Tilley v Hunt [2004] NSWSC 558

This matter was commenced by summons under which the plaintiff sought declarations that she was entitled to a trust beneficiary for a one quarter share of the profits of a property, and sought an order extending the operation of caveats which she had entered against that property. An interlocutory order was made extending the operation of the caveats until further order.

Some six months later an order was made that the proceedings go ahead on pleadings and the plaintiff filed a statement of claim. In that document the plaintiff claimed a continued extension of the caveats until the proceedings were determined or an injunction restraining the defendants, from dealing with that land until the proceedings were determined and then sought an order for removal of the first defendant, as a trustee of the trust, and that another person be appointed as trustee in her place, and she sought subsequent orders for the taking of accounts.

Subsequently the first defendant, provided a valuation of the land which was the subject of security to the trust which satisfied the plaintiff that the security was sufficient. The land was worth about double the sum secured on it. Next, an additional trustee was appointed to the trust and the plaintiff no longer pressed for the removal of the first defendant as trustee. The caveats were then removed from both parts of the property. The plaintiff’s position was secured insofar as she had a right to have the trust properly administered.

None of that would have happened had the proceedings not been commenced. It was only at the last minute that the first defendant produced evidence to show that, although there was a breach of trust, there did not appear to have been any damage to the trust beneficiaries of which, the defendant was one (and was entitled to the income from the trust estate).

It follows from this that, first, there was no basis upon which the costs of the first defendant should be ordered to be paid by the plaintiff. Second, that, insofar as the plaintiff had been successful but not completely successful, in view of the caveat application, she would be entitled to, generally speaking, an order for an appropriate amount of her costs to be paid by the first defendant. Thirdly, that, there would be no basis upon which the first defendant should be entitled to her costs out of the trust estate.

Order that the statement of claim be dismissed. Order that the first defendant pay 75 per cent of the plaintiff’s costs of the proceedings. Order costs of the first defendant be borne by her and that she not be indemnified out of the trust estate for those costs or her costs of the proceedings. No order as to costs of the second defendant.

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