Metropolitan Petar v Mitreski

Metropolitan Petar v Mitreski - [2006] NSWSC 336 - NSWSC 2005 case summary — Zoe

[25]

36 As to the first, that is costs incurred before the allegation of breach of trust became plain, the plaintiffs have a stronger prima facie case, at least in relation to the Schedule A property, since there is no doubt that that property is subject to the declared trust. There is still contest as to whether or not the various conduct complained of was in breach of trust. In this case, there are much the same matters to be considered in the balancing exercise as are weighed in [39] and [40] below in relation to the third head. However, on this head there are discretionary considerations, which in my view will, upon any balancing of the relevant considerations, lead to the conclusion that injunctive relief ought be refused. These arise from delay by the plaintiffs and hardship to others. The plaintiffs, the applicants for relief, stood by for months on end before taking any objection to the use of trust property to fund the defence of the proceedings. The Attorney General, who is charged with supervision of the public interest in charitable trust funds and who is a party to the proceedings, has not joined in the plaintiffs' application, indicating in submissions made to the Court that he supports neither the plaintiffs nor the defendants. During the lengthy period which it took the plaintiffs to reach the stance they have now taken, the defendants continued to incur costs and their lawyers continued to do large amounts of work on the basis that the objection to this course had not been formulated. By reason of the course of action which the defendants and their lawyers have pursued since April 2004, there is no reason to doubt that, had their conduct been challenged earlier, they would have applied to the Court earlier for judicial advice in respect of the Schedule A property. The work having been done, it would inflict grave hardship on both the defendants and their lawyers to grant relief in respect of costs incurred on that basis. See Meagher, Gummow & Lehane's Equity Doctrines and Remedies (4th ed, 2002) [21-375], [21-380].

Parties

Applicant/Plaintiff:

Metropolitan Petar

Respondent/Defendant:

Mitreski

Legislation Cited (1)

Trustee Act 1925(NSW)

Cases Cited (21)

CITATION : Metropolitan Petar v Mitreski [2006] NSWSC 336

Alsop Wilkinson (A Firm) v Neary [1996] 1 WLR 1220 Application of Macedonian Orthodox Community Church of St Petka Incorporated [2004] NSWSC 388 Application of Macedonian Orthodox Community Church St Petka Incorporated (No 2) [2005] NSWSC 558 Chandler v Church Chancery Division 21 December 1987 unreported Harman J Drummond v Drummond [1999] NSWSC 923 Hayman v Equity Trustees Ltd (2003) 8 VR 548 His Eminence Metropolitan Petar, Diocesan Bishop of the Macedonian Orthodox Church of Australia & New Zealand v Macedonian Orthodox Community Church St Petka Incorporated NSWCA 8 December 2004 unreported Kirwan v Cresvale Far East Ltd (in liq) (2002) 44 ACSR 21 Kolback Securities Limited v Epoch Mining NL (1987) 8 NSWLR 533 Metropolitan Petar v Mitreski [2003] NSWSC 262 Metropolitan Petar v Mitreski [2003] NSWSC 1089 Metropolitan Petar v Mitreski [2004] NSWSC 210 CASES CITED : Metropolitan Petar v Mitreski [2004] NSWSC 439 Metropolitan Petar v Mitreski [2005] NSWSC 330 Metropolitan Petar v Mitreski [2005] NSWSC 331 Metropolitan Petar v Mitreski [2005] NSWSC 332 Metropolitan Petar v Mitreski [2005] NSWSC 384 National Trustees Executors and Agency Co of Australasia Ltd v Barnes (1941) 64 CLR 268 PCW (Underwriting Agencies) Ltd v Dixon [1983] 2 All ER 158 Re Beddoe; Downes v Cotton [1893] 1 Ch 547 Re Biddencare Ltd [1994] 2 BCLC 160 United Mizrahi Bank Ltd v Doherty [1998] 1 WLR 435 Walters v Woodbridge (1878) 7 Ch D 504 Biscoe on Mareva and Anton Piller Orders (2005) [6.21] Meagher, Gummow & Lehane's Equity Doctrines and Remedies (4th ed, 2002) [21-375], [21-380]

6 There has already been one trial in these proceedings in relation to questions ordered to be decided separately. Those questions were, as set out in Metropolitan Petar v Mitreski [2003] NSWSC 262 ("my substantive judgment") at [47]: "(a) Whether the property referred to in Schedule A and any other property referred to in paragraph 11 of the Further Amended Statement of Claim ("the Property") was, prior to it being vested in the Sixth Defendant, held upon any and if so what trust, (i) for the purposes of the Macedonian Orthodox Church (as that term is defined in the Further Amended Statement of Claim); (ii) for some other purpose or beneficiary,. And [sic] if so what purpose or beneficiary. (b) Whether any trust found under (a) above is a valid charity. (c) Whether effect of the vesting of the Property in the Sixth Defendant was that the Sixth Defendant thereafter held the Property free of either trust.'"

8 I determined the form of declarations to be made as a result of those answers as follows. Those orders have, at the request of the parties, not finally been made, to the intent that there should ultimately be only one set of orders and, consequently, one substantive appeal in the proceedings. See Metropolitan Petar v Mitreski [2003] NSWSC 1089 at [3]: "The orders that I propose to make are as follows:

15 An application to restrain the sixth defendant from expending funds on costs was included in a multi partite application for interlocutory relief which was heard on 22 and 23 March 2004. The injunction which the plaintiff then sought was in similar terms to the injunction now applied for, in that it was sought to restrain the use by the sixth defendant of any of its funds to pay costs outstanding to its lawyers. On 23 March 2004 I dealt with that application in Metropolitan Petar v Mitreski [2004] NSWSC 210. Concerning that head of the application, I said: "8 There has been further debate about whether or not I should at least grant an injunction restraining the use by the sixth defendant of any of its funds to pay costs outstanding to its lawyers. The sixth defendant is proceeding to obtain judicial advice concerning this matter. I am told that there is no intention at present to make payment to the lawyers out of any funds of the sixth defendant or for the lawyers to receive any payment pending the obtaining of that judicial advice. The fact that the sixth defendant is proceeding to obtain that advice bespeaks a care on its part to use funds only in proper circumstances. On the application for restraint, I bear this fact in mind. I also bear in mind that it is not clear that all funds of the sixth defendant are impressed with this trust. There is, for instance, no reason to think that the funds recently raised by appeal for the costs of the litigation are impressed with the trust. But, further than that, I have already said that it is far from clear on the evidence that all of the funds of the sixth defendant are impressed with the trust. On all the evidence, in the exercise of my discretion, I decline to grant relief of this sort." There was much less evidence on that application than has been led on the present application.

19 In the meantime, the plaintiffs were insisting that the matter go to trial, whether or not the defendants could be represented. However, in face of the fact that the plaintiffs had chosen to appeal from the advice given by Palmer J and thereby to deflect his Honour from giving any further advice until the matter was dealt with by the Court of Appeal, on 21 May 2004 I vacated the August fixture: Metropolitan Petar v Mitreski [2004] NSWSC 439.

23 The plaintiffs brought forward a sixth amended statement of claim and sought leave to file it. This was, of course, opposed. I heard that application on 28 February and 14 and 31 March and delivered judgment on 31 March 2005: Metropolitan Petar v Mitreski [2005] NSWSC 330. Leave was granted to make some but not all of the amendments sought. On 1 April 2005 the sixth amended statement of claim was filed in accordance with that leave. It was not until then that the definition of "parish property" for the purposes of the statement of claim was widened by the insertion of the very tortuous par 19C. Paragraph 29E was amended to extend the conduct complained of to denying that the parish property in the wider sense is subject to the declared trust or is held on trust at all. There is a complaint in a simplified par 29F that the sixth defendant has applied parish funds in the wider sense in defending the proceedings. The result is that as of 1 April 2005 it was formally alleged in the substantive proceedings that any expenditure from the sixth defendant's funds on the defence of the proceedings is a breach of trust.

24 On 31 March 2005 I granted a temporary injunction, which was varied on 1 April 2005 and was renewed in wider terms on 19 April 2005: Metropolitan Petar v Mitreski [2005] NSWSC 331, 332, 384. The injunction, as still in force, is in the following terms: "The defendants are restrained from paying any legal costs out of the assets of the 6th defendant (with the exception of $22,030 raised by a lottery for costs of these proceedings) other than (a) costs the payment of which is authorised under judicial advice given by Palmer J; (b) the costs of transcript and court fees; and (c) reasonable legal costs of opposing the relief claimed by the plaintiffs in their notice of motion filed on 14 March 2005 and any appeal therefrom."

(2003) 8 VR 548

(1987) 8 NSWLR 533

(1941) 64 CLR 268

(1984) 59 ALJR 1

(1986) 61 ALJR 57

(1982) 57 ALJR 425

(1984) 58 ALJR 283

(1986) 60 ALJR 679

(1936) 54 CLR 572

[2005] NSWSC 332

[2005] NSWSC 558

[1999] NSWSC 923