Ludwig v Jeffrey (No 4) [2021] NSWCA 256

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Ludwig v Jeffrey (No 4) [2021] NSWCA 256 Hearing dates: 20 September 2021 Date of orders: 26 October 2021 Decision date: 26 October 2021 Before: Meagher JA at [1]; Brereton JA [2]; Emmett AJA at [3] Decision: The Court orders: 1) Leave to appeal in relation to grounds 1,2,3,5 and 10 is granted. 2) Appeal in relation to grounds 1,2,3,5 and 10 is dismissed. 3) Leave to appeal in relation to 4,6,7,8 and 9 grounds is refused. 4) The Beneficiaries to pay the Trustee's costs of the appeal. 5) The Trustee is entitled to be indemnified in respect of his costs of the appeal from the funds remaining with the Independent Solicitor. Catchwords: EQUITY — trusts and trustees — powers, duties, rights and liabilities — indemnity of trustee — whether trustee is entitled to be indemnified — where parties are joint tenants of a property — rights of trustees to be indemnified for defending proceedings brought against the trust — trustee entitlements to security for contingent liabilities EQUITY — trusts and trustees — judicial advice — disagreement between trustee and beneficiaries regarding management of property — whether judicial advice should have been sought by the trustee pursuant to Trustee Act 1925 (NSW), s 63 before defending the proceedings — consequences of a failure to seek judicial advice — if judicial advice had been sought, the trustee would have been advised that defending the proceedings was appropriate — that a trustee "should" seek legal advice does not give rise to a legal obligation to do so Legislation Cited: Civil Procedure Act 2005 (NSW) Conveyancing Act 1919 (NSW), Pt 4 Div 6 Evidence Act 1995 (NSW) Income Tax Assessment Act 1997 (Cth), Pt 3-1, ss 104-75, 106-50, Pt 3-3 Supreme Court Act 1970 (NSW), s 75A Trustee Act 1925 (NSW), ss 59, 63 Uniform Civil Procedure Rules 2005 (NSW), r 42.25 Cases Cited: Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226; [1998] HCA 4 Gatsios Holdings Pty Ltd v Kritharas Holdings Pty Ltd (in liq) [2002] NSWCA 29; ATPR 41-864 In Re Beddoe [1893] 1 Ch 547 Ludwig v Jeffrey [2019] NSWSC 1550 Ludwig v Jeffrey (No 2) [2020] NSWSC 1677 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42 Northey v Juul [2014] NSWSC 464 Segal v Osborne (No 2) [2016] NSWSC 1328 Category: Principal judgment Parties: Joanne Elizabeth Ludwig (First Applicant) Robert Walter Ludwig (Second Applicant) Lynton Barrett Jeffrey (Respondent) Representation: Counsel: J E F Brown with N Condylis (Applicants) R D Wilson SC (Respondent)