all of the remaining issues which arise so far as the Sale Trustee’s administration is concerned. Once that has happened the trustee can be discharged and the parties’ residual shares paid into Court so that the remaining questions about the division of the proceeds can be determined.
The Sale Orders were made under Part 4 of the Property Law Act 1958 (Victoria) (“PLA”), pursuant to jurisdiction exercised by this Court under cross-vesting legislation. The factual background and the course of the administration up until mid-2024 is set out at J3 [7]-[88] and J4 [6]-[52].
As already noted, following the dismissal of the applications by the Aesthete Companies, the Sale Trustee proceeded with the sales of the five properties. The last of the sales was completed in January last year. The total amount received by the Sale Trustee (net of selling costs) from the five properties was $2.17 million.
Questions arose about whether the Sale Trustee would be liable for capital gains tax and how that liability ought to be assessed. Advice was sought on these questions. The Sale Trustee’s advisors have concluded that he will be obliged to lodge a return for capital gains tax purposes, but that no taxable capital gain will have been made. Counsel for the PIA Trustee did not accept the reasons given for this by the Sale Trustee, but agreed with the conclusion for different reasons.
The Sale Trustee’s notice of motion was initially filed in September last year. It has since been amended. As well as claiming his remuneration, the Sale Trustee seeks some administrative orders concerning the lodgement of capital gains tax returns and an order fixing an amount of recoverable costs arising out of the 2023 applications (see J3 [196]). The making of these other orders was not in dispute.
In the usual way, a consent was put before the Court in 2019 from the Sale Trustee before the order was made appointing him as trustee for sale. The Sale Trustee is a member of the accounting firm PKF and is based at the firm’s Melbourne office. Attached to the consent was a schedule of hourly rates to be charged for the services of firm members who might work on the administration. The schedule apparently reflected PKF’s standard charge-out rates at the time. The rates varied according to the position held with the firm, and ranged from $92 for a junior up to $602 for a principal.
The order made by the Court concerning the Sale Trustee’s remuneration provided that “[p]ursuant to [PLA] s 231(4)” he was “authorised to charge at the rates set out” in the schedule, which was referred to in the order as “Exhibit C”. The order also provided that the Sale Trustee was authorised to deduct payment so calculated from the proceeds of sale of the five properties.
The orders I made in September and October 2023 ([6] above) followed hearings on 29 September and 20 October respectively. In the course of the hearing on 29 September 2023, eight identifiable issues had emerged concerning the sale of the properties and the distribution of the proceeds (J3 [99]ff). One of these concerned the Sale Trustee’s remuneration for the work done to that point. Mr French had complained about the lack of progress in the administration. How much the Sale Trustee should be entitled to charge for his firm’s work was in contest.
Prior to the hearing on 20 October, a minute of order was agreed between the solicitors for Dr Bremner (who was then legally represented), the PIA Trustee and the Sale Trustee, providing for the resolution of the application before the Court. The minute was circulated to Mr French. It included an order that the Sale Trustee be entitled to charge at the rates specified in a new schedule, which set out PKF’s 2023 standard rates, “or as updated from time to time”.
The minute was not however presented to the Court at the hearing. Instead there was a debate about six of the issues which had been identified on 29 September. Some of these were resolved on the spot. Others I reserved for the making of orders. After the hearing, the minute was sent to the Court by Dr Bremner’s solicitors as an aide-memoire for the purpose of formulating those orders.
One of the issues which had not been resolved was the question of the Sale Trustee’s charges to date. In the end I decided to hold the question over until the end of the administration, and made some consequential adjustments to the 2019 Sale Orders (J3 [129]-[133]). The question of increasing the rates to be charged by the Sale Trustee did not arise and the proposed order to that effect did not play any part in formulating the orders which I made.
As already noted, in its final form the Sale Trustee’s application is for remuneration in the sum of $303,239. This includes $286,739 for work already done up to and including February this year. There is also an estimate of $16,500 for work which has not so far been billed and will be required to complete the administration. That estimate is not disputed.
The figure of $286,739 is, however, disputed. The dispute concerns two features of the claim as ultimately presented.
One was that the amount claimed was calculated by reference to PKF’s standard fee rates from time to time, as increased each year on 1 July. The effect was, by 2025-2026, the rates had increased by around 15-20% over the 2019 rate schedule set out in the October 2019 order.
The other feature was that, over time, employed staff who worked on the administration were promoted, which resulted in their services being charged out at higher rates than was charged for them under the 2019 rate schedule. For instance, Mr Mitchell Stewart, who undertook most of the work assisting the Sale Trustee on the administration, held in 2019 the rank of “senior 1”, resulting in his time being charged at $259 per hour. By 2023 he had been promoted to manager, and his services were being charged at $495 per hour.
Through his lawyers, the PIA Trustee challenged both of these features of the calculation. So far as the use of PKF’s standard rates from time to time was concerned, the contention was simple. The original Sale Orders only authorised the Sale Trustee to charge at the 2019 scale of fees. There had never been any amendment to the Orders in that regard. The annual increases used in the calculation for later years were therefore unjustified. I will refer to this as the “2019 fee scale” point.
The second point was not so direct. The PIA Trustee accepted that, as a matter of interpretation of the 2019 Sale Orders, PKF staff members could be charged out according to their ranks at the time they undertook the work (at 2019 rates for those ranks). But it was not legitimate, in counsel’s submission, to charge them out at automatically increasing rates as they were promoted, irrespective of the work they were doing. For instance, if in 2019 the work done by Mr Stewart in assisting the Sale Trustee had been capable of being done by someone holding “senior 1” rank, equivalent work in later years should likewise have been performed by someone holding that rank, rather than continuing to be performed by Mr Stewart at much higher rates which reflected his promotion within the firm. I will refer to this as the “staff promotion” point.
Ms Rodrigues, one of the solicitors acting for the PIA Trustee, undertook a calculation applying the 2019 rates and 2019 ranks to the work done in the later years. On these calculations, the annual increases in PKF’s standard rates accounted for $75,629 and the promotion of staff accounted for a further $29,402. There was no challenge to her calculations.
There was some debate between the parties about the way in which the application was conducted. In particular, counsel for the PIA Trustee submitted that the Sale Trustee failed to consult with the PIA Trustee’s representatives, resulting in significant unnecessary expenditure of costs. I do not see this debate as relevant to the fixing of the Sale Trustee’s remuneration itself. I will return to it, to the extent necessary, when dealing with the costs of the application.
Counsel for the Sale Trustee began by submitting that, in fixing the Sale Trustee’s remuneration, I was exercising an inherent jurisdiction of the Court to allow remuneration out of trust assets in connection with the administration of a trust fund. In counsel’s submission, the lodestar for the Court in such an application is to ensure that trustees receive fair and reasonable remuneration for the work done by them: Sanderson v Sakr (2017) 93 NSWLR 459 at [69]-[72].
In response to the 2019 rates point, counsel for the Sale Trustee submitted that it was clearly established that the Court had power, in the exercise of its inherent jurisdiction, to increase rates of remuneration specified in the original trust deed (or, in this case, court order) so as to keep pace with the rates generally charged for such services. Counsel relied on the decision of the English Court of Appeal in Re Duke of Norfolk*’s* Settlement Trust**s [1982] Ch 61.
For this reason, counsel submitted that it was unnecessary to vary the Sale Orders so as to provide that the Sale Trustee was entitled to charge at PKF’s standard rates from time to time. But in case the Court disagreed, the notice of motion had been amended to seek a variation in these terms “nunc pro tunc”.
Counsel acknowledged that the amendment brought the functus officio doctrine into play. The classic statement of that doctrine appears in the judgment of Griffiths CJ in Woods v Sheriff of Queensland (1895) 6 QLJ 163. I quoted it at J3 [141] but set it out again here for convenience:
… when a judgment or order is pronounced or made after hearing both sides, it is a general rule that the court which pronounced the judgment or made the order cannot reverse or vary it. … this rule … in my opinion applies equally to all judgments and orders, whether final or interlocutory, and whether pronounced by the Full Court or by a single judge, and whether he is sitting in court or in chambers …
Counsel accepted that the rule applied but relied upon two exceptions to it. First, the rule did not prevent the Court from varying the order based on a material change in circumstances after it had been made (Woods at 165): indeed, as counsel pointed out, I had already varied the Sale Orders on this basis (J3 [141]-[143]; [153]). Second, the Sale Trustee had not been represented before the Court at the time the Orders were originally made and was therefore entitled to apply to have it varied under r 36.16(2)(b) of the Uniform Civil Procedure Rules 2005.
On the merits, counsel submitted that remuneration at PKF’s standard rates, as they increased from time to time, was necessary to reflect the commercial value of the work undertaken over the period of the administration. The increase represented approximately 3.5% per annum over the period, which was hardly excessive.
The need to increase the allowed rates of remuneration was said to be particularly pressing because of the length and complexity of the administration. Counsel submitted that the administration had been delayed and additional work had been occasioned by external factors which could not have been foreseen. These included: the Gippsland bushfires in late 2019 and early 2020 (see J3 [47]); the COVID-19 lockdowns in 2020-2021; the lack of co-operation from Mr French and Dr Bremner; and the involvement of the PIA Trustee, followed by the 2024 proceedings involving the Aesthete Companies ([7] above). Counsel also pointed to complexities which arose in the sale and conveyancing process.
In his written submissions, counsel added that the point taken by the PIA Trustee was “unsavoury” given his consent to the proposed 2023 order increasing the Sale Trustee’s rate of remuneration. In oral submissions counsel appeared to go further, contending that the PIA Trustee was now estopped from going back on the consent.
In answer to the staff promotion point, counsel submitted that retaining the same personnel on the administration despite their promotion could not simply be assumed to have been a source of unnecessary cost. Staff members who had been promoted could be expected to retain familiarity with the administration which would make them more efficient.
Counsel also submitted that “considerable weight” should be given to the Sale Trustee’s evidence on the subject. In his affidavits, the Sale Trustee deposed that all work was conducted by professionals who were suitably qualified, and who conducted the work in a timely and efficient manner, and that the work performed by each person was “appropriately allocated” for that particular person to perform.
On the 2019 rates point, counsel for the PIA Trustee pointed out that the order made in October 2019 had been an order under PLA s 231(4), and submitted that, as a result, any power to vary it needed to be found in the Act. In counsel’s submission, the order had been a final one, only capable of being varied by means of an appeal. The Act did not contain any other provision for such an order to be varied. In this regard, it stood in contrast to the equivalent New South Wales legislation which contained, in s 66G(6) of the Conveyancing Act 1919, an express conferral of power on the Court to vary the terms of the trust for sale after it had been first created.
On the merits, counsel pointed out that there had been a delay of almost five years between the twelve-month period in the Sale Orders and the bringing of the present application. In counsel’s submission, the delay was a significant factor. In effect, the Sale Trustee was asking to be rewarded for that delay. Counsel reminded me that in my October 2023 judgment I found that the Sale Trustee was at least partially responsible for the failure to progress the administration to that point (see J3 [169]). Counsel submitted that, in these circumstances, the onus lay on the Sale Trustee to explain, fully and candidly, what the causes of the delay had been and why they should operate to his advantage.
Counsel submitted that the evidence offered by the Sale Trustee fell well short of providing such an explanation.
The evidence concerning the effect of the 2019-2020 bushfires consisted of an email sent to a local agent on 17 December which was not answered until 7 January due to a “situation with fires in the area”.
The evidence of COVID-19 disruption disclosed only that there were two lockdown periods, one between 31 March and 12 May 2020, and the other from 9 July to 27 October 2020.
Counsel reminded me that there was a period of more than two years between October 2020 and November 2022 during which there was no apparent progress with the administration: see J3 [189]. The Sale Trustee’s evidence did not address this period at all.
As to the lack of co-operation from Mr French and Dr Bremner, counsel submitted that such difficulties are not unusual in administrations of the present type. They are something which trustees for sale simply have to deal with, albeit that they may result in some additional cost: James v James (No 2) [2019] NSWSC 116 at [24] (Slattery J). They were hardly unforeseeable and did not justify a failure to take action on the part of the Sale Trustee.
The litigation by the Aesthete Companies did result in the auction being postponed, but the postponement was only for about eight weeks or so, from 8-9 May to 3-4 July 2024.
No point was taken about the six months or so required to complete the last of the sales, but there was further unexplained delay thereafter. The PIA Trustee requested an estimate of the Sale Trustee’s remuneration on 26 March last year, and was informed on 3 April that “accurate final information will be available shortly”, yet no application was filed until 11 September.
Counsel further submitted that the application to vary the remuneration order had been made very belatedly: it did not in fact emerge until the notice of motion was amended in early March this year. There was no evidence from the Sale Trustee of any increase in the costs of conducting his practice and carrying out the work on the administration. Counsel submitted that the application was an attempt by the Sale Trustee to “remake his bargain” retrospectively and should be refused for that reason.
In oral submissions, counsel objected to the argument relying on the inherent jurisdiction considered in the Duke of Norfolk’s case. This argument was, counsel submitted, not foreshadowed in the Sale Trustee’s notice of motion, and there had been no proper opportunity to respond to it. But if it was available, it should be rejected on the merits for the same reasons as the variation argument should be rejected.
Counsel acknowledged that the PIA Trustee had consented in 2023 to the Sale Trustee’s costs being increased in accordance with PKF’s standard rates. But counsel pointed out that there had been no consent from Mr French, nor had any order been made by the Court. In counsel’s submission, the position previously taken by the PIA Trustee was not binding on the Court and could have no weight in the determination of this application.
Counsel submitted that what he characterised as the inadequately explained delay was also relevant to the staff promotion point. Counsel also criticised the evidence given by the Sale Trustee on the delegations made in the course of the administration. Counsel submitted that the evidence was general and conclusory. It did not explain the process of delegation in any specific way and did not disclose whether there had been any consideration given to increasing seniority of the staff to whom the work was delegated as the administration went on.
In reply on the staff promotion point, counsel for the Sale Trustee submitted that, even if the point had some general validity, that would not necessarily result in a reduction to the full extent calculated by Ms Rodrigues. Counsel suggested that the calculation should have been done on the assumption that work on the sale started in about November 2020 and would have taken 15 months or so from that point. This, in counsel’s submission, would have yielded a different (and lesser) figure. Counsel also submitted that it could not be assumed every time a staff member working on the administration was promoted, it would necessarily have been cost effective to replace that staff member with someone else at the same level. Furthermore, had that approach been taken, more supervision might have been required from the Sale Trustee himself.
Counsel submitted that, if the point were upheld, the onus lay on the PIA Trustee to demonstrate what the permissible level of fees would have been. I asked counsel whether he wished to make a fall-back submission in the event that I did not accept this argument. Initially, counsel floated the idea of making some further submission, but there was an obvious difficulty with prolonging the argument beyond the day of the hearing. After an adjournment, counsel contented himself with relying on the onus submission he had previously made.
2019 rate****s: It is convenient to begin with the “inherent” jurisdiction discussed in the Duke of Norfolk’s case*.* The case concerned a settlement originally made in 1958. One of the trustees was a trustee company (“SETCO”). The terms of the settlement prescribed a scale of fees which SETCO was entitled to charge for its services as trustee. The settled property originally included a block forming part of the settlor’s estate at the Strand in London. In 1966, and again in 1969, the settlor added further blocks in the estate to the settlement. This led to a substantial redevelopment which required much more work to be done by the trustees than had originally been foreseen. In 1975 they applied for increased remuneration.
The application was heard in 1978 by Walton J. His Lordship decided that he had power to authorise the payment of additional remuneration, both to SETCO and to another individual trustee, the Earl of Perth, for work “done in the past which was outside the scope of any duties which could reasonably have been expected to be rendered by them as trustees”. But he decided that he had no power to authorise any general increase in SETCO’s rate of remuneration in the future. There was no appeal by any affected beneficiary against the first decision. SETCO however appealed against the second decision and it was overturned by the Court of Appeal.
There was no dispute that the Court had power, at least in some circumstances, to allow a trustee to be remunerated out of the trust estate if that was in the interests of the proper and effective administration of the trust estate. Fox LJ, who gave the leading judgment, linked the power to allow remuneration with the Court’s power to appoint and remove trustees. He said:
When the court authorises payment of remuneration to a trustee under its inherent jurisdiction it is, I think, exercising its ancient jurisdiction to secure the competent administration of the trust property just as it has done when it appoints or removes a trustee under its inherent jurisdiction.
On appeal, there were two arguments in support of Walton J’s decision that the jurisdiction could not be exercised in the present case. One was that the deed of settlement operated as a contract between SETCO and the settlor, and the Court lacked power to vary that contract. The other was that SETCO’s right of remuneration was an equitable interest in the trust fund and could only be varied in extremely limited circumstances which were not found in the present case: Chapman v Chapman [1954] AC 429; see also Re Dion Investments Pty Ltd [2014] NSWCA 367.
Following a review of authority, Fox LJ rejected both of these propositions. His Lordship concluded:
… the court has an inherent jurisdiction to authorise the payment of remuneration of trustees and that that jurisdiction extends to increasing the remuneration authorised by the trust instrument. In exercising that jurisdiction, the court has to balance two influences which are to some extent in conflict. The first is that the office of trustee is, as such, gratuitous; the court will accordingly be careful to protect the interests of the beneficiaries against claims by the trustees. The second is that it is of great importance for the beneficiaries that the trust should be well administered. If therefore the court concludes, having regard to the nature of the trust, the experience and skill of a particular trustee and to the amounts which he seeks to charge when compared with what other trustees might require to be paid for their services and to all the other circumstances of the case, that it would be in the interests of the beneficiaries to increase the remuneration, then the court may properly do so.
If the court has an inherent power to authorise a prospective trustee to take remuneration for future services, and has a similar power in relation to an unpaid trustee who has already accepted office and embarked upon his fiduciary duties on a voluntary basis, I have some difficulty in appreciating the logic of the principle that the court has no power to increase or otherwise vary the future remuneration of a trustee who has already accepted office. It would mean that, if the remuneration specified in the trust instrument were lower than was acceptable to the incumbent trustee or any substitute who could be found, the court would have jurisdiction to authorise a substitute to charge an acceptable level of remuneration, but would have no jurisdiction to authorise the incumbent to charge precisely the same level of remuneration. Such a result appears to me bizarre, and to call in question the validity of the principle upon which it is supposedly based.
What these passages make clear, as a matter of ratio, is that the decision of the Court of Appeal in the Duke of Norfolk’s case only stands for the proposition that the Court has power to make an order increasing a trustee’s remuneration for the provision of future services. The question in the present case is whether the Court may retrospectively increase the Sale Trustee’s rate of remuneration for work already performed. That is quite a different question.
In his review of the case law, Fox LJ referred to Bainbrigge v Blair (1845) 50 ER 231 as a “case of importance”. Mr Blair, a solicitor, was one of the trustees and executors appointed by the deceased under his will. The deceased gave Mr Blair a legacy of £200 as compensation for his time and trouble in acting as one of the executors. The estate was involved in extensive litigation, in which Mr Blair acted. He claimed payment of professional fees. This was refused by a taxing master, who held he was only entitled to recover his disbursements.
The taxing master’s conclusion was upheld on appeal by Lord Langdale MR. Fox LJ quoted the following passage from his Lordship’s judgment:
It [the present case] is very different from the case, where a trust being in the course of execution, and many things remaining to be done, which can be done beneficially only by a particular trustee, who cannot; from his situation, do it without grievous personal loss; and that party comes to the court, and states, that he is in a situation and is willing to do these things, but that he cannot, consistently with his own interest, proceed with such duties, and gratuitously devote his time for the benefit of the trust. In such a case, it is competent for the court, considering what is beneficial to the cestuis que trust, and is calculated to promote their interest, to take the matter into consideration, and to give proper remuneration to that person who alone, by his own exertion can produce that benefit.
I think it is clear from the passages of Fox LJ and Brightman LJ in the Duke of Norfolk’s case which I have already quoted, that their Lordships similarly had in mind cases of trustees approaching the Court for increased remuneration where they are not otherwise prepared to carry on in their office. In such cases it is easy to see the justification for awarding the trustee increased remuneration in future. Indeed, Brightman LJ expressly referred to “future remuneration”. But it does not provide any compelling justification for retrospectively increasing the trustee’s remuneration for work already done.
Fox LJ did refer to the order made by Lord Eldon LC in Marshall v Holloway (1820) 36 ER 681 as an instance of remuneration being awarded for past as well as for future services. The order recited that the trustee in that case had managed the estate in the deceased’s lifetime and had a special familiarity with it. He had been left a legacy of £200 by the deceased, evidently by way of compensation for his continuing time and trouble. But the trustee alleged that continuing to act would be such an extensive task that it would interfere with his private business, and that he would not have undertaken the trusteeship without having first been assured that an application would be made to the Court for further remuneration. In these circumstances the order directed a master to determine a reasonable allowance for the trustee (taking into account the £200 already left to him) for work done by him on administration of the estate. The order also directed the master to ascertain whether the trustee’s continued involvement was to the benefit of the estate, and if so to settle a reasonable allowance on him by way of remuneration for his future services.
Lord Eldon’s order is far from a strong authority on the point. There is no reasoning to explain the decision beyond the recitals to the order itself. Whether the master eventually concluded that the trustee’s past services had been worth £200 is not known. And the question of retrospectivity is complicated by the fact that an application for increased remuneration was, apparently, foreshadowed from the outset.
On the other hand, the judgment of Walton J in the Duke of Norfolk’s case at first instance is a clear instance of additional remuneration being awarded retrospectively. But his Honour’s reasoning clearly underlines the unusual circumstances of the award.
Following a review of the authorities (which included Marshall and Bainbrigge), his Lordship formulated a series of propositions, which included:
The court has always shown marked reluctance to award any remuneration unless the application has been made very promptly on assumption of office or where there has been a radical change in the circumstances.
The situation appears to me to be that in this particular case the trustees, quite exceptionally, in dealing with the [Strand redevelopment], performed services which can properly be regarded as wholly outside the scope of any duties which could reasonably have been expected to be rendered by any trustees in the normal course of their duties. There has undoubtedly been financial gain to the trust as a whole; and I accordingly think that any dispassionate observer, seeing the wholly exceptional nature of the trustees' activities, would consider that such wholly exceptional services were only being rendered on the basis that, if successful, they would be remunerated by something over and above whatever the trustees would otherwise have received out of the trust funds. I think the wholly exceptional nature of the services the trustees did indeed render in the present case is emphasised by the fact that it would, I think, prove very difficult to find specific powers in the trust instrument under which they could claim, in strict law, to have acted.
…I have not held it against SETCO and Lord Perth that they have made their application for remuneration which I can allow at the conclusion, rather than at the inception, of the scheme for development of the Strand estate. Although doubtless there are passages in the relevant judgments which could be construed to indicate that the court will never grant special remuneration retrospectively, I cannot think that special services cease to be special if no claim for remuneration is made until completion. Indeed, where the basis is, as it is here, the enhancement of the value of the trust property, it is indeed even more appropriate that the application should be made when the scheme has been brought to a successful conclusion than that they should be made before embarking on the scheme.
The first instance judgment must of course be read in the light of the Court of Appeal’s decision but, as already noted, that decision only deals with future remuneration. The Sale Trustee’s claim in the present case plainly is not a claim for remuneration of “special services” in the sense used by Walton J, and the rationale offered by his Lordship for awarding remuneration retrospectively does not apply.
In these circumstances, I am not persuaded that there is power under the inherent jurisdiction to make the order for retrospective increase in the Sale Trustee’s rate of remuneration sought in the present case. But it is not necessary to make a final decision on this question. Even if such a power existed, I do not think the present case would be a proper one for its exercise.
I agree with counsel for the PIA Trustee that the Sale Trustee has failed to demonstrate that the delay in selling the properties was a result of factors which were unforeseeable or beyond his control. In particular:
The time periods taken up by the 2019/2020 bushfires and the Covid lockdowns were not long in the scheme of things, and even within those time periods, there is a lack of concrete evidence of interference with any steps actually being taken by the Sale Trustee to advance the sale.
I have already said why the view that the lack of co-operation from the parties should not have resulted in the Sale Trustee simply dropping his oars: J3 [87]-[88].
An application did have to be made to the Court in 2023 and that application was somewhat protracted. But I have already expressed the view, at J3 [192], that the Sale Trustee never should have allowed the circumstances which resulted in that application to arise.
The truth is, as the Sale Trustee by his counsel now appears to accept, that the Sale Trustee could and should have instituted the sale process in October or November 2020. Had he done so, the sales would in all probability have been completed by mid-2022 if not before. That was before Mr French even entered into the PIA. All of the complications with the PIA Trustee, and later with the Aesthete Companies, would have been avoided.
In these circumstances, I agree with counsel for the PIA Trustee that to accede to the Sale Trustee’s application to increase his rates above the 2019 rates would involve rewarding him for his own delay in completing the sale of the properties.
I also agree with counsel for the PIA Trustee that the consent offered by him in 2023 is of no significance for the outcome of this application. Mr French never consented. Even if the PIA Trustee had maintained his consent, the proposed order would have faced scrutiny. It cannot be assumed that, given the lack of progress to that point, the Court would not have insisted that the Sale Trustee either adhere to the existing rates or resign in favour of someone else.
In the Duke of Norfolk’s case, there was evidence that SETCO was providing its services at a loss and was contemplating resignation as trustee. There is no suggestion that this was the case here. Nor is there even any evidence that the Sale Trustee actually refused work which would have been more highly remunerated because he was engaged in the present administration. The present facts are remote from those which have led to an award of further remuneration in the decided cases.
There is a further point. There is simply no evidence before the Court about why the present application was not made until almost six years after the Sale Trustee was originally appointed. This is particularly mysterious when the Sale Trustee’s advisers were apparently aware in 2023 that the Sale Orders did not entitle him to increase his fees in accordance with PKF’s standard rates.
I turn to the other basis on which the Sale Trustee pressed his claim. In my December 2023 judgment I assumed that there was an ongoing power under the PLA to make further orders concerning the administration, including as to the distribution of the proceeds, if a change in circumstances warranted that course. I accept that this was only an assumption about the statutory scope of those powers. But it would certainly be very inconvenient if that were not the case. The power to make orders under the PLA is conferred on the Victorian Civil and Administrative Tribunal. If it was not able to make some further order it would be necessary to make a separate application to the Victorian Supreme Court to exercise the inherent jurisdiction.
In these circumstances, I am not sure that the PIA Trustee is right in suggesting that there is no power to make any further order for remuneration, once an order has been made under s 231(4). But on the view I take, I can continue to assume that there is. It by no means follows that the power extends to varying an order with retrospective effect.
I do not think the exceptions to the functus officio doctrine upon which counsel for the Sale Trustee relied are engaged.
The “exception” for change in circumstances is, as Griffith CJ explains in Woods itself, only an apparent exception. It permits a party to argue, by reference to circumstances which have arisen since the order in question was made, that the order should be varied for the future. It does not permit an argument, by reference to circumstances which existed at the time that the order was made, that the order should be varied ab initio.
UCPR r 36.16(2)(b) only applies to orders where the parties were not present. At the time of making the order the Sale Trustee was not a party to the second cross-claim; indeed, he still is not.
For these reasons, I do not think that there is power to vary the remuneration order with retrospective effect. If I am wrong in that view, then for reasons already given I would decline to exercise any such power in favour of the Sale Trustee in the circumstances of the present case.
Staff promotion: There was no dispute that the Sale Trustee was obliged, in the interests of the beneficiaries, to do his best to minimise unnecessary expenditure in the administration. Clearly (and I do not think this was disputed), that obligation extended to considering, as the administration went on, whether work should be reallocated to staff with a lower ranking and lower charge out rate if that would save costs. I agree with counsel for the PIA Trustee that the need to consider this was particularly acute given the lengthy delay in the conduct of the sale and the lack of meaningful progress over the first three years or so.
In my view, the continued use of staff members to do the same work after they had been promoted and were being charged out at much higher rates is something which required explanation. I also agree with counsel for the PIA Trustee in his criticisms of the evidence of the Sale Trustee on this point. It was indeed too generalised to be of any use.
In these circumstances, there is simply no satisfactory evidence before the Court that any consideration was given to the issue at all. There may have been some justification in retaining staff on the administration despite their having been promoted, but, if so, it has not been put before the Court.
I recognise that it does not follow that Ms Rodrigues’ calculation correctly reflects the allocations which would have been made had the question of delegation been regularly reconsidered. But at the same time I think it is too simple to say that the PIA Trustee bore the onus and needed to prove what the product, in dollars and cents, of proper regular reconsideration of delegations would have been. The Sale Trustee was, after all, the applicant on the motion. He was seeking to justify his charges before the Court. The point having been raised, he had at least an evidentiary onus to deal with it, and did not properly do so.
Ordinarily in such circumstances I would allow some further factual enquiry to be undertaken. But clearly that would not be in the interest of either party bearing in mind the relatively small amount involved. In these circumstances I think that it is proper to use Ms Rodrigues’ figure as a starting point, even though not all of the deductions she has made, might, if fully scrutinised, prove to be justified. In this regard, I bear in mind that, on my findings, the sale of the properties should have been completed before 2023, in which event a substantial, if unquantified, degree of complication, and its attendant cost, would have been avoided.
On Ms Rodrigues’ figures, the amount which should be allowed, taking into account my finding on the 2019 rates point and allowing the full deduction for the staff promotion point, would be $198,208. I propose to round that figure up and fix the Sale Trustee’s remuneration at $200,000.
On 2 May, I issued to the parties a draft of the judgment to this point. I invited them to confer of the form of orders required to give effect to my conclusion, and on costs. A further hearing took place on 8 May at which the form of the orders to be made on the motion was essentially agreed. Formal orders, set out below, were made by consent on 12 May.
The parties, however, were unable to agree on costs. Following extensive further written submissions, a hearing on this issue took place on 26 June. I now turn to that issue.
Three questions were debated between the parties concerning the costs of the Sale Trustee’s motion. The argument was largely conducted between counsel for the Sale Trustee and counsel for the PIA Trustee. Mr French was present during the argument but did not seek to add anything. Dr Bremner made some brief supplementary submissions.
The three questions debated were:
whether an inter partes costs order should be made against the Sale Trustee for the PIA Trustee’s costs of the motion;
whether the Sale Trustee’s costs of the motion (including any liability for the PIA Trustee’s costs) should be paid out of the net proceeds of the sale of the properties (“the Fund”); and
whether the PIA Trustee’s solicitor-client costs, to the extent that they exceed any costs recoverable inter partes against the Sale Trustee, should be paid out of the Fund.
There was no dispute between the parties about the principles which apply to the incidence of costs in a case such as the present. I recently discussed those principles in Vlahos v Vlahos [2025] NSWSC 1612 at [101]-[105]. I will not repeat that discussion here. In summary:
where the proceedings are “adversarial” in the relevant sense, the usual rules concerning the award of costs inter partes apply, and in particular, costs generally follow the event;
otherwise, a trustee is generally entitled to indemnity for any costs incurred in the proceedings, including costs awarded against the trustee, but this prima facie entitlement may be displaced in the case of trustees who in substance act in their own personal interests or act unreasonably;
where action by a party other than the trustee results in the recovery of funds for the estate, or ultimately improves the position of the beneficiaries, the Court may make an order in favour of that party out of the trust assets.
At the hearing on 8 May which followed the issue of my draft judgment, counsel for the Sale Trustee appeared to accept that the PIA Trustee’s costs should be paid by the Sale Trustee (although the Sale Trustee should be indemnified from the fund). In the discussion which followed I indicated to the parties that, if possible, they should try to agree the quantum of costs so payable, and also the quantum of the Sale Trustee’s own costs and any additional costs claimed by the PIA Trustee out of the Fund.
Following the hearing, counsel for the PIA Trustee lodged calculations and written submissions on these questions of quantum, and sought the making of fixed sum costs orders. But in the end, counsel for the Sale Trustee contended that there should be no inter partes costs order in favour of the PIA Trustee and the Court should not make any fixed sum costs orders.
I will deal in turn with the three questions which were debated between the parties (including issues of quantum), but, before doing so, it is necessary to set out a brief chronology of the motion.
Reserve for further consideration:
(a) the extent to which the Trustee’s remuneration should be paid out of the proceeds of sale;
(b) the division of Mr French’s half share of the net proceeds of sale between him and the PIA Trustee.
At the time, the Sale Trustee was in communication with Dr Bremner, Mr French and the PIA Trustee. They were the remaining active parties to the proceedings on the cross-claim by Dr Bremner (the second cross-claim) which had resulted in the Sale Orders pursuant to which the Sale Trustee had originally been appointed: see J3 [197]-[198].
Correspondence between the parties was in evidence on the motion. The Sale Trustee was represented by Harrison Carlson (“HC”). Aitken Partners (“AP”) initially acted for Dr Bremner, but by the time the motion came on for hearing they had dropped out and Dr Bremner was self-represented. Mr French was self-represented throughout. The PIA Trustee was represented by Matthews Folbigg (“MF”).
On 20 March last year, HC sent a lengthy letter to the parties. They reported on the completion of the sale of the properties and the costs involved. They also addressed various issues concerned with winding up the administration.
For present purposes, the only relevant issue addressed by HC was the quantification of the costs to which the Sale Trustee was entitled on Dr Bremner’s 2023 motion to extend the time for sale of the properties, pursuant to the order which I had made on 1 December 2023 (see [20] above). That order provided:
Order that the second respondent’s [Sale Trustee’s] costs of the motion, on a solicitor-client basis, but capped to the solicitor-client costs which would have been recoverable had the second respondent made his own application at the time and in the manner described in this judgment, be paid out of the [Fund].
HC stated that the Sale Trustee’s costs of Dr Bremner’s motion were $32,329. They proposed that the costs be capped at $28,063. This figure was calculated as 80% of their professional costs and 100% of counsel’s fees.
On 26 March MF responded. They noted that the PIA Trustee had been seeking an estimate of the Sale Trustee’s costs and remuneration since July 2024, but HC’s letter only dealt with legal costs. They asked that the Sale Trustee “promptly provide, at least a figure for his current work in progress for which he seeks to claim payment, together with an estimate of future remuneration and expenses to the conclusion of this matter”. They did not otherwise address the Sale Trustee’s proposal concerning the costs payable under the order of 1 December 2023.
On 3 April, HC replied to MF. They stated that the Sale Trustee intended to bring a formal application before the Court to deal with “various outstanding matters”, including his remuneration. An affidavit in support of the application was being prepared, which would contain detailed information concerning his remuneration. Although not finalised it was “in advanced stages of preparation”.
In these circumstances, HC declined to provide the information sought by MF. They gave the following explanation:
Given the complexity of and fluidity of the sale processes (and the peripheral matters) you will appreciate that our client’s ability to accurately forecast future attendances has been very limited (particularly during the second half of 2024), until relatively recently.
Although there are some limited/continuing issues, which may require our client’s further attention and attendances (being matters we have invited your client to respond to us about previously and in our recent correspondence), our client does not expect any further delays or complications will arise.
MF were not satisfied. On 29 April they responded, reciting their prior requests to have the Sale Trustee “render [his] account for” his remuneration and expenses, and noting his obligations as trustee to provide such an account.
MF specifically expressed concern about the proposed application by the Sale Trustee. Further legal costs should not be incurred “unless there was some demonstrated need that could not otherwise be met by agreement between the parties”. HC were asked to advise why such an application was considered necessary. They formally reserved the PIA Trustee’s right to oppose the costs of the proposed application being paid out of the Fund. They made a “final request” for the Sale Trustee to “provide some reasonable guidance on the remuneration which he has incurred in this matter”, including remuneration and expenses to date and expected future remuneration and expenses.
HC declined. On 7 May, they wrote to MF, stating:
The Court has specifically reserved questions of the Sale Trustee’s remuneration, and other matters, for further consideration. Given the nature of the various proceedings, the different parties involved (one of whom [Mr French] has been unrepresented throughout) and their respective interests combined with the fact that the Court saw fit to reserve these matters for further consideration, out client is of the view that it is appropriate for the matter to be brought before the Court by way of the Proposed Application …
Of course, if upon receipt of our client’s application and supporting material, the parties can agree to a common position, our client would not be opposed to informing the Court of the same and request that the Court considers the matters on the papers. In any event … the affidavit is in the advanced stages of preparation and a draft is being reviewed by our Counsel.
MF continued to protest, but to no avail. Four months went by. Eventually, on 8 September, MF approached the Court to have the proceedings relisted. The Sale Trustee’s notice of motion and supporting affidavit were then filed on 11 September.
In his affidavit, the Sale Trustee outlined the course of the administration and the difficulties which had been encountered in completing it. He then addressed various specific issues.
One of the issues was the quantification of the Sale Trustee’s costs under the order of 1 December 2023. The Trustee set out in detail the costs he had incurred. He referred to the proposal in his letter of 20 March that the costs be fixed at $28,063, noting that there had been no reply to that proposal from any of the parties.
So far as his remuneration was concerned, the Sale Trustee deposed that he had recorded WIP to date of $242,325. The affidavit was accompanied by a detailed itemisation of that figure. The Trustee noted that most of the work had been performed by Mr Stewart and himself. He deposed in general terms that in his opinion: the length of time recorded as having been spent by PKF staff was reasonably necessary for the purpose of the administration; that all work had been conducted by qualified professionals who undertook it in a timely and efficient manner; and (as already referred to at [38] above) all of the work had been appropriately allocated to the person who performed it.
As already noted, although the Sale Trustee’s affidavit did not say so, the WIP recorded had been recorded at the rates charged by PKF from time to time. The affidavit did not refer to the terms of the remuneration order which I had made on 31 October 2019.
The Sale Trustee’s notice of motion identified the persons affected by it as “all parties”. The notice of motion sought:
an order fixing the Sale Trustee’s remuneration in the sum of $242,325 “or such other amount as determined by the Court”;
directions as to the division of the Fund between Dr Bremner, Mr French and the PIA Trustee; and
an order fixing the Sale Trustee’s costs under the order of 1 December 2023 at $28,063.
As already noted, the remuneration order made on 31 October 2019 referred to rates specified in “Exhibit C”. It seems that a copy of Exhibit C was not included in the record of the order in the Court’s electronic filing system. On 23 September, MF wrote to HC seeking a copy of Exhibit C. This was provided by HC on 29 September. On 7 October MF wrote a lengthy letter to HC setting out the PIA Trustee’s position on the Sale Trustee’s motion.
MF made the initial point that there was a question about the allocation of the costs associated with the proceedings brought by the Aesthete Companies between the parties. But they suggested that this question need not involve the Sale Trustee. The appropriate course was to deal with the Sale Trustee’s remuneration and for the rest of the fund be paid into Court, to be the subject of separate directions which could be the subject of debate between the parties.
So far as the Sale Trustee’s remuneration was concerned, MF summarised the PIA Trustee’s position as follows:
the Sale Trustee has charged the time of himself and his staff at rates which are significantly above those which were approved by [the Court] at the time of his appointment, resulting in an additional $85,499.37 (including GST) being claimed by the Sale Trustee; and
to the extent that the Sale Trustee intends to claim the work undertaken by persons who have been promoted from time to time in the 6 years since the Sale Trustee was appointed (primarily this related to the work undertaken by Mr Mitchell Stewart), then the work would appear to have been performed at a level and therefore cost which is significantly above what is warranted which would not be appropriate, and would be inconsistent with obligations of Sale Trustee …
In the body of the letter, MF explained the background to these two points in particular, they observed, in connection with the 2019 rates point, that the Court’s order simply did not authorise an increase in fees. They quantified the unauthorised increases as amounting to $85,499 of the $242,325 claimed.
MF also addressed the quantification of the Sale Trustee’s costs entitlement under the order of 1 December 2023. They suggested that the Sale Trustee’s proposal, which involved adopting 80% of solicitors’ fees and 100% of counsel’s fees, was too high. Instead they proposed that the recovery should be limited to 60% of solicitors’ fees and 60% of counsel’s fees, amounting to $19,447.
The letter also foreshadowed an objection to the Sale Trustee’s costs of the motion being paid out of the Fund. MF noted the attempts made by the PIA Trustee in correspondence to obtain information, and if possible resolve any disputes, about the Sale Trustee’s remuneration. The letter noted that the filing of the notice of motion and supporting affidavit represented the first occasion on which the Sale Trustee had actually particularised his costs and expenses.
HC responded on behalf of the Sale Trustee on 13 October. They asserted that the PIA Trustee had no standing to be heard on the question on remuneration. On the 2019 fee scale point, HC referred to the events of October 2023 and asserted that it was “not open” to the PIA Trustee to argue that the Sale Trustee’s rate should be limited to the ones in force in 2019.
HC also rejected the staff delegation point, referring to the complexity of the administration and saying it was “necessary and appropriate for Mr Stone and Mr Stewart” to be involved throughout. They referred to the general statements made in Mr Stone’s affidavit which I have already set out.
HC joined issue on the quantification of the costs to which the Trustee was entitled under the order of 1 December 2023, maintaining a claim for $28,063. They also rejected any challenge to the payment of the Sale Trustee’s costs of motion out of the Fund. They argued:
… whilst it may have been possible to seek a consent position on some matters set out in our clients Notice of Motion, the Notice of Motion is of course not limited to fixing the Trustee Remuneration. A consent position could not, of course, be reached with respect to distribution of the proceeds between the parties, particularly given the Court’s order of 23 October 2023 that matters involving the Trustee’s remuneration and the “division of Mr French’s half share of the net proceeds of sale between him and the PIA Trustee” were matters to be reserved for further consideration by the Court. Our client’s Notice of Motion, therefore, was required and appropriate given the comments from [the Court].
A directions hearing took place for the motion on 24 October. Directions were agreed between the parties fixing it for hearing on 5 December.
At the directions hearing counsel appeared for Mr Neilson, Dr Bremner’s financier ([9] above), for the first time. Counsel sought leave for Mr Neilson to be joined as an additional cross-defendant in the proceedings. A formal notice of motion was later filed for Mr Neilson and it too was eventually fixed for hearing on 5 December.
At the hearing on 5 December there was no opposition to Mr Neilson’s application to be joined; I later made orders accordingly. I also raised with the parties at the hearing questions about capital gains tax liabilities arising from the appointment of the Sale Trustee and the sale of the properties. Although the Sale Trustee’s evidence in support of the motion was formally read, it was agreed that questions about his remuneration could not be decided until the CGT issue had been investigated.
The proceedings were adjourned until 12 December. They were later adjourned until 19 December. By this stage the Sale Trustee had advised that his work in progress had reached $270,000. Counsel for the PIA Trustee indicated that there was no objection to the undisputed component of that amount being paid out of the Fund. The parties also agreed in principle that the Sale Trustee would need to file trust tax returns disclosing the disposal of the properties.
The upshot was a set of consent orders made following the hearing. These consisted of:
an order that the Sale Trustee be entitled to apply the sum of $156,825.24 from the Fund towards his remuneration;
directions for the Sale Trustee to amend his notice of motion and for the motion to be heard on 16 March this year;
directions for the PIA Trustee to file his cross-claim (see [8] above), and for it also to be heard on 16 March;
directions for Mr Neilson to file his cross-claim (see [9] above), to be returnable for mention on 16 March.
Pursuant to the directions made on 19 December, the Sale Trustee’s Notice of Motion was amended on 4 March this year. In its amended form, the Notice of Motion included the additional order amending, nunc pro tunc, the original remuneration order made on 31 October 2019 (see [16] above). The amount of remuneration was increased to $303,239. A direction was also added that the Sale Trustee prepare and lodge tax returns covering the period of the administration.
As contemplated by the directions, formal cross-claims were also filed on behalf of the PIA Trustee and Mr Neilson (see [8]-[9] above). The directions contemplated that that the PIA Trustee’s cross-claim would be heard and determined at the hearing on 16 March. But this did not happen. Instead it was agreed that the Court should deal with the Sale Trustee’s motion. This would allow his remuneration and costs to be determined and paid out, so that he could drop out of the proceedings.
As a result, the PIA Trustee’s cross-claim was stood over until after the Sale Trustee’s motion had been determined. Counsel for Mr Neilson took the same approach. No application was made on behalf of the Sale Trustee for any directions on the division on the assets either.
At the hearing on 16 March, counsel for the PIA Trustee advised the Court that no challenge was pressed to the figure proposed by the Sale Trustee for his recoverable costs of Dr Bremner’s motion of August 2023. Counsel also indicated that there was no issue in principle with directions being made concerning the filing of tax returns by the Sale Trustee. No objection was raised on these issues by Mr French or Dr Bremner either. The parties then proceeded with the presentation of evidence and submissions concerning the Sale Trustee’s remuneration.
The consent orders made on 12 May, following the issue of my draft reasons for judgment:
fixed the Sale Trustee’s remuneration at $200,000;
ordered that the remaining unpaid amount (taking into account the interim payment pursuant to the order made on 19 December last year) be paid out of the Fund;
fixed the Sale Trustee’s costs of Dr Bremner’s notice of motion of 9 August 2023 (see [171] below) at $28,063;
gave certain directions to the Sale Trustee concerning the lodgement of tax returns (see [171] below) and the notification of proposed drawings from the Fund.
Entitlement to costs: Counsel for the PIA Trustee contended that the concession by counsel for the Sale Trustee on 8 May had been correct. In substance, the dispute on the motion concerned the application of the 2019 rates point and the staff promotion point. It was adversarial in nature and the Sale Trustee lost. Costs should follow the event. The Sale Trustee should pay (on party-party basis) the whole of the PIA Trustee’s costs of the motion.
Counsel for the Sale Trustee disputed this analysis. Counsel made the following points.
The motion should not be seen as one brought in the Sale Trustee’s own interests. The question of remuneration had been reserved. And even if agreement had been reached with the PIA Trustee, this would not have bound Dr Bremner or Mr French. The Sale Trustee therefore had no choice but to bring an application before the Court.
Nor should the Sale Trustee be criticised for proceeding on the basis that he was entitled to increase his rates in conformity with the rates charged generally by his firm. In doing so, he was acting consistently with the approach of the other parties, including the PIA Trustee, which had been manifested in October 2023.
The Sale Trustee did not in the end succeed in recovering all of the remuneration which he sought. But he still obtained a substantial order for remuneration in his favour. This was consistent with the alternative claim in this notice of motion for “such other amount as determined by the Court”. The figure of $200,000 fixed by the Court exceeded the amount for which the PIA Trustee contended. The Sale Trustee thus obtained what, in substance, he sought.
Counsel acknowledged that the Sale Trustee’s application to vary the sale order as sought in the Amended Notice of Motion failed. But this, in counsel’s submission, was a minor aspect of the argument, which did not affect the overall picture.
Furthermore, the claim for remuneration was not the only claim for relief in the notice of motion. The Sale Trustee’s costs of Dr Bremner’s motion of August 2023 were eventually fixed in accordance with the Sale Trustee’s figure. The claims for directions concerning the lodgement of tax returns for CGT purposes and directions for the division of the proceeds of sale were resolved by agreement.
And the proceedings from September last year onwards involved not only the Sale Trustee’s claim for remuneration but other matters as well. Counsel mentioned the debate about CGT, and the cross-claims by both the PIA Trustee and Mr Neilson. In counsel’s submission, the appearances which took place, at least prior to the hearing on 16 March this year, would have been required even if no claim for remuneration had been made.
Counsel submitted that, in the light of these factors, the Sale Trustee should not be ordered to pay the PIA Trustee’s costs of the motion. Alternatively, any such order should be heavily discounted. Counsel suggested, on a “broad brush” basis, that at most the Sale Trustee should pay would be 35% of the PIA Trustee’s costs.
In evaluating the parties’ respective submissions, I think it is convenient to begin with the PIA Trustee’s letter of 7 October last year. That letter squarely raised the 2019 rates point and the staff promotion point. It quantified the financial effect of the 2019 rates point, demonstrating its significance.
The Sale Trustee’s response, in his letter of 13 October, was not co-operative. He did not address the substance of the 2019 rates point at all. Instead he denied that the PIA Trustee had standing to raise the point (an argument not pressed by his counsel at the hearing of the motion). He also asserted that the PIA Trustee’s conduct in 2023 prevented him, even if he had standing, from raising the point (an argument which, with respect, I found unmeritorious and have rejected). On the staff promotion point, he simply repeated the broad generalities from his affidavit, which I have found to be an insufficient response.
What happened thereafter was not some sort of generalised enquiry about how much remuneration the Court should allow the Sale Trustee. There was no question that the Sale Trustee was entitled to be remunerated. The Court had already made an order in his favour. The issue, as between the Sale Trustee and the PIA Trustee, was whether specified components fell within the terms of that order, or, if not, the order should be varied. It was an adversarial contest.
Nor is there any dispute about the outcome of that contest. The area of dispute lay between the amount claimed by the Sale Trustee (eventually $303,239) and the amount conceded by the PIA Trustee as not being affected by the 2019 rates point and the staff promotion point (eventually $198,208). It is true that Sale Trustee recovered more than the amount conceded by the PIA Trustee on his best case, but this was only as a result of rounding. The PIA Trustee achieved more than 95% of the reduction which he sought. Clearly it was the PIA Trustee who won the day.
Nor do I agree that the Sale Trustee’s application to have the Court vary its remuneration order was some sort of separate issue. The application was only part of the wider argument about whether the Court could, or should, increase the Trustee’s remuneration beyond that which had been ordered in October 2019.
Similarly, I do not think that the inclusion of the other claims for relief in the notice of motion calls for any partitioning of the costs. To the extent that the Sale Trustee can be said to have succeeded on any of them, such claims were not so “clearly dominant or separable” (Waters v PC Henderson (Australia) Pty Ltd [1994] NSWCA 338 at 3) so as to justify such a partition.
The application for directions as to the division of the Fund between the parties did not play any part in the hearing and the Trustee did not obtain any such directions. This was because it was unnecessary for the Sale Trustee to be involved in that question, a point made by the PIA Trustee in his letter of 7 October last year.
The Sale Trustee did obtain directions concerning the filing of tax returns for CGT purposes, but there was no contest about those directions. Furthermore, as counsel for the PIA Trustee pointed out, properties purchased for investment purposes are commonly the subject of orders for sale by the Court. Practitioners accepting appointment as trustees for sale should be expected to be aware of their taxation obligations, particularly with respect to capital gains tax, in that capacity.
The PIA Trustee’s letter of 7 October did contest the figure proposed by the Sale Trustee for his recoverable costs of Dr Bremner’s motion of August 2023. But thereafter the issue does not appear to have been further agitated by either party until the PIA Trustee’s objection was formally abandoned on 16 March this year.
Similar considerations apply to the cross-claims by the PIA Trustee and Mr Neilson. So far as I can see, the Sale Trustee’s motion was the principal focus throughout. The cross-claimants may have taken advantage of court hearings occasioned by that motion to obtain directions and other procedural orders for the purposes of their cross-claims, but this did not substantially increase the length (or, presumably, the cost) of the hearings. Had the motion not been brought, the course of the proceedings would have been quite different. I do not agree that the hearings which took place would have been required in any event.
It must be borne in mind, however, that the PIA Trustee will have incurred some costs, apart from the costs of the mention hearings on the motion, solely referable to prosecuting his cross-claim or defending Mr Neilson’s cross-claim. His costs of preparing and filing his statement of cross-claim are an example. Another is the costs of the mention on 31 October last year, which concerned Mr Neilson’s motion for joinder only. Such costs will not be covered by the order to be made in favour of the PIA Trustee against the Sale Trustee.
It remains to consider the position prior to Sale Trustee’s letter of 13 October last year.
I think that the criticisms of the Sale Trustee’s conduct during this period which were made by counsel for the PIA Trustee have some force. It is true that the Court had formally reserved the question of the Sale Trustee’s remuneration. That required orders to be sought from the Court fixing that remuneration. But it did not require a formal application by way of notice of motion. If the parties had been able to agree, it could have been done by way of consent order.
It is therefore regrettable that the Sale Trustee insisted on making a full-scale application for his remuneration by way of notice of motion, without giving the parties an indication of the amount which was to be claimed in correspondence first. I can see no good reason for holding that information back. The only justification offered by the Trustee in correspondence for doing so was that the application was already in an advanced state of preparation, so that nothing would be gained by immediate disclosure. That however did not prove to be the case, and there is no evidence to explain the delay.
Mystery also surrounds the lack of reference by the Sale Trustee, in putting together the application, to the remuneration order being limited to PKF’s 2019 rates. As already noted, I thought it reasonable to suppose from the minute of order proposed by the Trustee in October 2023 that his representatives were, at that point, aware of the limitation. If so, they cannot have been unaware that the order had not been made, and the problem had therefore not been solved. Yet nothing more appears to have been done about it.
In these circumstances, I am not prepared to accept that the submission from counsel for the Sale Trustee that it was reasonable for the Trustee to bring the application as he did because he assumed that all parties agreed that his fees would increase in accordance with PKF’s standard rates. There was no evidence on the application which actually said that. And if the Sale Trustee simply assumed that it was so, that would hardly have been satisfactory.
As trustee, the Sale Trustee had a duty to familiarise himself with the terms of the trust (J D Heydon and M J Leeming, Jacobs*’* Law of Trusts in Australia (8th ed, 2016, LexisNexis) at [17-01]). So far as his remuneration was concerned, the order was quite clear in its effect. The Sale Trustee should not have found it necessary to rely on the PIA Trustee to point it out to him.
Upon being served with the Sale Trustee’s Notice of Motion, the PIA Trustee promptly obtained a copy of Exhibit C and then raised the 2019 rates point and the staff promotion point. There is every reason to think that if the Sale Trustee had provided the information requested by the PIA Trustee in correspondence, the PIA Trustee would have been able to notify the points to the Sale Trustee before the notice of motion was filed.
It is therefore plausible to argue that the Sale Trustee’s reaction when the points were raised would have been the same if they had been raised before the Notice of Motion was filed, and the motion should be treated as between the Sale Trustee and the PIA Trustee, as having been adversarial from the outset. But that would result in the PIA Trustee receiving his costs of investigating and responding to the Sale Trustee’s claim, which he might not have received if the issues had been raised in correspondence and the costs had been incurred before the notice of motion was filed.
Furthermore, counsel for the Sale Trustee was correct to point out that Dr Bremner and Mr French were entitled to consider the questions raised by the motion for themselves. It was not unreasonable for the Sale Trustee, even if only on their account, to give a detailed description of the course of administration and to present his application for remuneration in that context. There were also other matters canvassed in correspondence and made the subject of the motion.
The matter is close to the line. But in the end I do not think that I should go to the extent of treating the entire motion, from its inception, as having been adversarial in nature as between the Sale Trustee and the PIA Trustee. I therefore conclude that the PIA Trustee should receive an order for his costs from 13 October last year onwards, on an inter partes basis. He will bear his own costs of the motion prior to that date.
Quantum: The PIA Trustee was said to have incurred at least $150,000 in responding to the Sale Trustee’s motion. Counsel for the PIA Trustee asked the Court to make a lump sum costs order for half that amount ($75,000). Counsel submitted that this was well below what the PIA Trustee might expect to recover on assessment.
Counsel for the Sale Trustee resisted the application. In the usual course, the quantification of costs, if the parties cannot agree, is undertaken by assessment. Counsel submitted that there was nothing in the present case to take it outside the ordinary course.
Furthermore, counsel submitted that the PIA Trustee’s costs appeared high. Counsel suggested in particular that a great deal of work had apparently been done on “reverse engineering” the remuneration claimed by the Sale Trustee. Counsel submitted that this was routine work that should not have been done by a solicitor and charged out at professional rates of $450 per hour.
On the face of it, 50% is a steep discount. Counsel for the PIA Trustee pointed out in reply that the PIA Trustee’s costs were comparable to those which have been incurred by the Sale Trustee himself. Nevertheless counsel for the Sale Trustee insisted that there was a possibility that the costs as assessed might be less than half the amount claimed.
Be that as it may, I agree with counsel for the Sale Trustee that there is no reason to think that the quantum of the costs could not be the subject of agreement, or if there is no agreement, that it cannot be efficiently determined by means of assessment. Both the PIA Trustee and the Sale Trustee are represented by capable lawyers. Furthermore, since the inter partes costs order will be met by the Sale Trustee from his own funds, the progress of the administration will not be delayed if an assessment is required. In these circumstances, I do not propose to make a lump sum costs order over the protest of the Sale Trustee.
Entitlement to costs: As already noted, counsel for the Sale Trustee contended that the Trustee should be indemnified out of the Fund for his costs of the motion, including any costs awarded in favour of the PIA Trustee. Counsel submitted that those costs had been reasonably as well as honestly incurred, and that this was sufficient to entitle the Sale Trustee to an indemnity (citing Miller v Cameron (1936) 54 CLR 572 at 578; Drummond v Drummond [1999] NSWSC 923 at [43]-[46]).
I accept of course that the Sale Trustee acted honestly. His contentions were not unarguable. But I do not think that is enough. I have concluded that Sale Trustee’s reaction to the PIA Trustee’s letter of 7 October was adversarial. The terms of the order made on 31 October 2019 were clear. In contending that he could recover the remuneration claimed, the Sale Trustee was doing no more than advancing his own interests. So far as the 2019 rates point was concerned, he was seeking an indulgence.
I thus conclude that the Sale Trustee is entitled to recover his costs of his motion from the Fund up until he received the PIA Trustee’s letter of 7 October, but thereafter should have no recovery, either for his own costs or the PIA Trustee’s costs.
It should however be borne in mind that the Sale Trustee was named as a cross-defendant both in the PIA Trustee’s and Mr Neilson’s cross-claims. Again, costs incurred by him solely in that capacity as a cross-defendant (or as a respondent to Mr Neilson’s motion for leave to be joined as a defendant) are not costs of the motion. The Sale Trustee should recover them from the Fund (I assume that, when the Sale Trustee drops out of the proceedings, the cross-claims will be dismissed against him with no order as to costs).
Quantum: Counsel for the PIA Trustee did not dispute that, generally speaking, any costs to which the Sale Trustee was entitled from the Fund would be paid on an indemnity basis. But counsel contended that in the present case full indemnity would not be appropriate.
Counsel submitted that the Sale Trustee’s costs from the beginning of last year onwards were excessive. Counsel also criticised the delay in bringing the remuneration application forward, especially given the Sale Trustee’s refusal to engage with the PIA Trustee on the quantum of remuneration sought. In counsel’s submission, the upshot had been a significant waste of costs.
Counsel presented a detailed set of calculations which reduced the Sale Trustee’s costs by about 40%. Counsel invited me, again, to fix the amount due by way of lump sum costs order, in the interests of bringing the resolving the question and allowing the remaining questions between the parties about distribution of the Fund to be determined.
As already described, counsel for the Sale Trustee rejected the criticism of his conduct. Nor did counsel accept the financial analysis put forward by counsel for the PIA Trustee. In his submission, if there was to be any investigation of the costs at all, it needed to be undertaken on an assessment basis.
The criticisms by counsel for the PIA Trustee of the Sale Trustee’s conduct in bringing the application have already been addressed. While there is force in some of those criticisms, it is not sufficient to persuade me that there should be any qualification in principle upon the Sale Trustee’s right to recover the costs of the motion (up to 7 October last year) out of the Fund. Although the Sale Trustee may be considered somewhat fortunate in obtaining full recovery, it is simply not expedient to try to formulate an order imposing qualifications upon that right (for instance recovery only for particular tasks, or over particular periods of time). Indeed I was not asked to do so.
The order which will be made in favour of the Sale Trustee does not, of course, prevent his claim from being scrutinised at all. As with any order for indemnity costs, objection may still be taken on the basis that specific items were so unreasonably incurred, or are in such an unreasonable amount, as to fall outside the indemnity.
But I am not prepared to fix the final figure by way of lump sum costs order, over the objection of the Sale Trustee. His entitlement to recover indemnity for his costs is a matter of legal entitlement; it derives directly from his status as a trustee appointed by the Court: 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 at [69]; see also Perpetual Trustee Company Ltd v Attorney General (NSW) [2018] NSWSC 1456 at [122]-[127] (Leeming JA, sitting at first instance). A lump sum costs order generally involves fixing a figure which is less than the amount which would be recovered on assessment: Hamod v State of New South Wales [2011] NSWCA 375 at [814]. I would require further persuasion before being satisfied that I could properly impose that on the Trustee, with the result that he receives less than his legal entitlement for undertaking the administration, over his objection.
And even if I thought that it were permissible, I would not make a lump sum costs order in the present circumstances. I am not satisfied that the PIA Trustee’s calculations are an accurate method of assessing the Trustee’s entitlement for that purpose. On any view, detailed further consideration of individual items of cost would be required, and that would not be a satisfactory use of judicial time.
Given the orders that I propose to make, it will be necessary for the Sale Trustee to identify the costs of the motion up to 7 October last year to which he claims to be entitled (as well as any costs solely referable to the cross-claims by the PIA Trustee and Mr Neilson). I would like to think that, given the scrutiny which has already been applied through the costs argument, that can be done quite quickly and that it should be capable of agreement. But if objections remain, I will ask the parties to propose some method for their resolution, which may involve referring the matter to the Registrar or perhaps to a referee.
Counsel for the PIA Trustee pointed out that the Trustee’s defence of the application had resulted in a saving to the beneficiaries of the Trust. Counsel submitted that, as a result, the PIA Trustee’s costs of defending the application, to the extent not covered by the inter partes cost order against the Sale Trustee, should be paid out of the Fund.
An initial point should be mentioned. Any costs awarded out of the Fund on this ground would need to be capped. On no view should they exceed the benefit derived by the beneficiaries from the PIA Trustee’s defence of the motion.
That benefit may be difficult to quantify. Based on the respective positions of the Sale Trustee and the PIA Trustee at the final hearing of the application, the saving is $105,031.31. But if the PIA Trustee had not defended the Sale Trustee’s application, it would likely have been resolved more quickly and the Sale Trustee’s remuneration would have been lower than the amount ultimately claimed, thus reducing the benefit.
I do not find it necessary to go into this question. I think that practical questions predominate. If I accede to the PIA Trustee’s application, it would be necessary to have a further debate the quantum of costs (bearing in mind that the Sale Trustee contends that the costs incurred are excessive) which will delay further the next step in the proceedings, which is to divide the proceeds net of the fees and costs payable out of the Fund, among the parties.
The PIA Trustee already has the benefit of a party-party costs order. One would not usually expect that there would be a large difference between the Trustee’s party-party costs and his solicitor-client costs. He was represented (entirely appropriately, so far as I can see) by experienced junior counsel. I have referred to the offer made on his behalf to accept 50% of his costs by way of lump sum costs order, but I have declined to make such an order and I would expect the assessable costs to exceed that percentage. In these circumstances, I do not consider that there is sufficiently compelling case for an additional order out of the Fund.
The orders made by the Court on 12 May 2026 on the Sale Trustee’s Notice of Motion filed 11 September 2025, as amended, were (relevantly):
ORDER that Jason Stone’s remuneration, in his capacity as trustee for sale appointed pursuant to orders made on 31 October 2019, be fixed in the sum of $200,000 (inclusive of GST).
ORDER that Jason Stone’s remuneration, as fixed by the Court pursuant to order 1 be paid out of the proceeds of sale of the properties the subject of his appointment.
Noting that pursuant to order 1 made on 19 December 2025 Jason Stone has already drawn the sum of $156,825.24 from the proceeds of sale of the properties the subject of his appointment (“the Nett Proceeds”), Jason Stone is authorised to deduct a further amount of $43,174.76 from the said proceeds in payment of the balance of his remuneration pursuant to order 1 above.
ORDER that Jason Stone’s costs of the Notice of Motion filed by Dr Bremner on 9 August 2023 be fixed in the sum of $17,063 (including GST), plus counsel’s fees in the sum of $11,000 (including GST).
DIRECT Jason Stone to finalise and lodge tax returns for the period of his appointment as trustee for sale pursuant to the orders of the Court made on 31 October 2019 by 20 May 2026.
DIRECT Jason Stone to provide the PIA Trustee, Dr Bremner and Mr French with a schedule identifying the costs and expenses he intends to pay from the Nett Proceeds by no later than 20 May 2026.
The further orders I now make on the motion are:
Order that the applicant pay the third respondent’s costs of the motion, on the ordinary basis, from 13 October 2025 onwards.
Order that the third respondent otherwise bear his own costs of the motion.
Order that the applicant pay his own costs of the motion from 7 October onwards, as well as the costs payable under order (1), without recourse to the proceeds of sale of the properties the subject of the Court’s orders.
Order, for the avoidance of doubt, that the costs of the applicant and of the third respondent of the motion are not to include costs solely referable to their prosecution or defence, as the case may be, of the third or fourth cross-claims.
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[15] grammatical error. [54] grammatical error.
Bremner
French (No 6)
(2008) 237 CLR 66
(1936) 54 CLR 572
(2017) 93 NSWLR 459