Perpetual Trustee Company Limited in its capacity as trustee of the HIH NZ Converting Notes 1998 Trust [2011] NSWSC 1091

Supreme Court New South Wales

Medium Neutral Citation: Perpetual Trustee Company Limited in its capacity as trustee of the HIH NZ Converting Notes 1998 Trust [2011] NSWSC 1091 Hearing dates: Tuesday, 6 September 2011 Decision date: 07 September 2011 Jurisdiction: Equity Division - Duty List Before: Brereton J Decision: Perpetual Trustee Company Pty Limited would be justified in bringing the proposed New South Wales proceedings and continuing to prosecute the New Zealand proceedings and doing all things necessary or reasonably incidental to conducting each of those proceedings. Perpetual Trustee Company Pty Limited would be justified in accepting funding for the New Zealand proceedings and proposed New South Wales proceedings upon the terms of the funding agreement. Perpetual Trustee Company Pty Limited would not be justified, in the absence of further advice from the Court, in continuing the proposed New South Wales proceedings in the event that the New Zealand Court declines to stay the New Zealand proceedings. Costs of the application are paid out of the trust of the estate. Catchwords: TRUSTS - Trustees - Application for judicial advice - trustee seeks advice as to institution and continuation of proceedings and obtaining litigation funding - reasonable grounds for thinking proceedings have prospects of success - proceedings if successful would bring commercial benefits to beneficiaries - trustee acting reasonably and prudently in bringing proceedings - without litigation funding from a beneficiary, trustee will not bring proceedings - not unreasonable that beneficiary funding litigation receives financial reward - trustee wishes to institute parallel proceedings in New South Wales because of exclusive jurisdiction clause and cost savings - New Zealand courts not unfamiliar with Australian law - institution of proceedings in New South Wales not unreasonable or imprudent in context of pursuing the interests of the trust as a whole. Legislation Cited: (NZ) Companies Act 1993, s 248, s 284, s 304 (CTH) Corporations Act 2001, s 479, s 1321 (NSW) Trustee Act 1925, s 63 Cases Cited: Bloom and Harms Offshore AHT "Taurus" KG (2010) 2 WLR 349 Commissioner of Inland Revenue v Compudigm International Ltd (in receivership and in liquidation) (High Court of New Zealand, Gendall AJ, 21 September 2010, unreported) HIH Insurance Ltd (in liq), Re; McGrath v Perpetual Trustee Co Ltd (2008) 66 ACSR 210 In re Beddoe [1893] 1 Ch 547 Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand and Another (2008) 237 CLR 66 Poynter v Commerce Division [2010] 3 NZLR 300 Re Vocalion v Foreign Limited [1932] 2 Ch 196 Category: Principal judgment Parties: Perpetual Trustee Company Limited in its capacity as trustee of the HIH NZ Converting Notes 1998 Trust Representation: Counsel: J.A.C. Potts Solicitors: Corrs Chambers Westgarth File Number(s): 2011/288207