FERNE PETA MEYNERT as Executor of the Wills of the late GIUSEPPE PITTORINO and the late GIUSEPPINA PITTORINO

Application for appointment of receiver and manager over property of trustee - Alleged misappropriations of estate and trust property - Jurisdiction to appoint receiver and manager - Section 25(9) Supreme Court Act 1935 (WA) - Trust property relevantly at risk

Inheritance (Family and Dependants Provision) Act 1972 (WA)

Supreme Court Act 1935 (WA), s 25(9)

Application for a springing order granting liberty to enter interlocutory judgment allowed

Pittorino v Meynert (as Executrix of the Wills of Giuseppe Pittorino (dec) and Giuseppina Pittorino (dec)) & Ors [2002] WASC 76

Yunghanns (by Yunghanns) v Candoora No 19 Pty Ltd (No 2) [2000] VSC 300; 35 ACSR 34

Cadura Investments Ltd v Rototek Pty Ltd & Ors [2004] WASC 150

R & I Bank of Western Australia Ltd v Anchorage Investments Pty Ltd & Ors (1993) 10 WAR 59

Temwood Holdings Pty Ltd v Western Australian Planning Commission & Anor [2001] WASCA 298

1 LE MIERE J: The plaintiff applies for the appointment of a receiver and manager of property of the second defendant as trustee of the Pittorino Family Arrangement Trust ("the Arrangement Trust") and the Pittorino Family Trust ("the Family Trust") and certain ancillary or consequential orders, including injunctions. The plaintiff also applies for the action to be admitted into the expedited list and for a springing order that unless the first and second defendants file their defences within seven days the plaintiff be at liberty to enter interlocutory judgment against them.

2 The plaintiff, who I will sometimes refer to as Cathy, is the eldest daughter of Giuseppe Pittorino and Giuseppina Pittorino (both deceased). The first defendant, who I will sometimes refer to as Bert, is the youngest child, and only son, of Giuseppe and Giuseppina Pittorino. The fourth and fifth defendants, who I will sometimes refer to as Vicky and Elizabeth respectively, are respectively the second and third children of Giuseppe and Giuseppina Pittorino.

3 In 1983 Giuseppe Pittorino established the Family Trust as a family discretionary trust. The second defendant (Leafdale) was and still is the trustee of the Family Trust. In 1993 Giuseppe Pittorino established the Arrangement Trust which is another family discretionary trust. Leafdale was and still is the trustee of the Arrangement Trust.

4 Giuseppe Pittorino died on 2 June 1997. Probate of Giuseppe's Will was granted on 12 August 1998. By his Will Giuseppe appointed the third defendant, who I will sometimes refer to as Ferne Meynert or Ms Meynert, the executor of his Will and trustee of his estate. Giuseppe devised to Bert one half of his interest in the fishing boat "Mascot" and the residue of his estate to the trustee of the Arrangement Trust in trust for the Arrangement Trust.

5 Giuseppina Pittorino died on 16 December 1997. Probate of her Will was granted on 6 April 1999. Giuseppina appointed Ms Meynert executor of her Will and trustee of her estate. By her Will Giuseppina also appointed Ms Meynert as trustee of the Arrangement Trust in lieu of the second defendant (Leafdale). Giuseppina gave Bert one half of her interest in the fishing boat "Mascot" and the residue of her estate to the trustee of the Arrangement Trust in trust for the Arrangement Trust. By a codicil annexed to her Will Giuseppina gave all of her shares in Leafdale to Bert and directed her trustees to appoint Bert as the sole director of Leafdale.

6 Until the death of Giuseppe, Giuseppe and Giuseppina Pittorino were the two directors of Leafdale. On 13 September 1997 Giuseppina became the sole director of Leafdale. Following the death of Giuseppina Bert became the sole director of Leafdale. The current shareholders of Leafdale are Leafdale as trustee for the Arrangement Trust and Bert, who hold one ordinary share each. Leafdale as trustee for the Arrangement Trust became a shareholder of Leafdale in or about September 1997 when Ms Meynert, as executor of the Will of Giuseppe, transferred Giuseppe's one ordinary share to Leafdale pursuant to the terms of Giuseppe's Will. Bert became a shareholder in Leafdale in or about January 1998 when Ms Meynert, as executor of the Will of Giuseppina, transferred Giuseppina's one ordinary share to Bert pursuant to the terms of the codicil to her Will.

The Inheritance Act Proceedings and Settlement Agreements

7 In 1999 Elizabeth commenced Supreme Court action CIV 2012 of 1999 claiming that proper provision be made for her out of the estates of Giuseppe and Giuseppina Pittorino pursuant to the Inheritance (Family and Dependants Provision) Act 1972 (WA). In those proceedings Ferne Meynert was joined as first defendant, Cathy was joined as second defendant, Vicky was joined as third defendant and Bert was joined as fourth defendant.

8 In September 2000 the parties to the proceedings and their legal representatives attended a court directed mediation. On 25 September 2000 the parties, except for Cathy, and some of their legal representatives signed a handwritten agreement ("the mediation agreement"). Cathy's solicitor signed the mediation agreement on her behalf. The agreement contains the following conditions. Bert and Cathy are to execute an agreement as to the terms on which they will operate the Arrangement Trust, the Family Trust and the Pittorino Superannuation Fund. Leafdale, as trustee of the Arrangement Trust, is to use its best endeavours to obtain conditional approval for a borrowing of $1,750,000. Vicky is to swear, file and serve on the parties an affidavit setting out her assets and liabilities and the assets and liabilities of any company or trust with which she or her husband or children is associated for the purpose of disclosing their assets and liabilities.

9 The agreement then provided that subject to compliance with those conditions the Inheritance Act application should be compromised in the following terms. Leafdale, as trustee for the Arrangement Trust, is to pay to Elizabeth $1,000,000, of which $250,000 was to be paid within seven days of the agreement. In addition, Ferne Meynert, as executor of the Wills of Giuseppe and Giuseppina Pittorino was to transfer to Elizabeth the properties at 26 and 28 Chalmers Street, Fremantle and 113 Attfield Street, Fremantle.

10 It was further agreed that Leafdale as trustee for the Arrangement Trust would pay to Vicky the sum of $1,000,000 and Ferne Meynert, as executor of the Wills of Giuseppe and Giuseppina Pittorino, would transfer to Vicky the properties at 29 Holland Street, Fremantle and 22 Stephens Street, Fremantle. There were other ancillary and consequential terms of the purported agreement.

11 On 21 November 2000, Cathy, Bert and Ferne Meynert executed a handwritten deed. On 23 January 2001 Cathy, Bert, Ms Meynert and Leafdale executed a further deed which Cathy deposes superseded the deed of 21 November 2000. The terms of the deed are as follows. Leafdale as trustee of the Arrangement Trust shall transfer the $1 share it holds in Leafdale to Cathy. Bert and Cathy shall do all such acts and sign all such documents as may be necessary or desirable to constitute Cathy as an equal director with Bert in Leafdale. The parties shall do all such acts and sign all such documents as may be necessary or desirable to amend the Arrangement Trust deed and the Family Trust deed so as to constitute Bert and Cathy as joint appointors and joint guardians under each of the trust deeds. Ferne Meynert shall transfer one undivided half share of Mascot to Bert. The deed also contains terms for Bert and Cathy to be employed in certain capacities and receive specified remuneration. There were also provisions relating to obtaining loans from the Commonwealth Bank.

12 Cathy swears that subsequently both Bert and Elizabeth refused to settle under the terms of the mediation agreement and the deed of 23 January 2001 ("the operating agreement").

Attempt to Enforce the Settlement Agreements

14 In May 2001 Ferne Meynert applied to this Court by interlocutory summons in the Inheritance Act proceedings, CIV 2012 of 1999, for a declaration that the parties had agreed to terms of settlement in accordance with the mediation agreement and for orders to facilitate the carrying out of the settlement. On 6 July 2001 by a further interlocutory summons in the same proceedings, Elizabeth applied to set aside the purported mediation agreement on a number of grounds.

15 On 25 and 26 September 2001 and from 12 to 15 February 2002 the interlocutory summonses were heard by Scott J. His Honour delivered judgment on 12 April 2002: Pittorino v Meynert (as Executrix of the Wills of Giuseppe Pittorino (dec) and Giuseppina Pittorino (dec)) & Ors [2002] WASC 76. One of the grounds on which Elizabeth challenged the mediation agreement was that at the mediation conference she was suffering from a disability, ill health and lack of confidence in her solicitors, and the other parties unconscionably took advantage of that disability. Scott J did not accept that contention. Scott J concluded that Elizabeth's application to set aside the mediation agreement would be dismissed and the first defendant's application for a declaration that the parties had agreed to terms of settlement in accordance with the written mediation agreement should be allowed. His Honour added that there remained a question as to the construction of the mediation agreement that was yet to be argued. The latter issue referred to by Scott J has not been determined.

16 Cathy deposes that there have been further proceedings in this Court as follows. CIV 1466 of 2002 involves the issue of whether Bert's share and directorship in Leafdale should be transferred back to Ferne Meynert and whether Ferne Meynert or Leafdale was the proper trustee of the Arrangement Trust. CIV 2099 of 2001 involves issues of accounting.

17 On 31 August 2004, Master Newnes made orders in CIV 2099 of 2001. The first order is that Ferne Meynert file and serve on all parties an account for the income derived by all assets in each of the estates of Giuseppe and Giuseppina Pittorino and other specified assets and an account of all proper deductions in accordance with the Arrangement Trust and all just allowances and deductions. The orders also included an order that Bert and Leafdale as trustee for the Family Arrangement Trust file an account for the income derived by Leafdale in respect of certain rock lobster fishing licences and all proper deductions and just allowances.

18 On 10 November 2004, Bert swore an affidavit on behalf of Leafdale in purported compliance with the orders of the Master made on 31 August 2004. Bert's affidavit annexes a copy of the minutes of a meeting of directors of Leafdale as trustee of the Family Trust of 5 May 2004. The minutes record that the sole director present was Bert. The minutes record that "having considered the potential beneficiaries of the Trust, in its absolute discretion and as contemplated by clause 7(a) of the trust deed" Leafdale resolved that the trust fund be transferred to and applied for the use and benefit of beneficiaries as specified in the resolution. The resolution provided that the property at 22 Stephens Street and 22 west coast rock lobster fishing entitlements or units on the F8 rock lobster licence number1873 be distributed to and transferred to Bert.

19 Bert's affidavit also appended a copy of minutes of a meeting of directors of Leafdale as trustee of the Arrangement Trust held on 5 May 2004. The minutes record that Bert was the sole director present. The minutes record that "having considered the potential beneficiaries of the trust, and its absolute discretion and as contemplated by clause 7 of the deed of settlement of the trust" Leafdale resolved that the trust fund and capital of the trust be transferred to and applied for the benefit of beneficiaries as specified in the resolution. The resolution provided for $100,000 to be distributed to Bert. The resolution provided for the interest of the trust in the F8 west coast rock lobster licence number WCRL1873, the interest of the trust in F510 west coast rock lobster licence number WCRL1875, the interest of the trust in F519 west coast rock lobster licence number WCRL1321 and the interest of the trust in F284 west coast rock lobster licence number WCRL1826 be transferred to Bert.

20 By transfer of land dated 17 November 2004, the property at 22 Stephens Street was transferred by Leafdale to Bert. The consideration was stated to be by way of trust distribution pursuant to the resolution of Leafdale as trustee of the Family Trust on 5 May 2004. Cathy deposes that if that resolution is held to be valid then the only property left in the Family Trust fund would be the property at 22 Knutsford Street, Fremantle which is encumbered by a mortgage to the Commonwealth Bank. Cathy further deposes that if the resolution of Leafdale as trustee of the Arrangement Trust made on 5 May 2004 is valid there would be no property left in the Arrangement Trust fund.

Alleged Misappropriations of Estate and Trust Property

21 In her affidavit sworn 22 December 2004 Cathy swears that she is aware of numerous misappropriations of estate and trust property by Bert.

22 Cathy says that she collected rent for two properties of the estates of Giuseppe and Giuseppina Pittorino, at 28 Chalmers Street, Fremantle and 113 Attfield Street, Fremantle. She says that money collected by way of rent was in a bag, that the money went missing and Bert admitted that he had taken it. Cathy says that from time to time other rent money went missing. Cathy says that on one occasion in August 2000 she collected rent, the money went missing and Bert admitted that he had taken it but that the bank records did not indicate that the money had been deposited.

23 Cathy swears that in or about June 2000 Bert sold, or arranged the sale of, about 100 pots worth in the order of $10,000. She says the money has never been accounted for.

24 Cathy swears that in or about May and June 2000 Bert sold octopus and did not account for the sale proceeds.

25 Cathy deposes that on or about 10 October 2000 she found a bag containing $10,000 at 26 Chalmers Street, Fremantle, the family home where Mr and Mrs Pittorino lived prior to their deaths. Cathy deposes that Bert said that he would keep the money and put it in a safe but that she has not seen the money since and it has never been accounted for.

26 Cathy deposes that Bert sold some furniture the property of their parents but has never accounted for the proceeds of sale.

27 Cathy swears that Bert completed an estate cheque butt dated 7 December 2000 with the entry "RMS Engines - $5,000" but drew the cheque to Hammond Worthington, his solicitors. Cathy says that she has been informed by Ferne Meynert that there are numerous discrepancies between cheque butts and cheques in the Family Trust.

28 On 16 December 2002 Bert swore an affidavit in Supreme Court CIV 1466 of 2002. Bert swore a further affidavit in those proceedings on 5 March 2003. In those affidavits Bert answers some, but not all of the allegations made by Cathy and referred to by Ms Meynert.

29 Ms Meynert swore an affidavit on 2 August 2002 in Supreme Court CIV 1466 of 2002. In her affidavit Ms Meynert deposes that Cathy told her that she had found $10,000 when clearing out 26 Chalmers Street, Fremantle and that Bert had taken rent money received by her for two of the estate properties and that also Bert had sold craypots and some furniture and kept the sale proceeds.

30 Ms Meynert arranged a meeting at the offices of her counsel in Francis Burt Chambers on 8 December 2002 that was attended by herself, Bert, Cathy and their respective solicitors and counsel. The matters alleged by Cathy were raised at the meeting and discussed. At that meeting Bert admitted that on a few occasions he had used moneys received by way of the rent for estate properties to pay for petrol for the Landcruiser which was owned by the estates but which he had transferred into his name on the death of Giuseppina Pittorino. He was not able to provide any specific details of how much money he had used but he promised not to use estate cash to pay such costs again. He undertook to bank the $10,000 cash which he said he had found into the estate's bank account. He said that in July 2000 he had sold a number of crayfish pots and gear but he could not remember how much money he had received. He said that he had not paid the money into the estate's bank account as in his view those items were not part of the estate. He said that surplus fish caught had been sold by him for cash but that he was unable to remember how much fish had been sold or how much money he had received. He confirmed that he had not paid this money into the estate's bank account.

31 Ms Meynert deposes that the $10,000 had not at the time of swearing her affidavit been paid into the estate's bank account.

32 In October 2000 Bert signed contracts for the purchase of 1 and 1A Hough Road, Attadale. Bert says that it was intended that one property was for him and one was for Cathy but that both contracts were mistakenly executed in his name. That is disputed by Cathy.

33 In December 2000 Cathy signed an offer to purchase 1 Hough Road, Attadale. The offer was dated 23 October 2000. Settlement took place on 22 December 2000. Cathy moved into 1 Hough Road on 29 December 2000 and has lived there since with her son, Alessandro.

34 The purchase of 1 Hough Road was financed by a loan from the Commonwealth Bank to Leafdale as trustee of the Arrangement Trust and was guaranteed by Cathy and Bert. From 22 January 2001 up until late 2003 the Commonwealth Bank deducted $7,250 per month from the estate's bank account, being $3,625 per month in respect of 1 Hough Road and $3,625 per month in respect of 1A Hough Road.

35 Cathy deposes that in or about December 2003 Ms Meynert, Bert and Leafdale agreed to transfer responsibility for the repayments on the loan to Leafdale as trustee for the Arrangement Trust. Subsequently Leafdale as trustee for the Arrangement Trust made the monthly repayments of $3,625 on the loan up until October 2004.

36 On 3 December 2004 Hammond Worthington, on behalf of Leafdale as trustee for the Arrangement Trust, wrote to Cathy. They advised that in May 2004 Leafdale made various distributions of income and assets such that it could no longer meet the repayments of the loan for 1 Hough Road and said that Cathy should contact the Commonwealth Bank and take immediate steps to meet the loan repayment which was due on or about 23 November 2004 and if she did not make appropriate arrangements with the bank then they anticipated the bank may foreclose on the loan and sell the property.

37 In her affidavit sworn 22 December 2004, Cathy deposes that she purchased the Hough Road unit on the clear understanding that Bert, Leafdale and Ms Meynert would look after her interests and would cover the repayments. She says that she could not afford, and has never been in a position to afford, repayments of $3,625 per month. At the time of swearing her affidavit her only assets were the Hough Road unit valued at approximately $600,000 and subject to the Commonwealth Bank mortgage, household contents valued at approximately $5,000 and approximately $4,000 cash. She was working as a part time office administrator for the estates earning $467.92 net per week and as a part time medical receptionist earning approximately $201.00 net per week.

38 The Family Trust deed provides that the trustee may anytime prior to the expiration of any accounting period, that is a period of 12 months ending on 30 June, determine to pay, apply or set aside all or any part of the net income of the trust fund for that period for any one or more of the general beneficiaries. The deed further provides that in the event that no such determination shall have been made then such income or any balance thereof shall be deemed to have been paid, applied or set aside for the primary beneficiaries, that is the children of Giuseppe and Giuseppina Pittorino. The Arrangement Trust deed contains similar provisions.

39 In her affidavit sworn 22 December 2004 Cathy deposes that she believes that she is owed a substantial income by Leafdale as trustee for the Arrangement Trust and the Family Trust and/or the estates. Part of this income is said to arise from the income derived from the fishing licences transferred by Ms Meynert to the Arrangement Trust in or about September 1997. Cathy deposes that to her knowledge there has not been any determination to distribute income of the Arrangement Trust for any financial year from 1997 to 2003.

40 In her affidavit sworn 22 December 2004, Cathy deposes that the Arrangement Trust receives approximately $300,000 per annum from the leasing of the fishing licences and a further part of the income arises from income derived from the 22 fishing entitlements owned by the Family Trust. Cathy says that no determination to distribute income in the Family Trust has been made.

42 On 22 December 2004 Master Newnes granted ex parte interlocutory injunctions restraining Leafdale, as trustee of the Family Trust and the Arrangement Trust, from dealing with the trust property except in the ordinary course of the trust business. The injunctions also restrained Bert from dealing with any of the property the subject of the resolutions of Leafdale as trustee of the Family Trust and of the Arrangement Trust on 5 May 2004. There were other orders made and the application was otherwise adjourned to 13 January 2005.

43 On 13 January 2005 Templeman J ordered that the interlocutory injunctions made 22 December 2004 be amended by adding the qualification that had the effect that the Mascot catch may be sold in the ordinary course of business. Templeman J further ordered that, subject to the rights of the Commonwealth Bank to its duly appointed receivers Munday and Hughes, Leafdale as trustee of the Arrangement Trust do until further order pay all of the repayments, fees and charges on or before the due dates to the Commonwealth Bank under the loan agreement made on or about 18 December 2000 between Leafdale as borrower and the Commonwealth Bank as lender to finance the purchase by Cathy of the strata unit at 1 Hough Road, Attadale.

44 On 2 February 2005 Cathy filed her statement of claim in which she seeks the following relief. Cathy claims a declaration that the mediation agreement is binding and enforceable and a declaration that the operating agreement is binding and enforceable. She claims an order for specific performance of the operating agreement. Alternatively, to those orders, Cathy claims an order that Leafdale be removed as trustee of the Family Trust and the Arrangement Trust and that the Public Trustee or such other trustee as is appropriate be appointed in its place. In the further alternative Cathy claims an order restraining Leafdale as trustee of the Arrangement Trust from dealing with any property of the trust fund except in the ordinary course of trust business pending the determination of Supreme Court proceedings CIV 2012 of 1999 (the Inheritance Act proceedings) and an order restraining Leafdale as trustee of the Arrangement Trust from appointing another trustee of the trust pending the determination of the Inheritance Act proceedings.

45 Cathy further seeks an order restraining Bert from dealing with any property the subject of the resolution of 5 May 2004 of Leafdale as trustee of the Arrangement Trust. Cathy seeks an order that the resolutions dated 8 April 2004 and 5 May 2004 of Leafdale as trustee of the Family Trust purporting to vest the capital of the trust fund in Bert be set aside and an order that Bert restore to the Family Trust fund the property the subject of the resolutions. Cathy seeks similar orders in relation to the resolution of 5 May 2004 of Leafdale as trustee of the Arrangement Trust. Cathy seeks an order that the resolutions made 29 June 2004 of Leafdale as trustee of the Family Trust and the Arrangement Trust to vest the 2004 income of the trusts in Bert be set aside and an order that Bert restore to the Family Trust and the Arrangement Trust the income so distributed. Cathy seeks an order compelling Leafdale as trustee of the Arrangement Trust to pay all of the repayments, fees and charges on or before the due dates under the loan agreement made about 18 December 2000 between Leafdale as borrower and the Commonwealth Bank as lender to finance the purchase by Cathy of the property at 1 Hough Road, or alternatively an order compelling Bert to do that. Cathy seeks damages and enquiries and accounting as well as equitable compensation and interest.

46 On 8 February 2005 the defendants were ordered to file and serve defences and any counterclaim by 4 March 2005. Defences have been filed by Ms Meynert and by Elizabeth. Vicky, has filed a counterclaim in which she seeks relief including a declaration that the mediation agreement is binding and enforceable and an order for specific performance of the mediation agreement.

47 The first and second defendants, Bert and Leafdale, sought an extension of time to file and serve a defence and counterclaim. The application was made on two grounds. First, the complexity of the matters in issue between the parties and, secondly, that the former solicitors of the first and second defendants were maintaining a solicitors' lien over documents. On 4 March 2005, an order was made extending the time for the first and second defendants to file and serve a defence and counterclaim to 18 March 2005. As I have said, the first and second defendants have still not filed a defence or counterclaim.

Position of Defendants other than Bert and Leafdale

48 All of the defendants, other than Bert and Leafdale, support the appointment of a receiver and manager.

The Jurisdiction to Appoint Receivers and Managers

49 Section 25(9) of the Supreme Court Act 1935 (WA), empowers the Court to appoint a receiver by an interlocutory order in all cases in which it shall appear to be just or convenient.

50 In Yunghanns (by Yunghanns) v Candoora No 19 Pty Ltd (No 2) [2000] VSC 300; 35 ACSR 34, Warren J reviewed the legal principles relevant to the appointment of a receiver of the assets of a trust. At [83] - [84] Warren J concluded that from the authorities and texts three principles can be distilled:

"First, the courts will appoint a receiver of trust property (on an interlocutory and/or permanent basis) where that property is in jeopardy through misconduct, waste, improper disposition, breach of the trustee's duty or the unsuitable character of the trustee. Second, the case in favour of appointment of a receiver must be a strong one but in assessing the risk to the trust the courts will apply a qualitative judgment. Third, a receiver will be appointed to preserve the benefit of a person who has an interest in trust property."

51 Having regard to the relevant legal principles, I am satisfied that the trust property is relevantly at risk. There are a number of factors that lead to this conclusion.

52 First, there is evidence that Bert kept rent money for his own use, that he retained $10,000 cash, that he sold crayfish pots and kept the proceeds for himself, that he sold surplus fish or octopus and kept the proceeds for himself, that he sold furniture and kept the proceeds, that he used a Landcruiser for his own use and then sold it and applied the proceeds for his own use. In each case the asset or proceeds belonged to the trusts or the estates.

53 It is not necessary or appropriate to make findings of fact in relation to each of the allegations made against Bert in relation to these matters. I find that the evidence in support of those allegations is sufficiently strong to justify the appointment of a receiver of the trust property, for that reason alone and for that reason taken in conjunction with the other matters to which I am going to refer.

54 Secondly, there is evidence that Bert, who controls Leafdale, has conducted the affairs of the trusts in a manner that is not businesslike and renders scrutiny of his conduct in relation to the affairs of the trusts and estates difficult. There is evidence that in or about November 2004 Bert instructed Beacon Marine to prepare two leases for the F8 WCRL187 licence, one lease for 72 pots by the estate of Giuseppina and Leafdale as trustee of the Family Arrangement Trust and the other lease for 30 pots, being the balance of pots on the licence, by Bert on the basis that Bert was going to buy 30 pots from the licence. It was arranged that Lobster Australia would pay the lease payments on the 30 pot lease to the Beacon Marine trust account until such time as Bert actually acquired the 30 pots. The first lease payment of $6,600 was paid to the Beacon Marine Trust Account. The second lease payment of $19,800 was paid by Lobster Australia to Bert. In the end, because of finance problems, Bert did not purchase any pots and the lease agreement was therefore ineffective.

55 In his affidavit sworn 3 May 2005 Bert says that in mid-January he received a cheque from Lobster Australia for $19,800. He states that as he was doing other business through Lobster Australia, he thought that the payment related to those transactions. He did not bank the cheque at first because he expected to receive advice as to what it was about. He did not receive any advice as to what the cheque was for and he eventually banked it. A few weeks later he received a telephone call from David Izzard, the accountant for Lobster Australia, who told him there was a problem because Lobster Australia had made a payment to him for the 30 pots. Bert told David Izzard that he did not buy the pots. Izzard told Bert that Lobster Australia had to get its money back. Bert told Izzard to take it from the next lease payments.

56 On the hearing of this application counsel for the first and second defendants maintained that the $19,800 was subsequently repaid by Bert to Lobster Australia by way of a set-off against lease payments due from Lobster Australia to Bert. After the hearing of this application, counsel for the first defendant informed the Court that the $19,800 had not been repaid by Bert to Lobster Australia by way of a set-off against lease payments due from Lobster Australia to Bert and the amount remains outstanding. Counsel further informed the Court that Bert has given instructions that he will repay the amount directly to Lobster Australia. In any event, Bert's conduct in relation to the cheque for $19,800 is not businesslike and gives rise to concern as to the manner in which he is or is likely to conduct the affairs of Leafdale as trustee of the trusts.

57 The resolutions of Leafdale, as trustee of the trusts, to distribute the income for the year ended 30 June 2004 to Bert also gives rise to concern as to the suitability of Bert, and through him Leafdale, to conduct the affairs of the trusts. The resolutions were backdated. Bert says that he did not notice at the time he executed the resolutions that they were backdated and he did not become aware of the issue until a later time. On becoming aware of the irregularity Bert has done nothing to restore the position that was incorrectly brought about as a result of the irregular resolutions.

58 Thirdly, there is evidence from which it may be inferred that Bert has not acted impartially, and may have acted in breach of his fiduciary duties in, through Leafdale, conducting the affairs of the trusts. Bert has caused Leafdale to distribute all of the property of the trusts to himself. Each of the resolutions recite that the trustee has given consideration to the potential beneficiaries of the trust. However, the circumstances of each of the parties calls for some explanation as to why the trustee distributed all of the income and capital to Bert. Bert has offered no explanation for that.

59 Fourthly, various of the licences are jointly owned by the estates and the trusts or Bert. The executor, Ms Meynert, has submitted through counsel that the managing of the jointly owned assets is impeded by Leafdale being the trustee and Leafdale being controlled by Bert.

60 Fifthly, the parties have been engaged in litigation for some years. A number of actions have been commenced in this Court. It is apparent that there is conflict, if not animosity between the parties.

61 Taking all matters into consideration, I am of the view that Bert is not a suitable person to be in control of the trust property and Leafdale is not a suitable company to be in control of the trust property so long as Bert controls Leafdale.

62 It is appropriate that this matter be entered into the expedited list. Entry into the list is supported by all of the parties except Bert and Leafdale. Bert opposes entry into the list on the ground that entry into the list would require intense and frequent attendance by him to the litigation and would cause him to miss fishing days with consequential damage to the business. That is not a sufficient reason for refusing entry into the list. The issues in these proceedings and the facts and events giving rise to them have been known to the parties for a considerable period of time. Bert and Leafdale have been represented by solicitors for a considerable period of time. It is apparent from Bert's affidavit that extensive instructions have been given by Bert to his solicitors and considerable work has been done to draft a defence and counterclaim. The Court must have regard to the other parties to this litigation and the interests of all in seeing that the litigation is resolved expeditiously.

63 The first and second defendants have had adequate opportunity to file a defence and counterclaim. They have had further time to attend to that matter since this chamber summons was served. It is appropriate that the springing order sought by the plaintiff be made.

64 The plaintiff seeks an order that the receiver pay from the assets under his control the mortgage repayments of $3,625 per month to the Commonwealth Bank under the loan agreement referred to earlier. It is appropriate that that order be made. The order will provide for the receiver to give effect to the order made by Templeman J on 13 January 2005.

65 The plaintiff seeks an order that Bert forthwith pay to the receiver the sum of $19,800 being the amount of the lease payment mistakenly paid by Lobster Australia to Bert on or about 12 January 2005. Bert has informed the Court, through his counsel, that he will repay the amount directly to Lobster Australia. In any event, it is not in my view an appropriate matter to be dealt with by way of interlocutory order.

66 The plaintiff seeks an order that the first defendant be restrained from dealing with specified fishing licenses, real estate, trusts, trust assets and the company except pursuant to the order of this Court. An order to that effect is appropriate but the wording of the proposed order may need some attention.

67 The plaintiff seeks an order that Leafdale be restrained from dealing with the fishing licenses, real estate, trusts, trust assets and itself except pursuant to the order of this Court. Such an order appears to be unnecessary in view of orders 1 and 2 made by Master Newnes on 22 December 2004.

68 I will hear the parties as to the orders that should be made to give effect to these reasons for decision.