Supreme Court New South Wales Medium Neutral Citation: Beach Coast Property Pty Ltd v North Coast Beach Property Pty Ltd & Anor [2011] NSWSC 1089 Hearing dates: Tuesday, 6 September 2011 Decision date: 06 September 2011 Jurisdiction: Equity Division - Duty List Before: Brereton J Decision: Motion dismissed with costs. Catchwords: PRACTICE AND PROCEDURE - Plaintiff applies for determination of separate questions - matters on foot involving parties to present application in Common Law and Equity Divisions - proposed separate questions discrete and not manifestly unsuitable for preliminary determination - issue whether valid and effective removal of trustee occurred - practical issue is whether issue should be resolved on final basis in Equity or Common Law proceeding - Common Law proceedings set down for interlocutory hearing on 29 September - inappropriate to pre-empt hearing by making orders in Equity Division dealing with same issues. Category: Procedural and other rulings Parties: Beach Coast Property Pty Ltd (plaintiff) North Coast Beach Property Pty Ltd (first defendant) McMillan Investment Holdings Pty Limited (second defendant) Representation: Counsel: Mr G. A. Moore (plaintiff) Mr B. L. Smith (first defendant, solicitor) Mr B. Connell (second defendant) Solicitors: Colin Biggers & Paisley (plaintiff) B. L. Smith (first defendant, solicitor) PMF Legal (second defendant) File Number(s): 2011/188537 Judgment (ex tempore) 1HIS HONOUR: By summons filed in these proceedings on 8 June 2011, the plaintiff Beach Coast Property Pty Ltd ('Beach Coast') claims relief first, to the effect that it has been appointed trustee of land at Stockton of which, it is contended, the first defendant North Coast Beach Property Pty Limited ('North Coast'), was formerly the trustee; and, secondly, that a mortgage given by the first defendant originally to Byville Pty Ltd and subsequently assigned to Santai Corporation Limited and ultimately to the second defendant McMillan Investments Holdings Pty Limited ('McMillan'), was given in breach of trust and/or secures no moneys. The plaintiff seeks consequential relief to procure a discharge of that mortgage. 2In proceedings commenced by McMillan in the Common Law Division of the Court (matter number 2011/122285), McMillan claims possession of the Stockton property. The defendant in the Common Law proceedings is North Coast, the present first defendant, which has apparently consented to judgment for possession. In the Common Law proceedings, Beach Coast has filed an application to be joined as a defendant, which application is fixed for hearing in the possession list on 29 September. 3By notice of motion filed in the Equity proceedings on 25 August 2011, Beach Coast claims an order, in substance, that the question whether it has been appointed as trustee of the property in place of McMillan and is entitled to be registered as such be determined separately and before the other issues in the proceedings, and be fixed for hearing prior to 29 September, so it can be resolved before the hearing of its application for joinder as a defendant in the Common Law proceedings. 4On the proposed separate question, the chief issues would appear to be first, whether, on the proper construction of clause 14 of the trust deed, the appointment of a new appointor had the effect of removing the previous appointor, so that the new appointor could act alone; and, secondly, whether the new appointor's purported removal of McMillan and appointment of Beach Coast as trustee was a proper exercise of the appointor's power of appointment, it being alleged that it was made not genuinely in the interests of the trust as a whole, but in the interests of a person who was not then a beneficiary. Those are matters which will have to be resolved in due course at the hearing. 5On Beach Coast's application to be joined as a defendant in the Common Law proceedings, the issues will be substantially the same as those that would arise on the proposed separate question, save that it may well be that Beach Coast would bear the lower onus of having to establish only a sufficiently arguable case, rather than proving its case to the standard required to support final relief. 6The proposed separate question is, it is fair to say, discrete in the sense that the determination of the relief sought in the balance of the proceedings stands apart from the determination of the proposed separate question. In that sense, it is not manifestly unsuitable for determination as a preliminary question. On the other hand, its determination will not remove the first defendant from further participation in proceedings as, assuming a determination favourable to Beach Coast, North Coast as former trustee will wish to be heard in opposition to the allegation that the mortgage was given in breach of trust, and quite possibly to maintain a lien as former trustee in respect of the trust property to secure its rights for contribution or indemnity out of the trust property. 7Whether on the application for joinder, or at the final hearing in the Common Law proceedings, it seems inevitable that the standing issue - namely whether there has been a valid and effective removal and replacement of the trustee - will have to be resolved in those proceedings if it is not first resolved here. The practical issue is whether that issue should be resolved on a final basis in the next three weeks in this Division, or whether it should be left to resolution in the Common Law proceedings, either on an interlocutory basis or, if the parties agree, on a final basis on 29 September, or, failing that, at the final hearing in those proceedings. 8It may not be impossible to find available dates in this Division between now and 29 September when the matter could be heard. But in circumstances where the application is already and has for some time been set down in the Common Law division, the issues will be substantially the same (the only difference being whether it may suffice for purposes of the application in that Division to resolve the matter only on an interlocutory basis), it is undesirable that the course of the litigation be interrupted by a late application in this Division. In circumstances where proceedings have been on foot for some time in the Common Law division with a view to an interlocutory hearing on 29 September, it would be inappropriate to pre-empt that hearing by an early final hearing of the same issues in this division. 9I will therefore dismiss the motion. That does not preclude the plaintiff from seeking a similar order at a later stage, if the circumstances are different in a material way, which they may or may not be depending on the outcome of the application in the Common Law division. However, I have expressed the view that the standing issue will have to be resolved sooner or later in the Common Law Division and, in those circumstances, it is difficult to see why there should be on foot two proceedings seeking to resolve substantially the same issue. 10I order that the motion be dismissed with costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 September 2011