Crossman v PILT Nominees Pty Ltd [2008] NSWSC 557

New South Wales Supreme Court

CITATION : Crossman v PILT Nominees Pty Ltd [2008] NSWSC 557

HEARING DATE(S) : 27 May 2008

JUDGMENT DATE : 27 May 2008

JURISDICTION : Equity

JUDGMENT OF : Hamilton J

DECISION : Interlocutory injunction granted.

CATCHWORDS : EQUITY [220] – Trusts and trustees – The cestui que trust – Right to bring action in name of a beneficiary - Right to sue without joining trustee – Trustee will not sue.

CATEGORY : Procedural and other rulings

Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 CASES CITED : McLean v Burns Philp Trustee Company Pty Ltd (1985) 2 NSWLR 623 Ramage v Waclaw (1988) 12 NSWLR 84 Spellson v George (1987) 11 NSWLR 300

Phillip Michael Crossman (P) PARTIES : PILT Nominees Pty Limited (D1) Baltarna Pty Limited (D2) Ross Edward Seller (D3)

FILE NUMBER(S) : SC 2847/08

COUNSEL : R J H Darke SC and J B Spinak (P) D K L Raphael and J A Watson (Ds)

SOLICITORS : Allens Arthur Robinson (P) AT Lawyers Pty Limited (Ds)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

HAMILTON J

TUESDAY, 27 MAY 2008

2847/08 PHILLIP MICHAEL CROSSMAN v PILT NOMINEES PTY LIMITED & ORS JUDGMENT 1 HIS HONOUR: The plaintiff claims to restrain a proposed borrowing of $11.5 million by the trustee of the PILT Trust constituted by a trust deed dated 5 December 1995, which is in evidence. The complex provisions of that trust deed have been the subject of extensive but not exhaustive submissions by counsel for both sides. 2 One of the difficulties that the plaintiff faces in his case is that he is not a beneficiary of that trust. His position is indeed quite remote from it. He is a discretionary beneficiary of a trust called the BC Trust, which until 6 March this year was itself a discretionary beneficiary of a trust known as the Baltarna Trust, which is a beneficiary of the PILT Trust. 3 Arguments have been put on the defendants' behalf by Mr D K L Raphael, leading counsel for the defendants, with his usual vigour and I have been assisted by clear written and oral argument on both sides. Mr Raphael presses on me that it is clear that the plaintiff has no standing to move for the injunctive relief sought and that, what is more, upon a consideration of the trust deed and various events which have occurred, even if he had standing it would be clear that he had no case to establish that the transaction of which he complains was a breach of that trust. 4 On the other hand, it is put to me by Mr Darke, of Senior Counsel for the plaintiff, that the plaintiff does indeed have standing to bring the proceedings, although the BC Trust is no longer a discretionary beneficiary of the Baltarna Trust. The plaintiff says that the removal of the BC Trust from the category of discretionary beneficiaries of the Baltarna Trust in March of this year was in breach of the plaintiff's rights as a discretionary trustee of the BC Trust and the BC Trust should be treated for present purposes as entitled to be treated as a discretionary beneficiary of that Trust. 5 As I have said on more than one occasion during the argument, there is considerable force in several of the submissions put to me by Mr Raphael. However, the difficult questions that are raised in this case are not to be determined by me upon this interlocutory injunction application. I refer, not for the first time, to the principles laid down by McLelland J in Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 535 - 536 as follows: "As I see it, the position is as follows. Where a plaintiff's entitlement to ultimate relief is uncertain, the Court, in deciding to grant or refuse an interlocutory injunction, must consider what course is best calculated to achieve justice between the parties in the circumstances of the particular case, pending the resolution of the uncertainty, bearing in mind the consequences to the defendant of the grant of an injunction in support of relief to which the plaintiff may ultimately be held not to be entitled, and the consequences to the plaintiff of the refusal of an injunction in support of relief to which the plaintiff may ultimately be held to be entitled: see, eg, Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208 at 216; A v Hayden (No 1) (1984) 59 ALJR 1 at 4-5; 56 ALR 73 at 79. Where the uncertainty depends in whole or in part on a contested question of fact it is not appropriate for the Court to decide that question on the interlocutory application. Where the uncertainty depends in whole or in part on a contested question of law, it may or may not be appropriate for the Court to decide that question on the interlocutory application, depending on circumstances, eg, whether the question is novel or difficult, or is susceptible of resolution on the present state of the evidence, or whether the urgency of the matter renders it impracticable to give proper consideration to the question: see, eg, A v Hayden (No 1) (at 4; 78); Cohen v Peko-Wallsend (1986) 61 ALJR 57 at 59; 68 ALR 394 at 397. If the Court does decide the question of law the uncertainty is to that extent removed.