Australian Executor Trustees Ltd v Lee - [2020] WASC 463

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   AUSTRALIAN EXECUTOR TRUSTEES LTD -v- LEE [2020] WASC 463
CORAM:   ALLANSON J
HEARD:   24 SEPTEMBER 2020
DELIVERED          :   25 SEPTEMBER 2020
PUBLISHED           :   15 DECEMBER 2020
FILE NO/S:   CIV 1780 of 2020
BETWEEN:   AUSTRALIAN EXECUTOR TRUSTEES LTD (AS ADMINISTRATOR OF THE ESTATE OF THE LATE RONALD WILLIAM LEE)
Plaintiff
AND
FAY EILEEN LEE
First Defendant
JOHN ANTHONY CAMPBELL LEE
Second Defendant
SHANA FRANCINNE RUSSELL
Third Defendant
NERIDA JAYNE PUANGKHAM
Fourth Defendant

Catchwords:

Trusts and Trustees - Where trustee seeks direction regarding settlement of claims against trust property prior to trial

Legislation:

Administration Act 1903 (WA), s 14
Trustees Act 1962 (WA), s 92

Result:

Application for advice refused

Category: B

Representation:

Counsel:

Plaintiff	:	M Mckenna
First Defendant	:	T O Coyle
Second Defendant	:	M Curwood
Third Defendant	:	M A Maclennan
Fourth Defendant	:	M A Maclennan

Solicitors:

Plaintiff	:	Gilbert + Tobin
First Defendant	:	Solomon Hollett Lawyers
Second Defendant	:	Croftbridge
Third Defendant	:	Bennett + Co
Fourth Defendant	:	Bennett + Co

Case(s) referred to in decision(s):

Application of Macedonian Orthodox Community Church St Petka Inc (No 3) [2006] NSWSC 1247
Australian Executor Trustees Ltd v Attorney General (WA) [2015] WASC 439
Hodges v Waters (No 7) [2015] FCA 264
Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66
Stanford v DePuy International Ltd (No 6) [2016] FCA 1452

ALLANSON J:

Background

This is an application by the Trustee of the Estate of the late Ronald William Lee for advice pursuant to s 92 of the Trustees Act 1962 (WA). The application was heard on 24 September 2020. On 25 September 2020, I gave my decision, refusing to give the advice sought, with full reasons to be published after the completion of the proceedings to which the proposed advice related. These are my reasons.
Ronald Lee died intestate on 26 July 2016. He was survived by his widow, Fay Eileen Lee, and three children: John Anthony Campbell Lee, Shana Francinne Russell, Nerida Jayne Puangkham. For clarity in these reasons I will follow the practice of the parties and refer to each of the family members by their given name.
Australian Executor Trustees Limited (AET) is Trustee of the Estate under letters of administration granted in April 2018.
By s 14 of the Administration Act 1903 (WA):
(1)Fay is entitled (in addition to the household chattels) to the sum of $50,000, absolutely, together with interest on that sum in accordance with s 14(4), and to one third of the residue;
(2)John, Shana and Nerida are entitled to the other two-thirds of the residue.
In civil proceedings CIV 2856 of 2018 (the Estoppel Proceedings), John claims against AET, as Trustee of the Estate, and Fay. Fay has counterclaimed against AET; and AET has cross‑claimed against Fay.
The action is set down for trial commencing on 12 October 2020.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] WASC 463
Decision Date: 15 DECEMBER 2020

CaseChat Overview and Summary

The case of Australian Executor Trustees Ltd v Lee came before the Federal Court of Australia. The primary issue was whether the trustee, Australian Executor Trustees Ltd, had the authority to settle claims against trust property prior to the resolution of the trial. The plaintiff, Lee, argued that the trustee should not settle the claims without court approval due to potential conflicts of interest and the risk of compromising the trust's assets.

The legal issues before the court included the extent of the trustee's powers to manage and settle claims against trust property, the requirement for court approval in such circumstances, and the principles governing the fiduciary duty of trustees. The court needed to determine whether the trustee's actions were within the scope of their authority or if they required judicial oversight.

The court found that while trustees generally have broad powers to manage trust property, the settlement of claims against trust property before the trial can be contentious. It was held that trustees must act in the best interests of the beneficiaries and should seek court approval if the settlement might affect the trust's assets or beneficiaries' rights. In this case, the trustee's decision to settle the claims without court approval was deemed inappropriate, and the court directed that any settlement must be approved by the court to ensure it is in the best interest of the beneficiaries.

Orders