Mongar Pty Ltd v Levko Pty Ltd [2008] NSWSC 445

New South Wales Supreme Court

CITATION : Mongar Pty Ltd v Levko Pty Ltd [2008] NSWSC 445

HEARING DATE(S) : 5 May 2008

JUDGMENT DATE : 8 May 2008

JURISDICTION : Equity Division

JUDGMENT OF : Young CJ in Eq

DECISION : Will construed, orders to be made to supplement proposal.

CATCHWORDS : SUCCESSION [229]- Wills- Construction- Life interest or absolute interest. TRUSTS AND TRUSTEES [204]-Orders proposed under s 81 Trustee Act 1925- Proposal to channel distributions through intermediary corporation- Whether proposal was for the management and administration of the trust- Whether expedient.

LEGISLATION CITED : Trustee Act 1925, ss 45, 81

CASES CITED : James N Kirby Foundation Ltd v AG (2004) 62 NSWLR 276 Re Cosaf Pty Ltd (Young J, 15.12.1992, unreported)

Mongar Pty Limited (P1) PARTIES : Bettgar Pty Limited (P2) Levko Pty Limited (D1) [other defendants' names suppressed]

FILE NUMBER(S) : SC 1995/08

COUNSEL : T Jucovic QC (P) M Cashion SC (D2)

SOLICITORS : Addisons (P) Kemp Strang (D2)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG CJ in EQ

Thursday 8 May 2008

1995/08 – MONGAR PTY LTD v LEVKO PTY LTD JUDGMENT 1 HIS HONOUR: The present proceedings concern the construction of the will of a wealthy gentleman and whether an order should be made under section 81 of the Trustee Act 1925 with respect to the administration of some of the trusts resulting from his estate. 2 The testator died on 6 December 1997, having first made and published his last will of 19 November 1997. Probate of that will was duly granted. 3 The testator was married twice and had three children. He has two daughters whom I will call Betty and Monica. Betty is a child of the testator's first marriage, Monica of the second. He also has a son whom I will call Fred: Fred is a son of the first marriage. 4 Fred is a person who clearly is not able to manage his affairs. The testator clearly realised this and made special, though complicated provisions for him. 5 The estate has been fully administered and on 25 October 2007, the plaintiff companies became the trustees of the trusts of the will so far as they affect the testator's son. 6 The general scheme of the testator's will is that Betty, Monica and Fred share equally in the testator's estate. The daughters take their shares outright. Fred's share is burdened by the provisions to which I will shortly refer. 7 The testator had considerable assets of his own and also had control of other assets in the name of companies and trusts. 8 By clause 5 of the will, the testator left his shares in his Foundation as to one-third for each of his children for life with remainder to their issue. 9 The testator had set up separate discretionary trusts focused on each of his children. By clause 6 of his will he gave the shares in each of the companies operating as trustees of those trusts to the trustees of his will with various specific directions. The trustee of the trust focused on Fred is the first defendant Levko Pty Ltd. 10 It is common ground that those directions operate as guidelines to the trustee rather than mandatory imperatives as to how it must act. 11 The plaintiffs are the holders of the shares formerly held by the testator in Levko Pty Ltd. 12 The plaintiffs' summons seeks clarification of the true construction of the will and also orders under s 81 of the Trustee Act 1925 to enable them to administer the trusts thereof more expediently. 13 I need to turn to the will whose relevant provisions I set out in an anonymised form.