Ludwig v Jeffrey (No. 3) [2021] NSWSC 23

Supreme Court New South Wales

Medium Neutral Citation: Ludwig v Jeffrey (No. 3) [2021] NSWSC 23 Hearing dates: Decision made in chambers on the papers. Date of orders: 27 January 2021 Decision date: 27 January 2021 Jurisdiction: Equity Before: Slattery J Decision: Orders made providing for the payment of some funds out by the independent solicitor. Directions made for the fixing of a specified gross sum instead of assessed costs. Plaintiffs must elect whether they will raise issues concerning Trustee Act 1925, s 100A. Catchwords: EQUITY – Trusts and trustees – Powers, duties, rights and liabilities – 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 costs, expenses and tax liabilities as the trustee of his legal interest in the property – the maximum quantum of that indemnity in relation to the defendant's costs and expenses are fixed – the defendant's potential liability to capital gains tax and other taxes appears to be zero or very low – what orders should now be made with respect to the payment out of money which is held by an independent solicitor – should a cost assessment now take place or should a gross sum costs order be made – new issue raised as to whether Trustee Act 1925, s 100A may modify the amount paid out of the fund held by the independent solicitor. CIVIL PROCEDURE – Costs orders – Civil Procedure Act 2005, s 98(4)(c) – small trust estate – dispute about the quantum of costs – much of the estate already consumed by legal costs – whether a specified gross sum should be fixed instead of assessed costs. Legislation Cited: Civil Procedure Act 2005, ss 60, 98(4)(c) Justice Legislation Amendment Act (No 2) 2019 Legal Profession Uniform Law Application Act 2014 Trustee Act 1925, ss 100A, 100A(2), 100A(4) New South Wales Law Reform Commission, Report 144 (2018): Laws Relating to Beneficiaries of Trusts, Recommendation 2.1 Cases Cited: Australian Securities and Investments Commission v Letten (No 17) (2011) 286 ALR 346 Causley v Countryside Pty Ltd (No 3) (Unreported, NSWCA, 2 September 1996) Fraser or Robinson v Murdoch (1881) 6 App Cas 855 Hamod v New South Wales [2011] NSWCA 375 Hardoon v Belilios [1901] AC 118 Harrison v Schipp (2002) 54 NSWLR 738 JW Broomhead (Vic) Pty Ltd (in liquidation) v JW Broomhead Pty Ltd [1985] VR 891 Ludwig and Jeffrey [2019] NSWSC 1550 Ludwig v Jeffrey (No. 2) [2020] NSWSC 1677 Matthews v Ruggles-Brise [1911] 1 Ch 194 Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99 Texts Cited: H A J Ford, "Trading Trusts and Creditors' Rights" (1981) 13 Melbourne University Law Review 1 Category: Consequential orders 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