[2023] NSWSC 30

Mendonca v Tonna; Mendonca v Hathway

(1) Order that the following question be determined separately: “Does order 5 made by Darke J on 4 June 2021 finally limit to $20,000 the Trustee’s entitlement to charge for services provided by them and disbursements incurred by them pursuant to the appointment made by order 3?” (2) Determine that the answer to the separate question is: “No.” (3) Stand the proceedings before the Registrar to 5 April 2023. (4) Direct the Trustees, as soon as practicable but not less than 14 days before 5 April 2023, to provide to the plaintiff and defendants any further documents vouching, invoices or other material upon which the Trustees intend to rely and which, even if the Trustees do not intend to rely on it, are reasonably requested by the plaintiff and defendants to determine their position for the remuneration application.

Catchwords

EQUITY — Trusts and trustees — powers, duties, rights and liabilities — remuneration — where order made that trustees be authorised to charge at their usual hourly professional rates subject to the total sum not exceeding $20,000 — where trustees claim remuneration significantly in excess of $20,000 —where other parties contend that the order imposed a binding and invariable cap — separate question ordered — Court may authorise increase in remuneration — duties of trustees to discharge onus — just, fair and reasonable

Legislation cited

Uniform Civil Procedure Rules 2005 (NSW), § 28.2

Judgment

[1]
HIS HONOUR: Before the Court is a contested application by Stephen Wesley Hathway and Philip Raymond Hosking, registered liquidators who are appointed trustees for sale of land situated in Galston, New South Wales (Property) pursuant to orders made by Darke J on 4 June 2021 for the approval of remuneration said to have been earned by them and disbursements said to have been incurred by them in discharge of that appointment.
[2]
The orders were made after the contest which was resolved by judgments on 20 December 2019 by Ward CJ in Eq (as her Honour then was) that the plaintiff, Dr Renuka Maria Mendonca, held legal title to the property on a resulting trust for herself and the defendants, Mr Mark Julian Tonna and Mrs Lorraine Mary Tonna.
[3]
Orders 3 and 5 by Darke J are relevantly in the following terms:
[4]
The trustees claim that fees and expenses significantly exceeding $20,000 have properly been incurred by them.
[5]
The first response by the plaintiff and defendants to the claim by the trustees for authorisation to charge an amount exceeding $20,000 is that order 5 made by his Honour imposed an invariable cap of $20,000 on the fees and disbursements charged. It is expeditious and appropriate to order, pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW), that the Court determine a separate question as follows:
[6]
In my opinion, order 5 did impose a cap but not of the type contended for by the plaintiff and defendants. Order 5 entitled the trustees to charge and recover, without further authorisation, fees and expenses not exceeding $20,000. But it does not preclude them from seeking, and the Court approving, an increase in the amount if $20,000 transpires to be inadequate and the trustees satisfy the Court as to a just, fair and reasonable increase.
[7]
To give order 5 the operation contended for by the plaintiff and defendants would have the unfair consequence that if the costs and expenses of discharging their duties fairly and reasonably exceeded $20,000, the trustees would, to the extent of the excess, be working gratis.
[8]
The trustees will bear the onus of establishing that any increased amount claimed is just, fair and reasonable in all the circumstances.
[9]
The separate question should be answered “No”.
[10]
The Court makes the following orders and directions:
1. (1)
  Order that the following question be determined separately:
2. (2)
  Determine that the answer to the separate question is:
3. (3)
  Stand the proceedings before the Registrar to 5 April 2023.
4. (4)
  Direct the Trustees, as soon as practicable but not less than 14 days before 5 April 2023, to provide to the plaintiff and defendants any further documents vouching, invoices or other material upon which the Trustees intend to rely and which, even if the Trustees do not intend to rely on it, are reasonably requested by the plaintiff and defendants to determine their position for the remuneration application.