Supreme Court New South Wales Medium Neutral Citation: Application by Alan Maxwell Frost [2014] NSWSC 597 Hearing dates: 9 May 2014 Decision date: 16 May 2014 Jurisdiction: Equity Division Before: Rein J Decision: Application for judicial advice refused; summons dismissed Catchwords: EQUITY - trusts and trustees - application for judicial advice pursuant to s 63 of the Trustee Act 1925 - proceedings between trustees and beneficiaries or third parties - insolvent deceased estate - whether executors justified in pursing special leave application - application for judicial advice refused Legislation Cited: Bankruptcy Act 1966 (Cth) Trustee Act 1925 (NSW) Cases Cited: Alan Maxwell Frost and Diana Catherine Fallon [2013] NSWSC 1619 Bovaird v Frost [2013] FCA 974 Bovaird v The Trustee of the Bankrupt Estate of Frost [2010] FCA 1159 Frost v Fallon [2011] NSWSC 591 Frost v Bovaird [2014] FCAFC 20 The High Court in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42 Category: Principal judgment Parties: Alan Maxwell Frost (First Plaintiff) Diana Catherine Fallon (Second Plaintiff) Representation: Counsel: A J Sullivan QC/R J Carruthers (Plaintiffs) Solicitors: MBP Legal (Plaintiffs) File Number(s): 2014/116287 REASONS FOR Judgment 1In this matter the plaintiffs Alan Maxwell Frost and Diana Fallon (to whom I shall refer as "the executors") are the executors of the estate of Maxwell Walter Allen Frost ("the deceased"), who died on 26 November 2002. The executors seek judicial advice pursuant to section 63(1) of the Trustee Act 1925 ("the Trustee Act") in relation to a proposed appeal from the judgment of the Full Court of the Federal Court (Jagot, Barker and Katzmann JJ) in Frost v Bovaird [2014] FCAFC 20, delivered on 7 March 2014. I shall refer to that judgment as "the second Full Court judgment" for reasons which will become apparent. 2Section 63(1) and (2) of the Trustee Act are in the following terms: (1) A trustee may apply to the Court for an opinion advice or direction on any question respecting the management or administration of the trust property, or respecting the interpretation of the trust instrument. (2) If the trustee acts in accordance with the opinion advice or direction, the trustee shall be deemed, so far as regards the trustee's own responsibility, to have discharged the trustee's duty as trustee in the subject matter of the application, provided that the trustee has not been guilty of any fraud or wilful concealment or misrepresentation in obtaining the opinion advice or direction. 3The advice of the Court is sought on the following questions: (a)Would the plaintiff executors be justified in prosecuting an application in the High Court for special leave to appeal from the judgment of the Full Court of the Federal Court and in prosecuting an appeal if such special leave is granted? (b)Would the plaintiff executors be justified in incurring or potentially incurring the costs of the estate in pursuing the said application for special leave to appeal and an appeal if such leave is granted, with such costs to be recouped from the funds of the estate, but subject to any direction given by a court with bankruptcy jurisdiction to the trustee in bankruptcy to pay such funds to the plaintiff executors? 4As alluded to in (b), the estate of the deceased is insolvent. On 23 October 2009 the Federal Magistrates Court made orders for the estate to be administered under Part XI of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act"). Since that time the estate has been under the control of a trustee in bankruptcy. Accordingly, the executors do not have control of the funds of the estate, and cannot be paid any costs unless a direction to that effect is given to the trustee in bankruptcy by the court administering the bankruptcy. 5It is necessary to set out the history of litigation between the parties from which the application stems. 6The history has these elements: (1)In 2004 Monica Bovaird the sister of the deceased, Leon Bovaird her son (and nephew of the deceased and who on Monica's death became executor of her estate), sued the executors and a company controlled by the executors ("AFM") alleging breach of two separate contracts and Monica seeking family provision out of the estate of Maxwell Frost. (2)In April 2009 Brereton J gave judgment in favour of Monica for approximately $1.24 million, but found in favour of AFM. He also ordered that the executors pay the Bovaird's costs and that the executors' costs of defending the action be paid out of the estate. (3)Since the estate had funds of no more than $835,000 at the time of judgment the executors petitioned the Federal Magistrates Court in October 2009 to place the estate into bankruptcy. Orders were made to that effect. (4)The Bovairds (to whom I shall hereafter refer to as "the creditors") appealed to the NSW Court of Appeal from Brereton J's decision both as to quantum and in respect of his costs order refusing indemnity costs and permitting the executors to be paid out of the estate. I shall refer to these appeals as "the Supreme Court Appeals". (5)In February 2010 the creditors in separate proceedings sued the executors in their personal capacity in the Supreme Court alleging that the executors has dissipated funds of the estate ("the devastavit proceedings") and seeking damages from the executors, in respect of the losses for which the creditors allege the executors are liable. (6)In December 2009 the creditors filed an application in the Federal Court seeking leave to proceed with the Supreme Court Appeals. (7)In March 2010 the executors commenced an application in the Federal Court against the trustee in bankruptcy seeking the discharge of their right of indemnity in respect of the costs incurred in defending the creditors' claims before Brereton J. They also sought a declaration that their right of indemnity for future legal costs to be incurred in defending the Supreme Court Appeals, the devastavit proceedings, and in connection with the then current Federal Court proceedings, and an order that the trustee in bankruptcy pay such sums as may be required to meet their legal costs and expenses on an indemnity basis in respect of the Court of Appeal case and the devastavit proceedings. The trustee in bankruptcy filed an application for directions as to whether he would be justified or not in paying out legal costs of the executors in respect of the Supreme Court Appeals, the devastavit proceedings and the Federal Court proceedings. The executors then sought an order staying the devastavit proceeding, an order that the devastavit proceeding was for the benefit of the estate and that the trustee in bankruptcy was the proper plaintiff for such proceedings. (8)The matters referred to in [7] came before Perram J for determination. Perram J: (a)Declined leave to the creditors to appeal on quantum, but gave leave to appeal in respect of the costs order made in favour of the executors and AFM. (b)Declined to order the trustee in bankruptcy to pay the executors' costs of the Supreme Court Appeals. (c)Directed the trustee in bankruptcy that he would not be justified in paying the legal costs of the executors of the Supreme Court Appeals, the devastavit proceedings or the Federal Court proceedings. (d)Refused to grant a stay of the devastavit proceedings. (9)Both the executors and the creditors appealed from Perram J's decision to the Full Court of the Federal Court (Jacobson, Siopis and Nicholas JJ) who upheld the appeal on some of the grounds advanced by the executors. The Full Court's judgment was handed down on 30 April 2012 and I shall refer to it as "the first Full Court judgment". The executors sought judicial advice from the Supreme Court and obtained advice from Ward J (as her Honour then was) that they were justified in bringing an appeal from Perram J's judgment. (10)In Federal Court proceedings NSD 1394 and 1395 of 2009 (Bovaird v The Trustee of the Bankrupt Estate of Frost [2010] FCA 1159 or "the leave proceedings"), Perram J, inter alia, on 3 May 2011 granted leave to the creditors to proceed with the devastavit proceedings. His Honour ordered in this respect: (The creditors are) granted leave, nunc pro tunc, to proceed with (the Devastavit Proceedings). (11)The executors and the creditors each appealed various orders of Perram J but in doing so did not challenge that order. (12)On 24 April 2013, Basten JA (sitting alone) dismissed the Supreme Court Appeals in their entirety, without any hearing on the merits. (13)Later in 2013, the creditors moved to amend their claim in the devastavit proceedings. The executors asserted that the creditors required the leave of the Federal Court to pursue that amendment. 7On 27 September 2013 Perram J delivered judgement in Bovaird v Frost [2013] FCA 974, concluding that leave was not required for the creditors to amend their statement of claim in the devastavit proceedings and dismissed the executors' application. 8After seeking judicial advice as to whether they would be justified in pursuing an appeal from the decision of Perram J (see the judgment of Darke J in Alan Maxwell Frost and Diana Catherine Fallon [2013] NSWSC 1619), the executors appealed to the Full Court of the Federal Court. Jagot, Barker and Katzmann JJ, who as I have noted earlier, subsequently upheld the decision of Perram J. 9The executors now seek the advice of this Court on the questions identified at [2] above. 10Three issues were agitated in the proceedings before the Full Court and were conveniently identified in the second Full Court judgment of 7 March 2014 at [1]: (1)Whether, on the proper construction of s 249 of the Bankruptcy Act 1966 (Cth), where leave has been granted to "proceed" with a claim, any later step requires a fresh grant of leave? (2)Whether, on the proper interpretation of Perram J's orders made on 31 May 2011, the application to amend the Statement of Claim falls within the grant of leave already conferred? (3)In the alternative to the foregoing, whether the Full Court should consider the proposed amendments and, if so, whether they are arguable? 11Those questions were answered "no", "yes" and "no" respectively. 12The devastavit proceedings, it was accepted by the Federal Court, are proceedings "in respect of a debt provable in the administration" as contemplated by s 249(3) of the Bankruptcy Act. Section 249(3) reads: Except as provided by this Act, after an order has been made for the administration of the estate of a deceased person under this Part, it is not competent for a creditor: (a) to enforce any remedy against the estate in respect of a debt provable in the administration; or (b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceedings in respect of such a debt or take any fresh step in such a proceeding. 13There was no dispute that the proposed amendment to the statement of claim is a "fresh step" (see Frost v Bovaird [2014] FCAFC 20 at [8]). The issue in dispute was whether Perram J's grant of leave was a general or a confined one. 14The Full Court, with reference to the terms of s 249(3), accepted that Perram J had granted leave "at large" in the devastavit proceedings, and therefore held that no fresh grant was required for the applicants to amend the statement of claim. 15In so deciding the Full Court embraced the creditors' submission that: 17. The language of that section, properly understood, directs attention to 2 possible circumstances: first, where the bankruptcy precedes the commencement of the proceedings and, secondly, where it occurs during the pendency of the proceedings. In the first situation, a grant of leave is required to "commence" proceedings; in the second leave is required to take "any fresh step". The section does not, require, however, a fresh grant of leave once leave has been given to commence proceedings. 16The Full Court agreed with such a construction of s 294(3), holding that "the natural and ordinary meaning of the words 'such a proceeding' in s 294(3) is a proceeding which was commenced without the leave of the Court", citing earlier forms of the equivalent provisions and deeming those to be consistent with that conclusion (at [25]). 17The alternate reading of Perram J's grant of leave, as advanced by the executors before Perram J and the Full Court, is that it should be construed as leave to pursue the proceedings "as then constituted", which is gleaned from the scope of the statement of claim. This reading also relies on a construction of s 294(3)(b) which does not permit a general order for leave ever to be granted, as it would obviate the need to seek leave before taking a "fresh step", thus rendering the intended operation of s 294(3)(b) nugatory. 18However, such a construction also necessarily requires that leave be sought before every "fresh step" is taken in any legal proceedings - a clearly burdensome requirement in the context of on-going litigation that could not possibly have been intended. This construction, the Full Court thought, would promote a circular conduct of litigation in which Federal Court approval is required at each "fresh" step, increasing the prospects of costs wasted on procedure. 19Further, on the Full Court's construction of s 294(3), subsection (b) is not rendered nugatory, but only operates where an order is made for the administration of estate which is already the subject of proceedings, and a grant of leave must be sought before a "fresh step" is taken in those proceedings. 20In relation to the second of the issues set out at [10] above, in determining whether the creditors' application to amend fell within Perram J's general grant of leave the Full Court accepted that "There is no warrant for attempting to construe the grant of leave by reference to anything other than the terms of the grant" (at [31]). 21Further, at [32], their Honours noted: "...that clear words would be needed to confine an apparently general grant of leave to pursue the proceedings in the Supreme Court so as to exclude any substantial amendment application with which the Supreme Court is best placed to deal". 22The Full Court thought that, looking to the words of the grant of leave itself, there is nothing to indicate an intention that the grant should be confined to the proceedings as pleaded at the time the leave was granted. 23Further, Perram J had imposed conditions on the grant of leave which required "the creditors to undertake not to oppose any application by the trustee to be joined to the devastavit proceedings", and "to undertake to keep the trustee informed of the orders to be sought" (see Bovaird v The Trustee of the Bankrupt Estate of Frost [2010] FCA 1159 at [26]). The Full Court was of the view that had his Honour intended to confine the terms of the grant so that no application to amend could be made, he would have expressly provided. 24The Full Court rejected the executors' argument that leave was confined to the case as pleaded at the commencement of the proceeding. 25I turn to the third issue of those set out at [10] above. This issue would only arise if the executors succeeded on one or other of the first two issues, but I should note that Perram J's statement of principle at [20] that: The concern of this Court, as a court of bankruptcy, is not to superintend the behaviour of the parties to litigation relating to proveable debts. Rather, it is to ensure that the conduct of that kind of litigation is in the interests of the creditors as a whole. and the Full Court's endorsement of it, in my view, is undoubtedly correct. 26The executors have obtained the advice of Mr Alan Sullivan QC in which advice, for reasons which are, as one would expect of him, detailed and carefully expressed, he concludes that the Full Court's construction of Perram J's earlier order was in error on one or both of two bases which he articulates at para 40 of his advice (see Tab 6 of Volume 1 of the Court Book, which I shall make Exhibit A). 27Mr Sullivan also considers, as he was bound to do, whether the requirements for a successful special leave application will be met, and having pointed out that most special leave applications are unsuccessful he opines that "there are reasonable prospects of success" (para 45). 28The conclusion of the Full Court and of Perram J accords with my own understanding of s 294(3) and the construction that the executors propound seems to present an oppressive burden on claimants and on the Federal Court. However it is not my task to determine whether the arguments to be advanced by the executors are correct, and the advice of Mr Sullivan leaves me unwilling to say that the case advanced against the construction adopted by the Federal Court to date is "without any basis" or "hopeless". 29I will, for present purposes, assume in favour of the executors, that they do have reasonable prospects of success in their special leave application and of overturning the decision of the Full Court (and hence of Perram J) and that if successful the matter will need to be returned to Perram J to reconsider whether leave should be granted to the creditors to expand their claims in the devastavit proceedings. 30The estate as at June 2009 had a net value of $835,000 approximately made up then of $336,000 in cash and the balance in listed shares. As at the date of Brereton J's orders it could not meet all of its liabilities, since the creditors had obtained a judgment of $1.24 million plus costs estimated to be $172,000 and the executors have a costs order in their favour which equates, they claim, to an amount of approximately $523,000. 31The trustee in bankruptcy controls the funds of the estate - no money can be paid out by the executors and the Federal Court has directed the trustee not to pay any money out to the executors for their costs in the Federal Court or in the devastavit proceedings. The executors have, they claim, incurred costs of $230,000 in resisting the creditors' devastavit claim. 32It follows from [31] that the executors must fund the application for special leave themselves. 33I should mention that the Federal Court has held that the claim in devastavit does require leave of the Court pursuant to s 294(3) of the Bankruptcy Act and that conclusion has not been challenged by the creditors. I confess to having some doubt myself as to whether a claim against an executor constitutes "legal proceedings in respect of a debt provable in the administration" but given the approach of the Federal Court at both first instance and the Full Court and the absence of any challenge to it I proceed on the basis that the conclusion is correct. 34The estate is undoubtedly bankrupt. Not only can it not meet the $1.35 million (including costs) which flows from Brereton J's judgment but the $835,000 net value of the estate has already been significantly eroded by the executors' costs in defending the original Supreme Court proceedings. Given that the estate is bankrupt and that the executors are spending their own money in prosecuting the special leave application, my initial impression was that the question of whether or not the executors would be justified in prosecuting the special leave application was not a matter for judicial advice. The answer to that is put by Mr Sullivan as follows: (1)The executors are faced with a claim in devastavit. They are defending that claim and seeking to confine its scope. If the creditors fail in their claim, the executors will incur costs some of which may not be recoverable from the creditors and the executors will seek those costs from the estate. If the creditors succeed in their claim against the executors the executors will be liable to repay any money lost to the estate but may be able to obtain an indemnity from the estate notwithstanding their breach if such a breach is found. That the executors could be held liable in devastavit and yet obtain an order for indemnity of their costs is, I think, accepted to be a very unlikely outcome. (2)If the executors are successful in defending the devastavit proceedings and the executors are held against the creditors entitled to the cost of resisting the claim, they do not want to be met by the creditors claiming that the costs of the special leave application should be borne by them because they did not seek judicial advice that they were justified in doing so. (3)Even now the creditors are claiming in the devastavit proceeding that part of the claimed waste includes the applications to the Federal Court so there is likely to be contest about this. 35There are a number of matters which lead me to conclude that the matter is not one is respect of which I should give judicial advice and these are: (1)As the Full Court noted in its first decision the claim is one brought against the executors not the estate. (2)The Federal Court has prohibited the trustee from paying any costs of the devastavit proceedings. (3)Since the executors do not (and cannot) use the funds of the estate any incurral of costs in the special leave application is not, and could not be of itself, a breach of trust by the executors. It follows that the executors need not have recourse to s 85 of the Trustee Act in order to seek to be relieved of liability for breach of trust by reason of their having embarked upon the special leave application. (4)The effect of judicial advice given pursuant to s 63 of the Trustee Act is that if the trustee acts in accordance with the advice he will, so far as the trustee's own responsibility in the subject matter of the application, (provided he has not been guilty of any fraud or wilful concealment in obtaining the opinion, advice or direction) be deemed to have discharged his duty as trustee: see s 63(2). (5)In the first Full Court judgment the Full Court treated the devastavit claim as a beneficiaries claim and of a type that is regarded as ordinary hostile litigation in which costs follow the event and do not come out of the trust estate and referred to the principle that a trustee will not be able to rely upon the right of indemnity in respect of legal costs in protecting only his or her personal interests, at [70], but did observe that a trustee against whom misconduct is alleged may be entitled to rely on a right of indemnity to have his or her legal costs paid from the estate: "this may occur, for example, where a court finds at the trial of the action, or even afterwards, that the trustee acted properly in defending the claim made against him or her, or has been exonerated from wrong doing" (see [71]). If the executors are successful in resisting the devastavit claims they will be able to make a claim that any costs which they have incurred, are costs properly incurred as executors and for which they ought be reimbursed. The executors will not have breached any duty to the estate by funding the special leave application themselves but whether they are entitled to recover from the estate will have to be determined, by the Federal Court in its supervision of the trustee in bankruptcy. I accept that if the executors successfully resist the devastavit proceedings there is at the very least a realistic prospect that they may be able to obtain an order for payment of the costs of defending those proceedings and hence that the estate will be diminished to that extent but that does not lead to the conclusion that the estate will benefit from the narrowing of the claims made against the executors, since if the creditors are successful the estate will be expanded by any amount which the executors are required to repay. (6)If the executors are not successful in resisting the devastavit claims the prospect that they would be able to obtain from the estate the costs of defending the devastavit proceedings is remote. Once again, however, if they wish to make such an application the trustee in bankruptcy will need to obtain a direction from the Federal Court. (7)It seems to me that there is no present need for the executors to obtain judicial advice since they have no intention to, and cannot, utilise the funds of the estate. The High Court in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66; 82 ALJR 1425; 249 ALR 250 ("Macedonian") has made it clear that this Court can give judicial advice to a trustee whose acts are impugned and who wants protection in utilising the assets of the trust to defend the trust and themselves (see paras [54]-[74] and particularly [70]-[73]) but in that case the trustee had access to assets and wanted to utilise them. Indeed, the advice of Palmer J was qualified by a concern that there be sufficient assets available to adequately defend the extensive proceedings anticipated: see [24] of the High Court's decision. (8)On 30 May 2014 the creditors' motion to amend their statement of claim in the devastavit proceedings is to be heard in this Court. If the amendments are refused there will be no utility or need to press on with the special leave application. Mr Sullivan accepts that it would be open to include in any advice a qualification to the effect that the executors would not be justified in proceedings with the special leave application if this Court rules against the creditors. Such a qualification was contained in the advice given by Darke J (see [43]). (9)The trustee in bankruptcy has, by letter of 8 May 2014 to the solicitors for the executors expressed his views on the special leave application (which letter I have now marked Exhibit B) which letter it can be said reflects a view that the special leave application is not warranted from the point of view of the estate. A number of points are made, the salient of which I summarise as follows: (a)If the executors are unsuccessful in defending the devastavit proceedings "it is not appropriate that they be indemnified" from the estate - this it is said "would seem to follow" from the first Full Court decision. (b)The proposed amendments in the devastavit proceedings "raise the prospect that the bankruptcy may be annulled which is to the benefit of the estate". (c)The proposed amendments should have minimal cost impact on the estate itself. (d)The appeal to the High Court lacks utility "as the trustee is advised that if the appeal is upheld it is open to the plaintiffs to make an application for fresh or further leave to proceed". (10)I do not understand the relevance of the second point and so far as the third point the executors maintain that an expanded claim by the creditors will lead to greater costs and hence a greater amount being sought by the executors, with a consequent increased burden on the estate, but the utility point is important. If the High Court were to grant special leave and were to allow the appeal the likely consequence is remittal of the matter to the Federal Court to consider whether leave should be granted. If the Supreme Court has, by that stage, allowed the amendments sought by the executors the Federal Court will have to determine whether leave should be granted. Mr Sullivan's contention is that in considering the leave application Justice Perram would be required to look at the matter afresh with 'a different set of glasses'. Whilst I accept that there could be new issues to consider on whether leave should be granted nothing has been presented that would suggest that Perram J or any other Federal Court judge hearing the matter would be likely to refuse leave if the Supreme Court had determined that the amendments sought should be allowed. As I have already pointed out if the Supreme Court refuses the amendments there will be no need for any further hearing in the Federal Court. I think the first point made by the trustee in bankruptcy (a) above is reflected in (6) above. 36I am mindful of the fact that Ward J regarded the giving of advice as appropriate. Her Honour said, at [67] of the judgement,: Insofar as the present application is concerned, Brereton J in the very proceedings the subject of appeal noted that it was both desirable and prudent for a trustee promptly to obtain judicial advice as to possible proceedings, "lest it otherwise be suggested that they have been gambling with money that is not their own" (Bovaird v Frost [2009] NSWSC 917 at [32] per Brereton J). Therefore, the conduct of the executors in seeking advice as to whether to prosecute the appeal now on foot in the Full Federal Court cannot be criticised. 37Her Honour also referred at [68] to paras [70]-[72] of Macedonian. As at the date that Brereton J was considering the matter the executors were in control of the assets of the estate and it could have been suggested that they were using the assets of the estate to wrongly defend the creditors' claims. That changed however when the trustee was appointed. The executors then were however still dealing with claims made by the creditors as against the estate and not simply the devastavit proceedings. The appeal which the executors wish to pursue is from the second Full Court decision and that relates only to the devastavit proceedings and that raises a distinction between the situation that Ward J was asked to express a view on and that with which I am now faced. 38I am also mindful of the fact that Darke J gave advice that the executors were justified in appealing from Perram J's decision in respect of the leave to commence or discontinue the devastavit proceedings. That appeal of course did not involve any claim against the estate but as against the executors personally. I note however that his Honour did made two qualifications to his advice. One concerned the possibility that the Supreme Court might refuse the amendment sought by the creditors, to which I have referred in [35](8) above. The second was that at [44] his Honour said: I also conclude that the executors would be justified in incurring costs in pursuing the said appeal (subject to the stated qualification) with such costs to be recouped from the funds of the estate, subject to the further qualification that such recoupment should only occur in accordance with a direction given by a court with bankruptcy jurisdiction to the trustee in bankruptcy of the estate. 39Given that the Full Federal Court has by its first judgment given its ruling that the trustee is to act on its directions I doubt, with respect, that a ruling that "such costs to be recouped from the funds of the estate" can be properly made by this Court and if it could that it has any substantial effect when it is said to be "subject to the further qualification that such recoupment should only occur in accordance with a direction by a court with bankruptcy jurisdiction". In a sense the qualification highlights the lack of utility of the advice being sought and links to the earlier point made that the executors are not seeking protection from a claim that they have spent trust money because since the appointment of the trustee they have not done so. 40I accept that the view which I take to the appropriateness of judicial advice in the present circumstances is different to that taken by Darke J, and although the circumstances are now somewhat different probably to that taken by Ward J as well, and I do not wish to be taken as expressing any criticism of the legal advisors of the executors in having brought the application for judicial advice. 41In para [67] of Macedonian the plurality of the Court made the following observations concerning the application of s 63 of the Trustee Act: [67] Role of context in applying s 63. Sixthly, the application of s 63 will tend to vary with the type of trust involved. Where there is a non-charitable private trust involving a conflict between beneficiaries, or between beneficiaries alleging a breach of trust out of which a trustee has profited and that trustee, and where the defendants in those proceedings have a personal capacity to fund the defence, it might not be correct to give the trustee an opinion, advice or direction. The position is not necessarily the same where the trust is for a charitable purpose, where the public interest is involved since ex hypothesi the trust is beneficial to the public, where none of the contestants in the litigation about the trust is suing or defending in order to augment, defend or seek the restoration of personal assets, and where a crucial question is the precise terms of the purpose for which the trust exists. 42In paras [76]-[80] of the first Full Court judgment the Court said at [80]: [80] Here, although the trust established by the late Mr Frost's will was for charitable purposes, as we have said, the nature of the devastavit proceeding is analogous to a beneficiaries dispute in which a claim of impropriety is made against the executors. In fact, in our view, there are similarities between the devastavit proceeding and the first of the category of claims referred to by the High Court in the observations extracted at [76] above, in respect of which the High Court observed that it may not be correct to give the trustee a direction to have resort to the trust funds. 43There is no public interest involved here and as the first Full Court judgment points out the devastavit proceeding is analogous to a beneficiaries dispute. There is no suggestion that the executors do not have a personal capacity to fund the defence and they have maintained their defence in the devastavit proceedings without recourse to the estate's assets. I think the present case fits within the category identified in the second sentence of Macedonian at [67] set out above. 44In circumstances where the executors are not able to utilise the assets of the estate, are seeking to defend themselves from a claim that they have wasted assets of the estate and the Federal Court has blocked any use of the assets until further order, I do not think it an appropriate matter for judicial advice and I decline to give such advice. ********** 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: 16 May 2014