MATTER : Section 77 of the Trustees Act 1962 (WA)

the Ngarluma Charitable Trust and the Ngarluma Direct Benefits Trust

BETWEEN : NGARLUMA ABORIGINAL CORPORATION RNTBC

Trusts - Removal of trustee and appointment of new trustee - Statutory and inherent jurisdiction

Charitable trusts - Parties - Where Attorney General necessary party

Charitable Trusts Act 1962 (WA), s 21

Native Title Act 1993 (Cth)

Trustees Act 1962 (WA), s 77, s 77(1), s 77(2), s 78, s 85, s 93

First Defendant : State Solicitor for Western Australia

1 ALLANSON J: Ngarluma Tharndu Karrunga Maya Ltd (NTKML) is the sole trustee of two trusts which hold and administer funds paid under an Indigenous Land Use Agreement. In March this year the terms of office for its existing directors expired, and no replacement directors have to date been appointed.

2 The plaintiff seeks orders appointing a trustee in substitution for NTKML, for each trust, to enable those trusts to continue to operate for the purposes for which they were created. The plaintiff's expressed intention is that the appointment be temporary until NTKML can resume as trustee. Although there is no time limitation within the orders sought, the plaintiff seeks an order that the appointment of a new trustee and removal of NTKML is without prejudice to any future removal of the new trustee and reappointment of NTKML. The stated purpose of this order is to ensure the order of the court does not operate to prevent the future appointment of NTKML without further court order.

3 The material which I have been asked to consider is:

1. two affidavits sworn by Kevin William Leighton, company secretary of the plaintiff and Trust Manager of NTKML, dated 18 June 2014 and 26 June 2014;
2. a book of documents (three volumes) containing relevant agreements, including the two trust deeds, and correspondence.
3. an affidavit of Geoffrey Stuart Gishubl, affirmed 2 July 2014, a solicitor acting for other parties to the ILUA.

4 The plaintiff has filed an outline of submissions and the supplementary outline of submissions. The Attorney General of Western Australia filed an outline of submissions and was represented by counsel at the hearing. Two former directors of NTKML, Anthony Keith John Usher and Jacinta Agnes Kathleen Mack, lodged an outline of submissions which the parties agree that the court should have regard to.

5 The Attorney General has adopted, in effect, an amicus curiae role, assisting the court with submissions on the relevant law but not fully supporting the application made by the plaintiff.

6 The plaintiff is a Registered Native Title Body Corporate (RNTBC). It is the sole RNTBC for an area that is the subject of the RTIO Ngarluma Indigenous Land Use Agreement (ILUA) made between Hamersley Iron Pty Ltd, Robe River Mining Co Pty Ltd, the plaintiff, and Mt Welcome Pastoral Co. Pty Ltd. Hamersley Iron and Robe River Mining are collectively referred to as RTIO (Rio Tinto Limited is the ultimate parent company of Hamersley Iron and Robe River Mining). The plaintiff is the sole member of NTKML.

7 Pursuant to the ILUA and a Sub-Fund Agreement, RTIO pays a royalty for the right to transport iron ore across the lands of the Ngarluma people. The payments are received in accordance with a detailed Benefit Management Structure, set out in pt 6 and sch 15 of the ILUA. The ILUA and the Sub-Fund Agreement impose several requirements which the Benefits Management Structure must meet.

8 The agreed structure includes the two trusts, each of which was established by deed in July 2010: the trusts are called the Ngarluma Charitable Trust, and the Ngarluma Direct Benefits Trust. The two trusts perform different functions, and meet different needs, within the agreed Benefit Management Structure.

9 Where the trustee of the Ngarluma Charitable Trust is not a professional trustee, the Trust Deed must require the Trustee to appoint a Custodian Trustee to hold legal title to assets, including assets of the trust fund other than those required for the daytoday operations of the Ngarluma Charitable Trust (ILUA sch 15, cl 2.10). A similar provision is made regarding the Ngarluma Direct Benefits Trust, when the fund or its annual income reaches $1 million (ILUA sch 15, cl 3.8).

10 Trust Company (Australia) Ltd has been appointed as Custodian Trustee for each trust.

11 The requirements for a trustee, other than a professional trustee, are set out in sch 15, cl 5 of the ILUA. In accord with those requirements, NTKML is a company limited by guarantee, its constitution provides for a Board of Directors which must comprise between two and five nonIndependent Directors, including at least one Ngarluma person, and two Independent Directors.

12 The trust deed for the Ngarluma Charitable Trust was made 19 July 2010. The purpose of the Trust is found in ch 2. By cl 2.3:

(a) the Trust Fund will be applied by the Trustee in the Trustee's absolute discretion in accordance with the terms of this Deed exclusively for the Trust Objects which are the provision of money, property or benefits to other persons or entities for the promotion and advancement of the Charitable Purposes to the benefit of the current and future generations of Community members.

Community is defined in sch 1 of the Trust Deed. It includes the plaintiff as the prescribed body corporate holding native title rights and interests under the Native Title Act 1993 (Cth).

13 It is common ground that the Ngarluma Charitable Trust is a charitable trust.

14 Chapter 3 of the Trust Deed provides generally in relation to the Trustee. Clause 3.2 provides for appointment and removal of the Trustee. The Trustee may be removed and a new Trustee appointed from time to time by the Traditional Owner Group (defined in ch 1 as the Ngarluma people that are included on the Traditional Owner Register). Clause 3.2.2 provides a mechanism for the removal of a Trustee by the Custodian Trustee where, in the opinion of the Custodian Trustee, a Removal Event has occurred.

(g) If at any time there is no Trustee, by virtue of the operation of this clause 3.2 or otherwise, the Custodian Trustee (if any) is authorised to act as Trustee for the sole purposes of:

(ii) undertaking the minimum requirements necessary to sustain the Trust's usual operations in accordance with the most recent Annual Plan and Strategic Plan of the Trust, and otherwise in accordance with the terms of this Deed; and

(iii) facilitating the appointment by the Ngarluma People of an Eligible Trustee as new Trustee within 6 months of the removal of the Trustee.

(h) Where the Traditional Owner Group are unable to appoint an Eligible Trustee as a new Trustee within 6 months, then the Custodian Trustee must appoint a Professional Trustee Company as Trustee.

16 The Attorney General questions whether, because NTKML has no board there is no trustee, in the sense of a functioning trustee. If so, the current problem might be met under cl 3.2.2(g) and (h). It is not necessary for me to determine the question, but it is one of the factors that bear upon the court's discretion whether to remove NTKML and appoint a new trustee.

17 Chapter 5 of the Trust Deed provides for recognition by the Trustee of the 'connection between the Trust Fund and the Ngarluma People'. Clause 5.2 requires the Trustee to 'recognise, respect and support the decision-making processes determined by the Ngarluma people'. Clause 5.7 requires the Trustee to 'develop appropriate mechanisms for participation, consultation and information dissemination with the Ngarluma People and the Traditional Owner Group'.

18 Schedule 9 sets out 'Requirements for a Trustee which is not a Professional Trustee Company'. By 9.2.3:

(ii) where the prescribed body corporate ceases to exist, the directors of the company jointly.

19 Schedule 9.2.4 provides for the board of directors and 9.2.5 for the qualification of independent directors. The quorum for a meeting of directors must be at least 75% of the non-Independent Directors and one Independent Director: 9.2.7.

20 The Ngarluma Direct Benefits Trust is established by a deed dated 19 July 2010. Chapter 2 sets out the Trust Objects, including the purposes of the trust. Unlike the Ngarluma Charitable Trust, the Ngarluma Direct Benefits Trust is intended to benefit only the Ngarluma people. The beneficiaries include the members of the PBC and the PBC (that is, the plaintiff).

21 The Direct Benefits Trust Deed contains provisions that are not materially different from those in the Charitable Trust Deed regarding the requirements for an eligible Trustee, and for the removal of a Trustee.

22 I have also considered the Constitution of the NTKML. The plaintiff is the sole member: sch 1. The Constitution specifically requires the company, subject to the Constitution, to recognise, respect and support the decisionmaking processes determined by the Ngarluma people: ch 5, and in particular r 5.2. While the plaintiff is the sole member of NTKML, notice of every general meeting of the company is required to be given to all members of the Ngarluma people who may attend the meeting: r 7.3. The appointment of a Director is by Ordinary Resolution of NTKML, but any such appointment must be endorsed by the Ngarluma People: r 8.5.5. In Ngarluma Tharndu Karrungu Maya Ltd v Ngarluma Aboriginal Corporation RNTBC [2014] WASC 79, Hall J said:

These provisions strongly suggest that whilst the board of NAC may be in a position to control how votes at an NTKML general meeting are cast on behalf of NAC, it must do so on behalf of and in consultation with the Ngarluma People. This conclusion is reinforced by the fact that the SubFund Agreement contains clauses requiring that decisions of NAC in regard to NTKML must be validly made and that NTKML can require NAC to provide evidence of the proper calling of any meeting or making of a decision: See SubFund Agreement cl 16 [7].

23 While not seeking to be heard orally in the application, two of the former directors of NTKML have lodged a written submission emphasising the importance of the decision making processes of the Ngarluma People, and the need for any orders replacing the Trustee to be an interim measure. Counsel for the Attorney General similarly stressed the need for any solution to the present problem to pay regard to these processes.

24 The Custodian Trustee Agreement for each of the Direct Benefits Trust and the Charitable Trust is made between The Trust Company (Australia) Ltd and NTKML, and dated 22 February 2011. Under cl 6, the Custodian Trustee is only authorised to act on signed instructions of two of NTKML's Authorised Persons. In effect, there must be written instructions from an Independent Director and a Traditional Owner Director of NTKML for The Trust Company to release funds to NTKML.

25 Pursuant to the NAC Operating Agreement, NTKML appoints the plaintiff to provide the functions of Executive Office for the two trusts. In particular, it operates NTKML bank accounts into which the Custodian Trustee releases funds.

26 The Constitution of the Ngarluma Aboriginal Corporation RNTBC is also in evidence.

27 In April, the Custodian Trustee advised the plaintiff that under the terms of the Custodian Trustee Agreement it was only able to accept instructions from specified authorised persons acting on behalf of NTKML. Without such instructions it was unable to transfer any funds from the Trusts: document 33. Since about 29 March 2014, NTKML has not had a board of directors, and there are no authorised persons. The Custodian Trustee has not transferred money to the NTKML accounts administered by the plaintiff.

28 Under an agreed procedure (ILUA cl 28, 29), RTIO has stopped making payments to the Benefit Management Structure established under the ILUA, and is making the payments due under the ILUA into a Preservation Account. In his affidavit filed in support of the application, dated 18 June 2014, Mr Leighton outlines the financial difficulties this has caused. In effect, the plaintiff has had no funds for the purpose of making distributions under the trusts, or to meet the costs of administering the trusts. It has not had funds to pay external service providers, or tax payable to the Australian Taxation Office.

29 In these circumstances, the plaintiff brings this application by originating summons seeking orders that:

1. Pursuant to s 77 of the Trustees Act 1962 (WA) or in this Honourable Court's inherent jurisdiction Perpetual Trustee Co Ltd be appointed as the trustee of the Ngarluma Charitable Trust and the Ngarluma Direct Benefits Trust in substitution for the existing trustee, NTKML.
2. Perpetual is appointed and NTKML is removed as trustee of the Trusts without prejudice to any future removal of Perpetual and appointment of NTKML as trustee of the Trusts in accordance with the RTIO Ngarluma Indigenous Land Use Agreement (Body Corporate Agreement), and respective trust instruments and related agreements.
3. Pursuant to s 78 and s 85 of the Trustees Act the monies of the Trusts in [five specified bank accounts, is set out in Annexure A] hereto vest in Perpetual.
4. The plaintiff's costs of this application be paid from the Ngarluma Charitable Trust and/or the Ngarluma Direct Benefits Trust save as they have been otherwise unreasonably incurred.

30 The Attorney General of Western Australia is named as the first defendant to the application, and appeared on the hearing in relation to the application regarding the Ngarluma Charitable Trust only. The application has also been served on:

1. NTKML;
2. Australian Securities and Investments Commission;
3. The Registrar of Aboriginal and Torres Strait Islander Corporations;
4. Perpetual Trustee Company Ltd;
5. The Trust Company (Australia) Ltd;
6. The former directors of NTKML.

31 Two of the former directors of NTKML made a brief submission. ASIC, The Registrar, and Perpetual Trustee have written to the solicitors for the plaintiff, acknowledging the service and advising they would not appear. Perpetual has advised that it agrees to being appointed in the terms of the proposed orders.

Trustees Act 1962 (WA) s 77 and the inherent jurisdiction

32 Under s 77(1) of the Trustees Act:

The Court may, whenever it is expedient to appoint a new trustee or new trustees, and it is inexpedient, difficult or impracticable so to do without the assistance of the Court, make an order for the appointment of a new trustee or new trustees, either in substitution for, or in addition to, any existing trustee or trustees.

Subsection (2) sets out particular circumstances in which an order may be made, without limiting the generality of s 77(1). The current circumstances do not fall within s 77(2).

33 In Elovalis v Elovalis [2008] WASCA 141 [30] [38], Martin CJ summarised the principles which the court should apply in exercising the statutory jurisdiction:

1. the jurisdiction is remedial rather than punitive;
2. the power may be exercised in instances which do not involve misconduct or reflect discredit upon the part of the trustee;
3. the dominant consideration in the exercise of the jurisdiction is the welfare of the beneficiaries of the Trust;
4. the principal element in the welfare of the beneficiaries is to be found in the safety of the trust estate;
5. in the context of appointing a new trustee in substitution for an existing one, expedient means conducive to, or fit or proper or suitable having regard to, 'the interests of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee': Porteous v Rinehart (1998) 19 WAR 495; Smith v Smith [2006] WASC 166.

34 The court also has an inherent jurisdiction to remove trustees. The jurisdiction is ancillary to the court's principal duty to see that trusts are properly executed: Letterstedt v Broers (1884) 9 App Cas 371, Lord Blackburn 386. It is to be exercised bearing in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.

35 In Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572, Dixon J observed (580 581):

The jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee. In deciding to remove a trustee the Court forms a judgment based upon considerations, possibly large in number and varied in character, which combine to show that the welfare of the beneficiaries is opposed to his continued occupation of the office. Such a judgment must be largely discretionary. A trustee is not to be removed unless circumstances exist which afford ground upon which the jurisdiction may be exercised.

36 The power to replace a trustee may be exercised in relation to a charitable trust: Tomasevic v Jovetic [2012] VSC 405 [5]; Metropolitan Petar v Mitreski [2005] NSWSC 330 [12].

38 On the material before me, and subject to the question of standing which I deal with below, I am satisfied that it is in the interests of the efficient and satisfactory execution of the trusts that a new Trustee be appointed. Something has to be done. NTKML is currently unable to perform its function. The trust property will be preserved by the Custodian Trustee, and future payments under the ILUA will be preserved in the Preservation Account. But the benefits of the agreement cannot flow to the people intended to receive them.

39 It would not be practicable, or in the interest of the proper administration of either trust, to have an indefinite delay in the ability of the trustee to operate. For that reason, I am satisfied that it would not be expedient or practicable to await the appointment of a new trustee under the process in cl 3.2 of the Trust Deed, or the appointment of a new NTKML board so that it might continue in its role as trustee.

40 I have considered the possible operation of the mechanism under cl 3.2.2 of the Trust Deed, with the Custodian Trustee temporarily filling the role of Trustee, although on the limited basis set out in cl 3.2.2(g)(ii). As I have said above, I am not certain that the conditions for the operation of that clause have been met and that there is no trustee. That, in itself, may make reliance upon cl 3.2.2(g) difficult or impractical. But even were the mechanism in that clause available, that would not in my opinion prevent the exercise of the power in the courts inherent jurisdiction.

41 There may be other alternatives for, at least, short-term solutions. But the course proposed has the agreement of the plaintiff, the Custodian Trustee and the proposed new Trustee. It is acceptable to RTIO. The proposed process offers the minimum disruption to the existing structure and should permit the reappointment of NTKML, with the Custodian Trustee remaining in its role, once the process for appointing a board has been completed.

42 I have taken into account that the present proposal has not yet been the subject of formal consultation with the Ngarluma people. But I have also taken into account the time such consultation may take, and that the wishes of the Ngarluma people will necessarily be expressed in the process of appointing new members of the NTKML board.

43 Further, the proposed new Trustee is a proper person because:

1. it accords with the wishes of the settlor as expressed in the trust instrument, where the alternative of a Professional Trustee is expressly contemplated;
2. the appointment of a Professional Trustee will not promote the interests of some beneficiaries in opposition to the interests of others; and
3. the appointment will promote the execution of the trusts.

44 On balance, I am satisfied that it would be expedient to appoint a new Trustee, and it is inexpedient, difficult or impracticable to do so other than by order of the court. Further, I am satisfied that Perpetual would be in all ways appropriate as the new Trustee.

45 The plaintiff makes this application relying on the statutory jurisdiction of the court as a person beneficially interested in the trust property of each trust: Trustees Act s 93. This is not problematic with regard to the Direct Benefits Trust, where the plaintiff is one of the specified beneficiaries.

46 The position is not so clear for the Charitable Trust. While the plaintiff comes within the objects of the trust, being a member of the Community, it is not a beneficiary.

47 The plaintiff submits that the question posed by s 93 is not whether the plaintiff is a beneficiary, but whether it is beneficially interested in the trust property. It submits that as a matter of statutory construction, and the proper construction of the Ngarluma Charitable Trust Deed, the court should find that it is 'beneficially interested' in the trust property. There are some particular features of the Ngarluma Charitable Trust Deed which, the plaintiff submits, make it a person beneficially interested in the property of the trust:

the trust fund is to be applied by the Trustee in the Trustee's absolute discretion ... exclusively for the Trust Objects which are the provision of money, property or benefits to other persons or entities for the promotion and advancement of the Charitable Purposes to the benefit of the current and future generations of Community members.

1. In furtherance of the Trust Objects, the Trustee must recognise the important role of the PBC (that is, the plaintiff) within the Community and improve, enhance and support the capacity building activities and corporate governance practices of the PBC: cl 2.3(b)(iii).
2. Community is defined in sch 1. It is not limited to the Ngarluma people, but includes 'all persons of Aboriginal descent having a connection with or living in the Region'. It includes charitable institutions or community organisations benefiting those people, and includes the plaintiff.
3. Community members have a right to be considered for a distribution from the Trust Fund, but do not have any interest in any particular part of the Trust Fund or any investment made by the Trustee: cl 2.5.
4. Schedule 3 sets out the distribution policy, including the rules and procedures and how applications are to be made. By sch 3.6, the Trustee may consider applications for funding from the plaintiff, provided the Trustee, in deciding how much to distribute, considers a range of specified matters. Those matters include: the nature of the eligible project proposed; the amount that is spent on administration by the plaintiff and what it is actually achieving; what is reasonably required to ensure the proper and adequate administration of the plaintiff and the costs involved; and whether there are any other sources of funding to support the plaintiff.

48 The plaintiff submits that the court has previously acted in removing a Trustee under s 77 of the Trustees Act on the application of the beneficiaries of a discretionary trust where every discretion vested in the Trustee was absolute and uncontrolled, every power vested in the Trustee was exercisable at his absolute discretion, and the Trustee had the like discretion in deciding whether or not to exercise any such power: see Elovalis v Elovalis [6]. The plaintiff submits that, when the provisions of the Trust Deed are considered, it is beneficially interested by analogy with the position of a beneficiary of such a discretionary trust.

49 Counsel for the Attorney General submitted that the plaintiff cannot bring itself within s 93 of the Trustees Act. A charitable trust is for a purpose, not a person, and does not have beneficiaries: BSH Holdings Pty Ltd v Commissioner of State Revenue [2000] VSC 302; (2000) 2 VR 454 [9]. In Attorney-General (NSW) v Perpetual Trustee Co (Ltd) [1940] HCA 12; (1940) 63 CLR 209, 222 (Dixon and Evatt JJ) said:

To dispose of property for the fulfilment of ends considered beneficial to the community is an entirely different thing from creating equitable estates and interests and limiting them to beneficiaries.

50 In my opinion, this submission on behalf of the Attorney General is correct. The particular provisions relied upon are not, in my opinion, sufficient to create a beneficial interest in any part of the trust property to be held by the plaintiff. There could also be unforeseen consequences of a finding that the plaintiff is beneficially interested in the trust property: see, for example, Blair v Curran [1939] HCA 23; (1939) 62 CLR 464. It is not, however, necessary to go further into that question because I am satisfied that the trust deed did not intend to create beneficial interests in the trust property, to be held by the plaintiff or any other person.

51 As a result, the plaintiff does not come within s 93 of the Trustees Act as a person beneficially interested and has no standing to bring an action for the court to exercise its statutory jurisdiction.

52 Counsel for the Attorney General suggested, as an alternative, that because the matter had otherwise been brought to the court's attention, if the court is satisfied that its intervention is required then the court has power to act and exercise its statutory jurisdiction, alternatively its inherent jurisdiction. Counsel referred to Eden Refuge Trust v Hohepa [2008] NZHC 280 [13] [14].

53 In my opinion, however, that course does not sit with the authorities regarding the exercise of the court's jurisdiction in matters pertaining to charitable trusts. Once it is accepted, and it is not argued otherwise, that the Ngarluma Charitable Trust is a charitable trust then, save for statutory exceptions such as s 93 of the Trustees Act and s 21 of the Charitable Trusts Act 1962 (WA), neither of which applies in the present case, only the Attorney General can represent the charity and sue on its behalf: see, for example, the recent discussion of these principles in Num Hoi, PonSu, SoonDuc Society Inc v Num Pon Soon Inc [2001] VSC 363; Metropolitan Petar v Mitreski [2001] NSWSC 976 [4] [5]; Tomasevic v Jovetic [2011] VSC 131 [5] [7]. And see Wallis v SolicitorGeneral for New Zealand [1903] AC 173, 181 182.

54 Where, as here, the question is whether the trustee of a charitable trust should be removed and who should be appointed as trustee in its place, the Attorney General is the only proper person to bring the proceedings. That, effectively, is what counsel for the Attorney General argued, although she allowed for the exception based upon Eden Refuge Trust. I am not satisfied that there is such an exception.

55 The Attorney General is represented before the court, but as a defendant. The Attorney General has not outright opposed the proposed orders, but the submissions on behalf of the Attorney General have expressed such reservations regarding those orders that I cannot regard the Attorney General as in some sense the moving party. In Heydon JD and Leeming MJ, Jacobs' Law of Trusts in Australia (7th ed 2006) [1067], the learned authors state:

It is the duty of the Crown, as parens patriae, to protect property devoted to charitable purposes, and that duty is executed by the Attorney General as the officer who represents the Crown for all forensic purposes. The Attorney General represents the beneficial interest; in other words, the object of the charity.

56 If orders are to be made for the removal of NTKML as trustee of the charitable trust, and the substitution of a new Trustee, other than by the processes set out in the Trust Deed itself, that should be done upon the suit of the Attorney General. It is, in my opinion, the duty of the Attorney General to decide whether to bring such an application, and the duty of the court to enable that to be done.

57 As a result, while I would be prepared to make an order under s 77 of the Trustees Act in relation to the Direct Benefits Trust, in my opinion the proceedings in relation to the Charitable Trust should be adjourned to enable the Attorney General to consider his position.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : NGARLUMA ABORIGINAL CORPORATION RNTBC -v- THE ATTORNEY GENERAL OF WESTERN AUSTRALIA [2014] WASC 245 (S)

MATTER : Section 77 of the Trustees Act 1962 (WA)

the Ngarluma Charitable Trust and the Ngarluma Direct Benefits Trust

BETWEEN : NGARLUMA ABORIGINAL CORPORATION RNTBC

Rules of the Supreme Court 1971 (WA), O 66 r 4(1)

Supreme Court Act 1935 (WA), s 37(1)

Trustees Act 1962 (WA), s 77, s 93, s 97

Costs of plaintiff to be paid from Ngarluma Direct Benefits Trust

Costs of defendant to be paid from Ngarluma Charitable Trust

First Defendant : State Solicitor for Western Australia

1 ALLANSON J: On 7 July 2014, the court published reasons that dealt with the application by the plaintiff for orders appointing a trustee in substitution for the existing trustee in each of two trusts: the Ngarluma Direct Benefits Trust and the Ngarluma Charitable Trust. In those reasons, I considered the plaintiff's standing on the application regarding the Ngarluma Charitable Trust. The application was adjourned to enable the plaintiff to consider its position, in the light of those reasons, and to enable further consideration by the Attorney General.

2 The matter came back before the court on 14 July 2014. On this occasion, upon the plaintiff giving an undertaking to the court in terms agreed between the parties, the Attorney General moved for orders in regards to the Ngarluma Charitable Trust. The court ordered that:

1. Perpetual Trustee Company Ltd (ACN 000 001 007) ('Perpetual') be appointed as the trustee of the Ngarluma Direct Benefits Trust in substitution for the existing trustee, Ngarluma Tharndu Karrungu Maya Ltd ('NTKML').
2. Perpetual is appointed and NTKML is removed as trustee of the Ngarluma Direct Benefits Trust without prejudice to any future removal of Perpetual and appointment of NTKML as trustee of the Ngarluma Direct Benefits Trust in accordance with the RTIO Ngarluma Indigenous Land Use Agreement (Body Corporate Agreement) ('ILUA') and respective trust instruments and related agreements.
3. The monies of the Ngarluma Direct Benefits Trust in the bank accounts set out in items 3, 4 and 5 of Annexure A [to the orders] vest in Perpetual.
4. The plaintiff's costs of this application be paid from the Ngarluma Direct Benefits Trust save as they have been otherwise unreasonably incurred.
5. Perpetual be appointed as the trustee of the Ngarluma Charitable Trust in substitution for the existing trustee, NTKML.
6. Perpetual is appointed and NTKML is removed as trustee of the Ngarluma Charitable Trust without prejudice to any future removal of Perpetual and appointment of NTKML as trustee of the Ngarluma Charitable Trust in accordance with the ILUA and respective trust instruments and related agreements.
7. The monies of the Ngarluma Charitable Trust in the bank accounts set out in items 1 and 2 of Annexure A [to the orders] vest in Perpetual.
8. The costs of the defendant be paid out of the trust fund of the Ngarluma Charitable Trust on an indemnity basis (except to the extent that any costs were unreasonably incurred or of an unreasonable amount) and in default of agreement between the trustee of the Ngarluma Charitable Trust and the defendant taxed on that basis.

3 These are my reasons for making the costs orders.

4 First, for the reasons given in the principal application, I am satisfied that the application brought by the plaintiff was reasonably brought. In my opinion, the application was not only reasonable but necessary because, without court intervention, the trusts could not operate for the benefit of those intended or for the purpose for which the Ngarluma Charitable Trust was established.

5 I am not satisfied that the plaintiff had standing to bring the application with regard to the Ngarluma Charitable Trust. I am satisfied, however, that all of the material that was compiled and the work done with regard to the application was necessary for the application to the extent it related to the Ngarluma Direct Benefits Trust. The two trusts are interconnected as the two components of the Benefit Management Scheme under the ILUA. Some of the material is common to both trusts. The court needed to consider the whole scheme and all of the documents.

6 In my opinion, it is not feasible to separate work done in relation to each trust.

7 I have been provided with helpful submissions by both counsel with regard to entitlement for costs, and in particular the principles summarised by Murphy JA in Scaffidi v Montevento Holdings Pty Ltd [2011] WASCA 146 (S).

8 Under s 37(1) of the Supreme Court Act 1935 (WA) the court has full power to determine by whom or out of what estate, fund, or property, and to what extent costs are to be paid.

9 Under O 66 r 4(1) of the Rules of the Supreme Court 1971 (WA):

Where property is the subject of any action or matter, or where any question arising therein will affect any right or claim to property, the court may make an order that the costs of any party may be recovered out of the property with or without recourse against any other party: provided that no such order shall be made unless the court is satisfied that the party seeking the order had a genuine interest to protect, or that it was reasonable in the circumstances that he should appear.

10 Section 97 of the Trustees Act 1962 (WA) also confers a wide discretion on the court to order that the costs and expenses of and incidental to any application for any order under the Act 'be raised and paid out of the property in respect of which any of them is made, or out of the income of the property, or to be borne and paid in such manner and by such persons as the Court thinks fit'.

11 The particular matters which in my opinion entitle the plaintiff to the costs order are these.

12 First, the application was necessary. Except by court order, there was no expedient way to resolve the problem of NTKML being unable to carry out its functions as trustee.

13 Second, the plaintiff provides the function of Executive Office to the two trusts. It is also a party to the ILUA, and the Prescribed Body Corporate in the relevant agreements. In relation to the Ngarluma Direct Benefits Trust, in the absence of a trustee who could give instructions and apply to the court, it was reasonable that the plaintiff should do so. While others may have been entitled to bring the application under s 77 and s 93 of the Trustees Act, the plaintiff was the most appropriate party to do so.

14 Third, the plaintiff brought the proceedings and incurred costs for the benefit of the trust generally.

15 Fourth, I do not regard it as unreasonable that the plaintiff also sought orders in relation to the Ngarluma Charitable Trust, although ultimately I did not accept the argument regarding beneficial interest under s 93 of the Trustees Act, and did not accept that the plaintiff could bring the application. Even on that question of standing, while the Attorney General took the position that the plaintiff did not come within s 93 of the Trustees Act, he accepted that the court might still deal with the application: see Ngarluma Aboriginal Corporation RNTBC v The Attorney General of Western Australia [2014] WASC 245 [52]. In short, there is nothing that disentitles the plaintiff from claiming the costs incurred.

16 Fifth, there is no question that the plaintiff has litigated unreasonably or has incurred unnecessary expense in the proceedings before the court. Where the application has been properly brought for the benefit of the trust generally, it is appropriate to order that the costs be paid out of the trust property either on a solicitor and client or indemnity basis.

17 The Attorney General was a necessary party to the proceedings regarding the Ngarluma Charitable Trust. In my opinion, the Attorney General is also entitled to his costs out of the trust property and should be reasonably indemnified for his necessary involvement.