In the matter of Perpetual Investment Management Ltd as responsible entity for Perpetual's Monthly Income Fund and Perpetual's Wholesale Monthly Income Fund [2011] NSWSC 615

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Perpetual Investment Management Ltd as responsible entity for Perpetual's Monthly Income Fund and Perpetual's Wholesale Monthly Income Fund [2011] NSWSC 615 Hearing dates: On written submissions Decision date: 22 June 2011 Jurisdiction: Equity Division - Duty List Before: Ward J Decision: Costs of unitholder to be paid out of Fund Catchwords: COSTS - application by unitholder under s 93(2) of the Trustee Act 1925 (NSW) for costs of appearance on judicial advice application - HELD - unitholder's costs to be paid out of Fund Legislation Cited: Trustee Act 1925 (NSW) Cases Cited: Hughes v NM Superannuation Pty Ltd (1993) 29 NSWLR 653 Category: Procedural and other rulings Parties: Perpetual Investment Management Ltd as responsible entity for Perpetual's Monthly Income Fund and Perpetual's Wholesale Monthly Income Fund (Plaintiff) Representation: Counsel J Knackstredt/Ms T Gordon (Mr GA Roberts, unitholder) Solicitors Clayton Utz (Plaintiff) Haille Paine (Mr GA Roberts, unitholder) File Number(s): 10/418597

Judgment 1HER HONOUR : On 16 June 2011, I published my reasons for judgment on an application that had been made by the plaintiff (Perpetual), as the responsible entity of two registered managed investment schemes (Perpetual's Monthly Income Fund, referred to as MIF, and Perpetual's Wholesale Monthly Income Fund, referred to as WMIF) for clarification in respect of judicial advice earlier given on 9 March 2011 by White J pursuant to s 63 of the Trustee Act 1925 (NSW) in relation to the potential transfer of units from unitholders in each of the funds to Direct Share Purchasing Corporation Pty Investment (DSPC). On the hearing of the judicial advice application before me, there had been an appearance by Mr Knackstredt of Counsel for one of the unitholders in the MIF (Mr Roberts). 2When I handed down my judgment, Ms Gordon of Counsel, then appearing for Mr Roberts, sought (and I granted) leave to forward written submissions in support of an application by Mr Roberts that his costs of preparation for and attendance at the hearing on 30 May 2011 be paid out of the MIF. Those submissions have been served and I now rule on that application. 3The application is made pursuant to s 93 of the Trustee Act , which confers a broad discretion on the Court in relation to costs. In Hughes v NM Superannuation Pty Ltd (1993) 29 NSWLR 653, Sheller JA (with whom Kirby P, as his Honour then was, and Meagher JA agreed) said (at [671]): It is I think well-established that, where the terms of a trust document in the context of events which have happened reasonably lead to a trustee to seek administrative advice from the Court as to its meaning and how it should be administered, all parties properly joined should have their appropriate costs out of the Fund 4Mr Roberts was not joined as a party to the application for judicial advice. However, he was served with a copy of the Further Amended Summons and Supplementary Statement of Facts pursuant to orders sought by Perpetual and made by me on 23 May 2011, being an MIF unitholder in respect of whom Perpetual had sought advice first from White J (and was seeking further advice by way of clarification of his Honour's orders from me), in relation to the circumstances in which Perpetual would be justified in refusing to register a transfer of his units in the MIF. The appearance for Mr Roberts on 30 May 2011 was in order to protect his interests. 5On 30 May 2011, Mr Knackstredt made brief submissions as to Mr Roberts' interest and informed me of the Court proceedings that have been instituted on Mr Roberts' behalf seeking to set aside the purported contract arising by reference to a transfer form signed by him in favour of DSPC (at a time when it is said that Mr Roberts was suffering from dementia). 6In relation to costs, it is submitted by Mr Knackstredt that although Mr Roberts was not formally joined as a party to the present proceedings, the principles in Hughes v NM Superannuation apply with equal force to his position since Mr Roberts appeared at the hearing in consequence of the Court's direction made on 23 May 2011 (but which I would note did not require the attendance of unitholders but, rather, was to enable any unitholders an opportunity to make submissions in relation to the application to be heard on that occasion) and because s 63(11) of the Trustee Act provides that those persons who are served with notice of an application for judicial advice are bound by the opinion, advice, direction or order given under that section as if given or made in proceedings to which the person was a party. 7Perpetual has not served any written submissions but took the position on 16 June 2011 that the preliminary view I had expressed at that time (namely, that both DSPC and Mr Roberts should bear their own costs of the application) should be followed. 8I am satisfied that in the circumstances it was not unreasonable for those representing Mr Roberts' interests to retain Counsel to appear on the hearing of the judicial advice application to protect his interests (particularly in circumstances where by then other proceedings were already on foot on Mr Roberts' behalf in relation to the transaction that formed part of the series of transactions the subject of the judicial advice that had been sought). There was the potential (albeit perhaps unlikely given that Mr Roberts had not signed any amended Transfer Form or DSPC direction) that Mr Roberts' position might have been affected by advice given on the application before me (say, if there had been a determination that Perpetual was not justified in registering transfers within a particular class of unitholder in which Mr Roberts might then, or might subsequently, fall). 9While I consider that there is an argument that Mr Roberts' interests were adequately protected by the stance being taken by Perpetual, it seems not unreasonable that there might have been a circumstance arising in which Mr Roberts' individual position needed to be raised. Further, I take into account that the costs in question are not likely to be large. 10In the circumstances I order pursuant to s 93 of the Trustee Act that Mr Roberts' costs of preparation for and attendance at the hearing of the judicial advice application on 30 May 2011 be paid by Perpetual out of the MIF and that those costs be assessed on a solicitor/client basis.