Application by John William Kellert [2017] NSWSC 897

Supreme Court New South Wales

Medium Neutral Citation: Application by John William Kellert [2017] NSWSC 897 Hearing dates: 5 July 2017 Date of orders: 05 July 2017 Decision date: 05 July 2017 Jurisdiction: Equity Before: Hallen J Decision: See Paragraphs 34 to 36 inclusive Catchwords: TRUSTS AND TRUSTEES; JUDICIAL ADVICE – s 63 of the Trustee Act 1925 Legislation Cited: Trustee Act 1925 (NSW) Succession Act 2006 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Macedonian Orthodox Community Church St Petka Inc v Petar (2006) 66 NSWLR 112; [2006] NSWCA 160 Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42 Stein v Sybmore Holdings [2006] NSWSC 1004 Category: Procedural and other rulings Parties: John William Kellert (first Plaintiff) Frances Rita Maloof (second Plaintiff) Representation: Counsel: Mr C Harris SC

Solicitors: Brown Wright Stein Lawyers (Plaintiffs) File Number(s): 2017/27320

Judgment – EX TEMPORE (REVISED) 1. HIS HONOUR: In this application, which is made under the Trustee Act 1925 (NSW) s 63, the Plaintiffs, who are the executors of the estate of Clement Joseph Maloof ("the deceased"), seek advice on questions which concern the deceased's Will. 2. There has been read on this application, a Summons filed on 27 January 2017, what is described as a "Confidential Statement of Facts" dated 4 July 2017, a "Confidential affidavit of Rachel Vijayaraj sworn 4 July 2017" and a copy of the confidential opinion of senior counsel going to some aspects of the application. 3. The Plaintiffs sought leave to file an amended Summons, which, relevantly, seeks the following relief (with appropriate editorial amendments): "That the Court indicate, by way of advice pursuant to s 63 of the Trustee Act 1925 (NSW) whether the plaintiffs would be justified in: (a) treating the "mausoleum space" referred to in clause 7(1) of the Will of the late Clement Joseph Maloof dated 17 July 2006 on the basis that it is subject to the Family Court orders made in proceedings XXXXX of 1994 on around 14 November 1994; … (e) selling or realising the value of the "mausoleum space"; (f) applying any abatement to the proceeds of sale which is required to be applied to specific gifts to pay administration and other estate expenses; and (g) dividing the balance equally between the five children of the deceased namely Frances Maloof, Anthony Maloof, Clement George Maloof, Alberta Jane Rashid and Michael Maloof?" 1. (There is also a second Paragraph of the Summons that identifies another matter upon which judicial advice is sought, but as it cannot be dealt with today, I shall not refer to it. As I am on long leave from the end of August 2017, and as a number of steps are required to be taken by the Plaintiffs going to that aspect of the judicial advice, it has been necessary to adjourn that part of the relief sought in the amended Summons to the Registrar's List on 23 August 2017. There will be no difficulty in another Judge dealing with this aspect as no part of the hearing today has concerned it.) 2. I granted the leave sought by the Plaintiffs and ordered the amended Summons to be filed by 4:00 p.m. on 6 July 2017. I have proceeded today to deal with the relief sought as set out above in the amended Summons. 3. As is well known, s 63 enables trustees to 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. In this case, it can be seen from the relief sought, that the advice concerns the administration of the trust property and/or the interpretation of the trust instrument. 4. "Management or administration of property" includes taking steps to preserve the property, and taking steps to make the property financially productive. The words refer to both the manner in which trust property is managed, administered, handled, directed or controlled, and the actual carrying out of those functions. In addition, the words include transferring part, or all, of it, as required, to those who have become entitled to it. The words are not confined to the continued holding of the property in question: Stein v Sybmore Holdings [2006] NSWSC 1004 at [59]. 5. An order under s 63 produces the statutory consequence stated in s 63(2), namely that if the trustees, having received judicial advice, act in accordance with it, the trustees are "deemed to have discharged the trustee's duty as trustee in the subject matter of the application". 6. Uniform Civil Procedure Rules 2005 (NSW) ("the UCPR"), rule 55.1, provides: (1) A statement under section 63 of the Trustee Act 1925: (a) must be divided into consecutively numbered paragraphs, and (b) must state the facts concisely, and (c) must state the question for opinion, advice or direction. (2) Despite rule 6.12 (2), the originating process in proceedings under section 63 of the Trustee Act 1925 need not state the question for opinion, advice or direction." 1. UCPR rule 55.2 provides that an opinion, advice or direction given under s 63 "must be given by order". However, such an order is permissive in nature, its usual form being that the trustee "would be justified" in taking certain action. As such, the order does not carry with it the usual consequences of an order made by the Court in adversarial proceedings, regardless of whether parties have been given notice of the application under s 63(4). Thus, it does not create a res judicata. It does not finally determine the rights of parties. Indeed, it does not, of itself, determine any rights, although, it has the potential to affect the rights of the parties given notice under s 63(4). It does not carry with it the consequences of breach, including, e.g. the exposure to contempt proceedings should an order be disobeyed: Macedonian Orthodox Community Church St Petka Inc v Petar (2006) 66 NSWLR 112; [2006] NSWCA 160. 2. Whilst neither of those rules has been strictly complied with, the evidence to which I shall refer is the subject of evidence read in the proceedings, upon which the Plaintiffs rely. 3. Furthermore, this sort of application provides a summary procedure, intended to enable questions arising in the administration of an estate, or a trust, to be resolved cheaply and simply: Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42, at [61]. For this reason, to the extent necessary, I have proceeded with the evidence as read on the Plaintiffs' application.