//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2021] VSC 114
Supreme Court of Victoria
2021-03-15
MOORE, J
Original judgment source is linked above.
PRACTICE AND PROCEDURE - Application for leave to amend statement of claim - Where judgment has been handed down - Where proposed amendments to pleadings and prayers for relief are significant - Where no explanation has been provided for proposed amendments or the tardiness of the application - Where the defendants would have advanced defences at trial to meet the claims in the proposed amendments - Where a further trial would be required to adduce relevant evidence - Overarching purpose not furthered by allowing the proposed amendments - Application dismissed - Civil Procedure Act 2010, ss 7, 8, 9 - Supreme Court (General Civil Procedure) Rules 2015, r 36.01 - (2009) 239 CLR 175, applied - , applied.
2 The parties are in agreement about the terms of declarations to be made recording that three variations purportedly made to the Owies Family Trust Deed are void and of no effect. I will make declarations in those terms.
3 Two confined matters about which the parties are in disagreement are whether I should make declarations recording that the Owies Family Trust has no appointor and no guardian. I deal with those issues later in these reasons.
4 In order to understand the principal controversy between the parties, it is helpful to note that the issues I determined at trial included the following two issues:
(a) Whether the trustee failed to make any resolution regarding the income of the trust within the financial year for any of the financial years between 2010 and 2017 (the no resolution claims).[3] I found in favour of the trustee that it had made a resolution regarding the income of the trust in each of the above years.
(b) Whether the resolutions of the board of directors of the trustee which purported to resolve the distribution of income for each financial year in and between 2010 and 2019 were made in breach of trust because they were made without the trustee giving any genuine consideration to whether, in the exercise of its discretion, a distribution should be made to Deborah and/or Paul (the genuine consideration claims).[4] I found that the purported exercise by the trustee of its discretion in relation to the distribution of the trust's income for the financial years 2015, 2016 and 2018 miscarried because, in those years, the trustee did not take an informed view about whether or not to exercise its discretion in relation to the making of income distributions to Deborah or Paul.
5 In light of Paul and Deborah's partial success in relation to the genuine consideration claims, they seek that the Court make the following declarations and orders:
6 For reasons to which I shall shortly come, the trustee and Michael oppose the making of any payment orders for the benefit of Paul and Deborah, including those set out in paragraphs 4-6 above.[5] As to declaratory relief, they oppose the making of declarations in the terms of paragraphs 1-3 above and instead submit that the Court should make declarations in the following terms:
7 Putting aside matters of expression, the substantive difference between the declarations proposed by the parties is the inclusion of the words 'is invalid' at the end of each of the declarations proposed by Paul and Deborah. A recording of 'invalidity' is absent from the declarations proposed by the trustee.
8 When the proceeding was listed on 4 December 2020 for submissions as to the form of orders to be made giving effect to my judgment of 28 October 2020, the trustee and Michael contended that the declarations and payment orders sought by Paul and Deborah referred to in [5] could not be supported by the amended statement of claim dated 14 February 2020 which had been filed by consent shortly after the close of evidence at trial. It was submitted that those declarations and orders did not appear in the prayer for relief in the amended statement of claim and that, although Paul and Deborah had sought orders for monetary relief, that relief was referrable to the no resolution claims, which claims were unsuccessful. The trustee and Michael submitted that Paul and Deborah had never sought declarations that the income resolutions were void because of the genuine consideration claims, nor monetary relief in respect of those alleged breaches of duty.
9 In light of the submissions made by the parties on 4 December 2020, I ordered that Paul and Deborah file a summons seeking leave to file and serve a further amended statement of claim.
10 Paul and Deborah duly filed a summons seeking an order that they be granted leave to file and serve a further amended statement of claim. In support of their summons they relied on an affidavit by their solicitor, Jennifer Maher, sworn on 1 February 2021. In opposition to the summons, the trustee and Michael relied on an affidavit by the trustee's solicitor, Phoebe Langridge, affirmed on 15 February 2021.
11 The proposed further amended statement advanced by Paul and Deborah contains the following allegations in relation to the 2010 financial year:[6]
[Paragraph 35A is no longer relied upon][7]
35B. Any resolution of the Trustee regarding the 2010 Income was made without genuine consideration as to whether a distribution should be made to Debbie or Paul.
35C. By reason of it being made by the Trustee without genuine consideration as to whether a distribution should be made to Debbie or Paul, any resolution regarding the 2010 Income was not a valid resolution.
[Paragraphs 36, 37 and 38 are no longer relied upon][8]
b. the operation of clauses 3(ii) and 4(a) of the Trust Deed-
as from 1 July 2010 the Trustee held, and continues to hold, one third of the 2010 Income for each of Debbie and Paul.
39A. Notwithstanding that the Trustee did not make any resolution to distribute the 2010 income, the Trustee purported to record in the Financial Statements of the Trust a distribution to John and Eva of $153,199.67 and to Michael of $105,738.37.
12 In respect of all the other relevant financial years, the proposed further amended statement of claim contains paragraphs in the same or equivalent terms to those set out above, except that there is no equivalent pleading to paragraph 39A for the years 2017, 2018 or 2019.
13 The proposed further amended statement of claim contains the following prayers for relief in relation to the 2010 financial year, with additions underlined and deletions struck through:
14 In respect of all the other relevant financial years, the proposed further amended statement of claim contains prayers for relief in the same or equivalent terms to those set out above, except in two respects. For the 2013 and 2016 financial years, the prayers for relief in the form of paragraph E above do not include the word 'valid'. For the 2019 financial year, there was no prayer for relief in the nature of paragraph E, but the following additional prayer for relief:
15 In the proposed further amended statement of claim, Paul and Deborah also seek an order that 'any resolution of the Trustee regarding the trust income made without genuine consideration of whether to make a distribution to Debbie or Paul be set aside'.
16 As observed by a majority of the High Court in Aon Risk Services Australia Ltd v Australian National University, the starting point in considering whether to grant leave to a party to amend a document is the rules of court and any civil procedure legislation.[9]
17 Rule 36.01 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules) provides the following:
(1) For the purpose of -
(a) determining the real question in controversy between the parties to any proceeding; or
(b) correcting any defect or error in any proceeding; or
(c) avoiding multiplicity of proceedings -
The Court may, at any stage order that any document in the proceeding be amended or that any party have leave to amend any document in the proceeding.
18 In determining whether to exercise my discretion to grant leave to Paul and Deborah to further amend their statement of claim, I must give effect to the overarching purpose of the Civil Procedure Act 2010 (the Act) and the Rules 'to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute'.[10] Section 9 of the Act provides as follows:
(1) In making any order or giving any direction in a civil proceeding, a court shall further the overarching purpose by having regard to the following objects -
(a) the just determination of the civil proceeding;
(b) the public interest in the early settlement of disputes by agreement between the parties;
(c) the efficient conduct of the business of the court;
(d) the efficient use of judicial and administrative resources;
(e) minimising any delay between the commencement of a civil proceeding and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary for -
(i) the fair and just determination of the real issues in dispute;
(ii) the preparation of the case for trial;
(f) the timely determination of the civil proceeding;
(g) dealing with a civil proceeding in a manner proportionate to -
(i) the complexity or importance of the issues in dispute; and
(ii) the amount in dispute.
(2) For the purposes of subsection (1), the court may have regard to the following matters -
(a) the extent to which the parties have complied with any mandatory or voluntary pre-litigation processes;
(b) the extent to which the parties have used reasonable endeavours to resolve the dispute by agreement or to limit the issues in dispute;
(c) the degree of promptness with which the parties have conducted the proceeding, including the degree to which each party has been timely in undertaking interlocutory steps in relation to the proceeding;
(d) the degree to which any lack of promptness by a party in undertaking the proceeding has arisen from circumstances beyond the control of that party;
(e) the degree to which each person to whom the overarching obligations apply has complied with the overarching obligations in relation to the proceeding;
(f) any prejudice that may be suffered by a party as a consequence of any order proposed to be made or direction proposed to be given by the court;
(g) the public importance of the issues in dispute and the desirability of a judicial determination of those issues;
(h) the extent to which the parties have had the benefit of legal advice and representation;
(3) This section does not -
(a) limit any other power of a court to make orders or give directions; or
(b) preclude the court from considering any other matters when making any order or giving any direction.
19 The above factors must be weighed and balanced in each case.[11] The following manifestations of these factors will be relevant:
(a) whether an explanation for the need to amend the pleading has been offered and the content of that explanation, including why the pleading was not amended sooner;[12]
(b) the nature and importance of the amendment to the party applying for it;[13]
(c) the extent of the delay and the costs associated with allowing the amendment;[14]
(d) the prejudice that might be assumed to follow if the amendment is allowed, and that which is shown;[15]
(e) the parties' choices to date in the litigation and the consequences of those choices;[16]
(f) the detriment to other litigants in the Court;[17] and
(g) whether the grant of the amendment will lessen public confidence in the judicial system.[18]
20 Senior counsel for Paul and Deborah identified the central controversy as being the correct characterisation of the effect of the trustee's income distribution resolutions for 2015, 2016 and 2018. As noted above, in those years, the exercise of the trustee's discretion miscarried because it did not take an informed view of whether or not to exercise its discretion in relation to the making of an income distribution to Deborah or Paul. The nub of the dispute between the parties was submitted to be the correct characterisation of the effect of my finding.
21 Paul and Deborah submitted that the judgment of the Court of Appeal in Wareham v Marsella establishes that, given my findings at trial, the proper course is for the resolutions in question to be set aside by declaring them to be invalid, that is, void.[19] In Wareham v Marsella, a challenge was brought to the trial judge's conclusion setting aside the exercise of discretion by the trustees of a superannuation fund in relation to the payment of a death benefit on the basis that the trustees had failed to give real and genuine consideration to the interests of those who might potentially benefit from the exercise of the discretion.[20] In dismissing this challenge, the Court of Appeal stated:[21]
If the trustees did not exercise the discretion upon real and genuine consideration, there has not been a proper exercise of the discretion.
This statement was submitted to make plain that, irrespective of the content of the pleadings at trial, it necessarily followed from my findings in relation to the income distribution resolutions in respect of 2015, 2016 and 2018 that those resolutions were invalid and void; it was a conclusion of law consequent upon my findings of fact.
22 Paul and Deborah argued that, although they had not explicitly sought such declaratory relief, they had always implicitly sought such relief. In particular, in respect of their (unsuccessful) claim for the trustee to be removed, they had sought orders that the new trustee re-exercise its discretion for each of the years in which there had been a failure to give genuine consideration, which logically implied that the impugned resolutions were void.
23 Senior counsel for Paul and Deborah submitted that, once it was recognised that the resolutions of the trustee in question were void by operation of law, it followed that, in the language of cl 3(ii) of the trust deed, the trustee had not paid, applied or set aside income of the trust fund in the three years in question. Clause 3 of the trust deed relevantly provides:
(i) The Trustees shall in each accounting period until the Vesting Day pay apply or set aside the whole or such part (if any) as they shall think fit of the net income of the Trust Fund of that accounting period for such charitable purposes and/or to or for the benefit of or for all or such one or more exclusive of the others or other of the General Beneficiaries living from time to time in such proportions and in such manner as the Trustees in their absolute discretion and without being bound to assign any reason therefor (but after considering the wishes of the Guardian) shall think fit;
(ii) The Trustees shall hold so much of the income of the Trust Fund as the trustees shall not pay apply or set aside pursuant to the powers contained in paragraph (i) of this Clause in trust for the persons successively described in paragraphs (a) (b) and (c) of Clause 4 hereof as though each date on which income becomes subject to the Trusts hereof were the Vesting Day specified in the Schedule;
Because the trustee had not paid, applied or set aside income of the trust in the three years in question, cl 3(ii) had operated to vest the income for each of those years, with one third of the trust's income for each year being held on fixed trusts for each of the then three beneficiaries of the trust. Alternatively, it was submitted that, if the income resolutions for the years in question were merely voidable and not void, the appropriate course would be for relief to be granted setting aside the resolutions for those years.
24 A consequence of the above analysis, so it was submitted by Paul and Deborah, was that the amendments contained within the proposed further amended statement of claim merely regularised and brought to the surface the legal effect of my findings of fact in respect of the trustee's exercise of discretion in making the income distribution resolutions in the three years in question. The proposed amendments simply made explicit what was implicit in the amended statement of claim.
25 Paul and Deborah submitted that this analysis and conclusion was not altered by the fact that, in each of the three years in question, the trustee had in fact paid out income to the beneficiaries. In their written submissions, and in response to suggestions in the affidavit of the trustee's solicitor dated 26 November 2020, that John, Eva and Michael had already paid tax on their distributions from the impugned resolutions, Paul and Deborah submitted that the recipients could seek tax refunds from the Australian Taxation Office. It was submitted that, even if the recipients were now unable to seek refunds, the trustee could not resist orders remedying their default on the basis of some unspecified detriment that may accrue to a party in wrongful receipt of the product of the default. In oral submissions, Paul and Deborah submitted that they had never suggested that the trustee should attempt to recover the money that was distributed as a result of the impugned resolutions. They submitted that the payment orders can be paid out of the corpus of the trust and that it was a matter for the trustee as to whether it attempts to recover the money: the payment orders are not necessarily contingent on recovery from Michael and the estates of Eva and John. In light of this, it was said that the recipients had merely paid tax on money that they should never have had, and that this was not a detriment, but simply a lesser benefit.
26 Paul and Deborah submitted that the trustee cannot claim to be prejudiced by the proposed amendments. The trustee had not identified how the evidence adduced at trial might have been different if the amendments had been made earlier, or how it might have conducted its case differently. Further, the trustee cannot claim to have been taken by surprise by the proposed amendments because, at trial, Paul and Deborah had sought orders that the income resolutions were invalid and that a third of the income distributed in the years in question should be paid to each of them.
27 As is apparent from the foregoing, Paul and Deborah's application for leave to amend their pleading is premised on the proposition that a conclusion that the income resolutions made by the trustee in 2015, 2016 and 2018 are void is the necessary consequence in law of my findings that the exercise of the trustee's discretion miscarried in each of those years because it did not take an informed view about the exercise of its discretion.
28 The soundness or otherwise of this proposition will critically inform how the principles relevant to the discretion to grant leave to amend are to be exercised in the circumstances of this case. Amongst other things, the analysis contended for by Paul and Deborah permits them to advance the otherwise attractive argument in support of the grant of leave, namely, that the proposed further amended statement of claim merely regularises and makes explicit that which is already implicit in the amended statement of claim upon which the trial was conducted.
29 In my view, however, the submission advanced by Paul and Deborah does not accord with principle and, contrary to the submissions advanced on their behalf, is not required by the Court of Appeal's decision in Wareham v Marsella.
30 The distinction between voidable and void exercises of power by a trustee was considered in detail by the Supreme Court of the United Kingdom in Pitt v Holt[22] which concerned two appeals about what Lord Walker described as the 'so-called' rule in Hastings-Bass.[23] His Lordship observed that the rule would more aptly be described as 'the rule in Mettoy', being a reference to the decision of Mettoy Pension Trustees Ltd v Evans[24] which was 'concerned with trustees who make decisions without having given proper consideration to relevant matters which they ought to have taken into consideration'.[25] In Pitt v Holt, it was contended that certain decisions made by trustees were vitiated by their failure to give proper consideration to relevant matters.
31 Lord Walker, with whom the other members of the Court agreed, endorsed the following three aspects of the judgment delivered in the Court of Appeal by Lloyd LJ which are of central importance to the present controversy:
(a) First, the 'very important distinction' between:
...an error by trustees in going beyond the scope of a power (for which I shall use the traditional term "excessive execution") and an error in failing to give proper consideration to relevant matters in making a decision which is within the scope of the relevant power (which I shall term "inadequate deliberation").[26]
(b) Secondly, Lloyd LJ's statement that an act by trustees will be voidable:
...if, and only if, it can be shown to have been done in breach of fiduciary duty on the part of the trustees. If it is voidable, then it may be capable of being set aside at the suit of the beneficiary, but this would be subject to equitable defences and the court's discretion. The trustee's duty to take relevant matters into account is a fiduciary duty, so an act done as a result of a breach of that duty is voidable. Fiscal considerations will often be among the relevant matters which ought to be taken into account.[27]
...if an exercise by trustees of a discretionary power is within the terms of the power, but the trustees have in some way breached their duties in respect of that exercise, then (unless it is a case of a fraud on the power) the trustees' act is not void but it may be voidable at the instance of a beneficiary who is adversely affected.[28]
Lord Walker observed that this statement was 'plainly right, and in the absence of further argument on the point it is unnecessary to add much to it'.[29]
32 Given my findings that the trustee failed to exercise its income distribution power in 2015, 2016 and 2018 upon a real and genuine consideration in respect of Paul and Deborah because of its failure to take an informed view of whether or not to exercise its discretion in relation to the making of income distributions to them in those years, Paul and Deborah's submission that those income distribution resolutions are void, as distinct from voidable, is directly contrary to the above statements of principle in Pitt v Holt. Senior counsel for Paul and Deborah did not directly contest the trustee's submission that the above statements of principle represent a correct statement of the law in both the United Kingdom and Australia. Nor are they to be so easily dismissed, as Paul and Deborah would have it, as examples of the potentially misleading use of 'labels'. To the contrary, the above parts of Lord Walker's judgment in Pitt v Holt are a recent powerful statement of principle derived from a detailed consideration of authority. The fact that Pitt v Holt involved a failure by the trustees to take into account relevant considerations of a type different to the trustee's failures in this case is a difference of no significance in determining whether the trustee's decisions were void or voidable.
33 Tellingly, Wareham v Marsella contains no reference to Pitt v Holt. This is unsurprising because there is no reference in either the judgment at first instance or the judgment of the Court of Appeal to any discussion about whether the decision of the trustees was void or voidable. The issue did not arise. The availability of the substantive nature of the relief sought and obtained by the plaintiff - that the trustees' exercise of discretion be 'set aside' - was not in controversy. Unlike in Pitt v Holt, there was no occasion for the Court of Appeal to examine the consequences which flowed from there not being a proper exercise of discretion by a trustee where the trustee failed to exercise the discretion upon real and genuine consideration. Wareham v Marsella accordingly provides no support for the proposition that a trustee's exercise of discretion which is affected by a failure to give real and genuine consideration is 'invalid', that is void, as contended by Paul and Deborah.
34 It follows from the above that, because the trustee's failure to exercise its income distribution power in 2015, 2016 and 2018 upon a real and genuine consideration in respect of Paul and Deborah were decisions made within power, but in breach of trust, those decisions are voidable and not void.
35 This has the consequence that, although the relevant decisions of the trustee may be capable of being set aside at Paul and Deborah's suit, this is subject to the potential operation of any equitable defences and the exercise of the Court's discretion.[30] As stated by Lord Walker in Pitt v Holt, 'where trustees have been in breach of duty by exercising a discretion with inadequate deliberation, setting aside their decision may not be the only course open to the court'.[31]
36 As the trustee submitted, instead of making orders avoiding the decisions making the income distributions in the relevant years, it may be open to the Court to exercise its discretion and allow those decisions to stand having regard to all of the relevant circumstances, or to potentially allow the trustee to re-exercise its discretion in respect of those years. In that regard, the trustee made the following points which are particularly relevant in the event that leave to file the proposed further amended statement of claim is granted:
(a) It would seek to make submissions to the Court that, given my rejection of the claim for the trustee's removal, the appropriate course would be to permit it to re-exercise its discretion.
(b) A relevant factor in determining whether the decisions in question should be avoided is whether there are adverse tax consequences for the beneficiaries who received income which flowed from those decisions. There may be adverse tax consequences for beneficiaries who received income that flowed from a decision which is avoided. However, there is insufficient evidence before the Court to assess the nature and extent of any such prejudice which could be suffered by the recipient beneficiaries of the 2015, 2016 and 2018 income resolutions in the event that those decisions were avoided. Despite Paul and Deborah's submission that the payment orders would not necessitate the trustee recovering any wrongfully paid money, I accept the trustee's submission that further evidence dealing with these matters would likely be adduced.
(c) In considering whether the Court's discretion should be exercised either to avoid the relevant decisions, to permit the trustee to re-exercise those discretions, or for no orders to be made affecting those decisions, it would be appropriate for the Court to consider the consequences which flowed from each of these options over the other. In that regard, additional evidence might properly be required about all of the circumstances of Paul, Deborah, Michael, Eva and John, both now and at the time the relevant income resolutions were made, little of which was adduced at trial.
37 It is unnecessary to evaluate the merit of each of the above points in any detailed way. It is sufficient to acknowledge that they are issues for which it would be reasonably open for the trustee to raise in the event that I granted leave to file the proposed further amended statement of claim. They make good the trustee's submission that, if leave is granted, a number of substantial and potentially complex matters, including further evidence, will very likely require determination by the Court in a further hearing.
38 This circumstance arises because the issues now raised by Paul and Deborah were not raised by them, in any relevant way, before or during the trial.
39 Although the proceeding was commenced by originating motion, the Court made orders for the filing of pleadings and the trial was conducted by reference to nine issues agreed with the parties and drawn from the pleadings. The alignment of the pleadings and the issues determined at trial is confirmed by the filing by consent of the amended statement of claim after the close of evidence.
40 The pleaded case in the amended statement of claim in relation to the claims in respect of the trustee's income distributions may be summarised in the following way. Under what I have earlier referred to as the 'no resolution claims', Paul and Deborah alleged that the trustee did not make an income resolution in particular years, or that the relevant resolution was void for particular reasons. On that basis, they sought declaratory relief that the trustee did not make any income resolution in particular years and that they were each entitled to receive one third of the income of the trust for the relevant year by operation of cl 3(ii) of the trust deed (and payment orders to the same effect).
41 The genuine consideration claims were advanced in the alternative to the 'no resolution claims'. However, significantly, Paul and Deborah did not seek any orders avoiding any of the income distribution resolutions made by the trustee allegedly without genuine consideration, or orders for payment to them of trust income in respect of such avoided resolutions. It is these matters to which the proposed further amended statement of claim is addressed.
42 In addition to the pleadings, there was no indication in the opening and closing addresses delivered on behalf of Paul and Deborah that they sought orders avoiding the trustee's income distribution decisions on the basis of a lack of real and genuine consideration, and/or the making of payment orders on the basis of such a claim. Nor were these issues foreshadowed as being reserved for later consideration. To the contrary, at the outset of the trial, senior counsel for both parties confirmed their understanding that the trial would deal with the whole of the proceeding, including any entitlement of Paul and Deborah to relief. It may also be noted that senior counsel for Paul and Deborah informed the Court in oral opening submissions that cl 3(ii) of the trust deed, which is central to the payment order claims now sought to be advanced in the proposed further amended statement of claim, was only engaged in relation to the no resolution claims.
43 In considering whether to exercise my discretion to grant Paul and Deborah leave to file the proposed further amended statement of claim having regard to the overarching purpose of the Act, the desirability of a just resolution of a dispute is the paramount consideration.[32] In this matter, it is clear that, in light of my findings at trial, the proposed amendments are of particular importance to Paul and Deborah. They have succeeded in three of the genuine consideration claims but, in the absence of the proposed amendments, their relief in relation to those claims is confined to declarations that the relevant income distribution resolution was made without any genuine consideration of whether a distribution should be made to them and was accordingly a breach of trust. Without the grant of leave to amend, they will be unable to obtain orders for payment of monies, which orders, on their case, would be for a total amount of over $1.3 million. The self-evident importance of this issue to Paul and Deborah is a matter of real significance which weighs in favour of the grant of leave.
44 However, in weighing the competing considerations, I do not consider that the grant of leave to file the proposed further amended statement of claim will facilitate the overarching purpose.
45 Although, for the reasons just given, the just resolution of the proceeding favours the grant of leave when viewed from Paul and Deborah's perspectives, an assessment of whether the proposed amendment facilitates the just determination of the proceeding necessarily requires due consideration of the interests of all of the parties to the proceeding. In that respect, the trustee made a number of powerful points.
46 First, for the reasons I have explained, I accept that all of the parties to this proceeding had a right to expect that the proceeding would proceed to trial on agreed issues, and that those issues would not be altered after reasons for judgment were handed down.
47 Secondly, I also accept the trustee's submission that it has been taken by surprise by the proposed amendment because, as I have explained, Paul and Deborah had never sought, in relation to the genuine consideration claims, the relief contained in the proposed further amended statement of claim. In circumstances where the matter proceeded on the pleadings and where both parties were represented by senior and junior counsel, it is not an adequate answer to this objection that the relief now sought was in substance sought in relation to different claims brought by Paul and Deborah.
48 Thirdly, as the trustee submitted, the grant of leave to amend at this very late stage would mean that it would in effect have been denied the opportunity to properly consider and settle Paul and Deborah's claims on an informed basis prior to trial. The trustee was entitled to approach its defence of the proceeding, the conduct of that defence and possible attempts to settle by mediation in the context of the pleadings. If leave to amend is granted, Paul and Deborah's claim to monetary relief in respect of the genuine consideration claims will increase from zero to more than $1.3 million. Moreover, the proposed amendments also amend their claims in respect of all of the financial years that were the subject of the genuine consideration claims, not only the three years in which I found that the exercise of discretion miscarried. It is therefore possible that, on any successful appeal against my judgment regarding the genuine consideration issue, Paul and Deborah's monetary claim to relief may increase further.
49 The above considerations demonstrate that, when considering the interests of all of the parties to the proceeding, not just Paul and Deborah's, the need to facilitate the just resolution of the real issues in dispute in the proceeding does not operate in a one dimensional way to favour the grant of leave to amend. Overall, it is, I consider, a neutral factor in the exercise of my discretion.
50 The consideration of decisive significance in the exercise of my discretion is the overwhelming likelihood that leave to file the further amended statement of claim will, for the reasons I have explained, necessitate a further hearing. Moreover, such a hearing would not be confined to discrete and straightforward issues, but would likely require further evidence and raise substantial and complex issues in relation to equitable defences and the discretionary nature of relief. The grant of leave to amend will therefore not serve the efficient, timely and cost-effective resolution of the issues in dispute in the proceeding. It is, as the trustee submitted, too late to allow an amendment which, in effect, would activate the Court's discretionary power to grant relief.
51 To accede to such an application first raised some five weeks after delivery of judgment in a trial conducted in relation to agreed issues about the whole of the proceeding, including the question of relief, would, I consider, have a tendency to diminish public confidence in the judicial system.[33] Furthermore, the need to dedicate judicial resources to the resolution of further controversies in this proceeding will be to the detriment of the many other litigants in the Court who are awaiting the hearing and determination of their claims and defences.
52 It is also relevant that Paul and Deborah have not offered any explanation as to why this application for leave to amend was brought so late in the day. The absence of any explanation in this regard, despite the trustee having raised the issue squarely in its submissions, leaves open the proposition that a deliberate forensic decision was made by them to not seek the relief contained in the proposed further amended statement of claim until now.
53 For the above reasons, I do not consider that the grant of leave to Paul and Deborah to file the proposed further amended statement of claim would give effect to the overarching purpose. Their summons dated 1 February 2021 will accordingly be dismissed.
54 Paul and Deborah seek that declarations be made that: (1) the trust has no guardian; and (2) the trust has no appointor. This was submitted to be a consequence of the death of Dr John Owies, who was the last surviving guardian and last surviving appointor of the trust. It was submitted that such declarations were desirable to avoid any doubt in the future conduct of the trust.
55 The trustee opposed the making of such declarations on the basis that they could confuse matters. Although the effect of my findings is that the trust no longer has a guardian or appointor, it was submitted that Mr Sampson, being the legal personal representative of Dr John Owies, could exercise the powers of appointor. In those circumstances and because the powers of an appointor may still be able to be exercised, it was submitted that a declaration that the trust has no appointor may confuse the use of those powers. I accept that submission. The same potential difficulty does not however arise in respect of the proposed declaration that the trust has no guardian.
56 The trustee also opposed the making of the proposed declarations on the basis that they would effectively provide for the grant of relief by the 'back door' for the removal of the guardian and appointor, in relation to which Paul and Deborah were unsuccessful at trial. There is no substance to this point. The proposed declarations do not engage with the concept of removal; they simply record in formal terms the consequence of my findings at trial.
57 Michael opposed the making of the declarations on the basis that they were not sought by Paul and Deborah at trial. So much is true, but no prejudice (other than the question of confusion to which I have referred) thereby flows to Michael and the trustee in the event that the declarations were made.
58 Although I accept that, in light of the findings at trial, it is not strictly necessary for the proposed declarations to be made, given the substantial disputation which has arisen in relation to the affairs of the trust, clarity in its future operations will be served by making a declaration that the trust has no guardian. In the interests of avoiding confusion in the operation of the trust, I will not however make the declaration sought in relation to the positon of appointor.
59 I will accordingly make the following declarations:
[1] Re Owies Family Trust [2020] VSC 716.
[2] For completeness, it may also be noted that, after I delivered judgment in this proceeding, Paul and Deborah applied to re-open their case. I refused that application on 27 January 2021: Re Owies Family Trust (No 2) [2021] VSC 14. In these reasons, I use the abbreviations as defined in my reasons for judgment dated 28 October 2020.
[3] Issue 5 in my judgment dated 28 October 2020.
[4] This was Issue 6 in my judgment dated 28 October 2020.
[5] Michael adopted the submissions of the trustee in relation to the form of orders and declarations to be made and Paul and Deborah's summons dated 1 February 2021. At the hearing on 26 February 2021, he advanced further submissions on the discrete issues referred to in [3] which are addressed later in these reasons.
[6] Additions to the amended statement of claim are underlined and deletions are struck through or noted in parentheses.
[7] Paragraph 35A of the amended statement of claim states: 'The Trustee did not make any resolution regarding the 2010 Income prior to 30 June 2010.'
[8] This statement in parentheses first appeared in the proposed further amended statement of claim.
[9] Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, 200 [58] (Gummow, Hayne, Crennan, Kiefel and Bell JJ) ('Aon').
[10] Civil Procedure Act 2010 ss 7(1), 8(1)(a).
[11] Aon (n 9) 214-5 [102] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
[12] Aon (n 9) 215 [103] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
[13] Aon (n 9) 214-5 [102] (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
[18] Northern Health v Kuipers [2015] VSCA 172, [28] (Kyrou and McLeish JJA), citing Ultra Thoroughbred Racing Pty Ltd v Those Certain Underwriters at Lloyds, London [2011] VSC 370, [8] (J Forrest J).
[19] Wareham v Marsella [2020] VSCA 92.
[20] Marsella v Wareham (No 2) [2019] VSC 65, [78].
[21] Wareham v Marsella (n 19) [68].
[23] Ibid [1], citing In re Hastings-Bass, decd [1975] Ch 25.
[27] Pitt v Holt (n 22) [70] (emphasis added).
[28] Pitt v Holt (n 22) [93], quoting Pitt v Holt [2012] Ch 132, [99].
[33] See, for example, Northern Health v Kuipers [2015] VSCA 172, [28(f)] (Kyrou and McLeish JJA), citing Ultra Thoroughbred Racing Pty Ltd v Those Certain Underwriters at Lloyds, London [2011] VSC 370, [8] (J Forrest J).
Second Plaintiff
JJE NOMINEES PTY LTD
(2009) 239 CLR 175