Hillier v Martin (No 7) [2021] FCA 1221

Hillier v Martin (No 7) [2021] FCA 1221

There is no prima facie entitlement in a trustee (or equivalent such as Mrs Martin) to use trust assets to pay her legal costs in defending hostile proceedings absent a court order. Where trust assets have likely been applied for such purposes, the Court should order the reimbursement of those funds into court pending final determination, without needing to apply interlocutory injunction principles or require an undertaking as to damages, since the order simply enforces the existing law of trusts, not any new restraint.

Parties
Applicant: James Hillier; First Respondent: Victoria Martin; Second Respondent: Nordburger Operations Pty Ltd; Third Respondent: Erik Vari Pty Ltd
Jurisdiction
Australia
Judgment Date
11 October 2021
Procedural Posture
Interlocutory Application in Hostile Trust/beneficiaries Dispute / Ruling on an Interlocutory Application
Outcome
Application allowed. Order made as sought.
Legal Topics
Interlocutory Relief, Trustee Indemnity, Trust Asset Expenditure, Mandatory Injunctions, Trustee Costs, Jurisdiction of Federal Court, Proper Parties
Equity Trust Law Commercial Law Interlocutory Relief Trustee Indemnity Trust Asset Expenditure Mandatory Injunctions Trustee Costs +2 more

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Parties

James Hillier

Applicant

Victoria Martin

First Respondent

Nordburger Operations Pty Ltd

Second Respondent

Erik Vari Pty Ltd

Third Respondent

Procedural Posture

Interlocutory Application in Hostile Trust/beneficiaries Dispute / Ruling on an Interlocutory Application

Legal Issues

  1. 1 Whether the Court should order reimbursement of trust property used to pay the first respondent's legal fees pending final determination of hostile trust/beneficiaries proceedings;
  2. 2 Whether an order compelling reimbursement is in the nature of a mandatory interlocutory injunction so that principles relating to such orders apply;
  3. 3 Whether a trustee (or equivalent) has a prima facie entitlement to apply trust funds to their legal costs defending personal/hostile claims absent court sanction;

Ratio Decidendi

There is no prima facie entitlement in a trustee (or equivalent such as Mrs Martin) to use trust assets to pay her legal costs in defending hostile proceedings absent a court order. Where trust assets have likely been applied for such purposes, the Court should order the reimbursement of those funds into court pending final determination, without needing to apply interlocutory injunction principles or require an undertaking as to damages, since the order simply enforces the existing law of trusts, not any new restraint.

Court Disposition

Application allowed. Order made as sought.

Orders

  • Norman Waterhouse Lawyers is to reimburse any company or entity in the Nordburger Group from which it received payments of fees and disbursements in connection with Mrs Martin's representation in these proceedings, such amounts to be paid into court pending determination of the proceedings.