Ludwig v Jeffrey (No. 2) [2020] NSWSC 1677

Supreme Court New South Wales

Medium Neutral Citation: Ludwig v Jeffrey (No. 2) [2020] NSWSC 1677 Hearing dates: Determined on the papers. Date of orders: 30 November 2020 Decision date: 30 November 2020 Jurisdiction: Equity Before: Slattery J Decision: Directions given for the parties to bring in short minutes of order to give effect to the Court's reasons. Catchwords: EQUITY – Trusts and trustees – indemnity of trustee – the plaintiffs and the defendant were registered proprietors as joint tenants of certain real property – the defendant held his one third interest as joint tenant in the property on trust for the plaintiffs – the property sold and the net proceeds held pending the outcome of these proceedings – pursuant to orders of the Court part of the proceeds were applied by the plaintiffs to acquire another property – the defendant incurs expenses and tax liabilities as the trustee of his legal interest in the property – the plaintiffs accept liability to indemnify the defendant as trustee – what is the quantum of that indemnity in relation to the defendant's expenses and in relation to the defendant's potential liability to capital gains tax – whether the defendant's expenses were reasonably and properly incurred – how should the defendant's indemnity be secured – in what priority should the proceeds of sale be applied to satisfy the defendant's indemnity. Legislation Cited: Conveyancing Act 1919, s 66G Income Tax Assessment Act 1997 (Cth) Taxation Administration Act 1953 (Cth) Trade Practices Act 1974 (Cth), s 52 Trustee Act 1925, s 59(4) Uniform Civil Procedure Rules 2005, r 42.25 Cases Cited: Australian Securities and Investments Commission v Letten (No 17) (2011) 286 ALR 346 Burger King Corporation v Hungry Jack's Pty Limited (2001) 69 NSWLR 558 Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 Gatsios Holdings Pty Ltd v Kritharas Holdings (In Liq) [2002] NSWCA 29 Ludwig v Jeffrey [2019] NSWSC 1550 Macedonian Orthodox Community Church Saint Peka Incorporated v His Eminence Petar (2008) 237 CLR 66 National Trustees Executors & Agency Company of Australasia v Barnes (1941) 64 CLR 268 Nolan v Collie (2003) 7 VR 287 Northey v Juul [2014] NSWSC 464 Perpetual Nominees Limited v Storehouse Managed Investments Limited [2015] NSWSC 1994 Re Beddoe [1893] 1 Ch 547 Segal v Osborne (No. 20) [2016] NSWSC 1328 Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319 Worrall v Harford (1802) 32 ER 250 Category: Principal judgment Parties: First Plaintiff/respondent: Joanne Elizabeth Ludwig Second Plaintiff/respondent: Robert Walter Ludwig Defendant/applicant: Lynton Barrett Jeffrey Representation: Counsel: Plaintiffs/respondents: J. R. B. Pearson Defendant/applicant: C.T. Ensor