Coral Vista Pty Ltd & Ors v Halkeas & Ors; Halkeas & Ors v Coral Vista Pty Ltd & Ors [2010] QSC 449

SUPREME COURT OF QUEENSLAND CITATION: Coral Vista Pty Ltd & Ors v Halkeas & Ors; Halkeas & Ors v Coral Vista Pty Ltd & Ors [2010] QSC 449 PARTIES: CORAL VISTA PTY LTD (ACN 011 051 728) (first applicant) and S.D. HALKEAS DEVELOPMENTS PTY LTD (ACN 060 451 489) (second applicant) and S.D. HALKEAS & SONS PTY LTD (ACN 061 576 093) (third applicant) and S.D. HALKEAS INVESTMENTS PTY LTD (ACN 060 451 452) (fourth applicant) v SPYROS DEMETRIOS HALKEAS (first respondent) and SANDRA ELIZABETH CARDER (second respondent) and BERENICE PTY LTD (ACN 010 727 072) TRADING AS ATLANTIC WELDING (third respondent) and DEMETRIOS PATRICK HALKEAS (defendant by counterclaim) FILE NO: BS12318/09 PARTIES: SPYROS DEMETRIOS HALKEAS (first applicant) and SANDRA ELIZABETH CARDER (second applicant) and AVA GRACE HALKEAS by her Litigation Guardian (third applicant) v CORAL VISTA PTY LTD (ACN 011 051 728) (first respondent) S.D. HALKEAS DEVELOPMENTS PTY LTD (ACN 060 451 489) (second respondent) -- 1 of 12 -- 2 and S.D. HALKEAS & SONS PTY LTD (ACN 060 451 489) (third respondent) and S.D. HALKEAS INVESTMENTS PTY LTD (ACN 060 451 452) (fourth respondent) and DEMETRIOS PATRICK HALKEAS (fifth respondent) and KONSTANTINE HALKEAS (sixth respondent) and ALEXANDER SPYROS HALKEAS (seventh respondent) and LUCAS SYPROS HALKEAS (eighth respondent) FILE NO: BS11582/10 DIVISION: Trial Division PROCEEDING: Applications ORIGINATING COURT: Supreme Court, Brisbane DELIVERED ON: 30 November 2010 DELIVERED AT: Brisbane HEARING DATE: 1 November 2010 JUDGE: Margaret Wilson J ORDER: In 12318/09: 1. that the application filed on 18/10/10 be dismissed; 2. that the proceeding be placed on the Supervised Case List; and 3. that the first respondent Spyros Demetrios Halkeas pay the fourth applicant SD Halkeas Investments Pty Ltd’s costs of and incidental to the application filed on 18 October 2010, to be assessed on the standard basis. In 11582/10: 1. that the application be dismissed; 2. that the proceeding be placed on the Supervised Case List; and 3. that the first, second and third applicants pay the first, second, third and fourth respondents’ costs of and incidental to the application, to be assessed on the standard basis. -- 2 of 12 -- 3 CATCHWORDS: EQUITY – TRUST AND TRUSTEES – powers, duties, rights and liabilities of trustees – where six family trusts – where four companies act as trustees of six trusts ("trustee companies") – where fifth respondent in 12818/09 is sole director of four trustee companies – where fourth applicant/ fourth respondent as trustee ("trustee company") bought property for $2.75 and sold it for $2 million – whether fifth respondent in 12818/09 caused trustee company to obtain the best price for the property – whether trustee company met its obligations as trustee EQUITY – TRUST AND TRUSTEES – powers, duties, rights and liabilities of trustees – indemnity, lien and reimbursement – where fifth respondent in 12818/09 instructed part of sale proceeds be paid to himself in repayment of interest he had paid on a loan to a trust – where fifth respondent in 12818/09 expended trust moneys on legal costs – where first respondent/ first applicant seeks order restraining trustees from disposing of proceeds of sale and trust moneys – whether fifth respondent in 12818/09 disbursed sale proceeds in a contemptuous manner – whether misuse of trust funds EQUITY – TRUST AND TRUSTEES – appointment, removal and estate of trustees – where first respondent/ first applicant seeks appointment of trustee companies as custodian trustees of trusts – where first respondent/ first applicant seeks appointment of new trustees – whether circumstances warrant taking management of trusts away from trustee companies Property Law Act 1974 (Qld), Part 19 Trusts Act 1973 (Qld) s 19 Uniform Civil Procedure Rules (1999) Qld r 700 Public Trustee Act 1906 (UK) s 14 Public Trustee Act 2000 (UK) ss 17, 19 and 20 Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 at 52, cited Forster v Williams Deacon’s Bank Limited [1935] 1 Ch 359, cited Permanent Building Society (in Liq) v Wheeler (1994) 11 WAR 187 at 235, cited Re Brooke Bond & Co Ltd’s Trust Deed [1963] 1 Ch 357 at 363, cited Re Noosa Waters Syndicate Unit Trust (unreported, Supreme Court of Queensland, 9 January 1998; No 5847 of 1997), cited Re Whitehouse [1982] QdR 196, applied Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319, cited -- 3 of 12 -- 4 COUNSEL: In BS12318/09: N Cotman SC and G Coveney for the first, second, third and fourth applicants DA Savage SC and C Wilson for the first respondent No appearance for the second and third respondents The defendant by counterclaim appeared in person In BS11582/10: DA Savage SC and C Wilson for the first, second and third applicants N Cotman SC and G Coveney for the first, second, third and fourth respondents The fifth respondent appeared in person The seventh respondent appeared by his litigation guardian S Harmens (not a lawyer) No appearance by the sixth and eighth respondents. SOLICITORS: In BS12318/09: Daryl Kake for the first, second, third and fourth applicants Cronin Litigation Lawyers for the first respondent In BS11582/10: Cronin Litigation Lawyers for the first, second and third applicants Daryl Kake for the first, second, third and fourth respondents [1] MARGARET WILSON J: These are interlocutory applications in proceedings involving six discretionary trusts – the Halkeas Brothers Family Trusts Nos 1 to 5 ("Trust 1", "Trust 2", "Trust 3", "Trust 4" and "Trust 5") and the Halkeas Investment Trust ("Trust 6"). [2] In 12318/09 Spyros Halkeas ("Spyros") seeks an order against SD Halkeas Investments Pty Ltd and Demetrios Spyros Halkeas (now known as Demetrios Patrick Halkeas) ("Demetrios Patrick") restraining them from disposing of or dealing with (i) the proceeds of sale of a property at Sanctuary Cove and (ii) trust money. [3] In 11582/10 Spyros and the other applicants seek orders appointing the respondent companies as custodian trustees of certain trusts and the appointment of Messrs Lane and Peldan as managing trustees of those trusts, or alternatively the appointment of receivers or alternatively the removal and substitution of the trustees of those trusts. Family relationships [4] Spyros has children from three relationships: his first wife Michelle Stagg: Demetrios Patrick Halkeas, now aged 23 -- 4 of 12 -- 5 Konstantine Spyros Halkeas Lukas Spyros Halkeas Shirley Harmens: Alexander Spyros Halkeas his second wife Sandra Carder: Ava Grace Halkeas. Ms Carder has another child from a previous relationship. [5] The first three trusts were established during Spyros' relationship with Michelle Stagg, and the other three were established during his relationship with Sandra Carder. [6] Spyros' first marriage ended in divorce. [7] A proceeding pursuant to Part 19 of the Property Law Act 1974 (Qld) is pending between Shirley Harmens and Spyros. [8] Konstantine and Lukas live with Demetrios Patrick, who provides for their living expenses, education and medical and dental expenses, drawing on trust funds. The trusts [9] The trustees of the trusts are: Trust 1 Coral Vista Pty Ltd Trust 2 SD Halkeas Developments Pty Ltd Trusts 3 & 4 SD Halkeas & Sons Pty Ltd Trusts 5 & 6 SD Halkeas Investments Pty Ltd. [10] Demetrios Patrick Halkeas is the sole director of the four trustee companies. [11] The trusts are discretionary trusts. The principal beneficiaries are Spyros, his children, and their spouses. Michelle Stagg has renounced any entitlement in Trusts 1, 2 and 3. Sandra Carder has a beneficial interest in Trust 6 and also Trusts 4 and 5; she has no beneficial interest in Trust 2. Acquisition of 2020 The Circle, Sanctuary Cove [12] In July 2009 SD Halkeas Investments Pty Ltd as trustee of Trust 6 purchased a residential property at 2020 The Circle, Sanctuary Cove for $2.75 million inclusive of some chattels. The purchase was financed by an advance from Westpac, which was secured against the property and $792,929 borrowed from Trust 2. Of the moneys borrowed from Trust 2, $91,000 was used to pay a deposit bond. [13] Spyros, Sandra Carder, their daughter Ava and Ms Carder's other child resided in the house pursuant to a lease. History of litigation [14] In November 2009 the four companies, Coral Vista Pty Ltd, SD Halkeas Developments Pty Ltd, SD Halkeas & Sons Pty Ltd and SD Halkeas Investments -- 5 of 12 -- 6 Pty Ltd, sought a declaration that they were the trustees of Trusts 1 – 5, and the return of $301,000 allegedly removed from the trusts by Spyros. [15] A summary judgment application came before P Lyons J. On 5 February 2010 His Honour made declarations that the companies were the trustees of the five trusts. The balance of the claim was to go to trial. A week later, undertakings restraining disposition of trust assets were discharged. An appeal was lodged against the declarations, and a stay pending appeal was sought. The application for a stay was dismissed, and then the appeal was dismissed by consent. [16] On 28 June 2010 His Honour dismissed an application for the appointment of receivers to the six trusts. [17] In September 2010 two companies of which Spyros was a director lodged caveats over two trust properties. They were subsequently removed by consent. [18] These are interlocutory applications. As counsel for the trustee companies reminded the Court, as recently as 28 June 2010 P Lyons J refused to appoint receivers. It would be wrong to allow the present applications to be used as vehicles to re-litigate the issues already canvassed, unless there have been material developments since then, which either alone or in combination with the matters raised before His Honour, would justify reopening those issues. [19] Counsel for the applicants submitted that three things of significance had occurred since the discharge of the undertakings in February 2010 – (a) the Sanctuary Cove property had been sold at an undervalue; (b) Demetrios Patrick had distributed proceeds of sale after being served with an application to restrain him from doing so; and (c) some trust funds had been expended on legal costs of the trustees: that this was oppressive because the costs had been incurred to advance the position of Demetrios Patrick and the beneficiaries he favours. Sale of 2020 The Circle, Sanctuary Cove [20] The lease over the Sanctuary Cove property expired in April 2010, and Spyros and Ms Carder and their young children were forced to vacate the premises on or about 15 July 2010. [21] On 4 August 2010 the trustee of Trust 6 retained a real estate agent to sell the property. The agent was given the exclusive right to list the property until 28 September 2010, the list price being $2.75 million. Advertisements were placed on the internet and in the "Cove" magazine – a publication circulating among the residents of Sanctuary Cove. [22] On 14 September 2010 the trustee of Trust 6 entered a contract to sell the property for $2 million. [23] The sale was completed on Friday 15 October 2010. The net proceeds of sale were $1,950,587.45. Of that amount, $1,941,065.21 was paid by bank cheque in favour of Westpac. -- 6 of 12 -- 7 Sale at undervalue? [24] In Permanent Building Society (in Liq) v Wheeler (1994) 11 WAR 187 at 235, Ipp J (with whom the other members of the WA Full Court agreed) said – "It is a rule of equity that, in the management of the business of the trust, a trustee should exercise the same care and skill as an ordinary prudent man of business would exercise in conducting that business if it were his own: see Re Speight; Speight v Gaunt;1 Re Whiteley; Whiteley v Learoyd;2 Learoyd v Whiteley. 3 " [25] I accept the submission of counsel for the respondents that – "The duty of a trustee in the management of the business of the trust is that the trustee should exercise the same care and skill as an ordinary prudent man of business would exercise in conducting that business as if it were his own. 4 This statement of duty is qualified insofar as: (a) prudent businessmen incur risk in their dealings;5 (b) an ordinary prudent man may incur a prudent degree of risk, but must use caution in the sense of avoiding hazard; 6 (c) a trustee is not subject to a duty to maintain the value of the trust fund.7 " [26] Of course, the trustee was liable for debts incurred in the course of transactions entered into on behalf of the trust, subject to its right of indemnity out of trust assets.8 But, as counsel for the trustee companies submitted – "… Where the trust debts exceed the value of property held in the trust, the indemnity will naturally be worthless to the extent of the shortfall. The charge will absorb all assets. In such a case, both the trustee and the beneficiary will have a beneficial interest in the trust assets. However, in those circumstances, the trustees' interests will be preferred to the beneficiaries'. 9 That is, in a trust where the assets are significantly less than the liabilities, only the trustee’s interests are affected by the dealing in the assets. The trustee cannot be required to gamble with its position by waiting until a beneficiary is satisfied with any sale arrangements." [27] A trustee is not invariably obliged to engage in an extensive advertising campaign and reject an offer because it is less than what might be achieved if the property were allowed to remain on the market for some time. He or she is obliged to consider the overall position of the trust, including the prevailing economic climate and market conditions and the trust’s capacity to meet holding costs. It may be in the best interests of the trust for the trustee to take decisive action to stem ongoing losses. 1 (1883) 9 App Cas 1. 2 [1886] 33 Ch D 347 at 355. 3 (1887) 12 App Cas 727 at 733. 4 Permanent Building Society (in Liq) v Wheeler (1994) 11 WAR 187 at 235. 5 In re Godfrey (1883) 23 Ch D 483 at 493. 6 Learoyd v Whitley (1887) 12 App Cas 727 at 733. 7 Nestle v National Westminster Bank PLC [1994] 1 All ER 118. 8 Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319. 9 Ibid at 367. -- 7 of 12 -- 8 [28] James Eden, an experienced valuer, valued the Sanctuary Cove property for Westpac on 18 August 2009. In his opinion its market value at that time, exclusive of chattels, was $2.675 million, and its present value is $2.4 million. I accept his pertinent observations about the market and how long it is taking to sell properties. He said that the market for such properties has been depressed and uncertain for some time, and that properties have remained listed for sale for considerable periods without attracting buyers. He said properties need to be competitively priced if they are to sell in current conditions. [29] I do not accept the submission of counsel for Spyros and the other applicants that there is compelling evidence that Demetrios Patrick did not cause Halkeas Investments Pty Ltd (the trustee of Trust 6) to obtain the best price for the Sanctuary Cove property. The trustee was faced with a dilemma. The property was unoccupied and not producing any income. Interest charges, body corporate dues and other outgoings had to be met. Trust 6 had no funds from which to meet these expenses: Demetrios Patrick made interest payments totalling $30,580, but still the account with Westpac remained about $15,000 in arrears. [30] Counsel for Spyros and the other applicants submitted that the group of trusts should be considered as a whole – that they were conducted together and supported each other by inter-trust loans. It is not possible to undertake any detailed examination of the trusts as a whole on an interlocutory application such as this. I accept the submission of counsel for the respondent companies that generally the trusts were asset rich and income poor, and that only Trust 2 was apparently generating appreciable income. [31] The trustee took decisive action to stop the haemorrhaging. In all the circumstances I am not satisfied that there is a serious question to be tried as to whether it failed to meet its obligations in selling the property. Disbursement of proceeds of sale [32] $1,816,265.16 of the net proceeds of sale was used to discharge the Westpac mortgage. [33] That left $124,800.05 of the amount paid to Westpac from the proceeds of sale. In addition, the deposit bond was paid into Trust 6's bank account in the sum of $95,301.12. [34] On the evening of 15 October 2010, Demetrios Patrick instructed Westpac to pay from Trust 6's account – $189,420 to Trust 2 $30,580 to Demetrios Patrick [35] According to Demetrios Patrick, the payment to Trust 2 was in part repayment of the moneys borrowed from that trust to purchase the Sanctuary Cove property, and the payment to him was in repayment of interest he had paid to Westpac on the loan from it to Trust 6. [36] On Monday 18 October 2010 Spyros filed an application to restrain the trustee of Trust 6 and Demetrios Patrick from disposing of or dealing with the proceeds of -- 8 of 12 -- 9 sale or any other trust moneys including the balance outstanding to the trustee on a certain term deposit. It was served at about 4:30 pm that afternoon. [37] Counsel for Spyros and the other applicants submitted that the conduct of Demetrios Patrick on behalf of the trustee of Trust 6 in disbursing the sale proceeds after being served with the application to restrain their disposition was akin to contempt of Court. [38] This submission is based on an erroneous view of the facts. The money was paid to Trust 2 and to Demetrios Patrick on the Friday evening, and the application was not filed and served until the following Monday. At any rate, I would have difficulty in accepting that until the making of an order restraining disposition of funds it would be was contemptuous or akin to contemptuous to dispose of them. Expenditure of trust funds on legal expenses [39] Spyros and the other applicants complain that Demetrios Patrick caused the trustee companies to expend trust moneys on legal costs to advance his interests and those of the beneficiaries he favours. [40] A trustee is entitled to indemnity out of the trust estate for expenses properly incurred in the administration of the trust. A right of indemnity may take the form of a right to reimburse himself for expenses reasonably and properly incurred ( " a right of recoupment " ) or that of a right to pay expenses out of the trust fund (" a right of exoneration"). See Vacuum Oil; see also Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 at 52. [41] This general principle is reflected in r 700 of the UCPR which provides – "700 Trustee (1) This rule applies to a party who sues or is sued as trustee. (2) Unless the court orders otherwise, the party is entitled to have costs of the proceeding, that are not paid by someone else, paid out of the fund held by the trustee." [42] As I understand the evidence, the costs in question related to the conduct of litigation in which costs orders were made in favour of the trustee companies – two of them on the indemnity basis, and the others on the standard basis. There is no evidence that those costs orders have been satisfied. [43] In no instance did the Court order that the trustees were disentitled to have their costs paid out of trust funds. To the extent the costs orders are satisfied, moneys received by the trustees will be trust funds and must be accounted for as such. [44] In the circumstances I am not satisfied that there is a serious question to be tried as to the misuse of trust funds in this regard. Trusts Act 1973 (Qld) [45] Section 19 of the Trusts Act 1973 (Qld) provides – "19 Custodian trustees -- 9 of 12 -- 10 (1) Subject to the provisions of this section and to the instrument (if any) creating the trust, any corporation may be appointed to be custodian trustee of any trust in any case where, and in the same manner as, it could be appointed to be trustee. (2) Subject to the provisions of the instrument (if any) creating the trust, where a custodian trustee is appointed of any trust - (a) the trust property shall be vested in the custodian trustee as if the custodian trustee were the sole trustee, and for that purpose vesting orders may, where necessary, be made under this Act; and (b) the management of the trust property and the exercise of all powers and discretions exercisable by the trustee under the trust shall be and remain vested in managing trustees other than the custodian trustee (the managing trustees) as fully and effectually as if there were no custodian trustee; and (c) the sole function of the custodian trustee shall be to get in and hold the trust property and invest its funds and dispose of the assets as the managing trustees in writing direct, for which purpose the custodian trustee shall execute all such documents and perform all such acts as the managing trustees in writing direct; and (d) for the purposes of paragraph (c), a direction given by the majority of the managing trustees, where there are more than 1, shall be deemed to be given by all the managing trustees; and (e) the custodian trustee shall not be liable for acting on any direction to which paragraph (c) refers; but if the custodian trustee is of opinion that any such direction conflicts with the trusts or the law, or exposes the custodian trustee to any liability, or is otherwise objectionable, the custodian trustee may apply to the court for directions in the matter; and any order giving directions shall bind both the custodian trustee and the managing trustees; and the court may make such order as to costs as it thinks proper; and (f) the custodian trustee shall not be liable for any act or default on the part of any of the managing trustees; and (g) all actions and proceedings touching or concerning the trust property shall be brought or defended in the name of the custodian trustee at the written direction of the managing trustees, and the custodian trustee shall not be liable for the costs thereof apart from any payable out of the trust property; and (h) a person dealing with the custodian trustee shall not be concerned to inquire as to any direction, concurrence or otherwise of the managing trustees or be affected by notice of the fact that the managing trustees have not concurred; and (i) the power of appointing new trustees, when exercisable by the trustee, shall be exercisable by the managing trustees alone, but the custodian trustee shall have the same power as any other trustee of applying to the court for the appointment of a new trustee. (3) On the application of the custodian trustee or of any of the managing trustees or of any beneficiary and on satisfactory proof that it is the general wish of the beneficiaries or that on other grounds it is expedient to terminate the custodian trusteeship, the court may make an order for that purpose and may also make such vesting orders and give such directions as in the circumstances seem to the court to be necessary or expedient." -- 10 of 12 -- 11 [46] This provision follows cognate legislation in England (formerly Public Trustee Act 1906 (UK) s 14, see now Public Trustee Act 2000 (UK) ss 17, 19 and 20) and elsewhere. The reasons generally advanced in support of the appointment of a custodian trustee are – (i) that since the custodian trustee would be a corporation, the trust property could remain vested in it for the duration of the trust, so avoiding problems which might arise with respect to the vesting of trust property upon the appointment of new trustees or the death or disability of a sole trustee; and (ii) that the possibility of misappropriation by a trustee would be lessened if he were deprived of all title to the trust property. See Ford & Lee, Thomson, Principles of the Law of Trusts, vol 1 (at service 81) [8070] and Jacobs’ Law of Trusts in Australia (LexisNexis Butterworths, 7 th ed, 2006) [321]. See Forster v Williams Deacon’s Bank Limited [1935] 1 Ch 359, and Re Brooke Bond & Co Ltd’s Trust Deed [1963] 1 Ch 357 at 363 where Cross J said: – "It is apparent that the duties of a custodian trustee differ substantially from those of an ordinary trustee. If the trust instrument or the general law gives the trustees power to do this, that or the other, it is not for the custodian trustee to consider whether it should be done. The exercise of powers or directions is a matter for the managing trustees with which the custodian trustee has no concern, and he is bound to deal with the trust property so as to give effect to the decisions and actions taken by the managing trustee unless what he is requested to do by them would be a breach of trust or would involve him in personal liability." [47] In the present case the Court is asked to leave the trust property vested the trustee companies, but only as custodian trustees, and to appoint two persons who are respected insolvency practitioners as managing trustees. The applicants contend, in effect, that there has been mismanagement and misconduct by the trustee companies such that management of the trusts should be taken away from them, and, further, that the animosity between Demetrios Patrick on the one hand and Spyros on the other is such that it is in the interests of the beneficiaries that management of the trusts not be vested in companies controlled by him. They point to the decision of Shepherdson J in Re Noosa Waters Syndicate Unit Trust (unreported, Supreme Court of Queensland, 9 January 1998, No 5847 of 1997) as an example of the use of s 19 of the Trusts Act in analogous circumstances. [48] Five months have passed since P Lyons J dismissed an application to appoint receivers to the trusts. I am not satisfied that there has been a change of circumstances in the meantime which would warrant taking the management of the trusts away from the trustee companies controlled by Demetrios Patrick. I have not found that there is a serious question to be tried in relation to any of the three matters raised by counsel for the applicants. [49] The undoubted power to remove a trustee is not one to be exercised lightly. In Re Whitehouse [1982] QdR 196 at 205-206 Macrossan J said – "The question is whether it should be exercised. The leading authority appears to be Letterstedt v Broers (1884) 9 AC 371. At p 386 of the report of that case Lord Blackburn, in delivering judgment, said that even though -- 11 of 12 -- 12 charges of misconduct against a trustee were not made out or were greatly exaggerated, so that the trustee was justified in resisting the charges, yet if the court was 'satisfied that the continuation of the trustee would prevent the trust being properly executed, the trustee might be removed. It must always be borne in mind that trustees exit for the benefit of those to whom the creator of trust has given the trust estate'. At p.387 he continued: 'In exercising so delicate a jurisdiction as that of removing trustees, their Lordships do not venture to lay down any general rule beyond the very broad principle above enunciated, that their main guide must be the welfare of the beneficiaries. Probably it is not possible to lay down any more definite rule in a matter so essentially dependent on details of great nicety.' Dixon J (as he then was) in Miller v Cameron (1936) 54 CLR 572 at p 580, stated as follows: 'The jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee. In deciding to remove a trustee from court forms a judgment based upon considerations, possibly large in number and varied in character, which combine to show that the welfare of the beneficiaries is opposed to his continued occupation of the office. Such a judgment must be largely discretionary. A trustee is not to be removed unless circumstances exist which afford ground upon which the jurisdiction may be exercised.'" [50] There is undoubtedly ill feeling and distrust between Spyros and Demetrios Patrick, and between Spyros and Ms Harmens. This cannot be dissociated from the fractured family and domestic relationships between the parties. In Re Whitehouse at 206 Macrossan J said of disputes between a trustee and his sons – "As was pointed out in Forster v Davies (1861) 4 De G. F. & J. 133, it would be necessary to enquire further to see who was to blame for any dissention since otherwise the cestuis que trust would be placed in the falsely powerful position of being able to raise a dispute with their trustee and then apply for his removal." [51] These are matters which cannot be resolved on an interlocutory application such as this. [52] In all the circumstances the applications should be dismissed. [53] As I foreshadowed at the hearing, I consider that this litigation requires active supervision by the Court. Accordingly I am going to direct that proceedings 12318/09 and 11582/10 be placed on the Supervised Case List. [54] I will hear the parties on costs. -- 12 of 12 --