Solicitors:
FKG Law (Plaintiff)
Somerset Ryckmans (Defendant)
File Number(s): 2023/222176
[2]
JUDGMENT
The plaintiff is the executor and trustee of the estate of the late Ms Veselinka Lucic aka Veselinka Saikali. She was appointed to this role by the last will of Ms Lucic, dated 18 April 2013.
Ms Lucic died on 20 February 2014. A grant of probate was made on 1 April 2014.
The plaintiff no longer wishes to continue in her role as trustee. By a summons filed on 12 July 2023, the plaintiff seeks an order that the NSW Trustee and Guardian (NSW Trustee) be substituted for her and that the monies and property she holds as trustee be accordingly vested in the NSW Trustee.
The NSW Trustee has consented to the substitution.
The only property now held in the trust is an amount of money deposited in a direct investment account held at the Commonwealth Bank of Australia.
The defendant, who is the sole beneficiary of the trust monies, opposes the orders. He says that it would be a waste of money to appoint the NSW Trustee; rather the money should be released to him now.
Consistent with this wish, the defendant filed a cross-summons on 8 September 2023, seeking declarations that would lead to the trust being terminated immediately, and a consequential order relating to the funds held on trust.
The defendant did however agree that if I was not prepared to deal with the cross-summons, then, other than as to costs, the plaintiff's requested orders should be made.
The reason the plaintiff, as trustee, has not given the defendant the trust money is because the will says the money should not be transferred to the defendant until he reaches the age of 25 (cl 4 of the will). The defendant is now 23.
The plaintiff, in her affidavit sworn on 12 July 2023, sets out the reasons behind her application. They include:
1. the plaintiff is now 70 years of age and has retired from her practice as a solicitor; and
2. while she would otherwise have been content to continue in her role as trustee, an incident occurred on 9 May 2023 which caused her to take her present stance.
On 9 May 2023, the plaintiff, no longer working from an office, met the defendant at a café in order to give him up-to-date statements of the Commonwealth Bank account and some tax related documents which she had received from an accountant. The plaintiff also wished to discuss the possibility of investing the trust funds in a residential unit.
The plaintiff, wary of previous meetings with the defendant and his allegedly disruptive father, asked the defendant to attend the café on his own. He did not do so. I will pick up the events from the plaintiff's affidavit, from [16]:
"16. When I arrived at the café the Defendant was accompanied by a large man, who I did not know or recognise. When asked, the Defendant said that the man was his (the Defendant's) financial broker. The man then sought to be part of my consultation with the Defendant and demanded that I provide details to him of the trust monies and in a loud voice insisting that he had a right as the Defendant's financial advisor to receive such details. When I refused, he became angry and aggressive.
17. I handed the envelope containing the documents referred to in paragraph 14 to the Defendant and advised him to contact me or the accountant directly if he needed any further information or explanation relating to the documents. I then hastily left the café.
18. In my haste, I left my mobile phone in the café. I was later told by the owner of the café, who I know well, that the Defendant (who he described as 'the younger one') had taken my phone stating that he knew me well and would return it to me himself.
19. I caught up with the Defendant and the man on the public road outside of the café. I asked the Defendant to return my phone to me and advised him that if he didn't I would be reporting the matter to the police. Neither the Defendant nor the man returned my phone to me.
20. As I turned and walked away, the man followed me, physically blocked my path preventing me from going forward and pushed me with his stomach a number of times in what I regard as a threatening, intimidating and bullying manner, while at the same time repeating the words 'are you pushing me'. I managed to move away from him and head to my car which was parked within sight of the man. I am concerned that the man may have taken note of the registration number of my car.
21. I later learned from the owner of the café that the Defendant returned to the café some 20 minutes after he had taken my phone and placed my phone on the counter and left the café without speaking to any staff at the café."
The defendant has filed no evidence denying the events of 9 May 2023. I specifically confirmed this point with counsel and note that no explanation for the defendant's conduct was forthcoming.
Rather, the defendant concentrated on his case of immediate release of the funds to him relying on two affidavits of his solicitor, Mr Marc Ryckmans, sworn on 8 September and 8 November 2023 respectively.
The defendant's argument is that this is a "Saunders v Vautier" case (derived from Saunders v Vautier (1841) 41 ER 482) in which, to quote from the written submissions, "if a sole beneficiary in a trust is sui juris (of adult age and not under disability), the beneficiary may require the trustee to transfer the legal estate to him/her and terminate the trust even if the trust instrument provides that the beneficiary is only entitled to take the property at a later date".
The plaintiff's written submissions state that "the cross-defendant neither consents nor opposes" the orders sought by the defendant. The submissions refer to a memorandum of advice prepared by counsel (for the plaintiff) on 28 November 2019, and which is annexed to the affidavit of Mr Ryckmans sworn on 8 November 2023.
This advice includes the following:
"Although I am not entirely without doubt I am of the view that the probabilities are that the interest of Christian in the Deceased's estate is contingent upon his attaining the age of 25 years (and is not vested) such that the "rule in Saunders v Vautier" is not applicable."
Reasons are then given for this opinion. Then, at the end of the advice, under the heading "Conclusion", counsel states:
"Whilst my opinion is as expressed above, the contrary view (that the residuary gift to Christian has vested upon his attaining the age of eighteen (18 years) is arguable. In those circumstances it may be prudent "given the amounts involved and the issues of construction referred to above" for M/s Mullick to obtain judicial advice pursuant to Section 63 of the Trustee Act 1925 as to whether she would be justified in paying to Christian the monies that he now demands."
Clearly counsel, in a considered opinion, has concluded that the applicability of the rule in Saunders v Vautier is arguable both in favour of the rule and against the rule.
The same counsel appeared on the summons and cross-summons. He stated that he 'stood by' his written advice.
The defendant said the issue was straightforward, relying on the decision of White J (as his Honour then was) in Austin & Anor v Wells & Ors [2008] NSWSC 1266. Counsel for the plaintiff however pointed out that each case should be decided on its own "will", and that the relevant clauses in Austin were different to those in the present case.
Following receipt of the written advice the plaintiff asked the defendant for instructions on "whether he wished to go to the expense of having the proper construction of the Deceased's will determined by the court". An application for judicial advice pursuant to s 63 of the Trustee Act 1925 (NSW) was envisaged. Notwithstanding the request being made more than once, the defendant's instructions were "not to incur that expense".
The difficulty that now arises from the plaintiff's approach (of neither opposing nor consenting to the orders) is that there is no contradictor to the defendant's application, notwithstanding the previous opinion of counsel, as set out above.
I think the advice given on 28 November 2019 is correct to the extent that it says both sides of the argument (on the rule in Saunders v Vautier) are feasible. I think the court should have the benefit of either argument on the point or consent by the trustee.
I think the need for a contradictor was well explained by Kunc J in Carolyn Margaret Hickin v Robyn Patricia Carroll & Ors [2013] NSWSC 1686 from [20]-[24].
"20. In Tawil v Public Trustee of New South Wales (SCNSW; unreported; 1 July 1998), Hodgson CJ in Equity (as his Honour then was) said (at p.2):
The relief sought is declaratory relief, and as a general rule such relief requires both a contradictor and utility.
26. Utility is not the present issue. However, because of the way in which the proceedings have been conducted the Court has not had the benefit of a contradictor who would have put before the Court all available arguments for the validity of the Catholic condition.
21. In general, a contradictor is necessary for at least three reasons, although I have identified a fourth in the circumstances of this case.
22. First, our system of justice is based upon the adversary system, which assumes that justice is most likely to be done where the arguments for any proposition are advanced and opposed vigorously and independently by the party whose interest is for that proposition to succeed or not succeed, as the case may be.
23. Second, insofar as the opposing positions are not advanced by adversaries from the Bar table, the Court is deprived of the benefit of the assistance of the parties in ensuring that all relevant arguments and authorities are canvassed.
24. Third, to the extent the Court itself acts on arguments not advanced by any of the parties it risks being seen to have descended "into the arena" and prejudicing both the reality and appearance of impartiality which are fundamental to the administration of justice."
The defendant submitted that the written advice by the plaintiff's counsel effectively amounted to a contradiction, and it would be a waste of time and costs, noting s 56 of the Civil Procedure Act 2005 (NSW), to appoint the NSW Trustee when the matter could be decided now, by the Court.
There is strength in the submission, and there would be a saving of time and costs. However, the plaintiff, for good reason, no longer wishes to be the trustee so that she would necessarily be put in a position, if I regarded the written advice as putting an opposing argument, of still pursuing her role as trustee.
The plaintiff's request for the involvement of the NSW Trustee and Guardian is well-founded. This will not only relieve her of the onerous task of dealing with the defendant but also allow for a contradicting opinion to be provided to the court. Of course, the new trustee may well agree with the defendant, which would then be a powerful factor before the court to make the orders that the defendant seeks.
The general attitude taken by the defendant is well demonstrated by his submissions on costs. The submissions state that the plaintiff "essentially disregarded" counsel's suggestion to obtain a judicial advice.
The defendant's submissions continue:
"(the plaintiff's) refusal to consent to the early termination of the trust on the basis of equivocal legal advice, coupled with a decision not to obtain judicial advice but instead to seek to vest the estate in the NSW Trustee and Guardian to the obvious detriment of the Defendant as the sole beneficiary, is unreasonable conduct justifying an order that she should pay her own costs as well as the Defendant's costs of the Summons and Cross-Summons, and that these costs should not be paid out of the trust property."
These submissions ignore the following:
1. The events of 9 May 2023, which are not challenged, bespeak unreasonable, if not contumelious, conduct on the part of the defendant.
2. The plaintiff asked the defendant if she should seek judicial advice. He said "No".
The defendant also submitted that the plaintiff, by not seeking judicial advice and then coming to court by way of the present summons, had acted unreasonably. She could have taken up the offer by the NSW Trustee to be appointed by way of a deed (as suggested in an email from the NSW Trustee in June 2023).
I reject the assertion of unreasonable conduct. It is true that extra expenses have arisen by the filing of the summons, but I can well understand why the plaintiff has sought comfort in a court order against the background of the defendant's conduct.
I therefore intend to make the orders sought in the summons and to dismiss the cross-summons. As to costs, it should be obvious from what I have said above, that I disagree with the defendant's submissions on costs. The plaintiff should get her costs, on an indemnity basis, from the trust fund.
I make the following orders:
1. The NSW Trustee & Guardian is appointed trustee of the trust created by the last will dated 18 April 2013 of the late Veselinka Lucic aka Veselinka Saikali (Deceased) in substitution for the plaintiff herein.
2. All monies and property held by the plaintiff on trust (the trust property) for the defendant are vested in the NSW Trustee & Guardian.
3. The cross-summons is dismissed.
4. The defendant is to pay the plaintiff's costs, calculated on an indemnity basis, out of the trust property, in respect of both the summons and the cross-summons.
5. Noted the dismissal of the cross-summons is without prejudice to the defendants right to pursue orders 1 - 3 in the cross-summons.
[3]
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Decision last updated: 01 December 2023
Parties
Applicant/Plaintiff:
Mullick as Executor and trustee of the estate of the late Veselinka Lucic aka Veselinka Saikali (deceased)