Leerac Pty Ltd v Garrick E Fay [2008] NSWSC 1082

Leerac Pty Ltd v Garrick E Fay [2008] NSWSC 1082

Clause 17 is triggered only by actions asserting liability against the trustee for breach of trust, not by actions securing due administration. The present proceedings did not fall within clause 17 as they seek removal of trustees for due administration, not liability, and are not against the trustee company. If the clause purported to apply more widely to such proceedings, it would be void as contrary to public policy.

Jurisdiction
Australia
Judgment Date
18 September 2008
Procedural Posture
Judicial Advice Application / Ex Tempore Judgment on Preliminary Questions
Outcome
Question 1 answered 'No'; Question 2 does not arise. Costs ordered as set out. Proceedings 5032/06 adjourned.
Legal Topics
['judicial Advice to Trustees' 'non Contest Clauses' 'public Policy in Trusts' 'trustee Liability']
['equity' 'trusts'] ['judicial Advice to Trustees' 'non Contest Clauses' 'public Policy in Trusts' 'trustee Liability']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Judicial Advice Application / Ex Tempore Judgment on Preliminary Questions

Legal Issues

  1. 1 ["Whether a 'non-contest' clause in trust deeds excludes defendants from beneficiary status due to litigation commenced" 'Whether the clause is void as contrary to public policy if it would deter proceedings for administration/removal of trustees' 'Whether proceedings against directors of trustee company are proceedings against the trustee for the purposes of the clause']

Ratio Decidendi

Clause 17 is triggered only by actions asserting liability against the trustee for breach of trust, not by actions securing due administration. The present proceedings did not fall within clause 17 as they seek removal of trustees for due administration, not liability, and are not against the trustee company. If the clause purported to apply more widely to such proceedings, it would be void as contrary to public policy.

Court Disposition

Question 1 answered 'No'; Question 2 does not arise. Costs ordered as set out. Proceedings 5032/06 adjourned.

Orders

  • ["Question 1 in the Summons is answered 'No'." 'Question 2 does not arise.' "Plaintiff's costs on trustee basis and defendants' costs on party-party basis to be paid from each of the eight trusts pro rata." 'Note of undertaking as to damages given and received in 5032/06.' 'Proceedings 5032/06 adjourned...