Mullick as Executor and trustee of the estate of the late Veselinka Lucic aka Veselinka Saikali (deceased) v Saikali

The plaintiff is the executor and trustee of the estate of the late Ms Veselinka Lucic aka Veselinka Saikali. She was appointed to this role by the last will of Ms Lucic, dated 18 April 2013.

Ms Lucic died on 20 February 2014. A grant of probate was made on 1 April 2014.

The plaintiff no longer wishes to continue in her role as trustee. By a summons filed on 12 July 2023, the plaintiff seeks an order that the NSW Trustee and Guardian (NSW Trustee) be substituted for her and that the monies and property she holds as trustee be accordingly vested in the NSW Trustee.

The NSW Trustee has consented to the substitution.

The only property now held in the trust is an amount of money deposited in a direct investment account held at the Commonwealth Bank of Australia.

The defendant, who is the sole beneficiary of the trust monies, opposes the orders. He says that it would be a waste of money to appoint the NSW Trustee; rather the money should be released to him now.

Consistent with this wish, the defendant filed a cross-summons on 8 September 2023, seeking declarations that would lead to the trust being terminated immediately, and a consequential order relating to the funds held on trust.

The defendant did however agree that if I was not prepared to deal with the cross-summons, then, other than as to costs, the plaintiff’s requested orders should be made.

The reason the plaintiff, as trustee, has not given the defendant the trust money is because the will says the money should not be transferred to the defendant until he reaches the age of 25 (cl 4 of the will). The defendant is now 23.

The plaintiff, in her affidavit sworn on 12 July 2023, sets out the reasons behind her application. They include:

On 9 May 2023, the plaintiff, no longer working from an office, met the defendant at a café in order to give him up-to-date statements of the Commonwealth Bank account and some tax related documents which she had received from an accountant. The plaintiff also wished to discuss the possibility of investing the trust funds in a residential unit.

The plaintiff, wary of previous meetings with the defendant and his allegedly disruptive father, asked the defendant to attend the café on his own. He did not do so. I will pick up the events from the plaintiff’s affidavit, from [16]:

The defendant has filed no evidence denying the events of 9 May 2023. I specifically confirmed this point with counsel and note that no explanation for the defendant’s conduct was forthcoming.

Rather, the defendant concentrated on his case of immediate release of the funds to him relying on two affidavits of his solicitor, Mr Marc Ryckmans, sworn on 8 September and 8 November 2023 respectively.

The defendant’s argument is that this is a “Saunders v Vautier” case (derived from Saunders v Vautier (1841) 41 ER 482) in which, to quote from the written submissions, “if a sole beneficiary in a trust is sui juris (of adult age and not under disability), the beneficiary may require the trustee to transfer the legal estate to him/her and terminate the trust even if the trust instrument provides that the beneficiary is only entitled to take the property at a later date”.

The plaintiff’s written submissions state that “the cross-defendant neither consents nor opposes” the orders sought by the defendant. The submissions refer to a memorandum of advice prepared by counsel (for the plaintiff) on 28 November 2019, and which is annexed to the affidavit of Mr Ryckmans sworn on 8 November 2023.

This advice includes the following:

Reasons are then given for this opinion. Then, at the end of the advice, under the heading “Conclusion”, counsel states:

Clearly counsel, in a considered opinion, has concluded that the applicability of the rule in Saunders v Vautier is arguable both in favour of the rule and against the rule.

The same counsel appeared on the summons and cross-summons. He stated that he ‘stood by’ his written advice.

The defendant said the issue was straightforward, relying on the decision of White J (as his Honour then was) in Austin & Anor v Wells & Ors [2008] NSWSC 1266. Counsel for the plaintiff however pointed out that each case should be decided on its own “will”, and that the relevant clauses in Austin were different to those in the present case.

Following receipt of the written advice the plaintiff asked the defendant for instructions on “whether he wished to go to the expense of having the proper construction of the Deceased’s will determined by the court”. An application for judicial advice pursuant to s 63 of the Trustee Act 1925 (NSW) was envisaged. Notwithstanding the request being made more than once, the defendant’s instructions were “not to incur that expense”.

The difficulty that now arises from the plaintiff’s approach (of neither opposing nor consenting to the orders) is that there is no contradictor to the defendant’s application, notwithstanding the previous opinion of counsel, as set out above.

I think the advice given on 28 November 2019 is correct to the extent that it says both sides of the argument (on the rule in Saunders v Vautier) are feasible. I think the court should have the benefit of either argument on the point or consent by the trustee.

I think the need for a contradictor was well explained by Kunc J in Carolyn Margaret Hickin v Robyn Patricia Carroll & Ors [2013] NSWSC 1686 from [20]-[24].

The defendant submitted that the written advice by the plaintiff’s counsel effectively amounted to a contradiction, and it would be a waste of time and costs, noting s 56 of the Civil Procedure Act 2005 (NSW), to appoint the NSW Trustee when the matter could be decided now, by the Court.

There is strength in the submission, and there would be a saving of time and costs. However, the plaintiff, for good reason, no longer wishes to be the trustee so that she would necessarily be put in a position, if I regarded the written advice as putting an opposing argument, of still pursuing her role as trustee.

The plaintiff’s request for the involvement of the NSW Trustee and Guardian is well-founded. This will not only relieve her of the onerous task of dealing with the defendant but also allow for a contradicting opinion to be provided to the court. Of course, the new trustee may well agree with the defendant, which would then be a powerful factor before the court to make the orders that the defendant seeks.

The general attitude taken by the defendant is well demonstrated by his submissions on costs. The submissions state that the plaintiff “essentially disregarded” counsel’s suggestion to obtain a judicial advice.

The defendant’s submissions continue:

These submissions ignore the following:

The defendant also submitted that the plaintiff, by not seeking judicial advice and then coming to court by way of the present summons, had acted unreasonably. She could have taken up the offer by the NSW Trustee to be appointed by way of a deed (as suggested in an email from the NSW Trustee in June 2023).

I reject the assertion of unreasonable conduct. It is true that extra expenses have arisen by the filing of the summons, but I can well understand why the plaintiff has sought comfort in a court order against the background of the defendant’s conduct.

I therefore intend to make the orders sought in the summons and to dismiss the cross-summons. As to costs, it should be obvious from what I have said above, that I disagree with the defendant’s submissions on costs. The plaintiff should get her costs, on an indemnity basis, from the trust fund.

I make the following orders: