The substantive litigation between the parties concerned an
application for the removal of Mr Couper as trustee of a number of
family trusts. His removal was sought due to his decision to use
the trust property to arrive at equal outcomes between the
beneficiaries, some of whom had received more property than others
from other funds, rather than treatin g all beneficiaries equally.
The application was brought by both the beneficiaries and by some
of Mr Couper's co-trustees.
This hearing concerned who was to pay the costs of both the
trustees and the beneficiaries in relation to the substantive
litigation. Determining the issue of costs was complicated by the
fact that it was not clear who had been the most successful
parties. The judge found that the plaintiffs had been successful in
a number of important interlocutory matters, including forcing the
removal of Mr Couper, but that at trial the outcomes had been more
It had been held during the substantive litigation that, in
resisting the action, Mr Couper had been acting in his own
interests rather than in the interests of the trust. His costs had
not therefore been reasonably incurred and Mr Couper himself was
not entitled to an indemnification out of the trust funds (Re
Buckton, Buckton v Buckton  2 Ch 406; Re Spurling's Will
Trusts, Philpot v Philpot  1 All ER 745; Miller v Cameron
(1936) 54 CLR 572)
The extent of the participation of the defendant trustees in
the litigation had been reasonable. Although they had been the
subject of hostile attack, they had been removed as trustees not
because of any breaches of duty but because of the lack of sympathy
between the two sides and the necessity for the appointment of a
Mr Couper's fellow trustee had been entitled to take part
in the action as trustee to have Mr Couper removed. There would be
an order for part of the fellow trustee's costs and he would be
indemnified from the trust fund for the remainder.
In the action in which a trustee had been successful in one
cause of action and unsuccessful in another no award of costs was
justified and the issue of whether the trustee was entitled to
indemnification from trust funds was a matter for enquiry by the
A trustee who appeared to have been acting in part to defend
the interests of his sister rather than the trust but had
successfully sought variation of the consent order would receive a
modest sum from the trust fund in respect of that.
The trustee who had been a potential beneficiary in the dispute
in which he took part as a trustee had not by virtue of that fact
been acting unreasonably. Indemnification was therefore reasonable
(Re Ogilvie (1910) 11 SR (NSW) 11).
The plaintiffs had been successful against Mr Couper in
substantial ways before the substantive hearing but suffered
reversals at the substantive hearing. It was appropriate that there
be an award of costs against Mr Couper who had been the root of the
problems litigated over, but the award would be reduced to reflect
the reversals at the substantive hearing.
The costs of the court-appointed counsel and expert would be
met from the trust funds. The question of which funds should meet
their costs should be examined by the Public Trustee.
This case contains a useful summary of the principles to be
taken into account by the court in awarding costs to a trustee
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Many people are baffled by trusts, the purpose of which they don't fully comprehend. Some even regard them with suspicion, as tools of of opaque tax evasion strategies of a type favoured by wealthy individuals.
We were recently instructed by a Bank in relation to a regulatory matter. The Bank had made a suspicious activity report to the Financial Investigation Unit ("FIU") due to their concerns about the potential source of funds in an account.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).