Parkes -Linnegar & Anor v Watson [2011] NSWSC 37

Parkes -Linnegar & Anor v Watson [2011] NSWSC 37

The plaintiffs as sole, adult beneficiaries with an absolute, vested and indefeasible interest in the trust property are entitled to terminate the trust pursuant to the rule in Saunders v Vautier. The defendant trustee's concerns and claimed right of indemnity were not sufficient to prevent termination, as the liabilities in question were not properly established as obligations of the trust. The claim for misleading conduct failed as the letter in question did not amount to actionable conduct under the Fair Trading Act, 1987 (NSW).

Parties
First Plaintiff: Gloria Joy Parkes-Linnegar; Second Plaintiff: Robert Parkes-Linnegar; Defendant: Michael Carl Watson
Jurisdiction
Australia
Judgment Date
11 February 2011
Procedural Posture
Application to Terminate Trust / Principal Judgment
Outcome
Trust terminated; orders for transfer of shares to second plaintiff subject to conditions; claim for misleading conduct dismissed
Legal Topics
Trust Termination, Rule in Saunders V Vautier, Trustee Right of Indemnity, Misleading Conduct
Equity Trusts & Trustees Trust Termination Rule in Saunders V Vautier Trustee Right of Indemnity Misleading Conduct

Case Brief

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Parties

Gloria Joy Parkes-Linnegar

First Plaintiff

Robert Parkes-Linnegar

Second Plaintiff

Michael Carl Watson

Defendant

Procedural Posture

Application to Terminate Trust / Principal Judgment

Legal Issues

  1. 1 Whether trust should be terminated under the rule in Saunders v Vautier
  2. 2 Whether trustee was justified in withholding consent to termination
  3. 3 Whether trustee entitled to indemnity from trust assets for estate liabilities

Ratio Decidendi

The plaintiffs as sole, adult beneficiaries with an absolute, vested and indefeasible interest in the trust property are entitled to terminate the trust pursuant to the rule in Saunders v Vautier. The defendant trustee's concerns and claimed right of indemnity were not sufficient to prevent termination, as the liabilities in question were not properly established as obligations of the trust. The claim for misleading conduct failed as the letter in question did not amount to actionable conduct under the Fair Trading Act, 1987 (NSW).

Court Disposition

Trust terminated; orders for transfer of shares to second plaintiff subject to conditions; claim for misleading conduct dismissed

Orders

  • Order for transfer of 2,446 shares in CRL to second plaintiff, operation suspended for 28 days
  • Parties to agree within 21 days on amount of trustee indemnity from trust for authorised liabilities; failing agreement, accounts to be taken or mediation directed