JABW Pty Ltd

Catchwords: EQUITY – trusts and trustees – judicial advice – whether trustees justified in defending proceedings brought by beneficiaries – where beneficiaries seek access to trust documents – where trustees not obliged to provide trust documents under trust deed – advice given – trustees justified in defending proceedings

Legislation Cited: Bankruptcy Act 1966 (Cth) Pt XI
Guardianship Act 1987 (NSW)
Trustee Act 1925 (NSW) s 63

Cases Cited: Alexander Williams v Winifred Williams [2021] NSWSC 1402
AW v WW (No 2) [2024] NSWSC 146
Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42
Re Dion Investments Pty Ltd (2014) 87 NSWLR 753; [2014] NSWCA 367
Silkman v Shakespeare Haney Securities Ltd [2011] NSWSC 148
WW v AJFW [2024] NSWSC 754
Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484; [2003] HCA 15

Category: Principal judgment

Parties: JABW Pty Ltd ACN 656 940 028 (First Plaintiff)
AAFW Pty Ltd ACN 656 940 466 (Second Plaintiff)
JJFW Pty Ltd ACN 656 940 822 (Third Plaintiff)
BKFW Pty Ltd ACN 646 941 767 (Fourth Plaintiff)
WW Two Pty Ltd ACN 685 137 839 (Fifth Plaintiff)

Representation: Counsel:
R Marshall SC with P Bruckner and T Arnold (Plaintiffs)
F Douglas KC with B Dziubinski (Interested Party)
Solicitors:
One Group Legal (Plaintiffs)

File Number(s): 2025/380975

Publication restriction: None

JUDGMENT

Introduction

1. The plaintiff trustees seek judicial advice that they would be justified in defending proceedings (the Beneficiary Proceedings) brought by beneficiaries of the trusts of which they are trustees seeking:

2. Financial records relating to the trusts, including bank statements, certain invoices rendered to the trusts by professional advisers and other documents relating to loans made by the trusts to the late Winifred Williams (WW), the economic settlor of the trusts;

3. Interlocutory orders restraining:

(a) The first defendant, JABW Pty Ltd as trustee of the Win Williams Investment Trust, from distributing the income or capital of that trust or paying legal and accounting expenses; (b) The fifth defendant, WW Two Pty Limited from “transferring, dealing with, encumbering, or otherwise disposing of any property held by it as trustee of WW2 Trust”.

2. The plaintiffs also seek judicial advice that they would be justified in paying their legal costs of the application for judicial advice and the costs they incur in defending the Beneficiary Proceedings.

Background

3. The following background is taken from the statement of facts provided to the Court in connection with the application for judicial advice. It does not represent findings by the Court of facts, but rather is an outline of the assumptions made by the Court in giving advice.

4. In 2010, WW and her late husband, Mr Kenneth Williams (Ken), bought a house in Glaisher Parade, Cronulla (Glaisher Pde). For a time, their only son, Alexander, his wife Michelle, and their three children, Angus, Jordan and Billy lived in that house.

5. Following the death of Ken in 2015, relations between WW on the one hand and Alexander and Michelle on the other began to breakdown. For a time (it is not clear when), WW also lived in the downstairs area of Glaisher Pde. On 11 February 2021, WW commenced proceedings against Alexander and Michelle and a family company, Howglen Pty Ltd (Howglen), in which both WW and Alexander held shares, seeking to recover possession of her assets including Glaisher Pde. Mr Kelvin Solari, a Cronulla solicitor to whom WW had been referred by the Law Society, acted for her in those proceedings. The orders sought by WW were made by Rees J on 16 February 2021. Subsequently, the proceedings were settled on the basis that WW transferred her shares in Howglen to Alexander for $426,941 and the parties gave mutual releases.

6. On 31 March 2021, WW made her last will leaving the bulk of her estate to be divided equally between her three grandsons. The executors of her will are Mr Solari and her accountant, Mr Justin McCarthy.

7. In October 2021, WW contracted to purchase a self‑care unit from Wesley Mission for $678,000. She instructed a real estate agent to list Glaisher Pde for sale. Alexander commenced proceedings to restrain that sale, which were dismissed by Rein J on 15 October 2021: see Alexander Williams v Winifred Williams [2021] NSWSC 1402.

8. On 15 October 2021, WW contracted to sell Glaisher Pde for $5,660,000. That sale settled in January 2022, following which WW moved into her self-care unit. In the meantime, on 8 October 2021, Alexander commenced proceedings in the NSW Civil and Administrative Appeal Tribunal (NCAT) under the Guardianship Act 1987 (NSW) seeking the appointment of a financial manager and guardian for WW (NCAT1).

9. On 8 February 2022, WW established six trusts. Three were discretionary trusts (the AAFW Discretionary Trust, the JJFW Discretionary Trust and the BKFW Discretionary Trust), each of which held units in a unit trust that was intended to hold real property and shares (the AAFW Unit Trust, the JJFW Unit Trust and the BKFW Unit Trust respectively). JABW Pty Ltd is the trustee of the AAFW Unit Trust, the JJFW Unit Trust and the BKFW Unit Trust. The trustee of the AAFW Discretionary Trust is AAFW Pty Ltd. The trustee of the JJFW Discretionary Trust is JJFW Pty Ltd and the trustee of the BKFW Discretionary Trust is BFFW Pty Ltd. In the case of each discretionary trust, Alexander and Michelle, together with Mr Solari and Mr McCarthy, were identified in the “Excluded Class”. Mr Solari and Mr McCarthy were appointed and remain directors of each of the trustee companies.

10. On 8 February 2022, WW gifted $1,200,000 to each of the three discretionary trusts. Those amounts were derived from the sale proceeds of Glaisher Pde.

11. On 20 April 2022, a discretionary trust was settled to hold the retirement village asset (the Win Williams Investment Trust). The trustee of that trust is JABW Pty Ltd.

12. Each of the three unit trusts acquired a real property and a share portfolio.

13. On 30 May 2022, WW assigned to the trustee of the Win Williams Investment Trust her interest in her right to a refund of the deposit she had paid for her unit in the retirement village.

14. On 28 November 2022, following a contested hearing in which both parties were represented by senior counsel, NCAT made orders in NCAT1 dismissing Alexander’s applications for the appointment of a financial manager and guardian.

15. Alexander appealed to this Court from the decision in NCAT1. On 27 June 2023, Lindsay J delivered reasons for dismissing Alexander’s application for leave to proceed on the appeal other than on questions of law. Following a contested hearing in which both parties were represented by senior counsel, Kunc J, on 23 February 2024, dismissed the appeal from NCAT1: AW v WW (No 2) [2024] NSWSC 146.

16. On 8 March 2024, Alexander and Michelle filed fresh applications with NCAT for the appointment of a financial manager and guardian for WW (NCAT2).

17. On 13 May 2024, WW commenced proceedings in this Court against Alexander and Michelle to prevent them prosecuting NCAT2 on the grounds of vexation. That application was dismissed with costs on 21 June 2024: WW v AJFW [2024] NSWSC 754.

18. The trusts made loans to WW to pay her legal expenses of the various proceedings. It appears that, at least in part to enable the trusts to make those loans, the trusts sold assets including the real property they owned.

19. On 5 July 2024, the WW Two trust was established with WW Two Pty Ltd as its trustee.

20. On 17 December 2024, NCAT dismissed NCAT2.

21. On 29 December 2024, WW died at Sutherland Hospital. Subsequently, pursuant to resolutions passed by the trustees of the discretionary trusts, the assets of each of the discretionary trusts were transferred to the WW Two Trust and the WW Two Trust agreed to indemnify the transferring trust “for the Trust’s current debts, other liabilities and expenses and future debts, other liabilities and expenses incurred prior to future vesting of the Trust”. Those resolutions gave effect to instructions that WW had given before her death.

22. On 11 March 2025, Mr Solari and Mr McCarthy filed a summons for probate of WW’s last will.

23. On 25 September 2025, the Federal Court of Australia made orders on JABW Pty Ltd’s application that WW’s deceased estate be administered under Pt XI of the Bankruptcy Act 1966 (Cth).

24. The trust deeds governing the trusts were amended on several occasions on the instructions of WW.

25. Relevantly, as a result of amendments made on 14 October 2023 each of the trust deeds contains the following clauses:

“22.4 A Beneficiary in whose favour the Trustee has exercised a discretion under this Deed to distribute income or capital shall be entitled:

(a) to receive from the Trustee full details of the amount and nature of the Beneficiary's entitlement to the income or capital; and

(b) upon the Beneficiary making a request to the Trustee, or a request to the Trustee being made on the Beneficiary's behalf, to receive from the Trustee

(i) a copy of this Deed and any amendments thereto;

(ii) a copy of any minute, written resolution or other document recording the Trustee's exercise of discretion in favour of that Beneficiary; and

(iii) a copy of the accounts of the Trust Fund for the Financial Year in relation to which the Beneficiary's entitlement arose.

22.4A Notwithstanding clauses 22.3 and 22.4, a Beneficiary other than the Principal Beneficiary Winifred Williams shall not be entitled to receive from the Trustee the documents referred to in clauses 22.3, 22.4(b)(i), 22.4(b)(iii) or any other documents or information concerning the Trust until the last to occur of:

(i) the death of Winifred Williams;

(ii) Angus Alexander Forbes Williams reaching 30 years of age.

22.4B In deciding whether to provide any document(s) or information concerning the Trust to a Beneficiary other than to the Principal Beneficiary, the Trustee is entitled to take into account, but need not make any inquiry into, the Trustee's perception of:

(a) risk to the Principal Beneficiary;

(b) risk to the Trust Fund (both present and future);

(c) risk that the making of the request may have been at the behest of or otherwise influenced by Alexander John Forbes Williams or Michelle Kylie Williams from the Excluded Class and that a purpose of the request may be, directly or indirectly, for the benefit of Alexander John Forbes Williams or Michelle Kylie Williams from the Excluded Class;

(d) the prospect of whether the Trust Fund as a whole (both present and future) may benefit (or may be less likely to be adversely affected, by vexatious litigation or otherwise) by the document(s) or information not being provided to the Beneficiary, including capital that may be available for distribution to Angus Alexander Forbes Williams Beneficiaries including Angus Alexander Forbes Williams as at an age when appointments of capital may be made to him.

22.5 Except as provided in this clause 22, a Beneficiary shall not be entitled to demand or receive from the Trustee, or have access to, and the Trustee shall not be obliged to provide a Beneficiary with, or with access to, any accounts, accounting records, books, documents or papers of any kind whatsoever, or any information whatsoever, relating to the Trust Fund or its administration provided, however, that upon a specific request being made by a Beneficiary for a copy of this Deed and any amendments thereto the Trustee shall be obliged to comply with that request as soon as practicable (subject to clauses 22.4, 22.4A and 22.4B).

1.1 ‘Appointor’ means Winifred Williams, Justin Patrick McCarthy and Kelvin Solari. On the first to occur being the death of Winifred Williams or Winifred Williams being found of unsound mind Angus Alexander Forbes Williams will become an Appointor provided he has reached 30 years of age or, if at such time he has not reach 30 years of age, when he reaches 30 years of age. Where there are two or more Appointors, decisions must be unanimous. Where the Appointors disagree, a vote shall be held in accordance with clause 23 and the joint Appointors shall follow the decision of the majority of votes;”

The application

26. The application for judicial advice is made under s 63 of the Trustee Act 1925 (NSW), which allows a trustee, upon facts stated by the trustee, to apply to the Court “for an opinion advice or direction on any question respecting the management or administration of the trust property, or respecting the interpretation of the trust instrument”. Where, as here, advice is sort on whether the trustees would be justified in defending court proceedings, it is usual for the application to be supported by an opinion from counsel and the question for the court is whether that opinion satisfies the Court that there are sufficient prospects of success to warrant the trustee in bringing or, as in this case, defending the proceedings: see Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42.

27. In the present case, the Court was provided with an opinion of Mr R Marshall SC and P Bruckner. Mr Douglas KC and Mr B Dziubinski representing WW’s grandsons, who are the plaintiffs in the Beneficiary Proceedings, also appeared and made submissions to the Court. Their position was that the advice should be refused, on the basis that the trustees should neither consent to nor oppose the orders sought.

Consideration

28. I have concluded that the advice sought by the trustees should be given.

29. As to the claim for information, the trust deeds regulate what information should be given to the beneficiaries and in what circumstances. On the material before the Court those provisions were included in the trust deeds on the instructions of WW and in a context where (1) she had fallen out with her son and daughter-in-law and had been involved in a series of proceedings with them concerning her finances and her right to control her own financial affairs; (2) she wished to minimise the information concerning her affairs to which her son and daughter-in-law could obtain access; (3) she wished to leave her estate to be divided equally between her grandchildren but was concerned about the influence their parents had over them; (4) in order to achieve those objectives she established the trusts that are the subject of this application for and caused the trust deeds to be amended to limit the information that her grandsons could obtain until Angus turns 30. It is also relevant to observe that Billy is still a minor and brings the Beneficiary Proceedings by his tutor, Michelle.

30. The question whether the Court should give effect to the provisions of the trust deeds limiting the provision of information to the beneficiaries is not clear cut. It requires the Court to balance the prima facie right in equity of the beneficiaries to inspect trust documents against the express terms of the trust deeds which give effect to WW’s intentions.

31. It is appropriate for the trustees to adhere to and to carry out the trust. As the High Court said in You**yang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484; [2003] HCA 15 at [32] “[p]erhaps the most important duty of a trustee is to obey the terms of the trust”; and as Barrett JA (Beazley P and Gleeson JA agreeing) said in Re Dion Investments Pty Ltd (2014) 87 NSWLR 753; [2014] NSWCA 367 at [94] “[a] trustee's function is to take the trusts as it finds them and to administer them as they stand”. In those circumstances, it is appropriate that the trustees should seek to uphold the terms of the trust deeds; and they have a good argument that that is what should happen. Moreover, in circumstances where the position is not clear and may depend on evidence, it is desirable that there be a contradictor to the relief sought by the grandsons.

32. In opposition to the advice sought, the grandsons point to the fact that the trusts now exist principally for their benefit, that a large proportion of the assets of the trusts appear to have been dissipated and that the trusts are now controlled by Mr Solari and Mr McCarthy, who have charged, and will no doubt continue to charge, substantial fees for their services. According to material that has been provided to the grandsons, the trusts expended $1,066,816.00 on accounting, legal and trustee fees between 1 July 2022 and 30 June 2025. The grandsons also point to evidence apparently given by Mr McCarthy in NCAT2 which suggested that the trusts still owned the three properties that they had bought and received rent for them, whereas in fact each of the properties had been sold.

33. Several points should be made about these submissions. First, it is apparent that a substantial proportion of the trusts’ assets have been dissipated because of proceedings brought by Alexander and Michelle or claims asserted by WW that they have resisted. By and large, Alexander and Michelle have been unsuccessful in those proceedings. A significant asset of the trusts are the loans owed by WW’s estate to them. The ability of the trusts to recover that asset depends on the ability of the estate to recover costs from Alexander and Michelle. These points both help to explain what has happened to the trust assets and indicate that Alexander and Michelle’s interests are not necessarily the same as their sons or the trusts.

34. Second, underlying some of the submissions are complaints that are much broader than the way the trusts have been administered and that are directed to the way that WW’s financial affairs were managed, for which it is suggested that Mr Solari and Mr McCarthy bear some responsibility. So, for example, the grandsons point to the complicated trust structure that was put in place which appears to be inappropriate for the amount of money that that structure was designed to manage. The grandsons seek the documents they do in that context; and it is not entirely clear that they do so because they are concerned about the proper administration of the trusts or whether they, possibly encouraged by their parents, are concerned about the proper administration of WW’s affairs.

35. Third, the matters raised by the grandsons are relevant to the question whether the relief they seek should be granted and ought to be considered in that context, which is a more appropriate context in which to consider questions of fact relevant to the grandsons’ claim.

36. Fourth, whatever may be said about the advice that Mr Solari and Mr McCarthy gave WW, there is no evidence before the Court to suggest that in seeking the advice that they do, the trustees that are now controlled by Mr Solari and Mr McCarthy are acting in a way that is designed to do anything other than give effect to the trust deeds and to WW’s apparent wishes. As I have explained, the question whether the grandsons should be entitled to the information they seek notwithstanding the terms of the trust deeds, is not a straightforward one. On the other hand, it is not one that is likely to consume a great deal of time or costs. Most of the work that needs to be done by the trustees to assemble the relevant facts, has already been done for the purposes of the present application. It is desirable in those circumstances that the court that must decide that question have the benefit of a contradictor, even if the result is that the trusts will incur further expenses.

37. As to the claim for interlocutory orders, it seems to me entirely appropriate that the trustees should be entitled to resist those orders. It is quite possible that the orders if made will affect the proper administration of the trusts. It seems obvious that the trusts have a proper basis on which to resist the orders since no final relief is sought in respect of which the interlocutory orders are in aid of. The costs of resisting those orders are likely to be small.

38. If the trustees are justified in contesting the proceedings, they are justified in having their costs of doing so paid out of the funds held in trust by them. There is no reason why they should not be entitled to the costs of obtaining judicial advice.

Orders

39. Accordingly, the Court makes the following orders:

40. The plaintiffs in proceedings 2025/00380975 would be justified in defending the relief sought in the Summons filed on 1 September 2025 in proceedings 2025/00335220.

41. The plaintiffs in proceedings 2025/00380975 would be justified in defending the relief sought in the Notice of Motion filed on 9 September 2025 in proceedings 2025/00335220.

42. The plaintiffs in proceedings 2025/00380975 would be justified in paying their legal costs in proceedings 2025/00335220 out of funds held in trust by them.

43. The plaintiffs in proceedings 2025/00380975 would be justified in paying the costs of the application for judicial advice out of funds held in trust by any of them.

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