Leerac Pty Ltd v Garrick E Fay & ors [2010] NSWSC 1088

Leerac Pty Ltd v Garrick E Fay & ors [2010] NSWSC 1088

Leerac Pty Ltd, as trustee of the inter vivos trusts, is justified and entitled to pay the defendants' legal costs of defending the estate and appeal proceedings from the trust estate now and on an ongoing basis, without needing to await the outcome of enforcement of costs orders, provided any money later recovered by the defendants under those costs orders is paid to Leerac. The trustee's legitimate interest in the proceedings and the uncertain prospects of recovery under the costs orders warrant the payment from the trust estate.

Parties
Plaintiff: Leerac Pty Ltd; First Defendant: Garrick E Fay; Second Defendant: Dallas Fay; Third Defendant: Sioned Fay; Fourth Defendant: Louisa Fay
Jurisdiction
Australia
Judgment Date
23 July 2010
Procedural Posture
Equity Application / Application for Judicial Advice and Consequential Orders
Outcome
Trustees justified and entitled to aid defence of defendants
Legal Topics
Judicial Advice to Trustees, Trustees' Powers, Funding Litigation From Trust Assets, Costs in Estate Proceedings
Equity Trusts and Trustees Judicial Advice to Trustees Trustees' Powers Funding Litigation From Trust Assets Costs in Estate Proceedings

Case Brief

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Parties

Leerac Pty Ltd

Plaintiff

Garrick E Fay

First Defendant

Dallas Fay

Second Defendant

Sioned Fay

Third Defendant

Louisa Fay

Fourth Defendant

Procedural Posture

Equity Application / Application for Judicial Advice and Consequential Orders

Legal Issues

  1. 1 Whether trustee Leerac Pty Ltd is justified in paying the legal costs of the defendants from the trust fund prior to recovery action against plaintiffs
  2. 2 Whether such payments can also be made for appeal proceedings and ongoing costs

Ratio Decidendi

Leerac Pty Ltd, as trustee of the inter vivos trusts, is justified and entitled to pay the defendants' legal costs of defending the estate and appeal proceedings from the trust estate now and on an ongoing basis, without needing to await the outcome of enforcement of costs orders, provided any money later recovered by the defendants under those costs orders is paid to Leerac. The trustee's legitimate interest in the proceedings and the uncertain prospects of recovery under the costs orders warrant the payment from the trust estate.

Court Disposition

Trustees justified and entitled to aid defence of defendants

Orders

  • Questions 1(a), (b), (c) and 2 stated in the application are each answered 'Yes'.
  • Leerac's costs of the application be paid on the indemnity basis out of each of the eight inter vivos trusts pro rata.