Parkes-Linnegar & Anor v Watson (No 2) [2011] NSWSC 181

Parkes-Linnegar & Anor v Watson (No 2) [2011] NSWSC 181

The defendant's continued reliance on the first plaintiff's alleged lack of capacity and suggested undue influence was unreasonable because there was never a sound factual basis for it, the plaintiffs progressively supplied evidence of normal mental functions, rational reasons for termination, legal advice and accounting advice, and the undue influence case was not properly pleaded or pursued. Accordingly, the defendant must pay the plaintiffs' costs of the capacity issue on an indemnity basis and has no right of indemnity from trust property for his own costs or liability for the plaintiffs' costs on that issue. By contrast, outstanding liabilities to Spencer Whitby and Watson & Proud...

Jurisdiction
Australia
Judgment Date
18 March 2011
Procedural Posture
Trust Proceedings and Judicial Advice Application Concerning Termination of a Trust / Determination of Final Orders, Costs and Trustee Indemnity Following Principal Judgment
Outcome
Trust validly terminated; defendant ordered to execute share transfer; judicial advice given; mixed costs orders made; defendant denied indemnity from trust property for costs connected with the capacity issue but otherwise entitled to indemnity.
Legal Topics
['trustee Indemnity for Costs and Liability' 'judicial Advice Under Section 63 of the Trustee Act 1925' 'termination of Trust' 'capacity Issue' 'trust Debts' 'indemnity Costs']
['trusts' 'civil Procedure' 'costs'] ['trustee Indemnity for Costs and Liability' 'judicial Advice Under Section 63 of the Trustee Act 1925' 'termination of Trust' 'capacity Issue' 'trust Debts' 'indemnity Costs']

Case Brief

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Procedural Posture

Trust Proceedings and Judicial Advice Application Concerning Termination of a Trust / Determination of Final Orders, Costs and Trustee Indemnity Following Principal Judgment

Legal Issues

  1. 1 ["Whether the defendant trustee was justified in withholding consent to termination of the trust because of concerns about the first plaintiff's capacity." 'Whether the defendant trustee was justified in withholding consent to termination of the trust because of alleged trust debts.' "Whether the defendant trustee was entitled to indemnity from trust property for his own costs and liability for the plaintiffs' costs." 'Whether indemnity costs should be ordered against the defendant in relation to the capacity issue.' "What costs order should be made on the plaintiffs' misleading conduct claim."]

Ratio Decidendi

The defendant's continued reliance on the first plaintiff's alleged lack of capacity and suggested undue influence was unreasonable because there was never a sound factual basis for it, the plaintiffs progressively supplied evidence of normal mental functions, rational reasons for termination, legal advice and accounting advice, and the undue influence case was not properly pleaded or pursued. Accordingly, the defendant must pay the plaintiffs' costs of the capacity issue on an indemnity basis and has no right of indemnity from trust property for his own costs or liability for the plaintiffs' costs on that issue. By contrast, outstanding liabilities to Spencer Whitby and Watson & Proud...

Court Disposition

Trust validly terminated; defendant ordered to execute share transfer; judicial advice given; mixed costs orders made; defendant denied indemnity from trust property for costs connected with the capacity issue but otherwise entitled to indemnity.

Orders

  • ['Declare that the first and second plaintiffs have validly terminated the trust of 2,446 ordinary shares in CR Linnegar (Investments) Pty Ltd created under the Will of the late Charles Richard Linnegar.' "Order that the defendant sign and deliver to the plaintiffs the share transfer form dated 4 June 2010 enclosed...