Yunghanns v Candoora No 19 Pty Ltd

2. This, the Candoora proceeding, is one of three, or perhaps four, proceedings which are to be tried together before me in early 2001. I refer to these proceedings collectively as "the Yunghanns litigation". The second proceeding is proceeding no. 2034 of 1998 (F4890), a consolidated proceeding comprising proceeding no. 2034 of 1998 (F4890), proceeding no. 2033 of 1999 (F5010) and proceeding no. 2055 of 1999 (F5037). This consolidated proceeding is referred to as "the Rentiers proceeding". The third proceeding is proceeding no. 2053 of 1999 (F5035) which is referred to as "the Merim proceeding". The fourth proceeding, proceeding no. 6693 of 2000, has been transferred from the Family Court of Australia pursuant to the Jurisdiction of Courts (Cross-Vesting) Act 1987.

5. In order to understand the significance of the present applications it is necessary to set out a brief chronology, which I have taken from judgments given in this litigation by Gillard J on 16 July 1999 and Warren J on 4 August 2000.

8. By deed of settlement dated 27 June 1992, the Yunghanns Children Trust was established under which the defendant, Candoora Pty Ltd, was trustee and the primary beneficiaries were the children of Peter Nicholas Yunghanns born as at that date, or to be born prior to the vesting date. David Brian Yunghanns and Sarah Jane Mahon are children of Mr Peter Yunghanns born prior to that date. In the statement of claim it is alleged, but not admitted, that the appointor and guardian named in the deed of settlement was Dariway Pty Ltd.

11. On 15 March 1995 the marriage between Mr Peter Yunghanns and Margaret Bruce Yunghanns was brought to an end by decree absolute made in the Family Court. On 26 June 1996, following a settlement of property issues in the Family Court proceeding, consent orders were made including an order that the whole of the issued capital in Candoora, comprising two fully paid shares, pass to each of the children of the marriage, Mr David Yunghanns and Ms Sarah Mahon respectively.

14. In July 1996 Dariway resigned as guardian and appointor of the trust and no replacement has been made.

17. On 25 July 1996 Mr Peter Yunghanns married Patricia Gaye Yunghanns and, on 25 March 2000, a child of the marriage, William Yunghanns, was born. He is therefore a primary beneficiary under the trust. He is the plaintiff in this proceeding.

20. Candoora remains the trustee of the Yunghanns Children Trust. Mr David Yunghanns and Ms Sarah Mahon are its directors and sole shareholders. I was told that a further 98 shares had been issued in Candoora but this does not appear on the material nor have I been told who is the beneficial owner of these shares. I proceed on the basis that Candoora is controlled by Mr David Yunghanns and Ms Sarah Mahon.

23. It seems that the trust assets of the Yunghanns Children Trust include shares in Ligon 211 Pty Ltd ("Ligon"), valuable real estate and certain business activities comprising or including those of vineyard, wine production, farming and citrus production. This litigation concerns the ownership and control of these assets which are held by a number of companies within the Yunghanns group under trust and contractual arrangements of some complexity. It appears that the principal protagonists in this litigation are Mr Peter Yunghanns, on the one hand, and his children, Mr David Yunghanns and Ms Sarah Mahon, on the other.

26. The Candoora proceeding is brought by the newly born William Yunghanns, by his litigation guardian Mr Peter Yunghanns, against Candoora alleging that it is unfit to be the trustee of the Yunghanns Children Trust and seeking its removal from that office. In essence, what is said is that Candoora has been treated by Mr David Yunghanns and Ms Sarah Mahon as their own company and its trust assets as their own assets, at least insofar as their interests conflicted with those of Mr Peter Yunghanns or a beneficiary of the trust associated with him. Such a beneficiary is William Yunghanns. William Yunghanns seeks orders restraining Candoora from exercising any power under the trust deed to exclude him from membership of the class of beneficiaries under the trust or to vary or alter the deed of settlement to exclude or prejudice his interests. He also seeks orders removing Candoora as trustee.

29. On 1 August 2000 Warren J made interlocutory orders appointing Lindsay Philip Maxsted to be receiver of all of the assets and undertaking of the Yunghanns Children Trust. In her reasons published on 4 August 2000 her Honour concluded that a strong case had been made out that the trust assets were at risk. She said that she reached this conclusion for a number of reasons.

(1) There exists "on-going litigation warfare" between Mr Peter Yunghanns and the directors of Candoora, Mr David Yunghanns and Ms Sarah Mahon.

(2) There is a risk that the trust assets will be applied by Mr David Yunghanns and Ms Sarah Mahon for their own legal costs and the costs of parties associated with their interests. These costs have been and are likely to be substantial. The matter of concern for her Honour was that the trust assets should not be so applied until the propriety of this be established in this litigation.

(3) Candoora has been reluctant, "to a point that verges on obstruction" to disclose the trust accounting records to William Yunghanns.

(4) The trust funds have been applied in a manner "commensurate with David Yunghanns and Sarah Mahon treating the funds as if they were their own".

(5) There is a hostility on the part of Mr David Yunghanns and Ms Sarah Mahon towards William Yunghanns.

An order appointing the receiver was therefore made on 1 August 2000. It is, so far as is here relevant, in the following terms:

"1. Lindsay Philip Maxsted of KPMG, Chartered Accountants, of 161 Collins Street, Melbourne ('Maxsted') is appointed receiver of all of the assets and undertaking of the Yunghanns Children Trust established by Deed of Settlement dated 27 June 1992 ('the Trust') until the trial of this proceedings or further order.

2. With the object ('the Object') of protecting and administering the assets and undertaking of the trust for the benefit of all of the objects of the Trust Maxsted is empowered to do in Australia and elsewhere all things necessary or convenient to be done or in connection with or incidental to the attainment of the object.

3. Without limiting the generality of paragraph 2 of this order for the purpose of attaining the object Maxsted is empowered to:

(a) exercise all of the rights and powers attaching to or incidental to the 2 shares held by the Defendant in the issued capital of Ligon 211 Pty Ltd (ACN 003 666 957); and

(b) do any or all of the things described in sub-paragraphs (2)(a) to (w) of section 420 of the Corporations Law.

5. Maxsted be remunerated in accordance with the scale prescribed from time to time by the Insolvency Practitioners' Association of Australia.

6. The Defendant forthwith deliver up all accounting records, business records, documents and securities of the trust into the possession, custody and power of Maxsted.

7. Until the trial of this proceeding or further order the Defendant be restrained from exercising any power as trustee of the trust save with the prior written consent of Maxsted or the leave of the Court.

8. The Plaintiff, the Defendant and Maxsted each have general liberty to apply to the Court and to apply for directions."

48. On 8 August 2000 the receivership order was varied to have Mr Peter Yunghanns give an undertaking as to damages in the usual form and he did so.

51. By notice of appeal filed on 21 August 2000 Candoora has appealed against the receivership order.

54. Against this background there are before me four applications:

(1) An application by Candoora by summons filed on 18 August 2000 to discharge the appointment of the receiver and for consequential orders.

(2) An application by the receiver by summons filed on 11 September 2000 to confer powers on him with respect to the management of this litigation and for other orders.

(3) Applications by Candoora by summonses filed on 14 July 2000 and 7 August 2000 for specific discovery against Mr Peter Yunghanns.

(4) An application by William Yunghanns by amended summons filed on 22 September 2000 to strike out paragraph 24 of the Candoora defence and to stay or strike out Candoora's discovery applications.

61. Counsel for William Yunghanns raised as a preliminary point that, since the making of the receivership order, Candoora was not entitled to act as trustee of the Yunghanns Children Trust. They contended that its applications by summonses of 18 August 2000, 14 July 2000 and 7 August 2000 were not, or were no longer, within its power and that it was not entitled to resist the application of William Yunghanns to strike out paragraph 24 of its defence. Furthermore, for the same reason, it was not entitled to resist or make submissions as to the subject matter of the receiver's application.

64. Having heard what the parties wished to say on this matter, I ruled that the terms of the receivership order did not prevent Candoora from continuing litigation in which it sought to promote its own interests or to resist an attack on those interests. The order disempowered it from participating in litigation which was brought for or against the interests of the Yunghanns Children Trust.

67. In the Candoora proceeding, the claims of William Yunghanns in paragraph B, C and D of the prayer for relief, seeking to remove Candoora as trustee, are claims made against Candoora personally in the sense that it has a personal interest in remaining trustee. Candoora is not prevented by the order from resisting those claims. The claim made in paragraph A seeks to restrain Candoora from exercising certain powers under the trust deed. The claim assumes that Candoora is a trustee of the trust and arises only in the case that orders for its removal are not made. The disputing of this claim cannot therefore violate the terms of the receivership order. Finally, in paragraph E of the prayer for relief, William Yunghanns seeks trust accounts and enquiries. It may be supposed that this relief relates to Candoora's activities as trustee prior to the appointment of the receiver. Candoora's defence to this claim, likewise, cannot violate the terms of the order.

70. Turning to the applications before me, I concluded, for the same reasons, that Candoora was entitled to bring its three applications in this proceeding and to resist the strike out application. Likewise, insofar as the receiver's applications sought orders and directions with respect to the representation of the interests of the Yunghanns Children Trust, Candoora may participate in order to contend that it should have a role to play notwithstanding the terms of the receivership order.

73. Counsel for William Yunghanns sought and I refused leave to appeal from this ruling.

77. It was accepted that I might discharge the receivership order only if I were satisfied of the existence of changed circumstances arising since the order was made or where circumstances then existing had not been and might not reasonably have been brought to the attention of Candoora at the time the application was argued before her Honour. It was put on behalf of Candoora that these circumstances existed. What was said was this. Before Warren J, argument proceeded on the basis that Mr Peter Yunghanns was a man of substantial means. He has, since the date of the receivership order, sworn and filed affidavits in the Family Court to the effect that he lacks these means. It was not apparent to me how this would have affected the order appointing the receiver. It was said, however, that had this been known, Candoora would have sought security to fortify his undertaking as to damages and that I should now so order. I refused these applications. The submissions put to Warren J on behalf of Candoora proceeded on the basis that he was a man of means notwithstanding evidence to the contrary available to it contained in affidavits which had previously been filed in the Family Court. His subsequent affidavit in that court is not a circumstance which would warrant a revisiting of the orders made.

81. In paragraph 24 of his statement of claim, William Yunghanns makes an assertion in support of a quia timet injunction restraining Candoora from exercising powers under the trust deed which would disadvantage him in the ways I have identified in [9] above.

84. The paragraph of the defence which is the subject of the present attack was made in response to this allegation. It is a long paragraph which in sub-paragraph (1) admits that the trustee has the power to exclude William Yunghanns as beneficiary and to vary the trust deed. It then acknowledges in sub-paragraph (2) that it may not exercise these powers otherwise than in accordance with its duties and obligations as trustee. In sub-paragraphs (3) to (24) it sets out a number of facts which it said might justify the exercise of its powers adversely to the interests of William Yunghanns. In sub-paragraph (26) it says that it will not decide whether to exercise this power until the Merim proceeding and the Rentiers proceeding have been heard and determined, and in sub-paragraph (27) it undertakes not to exercise its power to exclude any children of Mr Peter Yunghanns as general beneficiaries without first applying for approval of the court.

87. The basis offered for the strike out application is that the allegations are hypothetical. I am not satisfied that this is the case. I assume that the assertion made by William Yunghanns in paragraph 24 is included in the statement of claim so that he may contend at trial that the trustee has evinced a disposition to exercise the exclusion power and that this exercise would be improper. What Candoora says is that circumstances exist which might warrant a trustee, acting properly, exercising that power, so that its disposition to do so is not itself improper. Counsel for William Yunghanns say in answer that, in no circumstances could a trustee acting properly exercise the power of exclusion in the circumstances alleged in sub-paragraphs (3) to (24). I am not sufficiently persuaded that this is the case to warrant striking out the plea.

90. I will therefore not strike out paragraph 24 of the defence.

94. Candoora seeks orders that Mr Peter Yunghanns, the litigation guardian of William Yunghanns, make discovery of specific classes of documents. The application filed on 14 July 2000 seeks this discovery pursuant to Rules 29.08 and 15.07(1); that filed on 7 August 2000 seeks similar orders from him as a non-party pursuant to Rule 32.07. Rule 15.07(2) contemplates that, in a case such as the present were the plaintiff is a minor of some five months of age only, discovery should be given by his litigation guardian.

97. I was referred to cases, such as Ingram v Little,[1] which stand for the proposition that an infant will not be required to make discovery either personally or by a next friend or guardian. This line of authority was subjected to a helpful analysis by Jenkinson J in Milanese v Harburger,[2] a case involving interrogatories and a notice for discovery directed to a plaintiff of unsound mind, whose action had been brought by the Public Trustee in his name. This case was, of course, decided on the rules as they stood before the major reforms of 1986. His Honour referred to the argument for immunity from discovery of a next friend based on their not being a "party", which argument was presented to me based on the current rules, and concluded that this basis of immunity disappeared in relation to interrogatories by the insertion in 1949 of O. 31 R. 1A.[3] Rule 30.08(1)(a)(ii) contemplates that the litigation guardian should answer interrogatories on behalf of a party under a disability. Rule 15.07 entitles a defendant to have discovery of an under-age plaintiff and obliges the litigation guardian to make discovery where it is not appropriate for the plaintiff to do so personally. I conclude, therefore, that Mr Peter Yunghanns should give this discovery.

100. Then, it is said that he has done so. The documents which Candoora seeks are not in the possession of William Yunghanns and Mr Peter Yunghanns is not obliged to give personal discovery. This may be so. In the present case, the proceeding must be viewed as part of a series of proceedings being managed and, ultimately, to be tried together. Mr Peter Yunghanns is intimately and actively involved in this litigation as a party. Notwithstanding that he is not a party to the Candoora proceeding he cannot be seen as a true stranger to it. He has made the allegation in paragraph 24 of the statement of claim, albeit on behalf of his infant son. In the circumstances, it is appropriate that he make discovery with respect to issues raised by that allegation pursuant to R.32.07.

103. Next, it is put that discovery may be had under R. 32.07 only of a document "which relates to any question in the proceeding". The documents in question here relate to the financial resources of Mr Peter Yunghanns. In paragraph 24(24) of the defence it is alleged:

"[Mr Peter Yunghanns] has substantial financial assets and further and alternatively is able to exercise control over substantial financial resources from which he is able to make provision for any children of his marriage to [Mrs Patricia Yunghanns]."

This allegation is admitted in the reply. It is therefore said that the documents do not relate to a question in the proceeding. "Question" is defined in Rule 1.13(1). The relationship between the documents sought and the question in the proceeding is not specified in R. 32.07 although "relates to" is of wide import. The terminology of R. 32.07 is not identical to that used in R. 29.02(1). It resembles that adopted by R. 30.02(1).

108. Notwithstanding the admission, it is possible, even likely, that the means of Mr Peter Yunghanns will be the subject of argument at trial. I have as yet only a passing familiarity with the disputes in this litigation. Differing views may be taken as to what is meant by "substantial financial assets". Where such differences are possible, I must accept that, in this case, that possibility is likely to become reality.

111. I will, therefore, direct that Mr Peter Yunghanns make discovery. No argument was presented against the terms of the proposed discovery order. I will make it.

115. In his summons of 11 September 2000 the receiver seeks a number of orders to the effect that he be appointed attorney of each of the first to fifthnamed defendants in the Rentiers proceeding, two of whom are also plaintiffs by counterclaim in that proceeding. These five companies are referred to in the summons as the "Wingara Wine Group companies". The authority sought from those companies is that to conduct the Candoora proceeding, the Merim proceeding and the Rentiers proceeding and to settle those proceedings. I mention in passing that those companies, other than Candoora, are not parties to any of the Yunghanns litigation except the Rentiers proceeding. The receiver seeks also that these companies deliver up to him all correspondence, documents and records relating to these proceedings. The receiver also seeks orders that those companies not dispose of or encumber their assets or permit the issue of new shares or the transfer of existing shares in their share capital. They are also to provide the receiver full access to and disclosure of their affairs. Finally, the receiver seeks orders permitting him to deduct from the trust assets his own remuneration and his proper costs of conducting the proceedings. These orders are supported by William Yunghanns but opposed by Candoora, or at least by Mr David Yunghanns and Ms Sarah Mahon.

118. The terms of the receivership order, incorporating as it does, the powers described in s. 420(2) of the Corporations Law, are very wide. It attaches to "all of the assets and undertaking" of the trust, rather than to the "property of Candoora". The subject matter of the receivership order was not the subject of debate before me. The parties appear to have proceeded on the basis that it includes the property held by Candoora and also that held by the other Wingara Wine Group companies. I am content to proceed on the same basis. Many of the powers sought by the receiver in his application are already included in the order. He is empowered to bring and defend the proceedings to which Candoora is a party;[4] he may instruct legal practitioners and other professionally qualified persons to assist;[5] he may take control of the property of Candoora including its documents;[6] and by paragraph 6 of the order, Candoora is required to deliver up to him its "accounting records, business records, documents and securities of the trust".

121. Powers which appear to be sought in the summons and which may not have been conferred upon the receiver by the order include -

(a) the power to act for Wingara Wine Group companies other than Candoora;

(b) the power to negotiate and agree a settlement or compromise of the Yunghanns litigation or part of it; and

(c) the power to draw his remuneration and to pay expenses from the property of Candoora.

127. In support of the application the receiver has on 8 September 2000 sworn an affidavit. In it he deposes that the conduct of the business of Candoora has been left largely to Mr David Yunghanns and Ms Sarah Mahon, under his supervision. This appears to be a satisfactory arrangement from his perspective. His concern, however, as it appears in paragraph 18 of his affidavit, is the apparent use prior to his appointment of assets by Wingara Wine Group Pty Ltd ("Wingara") to pay the legal expenses of "unrelated parties to those proceedings". It is not entirely clear what the deponent means by this. Nor does Exhibit LPM9 to his affidavit throw any light on the matter. In any event, the amount of legal fees incurred, as appears in the exhibit, is substantial.

130. In argument, I raised with counsel for the receiver my disinclination to permit his client to dispose of trust assets otherwise than in the ordinary course of business without the approval of the court[7] or to compromise any part of the Yunghanns litigation without such approval. On behalf of his client, he did not dissent from this. He then proposed that the application stand over with liberty to bring it on for hearing upon seven days' notice.

133. This, however, does not lay to rest the immediate practical difficulty facing the parties with respect to the trial which is due to start early next year and with respect to the immediate preparation for that trial. Are the interests of Candoora as trustee of the Yunghanns Children Trust to be looked after by the receiver as the receivership order appears to contemplate, or by its directors Mr David Yunghanns and Ms Sarah Mahon, subject to the supervision of the receiver, as counsel for Candoora instructed by them would prefer?

136. I should add at this point that I raised with counsel the question whether I might discuss this matter with Warren J, so as to draw upon her great familiarity with this litigation. All, but counsel for Candoora instructed by its directors, agreed with this course. In the face of this objection I said that I would not do so. I have, nevertheless, drawn upon her Honour's reasons for judgment published on 4 August 2000 in order to identify the risk to the trust assets she was concerned to protect and the objectives of the receivership order.

139. I have already indicated that Candoora has an interest in aspects of the Yunghanns litigation in its own right in contradistinction to its interest as trustee of the Yunghanns Children Trust. This distinction may cause demarcation difficulties which I will address as they arise. Counsel for Mr David Yunghanns and Ms Sarah Mahon argue that the appropriate course would be for those beneficiaries to continue to direct the litigation for the benefit of the trust, but subject to the supervision of the receiver. It was said that this would involve a saving of cost for the trust, since otherwise fresh solicitors and barristers would have to be engaged and instructed. It was said that the real disputants were Mr David Yunghanns and Ms Sarah Mahon so that they were the persons who had the energy and enthusiasm to battle their father, whose energy and enthusiasm for battle cannot be doubted.

142. Counsel for William Yunghanns said that this would be to put the receivership order at nought. For practical purposes, it would return the control of the litigation to those from whom the order of Warren J had removed it; it would be difficult in any real sense for the receiver to control the litigation or its cost; it would mean that the interests of the trust would be placed in the hands of two only of three beneficiaries and further where those hands were hostile to the interests of the third beneficiary. This, it was put, was what Warren J has sought to avoid.

145. In the course of argument it was suggested that the receiver was not or might not be impartial. No evidence of this was offered and I make no such finding. I assume that he was appointed on the basis that no party saw him as being partial. Inevitably, in heated litigation such as the present, he will have to take a position on some matters which may displease one or other of the contending beneficiaries. If, however, his conduct is other than impartial and even-handed, application may be made to remove him on that basis. No such application has been made.

148. From my reading of the reasons of 4 August 2000, I conclude that her Honour was concerned that the trust assets not be applied for non-trust purposes. In the context of this litigation, the risk is that they will be applied to prosecute or defend the interests of Mr David Yunghanns and Ms Sarah Mahon and of parties associated with them. There is a hint in her Honour's reasons at [86] that the trust assets have been in the past inappropriately expended in unnecessary steps in the Yunghanns litigation. I do not, however, understand her Honour to have been concerned that, in this litigation, the defence by Candoora of claims against the trust or its prosecution of claims for the benefit of the trust were frivolous or vexatious and therefore a waste of trust assets. If the concern be that procedural steps taken in the past have been taken merely for vindictive or some other improper purpose, this will be avoided in the future by the order empowering the receiver to prevent the bringing of any such application or any such defence of an application of an opposing party.

151. It is clear, too, that her Honour was troubled that Mr David Yunghanns and Ms Sarah Mahon bore ill-will towards their co-beneficiary, William Yunghanns. The risk here is that Candoora, under the direction of the adult beneficiaries, may disadvantage the infant. I accept for present purpose that this ill-will exists. I accept, too, that they see William Yunghanns as a person associated with his father in this litigation. In the context of this litigation this makes them adversaries. My concern is with their role in the on-going litigation as managing the interests of the trust in circumstances where they are adversaries of one beneficiary of the trust. This hostility towards the beneficiary of the trust whose interests they must prosecute or defend can cause a difficulty, only if and insofar as they may hereafter neglect the interests of the trust or subordinate those interests to their own personal interests. This risk, too, can be avoided by careful supervision on the part of the receiver.

154. Any concern of her Honour that the trust assets may be applied in this litigation improperly for non-trust purposes may be satisfied by ensuring that the receiver controls the purse strings.

157. On 29 August 2000, Warren J advised the parties that I was to be the trial judge and she referred to me the future management of this litigation. My present task is to work out the terms of the receivership order, in the circumstances now existing, so as to avoid the risks which her Honour has identified and to achieve the objectives of the appointment. At the same time I must ensure that the order intrudes no further than is necessary upon the legitimate interests of those affected. I remind myself that the principal objective of the order is to preserve the trust assets and to do so on a temporary basis until the trial and determination of the Yunghanns litigation.

160. In the circumstances of this case, this preservation requires the management of commercial activities of the trust and the protection of its assets in the present litigation. So far as the litigation is concerned, the receiver must act in the name of Candoora which remains the trustee of the Yunghanns Children Trust. On its face, paragraph 7 of the receivership order restrains Candoora from so acting without the consent in writing of the receiver or the leave of the court. The proper course, it would seem, is for the receiver to request Candoora as trustee of the trust to do so and, if it refuse, application might be made by the plaintiff as the party controlling the receivership application for an order compelling it to do so.[8] This the receiver has not done. Had such a request been made it seems very likely that Candoora would have gladly complied, for it is apparently keen to pursue the litigation. It will be noted that the involvement of Candoora in the Yunghanns litigation, other than this proceeding, is as fourth defendant in the Rentiers proceeding. Others of the Wingara Wine Group companies are defendants and plaintiffs by counterclaim in that proceeding. According to the summary set out in the judgment of Warren J of 4 August 2000 at [32] the allegations against these defendants in that proceeding strike at their assets and therefore the assets of the trust. There are also claims that they are in breach of fiduciary duties and claims that Mr David Yunghanns and Ms Sarah Mahon have wrongfully assumed control of those companies to the exclusion of Mr Peter Yunghanns. The counterclaim in the Rentiers proceeding appears also to be directed to protecting or enlarging the assets of Wingara and Ligon which are also trust assets.

163. The attitude of the receiver is that he is content, for the time being at least, to conduct the litigation for the benefit of the trust assets in the name of the trustee and using the legal representatives engaged by the trustee. These, he proposes, will continue to act for their client, Candoora, and other companies within the trust but will "liaise with" the receiver, to adopt counsel's expression. I, for my part, would not see this expression as satisfactorily meeting the requirements of a desirable relationship between the receiver and Candoora, any more than the word "invigilator" adopted by counsel for Candoora instructed by its directors. He must be the person responsible to the court for the protection of the interests of the trust in the litigation.

166. I will make orders to have the effect that the litigation on behalf of the trust will proceed in the name of Candoora. The receiver, as the person responsible to the court to protect the trust property, will direct and supervise the litigation in this way and will, in that sense, control this litigation so that the assets be not applied improperly or wastefully. I expect that the litigation will continue to be conducted by the legal practitioners who have previously acted for Candoora, since they have a great familiarity with it. Since the litigation is to be conducted by him in this way for the benefit of the trust, it follows that it should be so conducted at the expense of the trust. Doubtless, as the person charged with the protection of the trust assets, this expense will be no greater than is necessary for the purpose. In this way, her Honour's concerns are addressed and her objectives likely to be achieved.

169. There is another reason for adopting this course which appeals to me, as the judge whose task it is to conduct the trial of the Yunghanns litigation. This is the fact that Candoora will participate in the trial, in any event, to look after its non-trust interests. Joint representation would go far to avoid debate at trial as to which of two legal representatives was entitled to present argument or evidence for Candoora in any given situation.

172. In the course of argument there was discussion about conflicts of interest which might arise if the receiver were to retain the solicitors presently acting for Candoora and others. This is a matter, in the first instance at least, for the receiver and the legal practitioners concerned. I will say nothing further about it.

175. I note, in this regard, that the general rule is that a receiver should not defend court proceedings without first having obtained the leave of the court.[9] I assume that the order I might make as a consequence of this application should include the granting of this leave.

178. I will hear counsel further as to the precise terms of the order which I might make to give effect to these conclusions and as to any other orders sought under the receiver's summons.

181. In the course of argument I raised the question of the appropriateness of the title to this proceeding, or at least of the description of the plaintiff. Now that the plaintiff has been born and named, the title should be amended to reflect his identity. I directed therefore that in lieu of the words "An Infant Yunghanns", there be substituted the words "William Yunghanns, a minor".

[1] (1883) 11 QBD 251

[2] [1980] VicRp 61; [1980] VR 652

[3] [1980] VicRp 61; [1980] VR 652 at 653

[7] As to whether such a power is conferred by the receivership order, see s.420(2)(b). But see also AIDC v Cooperative Farmers & Graziers Direct Meat Supply Ltd [1978] VicRp 59; [1978] VR 633 at 639-40, per Marks J

[8] Kraft v Kupferwasser (1991) 23 NSWLR 236 at 244, per Powell J.

[9] Picarda, The Law Relating to Receivers Managers and Administrators, 2nd, 1990 at p.365