[2018] NSWSC 804

Almarie Investments Pty Ltd v Misidaro Pty Ltd

Defendant trustee to call meeting of unitholders

Catchwords

EQUITY – trusts and trustees – where unitholder of a unit trust requisitioned a meeting of unitholders – where trustee failed to call such meeting – where trustee has offered no explanation for its inaction COSTS – where defendant is a trustee – whether defendant entitled to be paid its costs of the proceedings from the assets of the trust

Legislation cited

Uniform Civil Procedure Rules 2005 (NSW)

Judgment

[1]
The defendant, Misidaro Pty Limited, is the trustee of the Maleny Hotel Unit Trust. I shall refer to it as “the Trustee”.
[2]
The plaintiff, Almarie Investments Pty Limited holds 80 of the 101 units in the Trust. The other unitholders are Warwick and Susan Williams (who hold 20 units) and Mahdeen Pty Limited (which holds 1 unit).
[3]
The Trust was established by a deed dated 29 September 2005 (the “Trust Deed”).
[4]
The effect of cll 22.1, 22.2 and 22.4 of the Trust Deed is that the Trustee must convene a meeting on unitholders if it receives a requisition for a meeting of unitholders signed by not less than one tenth in number of the unitholders and which states the objects of the meeting and the terms of any resolution proposed to be submitted to the meeting.
[5]
On 29 December 2017 Almarie, by its solicitor, delivered to the Trustee, by registered post, an “Application for a Meeting” signed on behalf of Almarie to consider the passage of the following resolutions:
[6]
The resolutions concern the directorship of Maleny Tricorp Hotel Pty Limited. The Trustee is a shareholder of that company.
[7]
The requisition complied with the requirements of the Trust Deed. It was signed on behalf of Almarie which holds more than one tenth of the units (indeed, it holds some 80 per cent of those units). It specified the objects of the meeting and the resolutions proposed.
[8]
The proposed resolutions are ones in respect of which the unitholders are entitled to vote upon and, if thought fit, pass.
[9]
The Trustee received Almarie’s requisition on 8 February 2018 but has not called a meeting of unitholders.
[10]
Almarie commenced these proceedings on 22 March 2018 seeking orders to compel the Trustee to comply with its obligations under the Trust Deed and call a meeting of unitholders.
[11]
The Trustee entered an appearance and, on the first return of the Summons appeared by solicitor and counsel.
[12]
Since then, the Trustee has indicated, by its solicitor, that it does not propose to file a defence or call any evidence. It did not appear when the matter was called outside Court today.
[13]
In those circumstances, I make the following order and declaration:
1. (1)
  That the defendant, Misidaro Pty Limited, by its servants and agents take all steps and execute all documents necessary to cause a meeting of the unitholders of the Maleny Hotel Unit Trust to be held on Monday 25 June 2018 at 4.30pm at the office of Walsh & Associates, 1st Floor, Suite 1, 34-38 Harper Drive, Coffs Harbour, NSW, including the taking of all steps necessary to give notice to each of the unitholders of the Maleny Hotel Unit Trust by no later than 5.00pm on 10 June 2018 of the calling of the meeting.
2. (2)
  A declaration that each of the proposed resolutions contained in the written application for meeting, delivered by registered post on 8 January 2018 to the defendant, is a proper resolution to be considered and voted upon at any meeting of unitholders.
[14]
So far as concerns costs, Almarie seeks an order pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 42.25.
[15]
That rule provides:
[16]
I am satisfied that the Trustee has acted unreasonably for the purpose of UCPR r 42.25(2)(a) and that, for that reason, I should make an order that it not be entitled to indemnify itself for the costs of these proceedings from the assets of the Trust.
[17]
The Trustee has not articulated any reason for failing to call the meeting the subject of Almarie’s requisition. Its failure to do so has led to the necessity of Almarie commencing these proceedings which, ultimately, are undefended.
[18]
For those reasons, in addition to the orders set out above, I order that:
1. (1)
  The defendant pay the plaintiff’s costs of the proceedings.
2. (2)
  Pursuant to UCPR r 42.25(2)(a) the defendant is not entitled to indemnity for the costs of these proceedings from the assets from the Maleny Hotel Unit Trust.
[19]
I also order that these orders be taken out forthwith.
[20]
Almarie has liberty to apply on short notice for any further orders necessary to give effect to these orders.