More recently, in Sir Moses Montefiore Jewish Home v Howell and Co (No 7) Pty Ltd [1984] 2 NSWLR 406 at 410-411, Kearney J treated the power to achieve immediate payment of the trust property as reposed in the entire range of persons entitled to call for the due administration of the trust in question."
33 In fact their Honours held that the CPT Custodian case did not fall within the extension of the rule stated in Montefiore because, although the plaintiffs were or represented 100 per cent of the unit holders in a unit trust, they were not the only persons interested in the due administration of the trusts of the deed. They "were not the persons in whose favour alone the trust property might be applied by the trustees of the deed": at [49]. The reason for this was that the trustee and the manager had an interest under a covenant to ensure that there were at all times sufficient readily realisable assets available for the trustee to raise the fees to which the manager and the trustee were entitled. For this reason the plaintiffs failed under the doctrine in Montefiore.
34 In the present case Mr Willmott, of Senior Counsel for the defendants, submitted that, on one view of the matter, all the first plaintiff, to take her as an example, has is a right under clause 5.1 to have income and capital as the trustees think fit. On this basis there is a possibility of intestacy on the first plaintiff's death.
35 However, it is submitted on the defendants' behalf that there are two approaches that can be taken to the construction of Trust 1. The first is that, despite what has been said in [35], one should construe the first plaintiff's interest under Trust 1 as a vested interest in the whole of the fund. That interpretation would be assisted by the well known presumption against the Court construing a will so as to result in an intestacy, as referred to by Bryson J in Robertson v Allen [2003] NSWSC 848 at [18]. On the second approach, it may be that the gift to the first plaintiff ought be construed as not giving her any vested interest at all.
36 If the first of the two views be correct, then the first plaintiff (and also the second plaintiff under the similar provisions) would be entitled to terminate the trusts and receive payment of the fund under what might be called the first leg of Saunders v Vautier, that is, that "she is the person with an absolute, vested and indefeasible interest in the capital and income of the property." It is only if the gift is construed in the second fashion to which Mr Willmott has pointed that it would be necessary to turn to what may be called the second leg of Saunders v Vautier, that is, the principle referred to in Montefiore.
37 In my view, in all the circumstances of the case the gift to the first plaintiff and the second plaintiff should be construed in the surrounding circumstances and in the events which have happened as gifts which absolutely vest the trust property in the first plaintiff and the second plaintiff respectively. There is no doubt in my mind that the testator intended that the property should be taken by the named beneficiaries and there should be no occasion of intestacy. In those circumstances there is no doubt that they are entitled to demand the corpus of the trust fund under the basic principle in Saunders v Vautier.
38 However, if I am wrong in that, then the plaintiffs would have to rely upon the Montefiore principle. Mr Willmott says that, if that is so, they fail because it is a requirement of the Montefiore principle that their rights are indefeasible. Mr Cotman, of Senior Counsel for the plaintiffs, submits that that is simply not so. The requirement of an absolute and indefeasible right is a requirement of the first and traditional basis of the rule in Saunders v Vautier and is not a requirement for the operation of the Montefiore principle.
39 It is not stated either by Kearney J in Montefiore or by the High Court in approving Montefiore in CPT Custodian as a requirement of the second basis. The second basis does not proceed on the basis of a proprietary right. It proceeds quite explicitly on the basis that there is no proprietary right. In the words of Kearney J, it applies where "the individual right of each object is in the nature of an equitable chose in action creating the entitlement to require the trustee to deal with the distributable funds in accordance with due and proper administration of the trust."
40 That this is the principle is demonstrated in the decision of the High Court in CPT Custodian, where application of the principle was refused to the plaintiffs in those proceedings on the basis that they were not the persons alone entitled to demand due administration. In this case the two plaintiffs are respectively the sole persons entitled to demand due administration of Trust 1 and Trust 2. Whether or not their rights could be said to be indefeasible (and perhaps they could in any event) is irrelevant to the application of Saunders v Vautier through the Montefiore principle.
41 Therefore, whatever conclusion one comes to on the true interpretation of the terms of the Trusts, in all the circumstances of the present case the plaintiffs are entitled to demand a transfer to them of the trust funds.
42 We are now in the situation where the plaintiffs have been successful on both claim and cross claim. There is in my view no doubt that they should have their costs of the proceedings out of the estate on the ordinary basis. I should say that, despite their lack of success, the defendants were justified in raising both issues with the Court and therefore ought have their costs out of the estate on the indemnity basis.