Brine v Carter - [2015] SASC 205

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
BRINE v CARTER
[2015] SASC 205
Judgment of The Honourable Justice Blue
22 December 2015
SUPERANNUATION - BENEFITS
SUPERANNUATION - BENEFITS - WHO ENTITLED TO RECEIVE - SPOUSE
EQUITY - GENERAL PRINCIPLES - FIDUCIARY OBLIGATIONS - FIDUCIARY DUTY - ACCOUNT FOR BENEFITS GAINED
EQUITY - GENERAL PRINCIPLES - EQUITABLE DEFENCES - LACHES AND DELAY
ESTOPPEL
The plaintiffs are the sons of the late Professor Brine. The defendant is the former de facto spouse of Professor Brine.
Professor Brine had a superannuation policy with UniSuper. Upon his death in December 2012, its capital value of approximately $545,000 became payable in the exercise of the trustee’s discretion to one or more of his dependants or his estate or a combination thereof.
Professor Brine appointed the plaintiffs and the defendant as executors. The plaintiffs and the defendant were each dependants within the meaning of the superannuation trust deed and eligible for consideration of exercise of the trustee’s decision in their own right as well as the estate being eligible.
The defendant in her capacity as a dependant made enquiries of UniSuper and lodged a form claiming payment of the lump sum benefit as his de facto spouse. She also had communications with the plaintiffs about the superannuation policy. Ultimately, the trustee exercised its discretion to pay the entire benefit to the defendant.
The plaintiffs claim that the defendant misled them concerning the superannuation policy and who were eligible beneficiaries and claimed payment to herself in circumstances in which she had a conflict of interest between her duty as executor and personal interest. They claim that she is obliged to account to the estate for the benefit received from UniSuper.
The defendant denies any misleading conduct or breach of duty. She contends that she was implicitly authorised by Professor Brine's will to act in her personal interest notwithstanding her position of conflict. She contends that the plaintiffs consented to her conduct. She contends that the action is an abuse of process and relies on defences of estoppel and laches. She denies any causal connection between any breach of duty and the benefit she received. She seeks relief for any breach of duty under section 56 of the Trustee Act 1936.
The plaintiffs also seek a declaration that, on the proper construction of Professor Brine’s will, the grant of a life interest in “my principal residence in Australia at the time of my death” comprised his property at 440 Gilles Street Adelaide and did not incorporate the adjoining property at 446 Gilles Street Adelaide.
Held:
1. The action is not an abuse of process (at [110]).
2. The plaintiffs are not precluded from bringing the action by estoppel or laches (at [118], [121]).
3. The defendant misled her fellow executors up to 4 March 2013 (at [137]).
4. The defendant breached her fiduciary duties up to 4 March 2013 (at 140]).
5. Professor Brine did not authorise the defendant's conduct (at [148], [157]).
6. The plaintiffs did not consent to the defendant’s conduct up to 4 March 2013 (at [150]).
7. The defendant did not breach her fiduciary duties after 4 March 2013 (at [156]).
8. The plaintiffs consented to the defendant’s conduct after 4 March 2013 (at [159]).
9. The defendant’s breach of fiduciary duty before 4 March 2013 did not have any causal connection with the benefit she received (at [165]-[167]).
10. No occasion arises to excuse the defendant under section 56 of the Trustee Act 1936 (at [173]-[174]).
11. On the proper construction of Professor Brine’s will, the grant of a life interest in “my principal residence in Australia at the time of my death” was confined to his property at 440 Gilles Street Adelaide (at [175]).
12. Action otherwise dismissed (at [176]).
Inheritance (Family Provision) Act 1972 (SA) s 7; Superannuation Industry (Supervision) Act 1993 (Cth) s 10; Superannuation Industry (Supervision) Regulations 1994 (Cth) r 1.1, r 6.22; Trustee Act 1936 (SA) s 4, s 56, referred to.
Chan v Zachariah (1984) 154 CLR 178; Clay v Clay [2001] HCA 9, (2001) 202 CLR 410; Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; Maguire & Tansey v Makaronis (1997) 188 CLR 449; McIntosh v McIntosh [2014] QSC 99; Mordecai v Mordecai (1988) 12 NSWLR 58; Pilmer Duke Group Limited (In Liquidation) [2001] HCA 31, (2000) 207 CLR 165; PNJ v The Queen [2009] HCA 6, (2009) 83 ALJR 384; Streeter v Western Areas Exploration Pty Ltd [2011] WASCA 17, (2011) 278 ALR 291; The Commonwealth v Verwayen (1990) 170 CLR 394; Tomlinson v Ramsey Food Processing Pty Limited [2015] HCA 28, (2015) 89 ALJR 750; Warman International Ltd v Dwyer (1995) 182 CLR 544, discussed.
Ede v Ede [2006] QSC 378; Hordern v Hordern [1910] AC 465; In Re Morish [1939] SASR 305; Johnson v Trotter [2006] NSWSC 67; Mitchell v The Queen (1996) 184 CLR 333; Pateman v Heyen (1993) 33 NSWLR 188; Princess Ann of Hesse v Field [1963] NSWR 998; Re Chirnside [1956] VLR 295; Re Dawson (deceased) [1966] 2 NSWR 211; Re Mulholland’s Will Trusts [1949] 1 All ER 460; Sergeant v National Westminster Board plc (1991) 61 P&CR 518; Vyse v Foster (1874) LR 7 HL 318, considered.

BRINE v CARTER
[2015] SASC 205
Civil.
BLUE J:

Martin Lindsay Brine, Matthew Charles Brine and Daniel James Brine as executors of the estate of Francis John Brine (Professor Brine) sue the fourth executor Norma Annie Carter for breach of fiduciary duty in relation to Professor Brine’s lump sum superannuation. The Brines claim that Ms Carter is obliged to account to the estate for the superannuation paid to her of $630,299.
Ms Carter sues the Brine brothers and their children seeking equitable relief against Professor Brine’s estate in relation to contributions to properties owned by Professor Brine or by Professor Brine and herself as tenants in common and statutory relief under section 7 of the Inheritance (Family Provision) Act 1972 (SA).
This action was heard concurrently with Ms Carter’s action and all evidence adduced at trial was evidence in each action. For convenience, I deliver separate reasons for judgment in each action.[1] Both reasons for judgment refer to and should be read in conjunction with each other.
[1] See Carter v Brine [2015] SASC 204.
Professor Brine died in December 2012. He had two UniSuper superannuation benefits: a Flexi Pension lump sum benefit and an Indexed Pension annuity benefit. Between January and early March 2013, Ms Carter made enquiries of UniSuper about the benefits and lodged a claim with UniSuper as Professor Brine’s de facto spouse. At the same time, she had several discussions with her fellow executors and the estate’s solicitor. In due course, the other three executors lodged a competing claim with UniSuper on behalf of the estate in respect of the Flexi Pension lump sum benefit. UniSuper decided to pay the entire lump sum to Ms Carter.
The Brines contend that Ms Carter failed to disclose to her fellow executors initially that there were two superannuation benefits and failed to disclose at all the amount of the lump sum benefit or that the estate and adult children of the deceased were eligible beneficiaries thereof. They contend that she misled them by representing that only spouses and dependent and disabled children were eligible beneficiaries. They contend that she breached her fiduciary duty by pursuing her personal interests in conflict with her duties as an executor and she is obliged to account to the estate for the benefit received.
Ms Carter contends that the action is an abuse of process or that the Brines by their conduct are estopped from bringing it or that the defence of laches applies. She denies that she failed to disclose information of which she was aware or misled her fellow executors and denies that she breached her fiduciary duties. She contends that Professor Brine by his will authorised, or the Brines consented to, her conduct. She contends that in any event there was no causal connection between any breach and the benefit she received. In the alternative, she seeks an order under section 56 of the Trustee Act 1936 (SA) (the Trustee Act) relieving her from liability.
The following issues arise:
1.Is the claim by the Brines an abuse of process?
2.Are the Brines estopped by their conduct from bringing the claim?
3.Does the defence of laches apply?
4.Did Ms Carter breach her fiduciary duties?
5.Did Professor Brine authorise Ms Carter’s conduct?
6.Did the Brines consent to Ms Carter’s conduct?
7.Is Ms Carter obliged to account to the estate for the benefit received?
8.Did Ms Carter act honestly and reasonably and ought she fairly to be excused for any breach of fiduciary duty under the Trustee Act?
Background
The general background is set out in my reasons for judgment in relation to Ms Carter’s action. I address matters particularly relevant to this action below.
At the beginning of July 1997, Professor Brine retired from his position as Associate Professor at the University of Adelaide. He commenced receiving monthly payments of an Indexed Pension annuity (the Indexed Pension). He also became entitled to a lump sum superannuation payment, which he continued to invest with UniSuper and which he could draw down when he chose (the Flexi Pension).
On 15 January 2001, Professor Brine applied to the trustee UniSuper to restructure his superannuation entitlements to receive a regular monthly Allocated Pension against the capital balance of his Flexi Pension. He wrote on the application form that his preferred beneficiary on death was his estate. He wrote a covering letter saying that in respect of his Indexed Pension his de facto spouse was Ms Carter. He said that with respect to his Flexi Pension the beneficiary was to be his estate, he having made provision for his children in his will and the funds remaining were to be applied to the provisions of his will. On 20 April 2001, he wrote a further letter confirming these matters.
On 18 January 2001, the capital balance of Professor Brine’s Flexi Pension was $410,111 and he commenced receiving a regular monthly Allocated Pension of $2,177. The payments of his Allocated Pension were deducted from the capital balance of his Flexi Pension, which continued to accrue net investment earnings.
On 13 March 2008, Professor Brine made a will. By his will, he appointed his three sons and Ms Carter as executors. He left beneficial life interests in two properties to Ms Carter and otherwise left his estate essentially to his sons and grandchildren. The will was witnessed by Ms Carter. She was aware of the terms of the will including that she was named as an executor.
On 20 May 2008, Professor Brine made a French will. By his will, he left a life interest in any French property to Ms Carter and the remainder to his sons.
As at June 2012, Professor Brine’s net monthly payments were $3,141 for the Indexed Pension and $2,192 for the Flexi Pension. Over the course of his receipt of the Flexi Pension, UniSuper issued six monthly statements showing the movements in the value of the lump sum benefit.
As at 14 December 2012, the lump sum value of the Flexi Pension was $542,000.[2] Professor Brine was receiving net monthly payments of his Flexi Pension of $2,192.
[2] Estimate rounded to the nearest thousand dollars based on value at 31 December 2011 of $486,273 and at 4 March 2013 of $556,463 by assuming 80% of the growth of $56,152 over that period had accrued by 14 December 2012.
On 14 December 2012, Professor Brine died.
On 21 December 2012, Martin, Matthew and Daniel met with Ms Carter to read through Professor Brine’s will. Ms Carter had obtained copies of the will and distributed then to the Brine brothers. The will was read through clause by clause. There was a discussion about engaging solicitors for the estate.
On 9 January 2013, Martin and Ms Carter met with Pam McEwin to assess whether Treloar & Treloar should be appointed as solicitors for the estate.
On 10 January 2013, Ms Carter telephoned UniSuper and spoke to Ann, a claims officer. Like all other conversations, UniSuper recorded the conversation and a transcript was tendered. Ms Carter made notes but they were not tendered.[3]
[3] Ms Carter was not asked in evidence whether she made notes, but it is apparent from her statements to Ann on 24 January 2013 that she made notes of both of her conversations with Ann.
Ms Carter told Ann that she was looking at all the documents she had found and believed that Professor Brine had two separate accounts but she could see only one number. Ms Carter said that one account paid $2,192 per month and the other paid $3,141 per month. These figures corresponded with the monthly payments Professor Brine had been receiving as at June 2012. Ms Carter told Ann that she had a statement for the Flexi Pension dated June 2012 on which Professor Brine had written the amount in that Flexi Pension as at 17 October 2012.
Ann told Ms Carter that there was a defined benefit Indexed Pension with account number 112267 which did not have a residual value and upon death 62.5% of the original pension was payable to, and only to, a surviving spouse, a dependent child or a disabled child.
Ann said that there was also an account balance Flexi Pension with account number 800112267 which could be paid to children – not necessarily dependent children – or the estate or a surviving spouse. Ann said that the Flexi Pension had a current balance right then and now.
Ann told Ms Carter that she would need to complete a Statement of Dependants form providing details of her relationship with Professor Brine. Ann said that she would send a letter to Ms Carter encompassing both pension numbers asking for completion of a Statement of Dependants form and provision of specific information and documents.
On 15 January 2013, Martin and Ms Carter agreed that, subject to the views of Matthew and Daniel, they would retain Treloar & Treloar to act as solicitors for the estate. Matthew and Daniel concurred.
On 16 January 2013 Treloar & Treloar were retained to act as solicitors for the estate by letter emailed to them by Martin.
On 18 and 22 January 2013, Ms Carter telephoned UniSuper. She said that she was still waiting for a letter and some forms that Ann had promised to send over a week ago and the matter was urgent.
On 24 January 2013, Ms Carter telephoned UniSuper and spoke to Ann again. She said that she was still waiting for the letter that Ann had said a fortnight ago would be sent. Ann said that the letter had been posted the previous day. Ann explained that in due course a recommendation would be made by a claims officer such as herself and the decision would be made by a committee accepting or rejecting that recommendation. Ms Carter enquired how long it would take for UniSuper to make a decision. Ann said that they were behind due to Christmas but were catching up. She said that the committee met every fortnight to make decisions on claims. Ms Carter made notes of the conversation.[4]
[4] Ms Carter was not asked in evidence whether she made notes, but she told Ann during the conversation that she was making notes. Her notes were not tendered.
On 24 January 2013, while they were talking, Ann emailed to Ms Carter the letter dated 21 January 2013, a four-page Statement of Dependants Fact Sheet and a 16-page Statement of Dependants form.
In January 2013, Ms Carter instructed Norman Waterhouse to act for her in her capacity as a beneficiary of Professor Brine’s estate.
On 25 January 2013, Vicki Dunn from Norman Waterhouse telephoned UniSuper and spoke to Renée. No evidence was adduced of the content of that conversation. A solicitor, Emma Dodson, certified various documents to be annexed to Ms Carter’s Statement of Dependants form.
On 12 February 2013, Martin and Ms Carter met with Ms McEwin of Treloar & Treloar. Ms Carter said that she was proposing to apply for Professor Brine’s superannuation. Ms Carter said that she believed that Professor Brine’s superannuation fell outside the will. Ms McEwin said that usually superannuation was outside the estate.
On 12 February 2013, Martin sent an email to Matthew and Daniel reporting on the meeting. He said that superannuation only goes to the next of kin, Ms Carter, and she planned to apply for it. He said that Ms Carter would send them a letter seeking their agreement to this.
On 13 February 2013, Ms Carter sent an email to Matthew and Daniel (forwarded later to Martin) relevantly saying:
I am writing regarding John’s UniSuper which is outside of the Will. The Trustees of the fund have discretion as to whom it should be paid, but as John’s spouse it appears that I am the only person with a right to make a claim. It is payable only to ‘spouse, dependent and disabled children’.
I have mentioned this already to Martin and Pam McEwin who are both comfortable with my claim.
In order to claim, I need to include a Statutory Declaration from all of the executors to say that he had no other ‘dependents’ than myself. I find the form a little ambiguous since the same form is required to be completed by both the claimant and the executors. However, I am reliably informed that this is the correct one for you.
So, please would you print out the form and complete it, have it witnessed, then post it back to me so that I can include it with my application.…
Of course, I should be most grateful if you would do this as soon as possible.
The attachment was not tendered. However, subsequent emails from Daniel and Martin show that Ms Carter attached one page from the Statement of Dependants form containing the statutory declaration saying that they were not aware of any other persons who would qualify as dependants.
On 14 February 2013, Matthew sent an email to Daniel and Martin saying not to sign the statutory declaration until they discussed it. He said that his understanding was that superannuation goes to the beneficiaries designated in a nomination form made within three years of death and inquiring whether they had the nomination forms.
On 14 or 15 February 2013, Ms Carter told Martin that she believed that Professor Brine had two pensions: a defined benefit Indexed Pension that would automatically go to her and a Flexi Pension. They agreed that Ms McEwin should be asked to contact UniSuper on their behalf to confirm the status of the pensions and in respect of the Flexi Pension to ascertain whether it identified a valid reversionary beneficiary or whether it should be included in the estate.
On 15 February 2013 Martin sent an email to Ms McEwin, copied to the other three executors, confirming that at the meeting on 12 February Ms Carter indicated that she believed that Professor Brine’s superannuation fell outside the will and requesting Ms McEwin to contact UniSuper in accordance with his agreement with Ms Carter referred to in the previous paragraph.
On 16 February 2013, Ms Carter sent an email to Martin and Ms McEwin, copied to Matthew and Daniel. She said:
… Also, what you write about my understanding of the pensions is not quite correct. My understanding is that:
1.     it stands outside the Will
2.     there are the two part – the Defined Benefit and the Flexi Pension, the former has no      reversionary benefit
3.     spouses and dependent or disabled children can apply to received [sic] the benefits
4.     the Trustees of the Fund have discretion to determine who receives the benefit,      taking into account any views which the deceased may have expressed in the     applicant’s case
Also, I should add, I didn’t say I had an automatic right to anything.
Furthermore, all I have asked you, Matthew and Daniel to do is to provide a Statutory Declaration to say that John didn’t have any dependents other than myself, using the form UniSuper have given me (i.e the form I have emailed to you).

On 16 February 2013, Martin sent an email to Ms Carter. He thanked her for the clarification. He said that Matthew and Daniel had been uncomfortable with signing an effectively blank page of an obviously longer document without a sufficient explanation of what they were signing.
On 18 February 2013, Ms Carter telephoned Ms McEwin and told her that she went to UniSuper to apply as dependant spouse and they said that she needed to include a declaration from the executors that Professor Brine did not have any disabled or dependent children. Ms McEwin said that she could not give advice separately if it affected the others.
On 19 February 2013, Ms McEwin wrote a letter to the four executors. She said that it was part of an executor’s duty to ascertain what assets are part or potentially part of an estate and it was therefore appropriate that they determine what status the UniSuper superannuation had. Generally under defined benefit schemes upon the death of the superannuant the trustee has no discretion and it is payable only to the spouse, but this depends on the rules that govern the fund and in some cases the superannuant can make a binding or non-binding nomination. It would be prudent for the executors to be aware whether this was a defined benefit scheme where there was no discretion, or if a nomination was made of which type, binding or non-binding. The outcome of those inquiries may mean that some of the executors may desire to obtain separate advice in their personal capacities. It was relatively rare for superannuation to go to an estate unless a person nominated their estate to receive the superannuation.
On 20 February 2013, Martin and Ms Carter signed acceptance of the terms of retainer of Treloar & Treloar.
On 20 February 2013, Martin telephoned Ms McEwin. He said that he thought it had been agreed that Ms McEwin would write to UniSuper but understood how she might have understood Ms Carter’s response as saying that she should not write to UniSuper. He said that there was a degree of mistrust.
On a date not disclosed by the evidence, Ms Carter sent an email to Daniel copied to Martin and Matthew. She said:
John’s UniSuper is in two parts.
The one, Defined Benefit, which has no residual value but a portion of which can only be paid to a surviving spouse (including de facto). The other, Flexi Pension, which has a residual value and is payable to current spouse (including de facto) and/or other dependents (which must be either children who were financially dependent on John at the date he died or disabled children). The latter part is outside the Will not only in that it was not mentioned in the Will but primarily because its distribution is solely at the discretion of the Trustees of UniSuper, and they have indicated in John’s case they will consider what dependents John had at the date of his death (again this is only his spouse or dependent children), and if more than one, then how it will be distributed among these potential beneficiaries.
On 27 February 2013, Ms Carter signed her duly completed Statement of Dependants form. She sent it to UniSuper, which received it on 7 March.
On 4 March 2013, Matthew telephoned UniSuper and spoke to Kym. Kym confirmed that there were two separate pensions. Kym said that the account balance of the Flexi Pension was $556,463. Kym said that Professor Brine had signed a non-binding preferred nomination in favour of his estate in relation to the Flexi Pension, but the trustee would exercise its own discretion and financial dependency took precedence. Kym said that the Indexed Pension was payable only to a surviving spouse and would probably go to Ms Carter.
On 4 March 2013, Matthew sent an email to Martin and Daniel. He summarised the information obtained from UniSuper and expressed concern that an executor may not be disclosing all information, either intentionally or not.
On 5 March 2013, UniSuper sent a letter by email to Martin attaching the Statement of Dependants Fact Sheet and Statement of Dependants form.
On 7 March 2013, Darren from UniSuper telephoned Martin in response to his call. Darren confirmed that Professor Brine had executed a preferred nomination in favour of his estate. Darren said that if it had been a current binding nomination, the trustee would have been bound to act in accordance with it. However, as it was only a preferred nomination, it was only a guide to the exercise of the trustee’s discretion. Darren said that in practice the trustee almost invariably exercised its discretion to pay to a dependant rather than the estate if there was a dependant, even if there was a preferred nomination in favour of the estate.
On 19 March 2013, Martin spoke to Ms McEwin. He passed on what he had learnt from Matthew. Ms McEwin advised that Professor Brine’s superannuation did not form part of the estate until the trustee determined where the funds would go. She said that the trustee should be provided with the information requested in the Statement of Dependants form. The trustee would then make a determination about the beneficiaries. If the trustee determined to pay to the estate, a supplementary application for probate on the superannuation should be made. If not, the beneficiaries of the estate should consider their positions.
On 24 March 2013, Martin signed a duly completed Statement of Dependants form and on 30 March prepared a joint statement in the name of his brothers and himself submitting that the Flexi Pension should be paid to the estate in accordance with Professor Brine’s preferred beneficiary nomination. He lodged them with UniSuper in the belief that he was lodging on behalf of his brothers and himself.
On 22 April 2013 UniSuper wrote to Martin saying that his brothers needed to lodge their own forms.[5] On 15 and 16 May 2013, Daniel and Matthew signed duly completed Statement of Dependants forms. They were sent to UniSuper and received on 24 and 29 May 2013 respectively.
[5]This letter was not tendered but was referred to by UniSuper claims officers in telephone discussions.
On 22 July 2013, Renée sent a memorandum to the Insurance Management Committee[6] of UniSuper recommending that 100% of the Flexi Pension be paid to Ms Carter as de facto spouse.
[6] Then known as the Management Claims Committee. It later changed its name to the Insurance Management Committee.
On 6 August 2013, the Insurance Management Committee resolved that 100% of the Flexi Pension be paid to Ms Carter as de facto spouse and that the Indexed Pension be paid to Ms Carter.
On 20 August 2013, UniSuper sent a letter to Ms Carter and the Brine brothers informing them that the trustee had decided to pay the Flexi Pension death benefit of $567,563 to Ms Carter.
On 9 September 2013, Matthew sent an email to Ms McEwin copied to Martin, Daniel and Ms Carter. He said that Martin, Daniel and he agreed that they should object to UniSuper’s decision. He said that he was also aware that Ms Carter was an executor and she may wish to recuse herself from the discussion and action because of her conflict of interest.
On 17 September 2013, Ms McEwin sent an email to the executors saying that she suggested that the notice of dispute be put forward by three of the executors with Ms Carter not objecting. She said that Ms Carter could make her own submission in her personal capacity. Ms Carter sent an email to Ms McEwin adopting that position.
On 19 September 2013, Ms McEwin sent to UniSuper a notice of dispute on behalf of the Brine brothers as three of the executors of the estate with the fourth executor not objecting. The notice of dispute contended that the trustee should have exercised its discretion in favour of the estate in accordance with Professor Brine’s April 2001 preferred nomination.
On 2 October 2013, Ms Carter sent by email to UniSuper a submission in response to the notice of dispute. She said that she was writing the letter in her capacity as Professor Brine’s spouse rather than as an executor.
On 7 October 2013, Renée sent a memorandum to the Insurance Management Committee recommending that it uphold its previous decision that 100% of the Flexi Pension be paid to Norma Carter.
On 15 October 2013 the Insurance Management Committee affirmed its previous decision to pay the Flexi Pension death benefit to Ms Carter.[7] On 21 October 2013, UniSuper wrote to the parties informing them of its decision.
[7] The review was made by the Insurance Management Committee due to an internal error by UniSuper. It should have been made by the Insurance Committee. This was discovered and rectified on 12 February 2014: see [64] below.
On 13 November 2013, Martin telephoned Sam, a claims officer at UniSuper. Sam told Martin what Darren had told him on 7 March 2013, namely that in practice the trustee almost invariably exercised its discretion to pay to a dependant rather than the estate if there was a dependant, even if there was a preferred nomination in favour of the estate.
On 27 November 2013, Matthew lodged with the Superannuation Complaints Tribunal a registration of complaint form in respect of UniSuper’s decision to pay the Flexi Pension death benefit to Ms Carter.
On 12 February 2014, Amalia and Steven sent a memorandum to the Insurance Committee of UniSuper recommending that it affirm the previous decisions of the Insurance Management Committee to pay the Flexi Pension death benefit to Ms Carter.
On 12 February 2014, the Insurance Committee affirmed the decisions of the Insurance Management Committee to pay the Flexi Pension death benefit to Ms Carter. On 12 February 2014, UniSuper wrote to the parties informing them of its decision.
On 23 January 2015, the Superannuation Complaints Tribunal dismissed Matthew’s Complaint.
On 22 April 2015, UniSuper paid to Ms Carter the Flexi Pension death benefit of $630,299.
On 26 June 2015, the Brine brothers instituted this action.
Evidence
Ms Carter gave evidence and called Ms McEwin to give evidence. Martin, Matthew and Daniel Brine gave evidence. Both parties tendered numerous documents.
I have addressed Ms Carter’s credit in my reasons for judgment in relation to her action. I formed an adverse impression of Ms Carter’s credit and reliability and am unable to rely on her evidence where it depends on acceptance of her credibility and reliability.
As expressed in my reasons for judgment in relation to Ms Carter’s action, I find that Martin, Matthew and Daniel were honest and generally reliable witnesses. In cases of conflict between their evidence and that of Ms Carter, I have preferred their evidence.
The superannuation trust deed
The entitlements of Professor Brine in respect of his Flexi Pension were governed by the UniSuper Consolidated Trust Deed and the UniSuper Regulations. The Trust Deed and the Regulations in the form they took as at 14 December 2012 were tendered.
Regulation 6.22(1)(a)(ii) and (2) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) effectively constrained UniSuper to pay only Professor Brine’s dependants[8] and/or legal personal representatives but said nothing about the exercise by the trustee of its discretion as between such eligible beneficiaries. That regulation relevantly provided:
[8] Defined by section 10 of the Superannuation Industry (Supervision) Act 1993 (Cth) to include a spouse (including a de facto spouse) and a child of the member.
6.22 Limitation on cashing of benefits in regulated superannuation funds in favour of persons other than members or their legal personal representatives
(1)Subject to subregulation (6) and regulations 6.22B, 7A.13, 7A.17 and 7A.18, a member’s benefits in a regulated superannuation fund must not be cashed in favour of a person other than the member or the member’s legal personal representative:
(a)     unless:
(i)the member has died; and
(ii)the conditions of subregulation (2) or (3) are satisfied; or
…
(2)The conditions of this subregulation are satisfied if the benefits are cashed in favour of either or both of the following:
(a)     the member’s legal personal representative;
(b)     one or more of the member’s dependants.
Professor Brine was a Division A member. He had elected under clause A.3.2(a)(ii) of the Trust Deed to receive part of his benefits on retirement as a lump sum benefit under clause A.7. Clause A.7 provided that the lump sum benefit was payable in accordance with clause 45. Clause 45.2 provided that:
If the Member dies before the benefit payable under Clauses A.7 … has been paid in full, any part of the benefit which has not previously been dealt with on behalf of the Member will be payable to such of the Member’s Dependants and legal personal representatives and in such shares as the Trustee may determine.
Clause 1.1 defined “Dependants” to include a spouse (including a de facto spouse) and a child of the Member.
Factual issues
Acceptance of appointment as executor
The Brines contend that Ms Carter accepted appointment as an executor no later than 21 December 2012. Ms Carter does not explicitly controvert that contention.
On 21 December 2012, Martin, Matthew and Daniel met with Ms Carter at the Gilles Street house and read through Professor Brine’s will clause by clause. There was a discussion about engaging solicitors to act for the estate. Ms Carter did not say that she accepted appointment as executor and her conduct was too equivocal to manifest such an intention.
On 15 January 2013, Martin and Ms Carter agreed, subject to the views of Matthew and Daniel, to retain Treloar & Treloar as solicitors for the estate. Matthew and Daniel concurred. On 16 January 2013 Treloar & Treloar were retained as solicitors for the estate. By her conduct in appointing solicitors for the estate, Ms Carter accepted appointment as executor on 16 January 2013.
Two benefits
The Brines contend that on 12 and 13 February 2013 Ms Carter misled them by failing to disclose that there were two superannuation benefits and by positive representations.
On 12 February 2013, Martin and Ms Carter met with Ms McEwin. I find based on Ms McEwin’s notes of meeting, Martin’s contemporaneous email to his brothers and the evidence given by Ms McEwin and Martin that Ms Carter referred to Professor Brine’s superannuation as being a single benefit and not as being two separate benefits of different natures and paying different types and amounts of benefits.
On 13 February 2013, Ms Carter sent an email to Matthew and Daniel saying amongst other things:
I am writing regarding John’s UniSuper which is outside of the Will. The Trustees of the fund have discretion as to whom it should be paid, but as John’s spouse it appears that I am the only person with a right to make a claim. It is payable only to ‘spouse, dependent and disabled children’.
Ms Carter thereby positively represented Professor Brine’s superannuation as being a single benefit and not as being two separate benefits of different natures and paying different types and amounts of benefits.
On 14 or 15 February 2013, Ms Carter told Martin that she believed that Professor Brine had two pensions: a defined benefit Indexed Pension that would automatically go to her and a Flexi Pension. This was the first time that she disclosed that there were two separate benefits and stands in contrast to her statements on 12 and 13 February 2013.
I find that Ms Carter knew at all times that Professor Brine had two separate benefits and knew of their general nature. She accepted in evidence that Professor Brine had discussed with her from time to time in the 2000s his changing of the allocation of his lump sum benefit as between different categories of investments. On 10 January 2013, she told Ann that there were two separate benefits and after some confusion Ann confirmed this and confirmed the differences between them. This was reiterated by UniSuper employees on 18 and 22 January and by Ann again on 24 January 2013.
I find that Ms Carter deliberately failed to disclose her knowledge of the two separate benefits to the executors before 14 or 15 February 2013 when she disclosed them to Martin.
Capital value of lump-sum policy
The Brines contend that Ms Carter misled them by failing to disclose the capital value of the lump sum superannuation benefit.
Ms Carter did not at any point disclose to her fellow executors the capital value or approximate capital value of the lump sum superannuation benefit.
I find that Ms Carter knew by 10 January 2013 when she spoke to Ann that the capital value of the lump sum superannuation benefit was approximately $500,000.[9]
[9] My reasons for this finding are set out at [253]-[263] of my reasons for judgment in Ms Carter’s action.
I find that Ms Carter deliberately failed to disclose the capital value to the executors before 4 March 2013 when it was ascertained by Matthew from UniSuper.
Estate as a potential beneficiary
The Brines contend that Ms Carter misled her fellow executors by failing to disclose that the estate was an eligible beneficiary of the lump sum superannuation benefit and by positive representations.
On 12 February 2013, Martin and Ms Carter met with Ms McEwin. Ms Carter said that she believed that Professor Brine’s superannuation fell outside the will.
On 13 February 2013, Ms Carter sent an email to Matthew and Daniel saying amongst other things:
I am writing regarding John’s UniSuper which is outside of the Will. The Trustees of the fund have discretion as to whom it should be paid, but as John’s spouse it appears that I am the only person with a right to make a claim. It is payable only to ‘spouse, dependent and disabled children’.
On 16 February 2013, Ms Carter sent an email to Martin and Ms McEwin, copied to Matthew and Daniel saying amongst other things:
Also, what you write about my understanding of the pensions is not quite correct. My understanding is that:
1.it stands outside the Will
…
3. spouses and dependent or disabled children can apply to received the benefits
… all I have asked you, Matthew and Daniel to do is to provide a Statutory Declaration to say that John didn’t have any dependents other than myself, using the form UniSuper have given me (i.e the form I have emailed to you).
On a date not disclosed by the evidence, Ms Carter sent an email to Daniel copied to Martin and Matthew saying amongst other things:
The … Flexi Pension, which has a residual value and is payable to current spouse (including de facto) and/or other dependents (which must be either children who were financially dependent on John at the date he died or disabled children). The latter part is outside the Will not only in that it was not mentioned in the Will but primarily because its distribution is solely at the discretion of the Trustees of UniSuper, and they have indicated in John’s case they will consider what dependents John had at the date of his death (again this is only his spouse or dependent children), and if more than one, then how it will be distributed among these potential beneficiaries..
On the last three occasions, Ms Carter represented to the other executors that the only eligible beneficiaries were spouses and dependent or disabled children. She thereby represented that the estate was not an eligible beneficiary. On all occasions, she implicitly represented that the estate was not an eligible beneficiary.
The other executors only discovered that the estate was an eligible beneficiary when Matthew telephoned UniSuper on 4 March 2013.
I find that at all material times from 10 January 2013 onwards Ms Carter knew that the estate was an eligible beneficiary. Ann made this clear to her on 10 January 2013. It also clearly appears from the Statement of Dependants Fact Sheet and Statement of Dependants form that Ann emailed to her on 24 January 2013. Ms Carter accepted in her evidence that she knew this. She said that she did not mislead the other executors not because she did not know that the estate was an eligible beneficiary but because she denied that she conveyed otherwise to the other executors. I reject that evidence.

I find that Ms Carter deliberately failed to disclose to her fellow executors that the estate was an eligible beneficiary.
Adult children as potential beneficiaries
The Brines contend that Ms Carter misled her fellow executors by failing to disclose that children were eligible beneficiaries of the lump sum superannuation benefit even if not dependent or disabled and by positive representations.
On each of the three occasions referred to at [91]-[93] above, Ms Carter represented to the other executors that the only eligible beneficiaries were spouses and dependent or disabled children. She thereby represented that children who were not dependent or disabled (adult children) were not eligible beneficiaries.
That representation was false. Ms Carter knew at all material times from 10 January 2013 that adult children were eligible beneficiaries. Ann made this clear to her on 10 January 2013. It also clearly appears from the Statement of Dependants Fact Sheet and Statement of Dependants form that Ann emailed to her on 24 January 2013.
I find that Ms Carter deliberately failed to disclose to her fellow executors that adult children were eligible beneficiaries.
Abuse of process
Ms Carter contends that the action is an abuse of process.
Ms Carter pleads merely that the claim is an abuse of process and should be struck out. No material facts are pleaded of the abuse. However, Ms Carter relies for her abuse of process contention on the same facts as are pleaded in support of her estoppel contention.
Ms Carter pleads that the Brines did not before the payment of the superannuation benefit in April 2015 raise the issue of conflict of interest in relation to Professor Brine’s superannuation and in reliance thereon she lodged the Statement of Dependants form, did not participate in lodging the notice of dispute and did not renounce her office as executor.
In PNJ v The Queen,[10] French CJ, Gummow, Hayne, Crennan and Kiefel JJ said:
It is not possible to describe exhaustively what will constitute an abuse of process. It may be accepted, however, that many cases of abuse of process will exhibit at least one of three characteristics:
(a)the invoking of a court’s processes for an illegitimate or collateral purpose;
(b)the use of the court’s procedures would be unjustifiably oppressive to a party; or
(c)the use of the court’s procedures would bring the administration of justice into disrepute.[11]
[10] [2009] HCA 6, (2009) 83 ALJR 384.
[11] At [3]. (Footnotes omitted).
Ms Carter relies on the second category, contending that the claim is unjustifiably oppressive to her.
In Tomlinson v Ramsey Food Processing Pty Limited,[12] French CJ, Bell, Gageler and Keane JJ said:
Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court’s procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.[13]
[12] [2015] HCA 28, (2015) 89 ALJR 750.
[13] At [25].
The bringing of this action is not oppressive to Ms Carter. If the Brines are estopped from bringing the action, estoppel will preclude its being brought. If not, there is nothing oppressive about the bringing of the action.
In any event, the Brines were ignorant of the true position as to the estate being an eligible beneficiary and the amount of the Flexi Pension benefit until 4 March 2013. Ms Carter was aware of the true position but did not disclose it to them. Although suspicious, the Brines did not learn that she had been aware of the true position until after the institution of this action. On the Brines’ case, she breached her duty by not disclosing to them the true position and by misrepresenting it. She cannot rely on her own conduct which on the present hypothesis is in breach of duty to found an oppressive conduct contention.
The claim of abuse of process fails.
Estoppel and laches
These two defences can be addressed in conjunction because they raise similar issues and each would preclude the Brines succeeding on the merits.
Estoppel
Ms Carter contends that the Brines are estopped from bringing the claim by estoppel by conduct. Ms Carter relies on the variety of estoppel by conduct articulated by the High Court in The Commonwealth v Verwayen.[14]
[14] (1990) 170 CLR 394.
Ms Carter pleads that the Brines did not before the payment of the superannuation benefit in April 2015 raise the issue of conflict of interest in relation to Professor Brine’s superannuation.
Ms Carter pleads that in reliance thereon she:
1.lodged the Statement of Dependants form;
2.did not participate in lodging the notice of dispute;
3.did not renounce her office as executor.
Ms Carter contends that she would suffer detriment if the Brines were permitted to bring this action and that it is unconscionable for them to do so.
As to the first pleaded reliance, Ms Carter was anxious to lodge the Statement of Dependants form as quickly as possible from 10 January 2013 and followed up UniSuper repeatedly until she received the form. She did not rely on anything said or not said by the Brines in so doing. The Brines were ignorant of the true positon before she lodged the form.
As to the second and third pleaded reliance, it was a matter for Ms Carter to form her own view whether she was acting in breach of her duties as executor. She was not entitled to breach them (if she did) merely because her fellow executors did not allege that she was breaching her duties.
The defence of estoppel fails.
Laches
Ms Carter contends that the defence of laches applies because the Brines delayed in bringing the action and by their conduct acquiesced in her conduct allegedly in breach of trust.
In Streeter v Western Areas Exploration Pty Ltd (No 2),[15] Murphy JA (with whom Buss JA relevantly agreed) said:
[15] [2011] WASCA 17, (2011) 278 ALR 291.
In Fysh v Page Dixon CJ, Webb and Kitto JJ said:
If a plaintiff establishes prima-facie grounds for relief the question whether he is defeated by delay must itself be governed by the kind of considerations upon which the principles of equity proceed. If the delay means that to grant relief would place the party whose title might otherwise be voidable on equitable grounds in an unreasonable situation, or if, because of change of circumstances, it would give the party claiming relief an unjust advantage or would impose an unfair prejudice on the opposite party, these are matters which may suffice to answer the prima-facie grounds for relief. See Lindsay Petroleum Co v Hurd and the observation in Lord Blackburn’s speech in Erlanger v New Sombrero Phosphate Co.
In Lindsay Petroleum Company v Hurd it was said:
Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.
In Orr v Ford Deane J said:
The ultimate test effectively remains that enunciated ... in Lindsay Petroleum Co v Hurd, namely, whether the plaintiff has, by his inaction and standing by, placed the defendant or a third party in a situation in which it would be inequitable and unreasonable ‘to place him if the remedy were afterwards to be asserted’.
The doctrine of laches comprehends two themes. One is delay implying not just quiescence, but rather acquiescence and assent, and the other is delay involving prejudicial change of circumstances.
In Orr v Ford Deane J referred to the statement in Lindsay Petroleum Co v Hurd to the effect that in order that the plaintiff’s remedy should be lost by laches, it is ordinarily necessary that there should be sufficient knowledge of the facts constituting the title to relief.[16]
[16] At [632]-[636]. (Footnotes omitted).
Ms Carter contends that the Brines consented to her conduct and this is an answer to the action. If that contention is made out, no issue of laches will arise. If that contention is not made out, it could not be said that the Brines acquiesced in her breach of duty for the reasons given above in the context of the estoppel defence.
Breach of fiduciary duty
The Brines contend that Ms Carter breached her fiduciary duties. Ms Carter denies any breach and contends in the alternative that she was authorised to so act by Professor Brine or the Brine brothers consented to her conduct.
Legal principles
An executor owes a duty to identify, secure and collect assets of the estate.[17]
[17] Re Chirnside [1956] VLR 295 at 304 per Dean J; Re Atkinson [1971] VR 612 at 616 per Gillard J.
An executor is a fiduciary who owes fiduciary duties.[18] A fiduciary generally owes a fiduciary duty not without prior authorisation:
1.to use knowledge or an opportunity arising out of his or her fiduciary position for his or her personal interests (the first limb);[19]
2.to pursue a personal benefit in circumstances in which there is a real or significant possibility of conflict between his or her fiduciary duty and personal interest (the second limb).[20]
[18] Re-Stewart [2003] 1 NZLR 809 at 815-816 per Laurenson J; Johnson v Trotter [2006] NSWSC 67 at [23] per White J.
[19] Chan v Zacharia (1984) 154 CLR 178 at 199 per Deane J (with whom Brennan and Dawson JJ agreed); Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 103 per Mason J (with whom Deane J relevantly agreed); Pilmer v Duke Group Limited (In Liquidation) [2001] HCA 31, (2001) 207 CLR 165 at [78] per McHugh, Gummow, Hayne and Callinan JJ.
[20] Chan v Zacharia (1984) 154 CLR 178 at 199 per Deane J (with whom Brennan and Dawson JJ agreed); Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 103 per Mason J (with whom Deane J relevantly agreed); Pilmer v Duke Group Limited (In Liquidation) (2001) 207 CLR 165 at [78] per McHugh, Gummow, Hayne and Callinan JJ.
These are the two limbs of the conflict rule insofar as it involves conflicts between duty and interest.[21]
[21] There are other limbs involving conflicts between duty to the beneficiaries and duty to others but they are not relevant in this case.
In Chan v Zacharia,[22] Deane J (with whom Brennan and Dawson JJ agreed) said:
The variations between more precise formulations of the principle governing the liability to account are largely the result of the fact that what is conveniently regarded as the one “fundamental rule” embodies two themes. The first is that which appropriates for the benefit of the person to whom the fiduciary duty is owed any benefit or gain obtained or received by the fiduciary in circumstances where there existed a conflict of personal interest and fiduciary duty or a significant possibility of such conflict: the objective is to preclude the fiduciary from being swayed by considerations of personal interest. The second is that which requires the fiduciary to account for any benefit or gain obtained or received by reason of or by use of his fiduciary position or of opportunity or knowledge resulting from it: the objective is to preclude the fiduciary from actually misusing his position for his personal advantage… Stated comprehensively in terms of the liability to account, the principle of equity is that a person who is under a fiduciary obligation must account to the person to whom the obligation is owed for any benefit or gain (i) which has been obtained or received in circumstances where a conflict or significant possibility of conflict existed between his fiduciary duty and his personal interest in the pursuit or possible receipt of such a benefit or gain or (ii) which was obtained or received by use or by reason of his fiduciary position or of opportunity or knowledge resulting from it. Any such benefit or gain is held by the fiduciary as constructive trustee. That constructive trust arises from the fact that a personal benefit or gain has been so obtained or received and it is immaterial that there was no absence of good faith or damage to the person to whom the fiduciary obligation was owed. In some, perhaps most, cases, the constructive trust will be consequent upon an actual breach of fiduciary duty: e.g., an active pursuit of personal interest in disregard of fiduciary duty or a misuse of fiduciary power for personal gain. In other cases, however, there may be no breach of fiduciary duty unless and until there is an actual failure by the fiduciary to account for the relevant benefit or gain: e.g., the receipt of an unsolicited personal payment from a third party as a consequence of what was an honest and conscientious performance of a fiduciary duty. The principle governing the liability to account for a benefit or gain as a constructive trustee is applicable to fiduciaries generally...[23]
[22] (1984) 154 CLR 178.
[23] At 198-199. (Footnotes omitted).
In Hospital Products Ltd v United States Surgical Corporation,[24] Mason J (with whom Deane J relevantly agreed), expressed the first limb in the following terms:
The rule that a fiduciary is not entitled to make a profit without the informed consent of the person to whom the fiduciary duty is owed is not limited to profits which arise from the use of the fiduciary position or of the opportunity or knowledge gained from it...[25]
and in a passage subsequently cited with approval by McHugh, Gummow, Hayne and Callinan JJ in Pilmer v Duke Group Limited (In Liquidation)[26] expressed the second limb in the following terms:
Accordingly, the fiduciary’s duty may be more accurately expressed by saying that he is under an obligation not to promote his personal interest by making or pursuing a gain in circumstances in which there is a conflict or a real or substantial possibility of a conflict between his personal interests and those of the persons whom he is bound to protect.[27]
[24] (1984) 156 CLR 41.
[25] At 103.
[26] (2001) 207 CLR 165.
[27] At 103. (Footnotes omitted).
In Warman International Ltd v Dwyer,[28] Mason CJ, Brennan, Deane, Dawson and Gaudron JJ said:
A fiduciary must account for a profit or benefit if it was obtained either (1) when there was a conflict or possible conflict between his fiduciary duty and his personal interest, or (2) by reason of his fiduciary position or by reason of his taking advantage of opportunity or knowledge derived from his fiduciary position.[29]
[28] (1995) 182 CLR 544.
[29] At 557. (Footnotes omitted).
The conflict rule and the associated obligation to account for personal benefits obtained when there is a breach of the conflict rule (often called the profit rule) are not to be applied technically or slavishly as if they were legislative provisions. Rather they should be applied with equity’s flexibility to adapt to the circumstances against the ultimate criterion of unconscionability which is the underlying rationale for the rules.
In Hospital Products Ltd v United States Surgical Corporation,[30] Mason J (with whom Deane J relevantly agreed) said:
The categories of fiduciary relationships are infinitely varied and the duties of the fiduciary vary with the circumstances which generate the relationship. Fiduciary relationships range from the trustee to the errand boy, the celebrated example given by Fletcher Moulton L.J. in his judgment in In re Coomber, in which, after referring to the danger of trusting to verbal formulae, he pointed out that the nature of the curial intervention which is justifiable will vary from case to case. In accordance with these comments it is now acknowledged generally that the scope of the fiduciary duty must be moulded according to the nature of the relationship and the facts of the case. The often repeated statement that the rule in Keech v. Sandford applies to fiduciaries generally tends to obscure the variable nature of the duties which they owe. The rigorous standards appropriate to a trustee will not apply to a fiduciary who is permitted by contract to pursue his own interests in some respects. Thus, in the present case the so-called rule that the fiduciary cannot allow a conflict to arise between duty and interest cannot be usefully applied in the absolute terms in which it has been stated. [31]
[30] (1984) 156 CLR 41.
[31] At 102-103. (Emphasis added and footnotes omitted).
In Chan v Zacharia,[32] Deane J (with whom Brennan and Dawson JJ agreed) said:
Many of the statements of the general principle requiring a fiduciary to account for a personal benefit or gain are framed in absolute terms - “inflexible”, “inexorably”, “however honest and well-intentioned”, “universal application” - which sound somewhat strangely in the ears of the student of equity and which are to be explained by judicial acceptance of the inability of the courts, “in much the greater number of cases”, to ascertain the precise effect which the existence of a conflict with personal interest has had upon the performance of fiduciary duty… one cannot but be conscious of the danger that the over-enthusiastic and unnecessary statement of broad general principles of equity in terms of inflexibility may destroy the vigour which it is intended to promote in that it will exclude the ordinary interplay of the doctrines of equity and the adjustment of general principles to particular facts and changing circumstances and convert equity into an instrument of hardship and injustice in individual cases. There is “no better mode of undermining the sound doctrines of equity than to make unreasonable and inequitable applications of them”.[33]
[32] (1984) 154 CLR 178.
[33] At 204-205. (Emphasis added and footnotes omitted).
In Clay v Clay,[34] Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ cited with approval the passages italicised in the judgments of Mason J and Deane J extracted above.
[34] [2001] HCA 9, (2001) 202 CLR 410 at [46]-[48].
In relation to the first limb of the conflict rule where a fiduciary uses knowledge or an opportunity arising out of his or her fiduciary position for his or her personal interests, there is not usually a need for flexibility, although even in this case a remedy may not be granted where the connection between the benefit and the knowledge or opportunity is insubstantial. However, in relation to the second limb, where the circumstances in which there is a possibility of conflict can be infinitely variable, there is a greater need for flexibility.
A fiduciary is not liable to account for a personal benefit where the fiduciary has been authorised to act in the manner in which he or she has acted:
1.expressly by the instrument creating the fiduciary duty or by implication arising from the circumstances of his or her appointment; or
2.by the informed consent of the beneficiary.

In Chan v Zacharia, [35] Deane J (with whom Brennan and Dawson JJ agreed) said:
The liability to account as a constructive trustee will not arise where the person under the fiduciary duty has been duly authorized, either by the instrument or agreement creating the fiduciary duty or by the circumstances of his appointment or by the informed and effective assent of the person to whom the obligation is owed, to act in the manner in which he has acted.[36]
[35] (1984) 154 CLR 178.
[36] At 204.
Conduct to 4 March 2013
Prima facie position
Ms Carter knew since not later than 10 January 2013 that there were two superannuation benefits, the estate was an eligible beneficiary of the Flexi Pension benefit and its value was approximately $500,000. She accepted the position of executor on 16 January 2013. The entitlement to consideration of exercise of the trustee’s decision in its favour was an asset of the estate.
Ms Carter as an executor owed a duty to disclose this information known to her to the other executors. She owed a duty not to pursue a personal benefit in circumstances in which there was a conflict between her duty and her personal interest. She chose not to disclose to her fellow executors the existence of two benefits until 14 or 15 February 2013 and not to disclose the value of the lump sum benefit or that the estate was an eligible beneficiary of it at all. She made positive representations that the only eligible beneficiaries were spouses and dependent or disabled children. While the other executors remained ignorant of the true position, she was advancing her own interests by obtaining information from UniSuper, expressing urgency and lodging a claim for payment of the benefit to herself.
In McIntosh v McIntosh,[37] James McIntosh had three superannuation policies of a total value of approximately $450,000. He died intestate in July 2013 and his mother Mrs McIntosh was appointed administrator in September 2013. On 30 September 2013, Mrs McIntosh lodged death benefit claims with the superannuation trustees claiming that she had been financially interdependent with the deceased. Atkinson J held that Mrs McIntosh breached her duties as an administrator. Atkinson J said:
It is essential to fiduciary duties that they include the core or irreducible minimum duties necessary for the legal personal representatives to perform their obligations “honestly and in good faith for the benefit of the beneficiaries.”…
In this case there was a clear conflict of duty and interest contrary to her fiduciary duties as administrator. When the applicant made application to each of the superannuation funds for the moneys to be paid to her personally rather than to the estate, she was preferring her own interests to her duty as legal personal representative to make an application for the funds to be paid to her as legal personal representative. She was in a situation of conflict which she resolved in favour of her own interests. As such she acted … in breach of her fiduciary duty as administrator of the estate …
An administrator of an intestate estate has a duty to apply for payment of superannuation funds to the estate. The administrator has no proprietary right to the funds but has standing to compel the trustees of the fund to exercise their discretion to pay out the funds.
…
It is axiomatic that the legal personal representative would, if he or she did not have a conflict, make an application for the payment of the superannuation to the deceased member’s legal personal representative. That application would be made as part of the administrator’s duty to get in the estate. Unless the application is made and is successful the funds do not become part of the estate.
…
The failure of the applicant to apply for payment to herself as legal personal representative was in breach of her fiduciary duty to act in the best interests of the estate, for which she may be held liable by the court.[38]
[37] [2014] QSC 99.
[38] At [69]-[71], [73], [78]. (Footnotes omitted).
Mrs McIntosh was an administrator whereas Ms Carter was an executor. This is not a relevant distinction because both owe the same fiduciary duties. Mrs McIntosh was the sole administrator whereas Ms Carter was one of four executors. If Ms Carter had disclosed what she knew about the superannuation benefits, recused herself from acting as executor in relation to them and left the other three executors to act alone on behalf of the estate in relation to them, for the reasons given below she would not have acted in breach of her fiduciary duties and there would be an important distinction between her situation and that of Mrs McIntosh. However, she did not act in that way prior to 4 March 2013.
Ms Carter acted in breach of fiduciary duty prior to 4 March 2013.
Authorisation
Ms Carter contends that she was authorised to act in relation to the superannuation benefits in circumstances in which there was a conflict between her personal interest and her duties because Professor Brine appointed her as an executor with full knowledge of the potential conflict.
Ms Carter contends that Professor Brine appointed her knowing that both Ms Carter in her capacity as his de facto spouse and the estate were eligible beneficiaries of his Flexi Pension superannuation benefit and thereby consented to her acting in a position of conflict between her self-interest and her duty to the estate.
As noted above, authorisation to act notwithstanding a position of conflict may be conferred expressly or by necessary implication arising from the circumstances of the appointment. This applies to the appointment by a testator of an executor as it does to any other appointment of a fiduciary. One circumstance giving rise to the implication is when a testator appoints as executor a person who is also made a beneficiary by the will. Another was articulated by the New South Wales Court of Appeal in Mordecai v Mordecai[39] in which Hope JA (with whom Samuels and Priestley JJA agreed) referred to the exception in the following terms:
That exception is where a testator or settlor, with knowledge of the facts, imposes on a trustee a duty which is inconsistent with a pre-existing interest or duty which he has in another capacity. In that situation the trustee is not thereby debarred from accepting the trust or from performing the duties which are imposed under it.[40]
[39] (1988) 12 NSWLR 58.
[40] At 66-67.
This principle has been applied where a testator appointed as executors persons who were partners of the executor,[41] fellow director shareholders of a company in which the testator held shares,[42] lessees of the testator’s land[43] or a lessee with an option to purchase the testator’s land.[44]
[41] Vyse v Foster (1874) LR 7 HL 318; Hordern v Hordern [1910] AC 465.
[42] Princess Ann of Hesse v Field [1963] NSWR 998.
[43] Sergeant v National Westminster Board plc (1991) 61 P&CR 518.
[44] Re Mulholland’s Will Trusts [1949] 1 All ER 460.
In the examples referred to in the previous paragraph, the pre-existing relationship of partnership, directorship, lease, etc was simple and obvious to the testator. This is to be contrasted with a sophisticated superannuation policy governed by a complex trust deed in which the trustee has discretionary functions. While Professor Brine knew and intended that Ms Carter was the beneficiary of his Indexed Pension superannuation benefit, there is no reason to infer that he knew that she was an eligible beneficiary of his Flexi Pension superannuation benefit. Even if he had such knowledge, there is no reason to infer that he intended Ms Carter to claim the benefit of his Flexi Pension superannuation benefit in her personal capacity or to authorise her to pursue her personal interest in competition with the estate. The circumstances whereby he appointed her as executor do not give rise to a necessary implication that she was authorised to act in a position of conflict of interest in this respect.
Even if Professor Brine’s appointment of Ms Carter were regarded as conferring some authority on her to act as executor notwithstanding her pursuit of a claim to the superannuation in her personal capacity, that could not be regarded as authorising her to fail to disclose her knowledge to her fellow executors or to mislead them about the superannuation entitlement.
In Mordecai v Mordecai,[45] Joseph Mordecai and his two brothers were directors and shareholders of a company. Joseph appointed his brothers as executors. After Joseph’s death, his brothers in their capacity as directors ceased trading through the company and commenced trading through a partnership and later their own company. The New South Wales Court of Appeal held that they breached their fiduciary duties as executors and the authority exception had no application. In McIntosh v McIntosh,[46] Atkinson J reached a similar conclusion.
[45] (1988) 12 NSWLR 58.
[46] [2014] QSC 99.
On no construction of the circumstances existing when Professor Brine made his will was Ms Carter authorised to act in the manner that she did in pursuing her personal interest when there was a conflict between her personal interest and her duty as an executor.
Consent
Ms Carter contends that the other executors consented to her conduct prior to 4 March 2013.
The conduct of the other executors did not at any time manifest consent to her conduct prior to 4 March 2013. In any event they could not have given informed consent before 4 March 2013 because they did not know that the estate was an eligible beneficiary or the amount of the superannuation benefit and indeed this lack of awareness was a result of Ms Carter’s own conduct. They could not have given informed consent after 4 March 2013 in respect of Ms Carter’s pre 4 March 2013 conduct because they did not know the detail of her communications and dealings with UniSuper which were a critical part of her breach of fiduciary duty and which they only discovered after institution of this action.
Conduct after 4 March 2013
Prima facie position
On 4 March 2013, as a result of Matthew’s telephone conversation with UniSuper, the other executors knew the amount of the Flexi Pension superannuation benefit and knew that both the estate and adult children of Professor Brine were eligible beneficiaries.
On 19 March 2013, Ms McEwin advised Martin that the remaining three executors should complete the Statement of Dependants form on behalf of the estate, lodge it with UniSuper and await the trustee’s decision. Ms McEwin had earlier on 19 February 2013 advised the executors that a conflict of interest existed and that some executors may wish to seek their own legal advice in their personal capacities. Ms McEwin took the view that Ms Carter was not precluded from further advancing her personal claim to UniSuper without resigning as an executor.
Thereafter, Martin, Matthew and Daniel lodged Statement of Dependants forms contending that the trustee should exercise its discretion in favour of the estate.
In September 2013, Ms McEwin advised the four executors that the proposed notice of dispute against the trustee’s decision should be lodged with UniSuper by three of the executors with Ms Carter not objecting. She advised that Ms Carter could make her own submission in her personal capacity.
From mid-March 2013 onwards, by their conduct it was effectively agreed between the four executors that in respect of the superannuation benefit the Brine brothers would act as if there were three executors and would act on behalf of the estate while Ms Carter would recuse herself from acting as executor and would be entitled to pursue her own interest in seeking payment of the benefit in her personal capacity. This was in circumstances in which the Brine brothers themselves had a potential conflict of interest between their duty as executors and their personal interest by reason of being eligible beneficiaries as children of Professor Brine albeit they did not pursue that personal interest and made no claim to UniSuper in their personal capacities as children.
As noted above, particularly in relation to the second limb of the conflict rule, the rule itself and the associated profit rule are not rigid or inflexible. In the circumstances referred to above, after 4 March 2013 Ms Carter did not act in breach of her fiduciary duties by continuing to pursue her claim to payment of the superannuation in her personal capacity as de facto spouse of Professor Brine.
Authorisation
I have already addressed the issue of authorisation above.
Consent
By their conduct referred to in the previous section, the Brine brothers as the remaining executors from mid-March 2013 assumed conduct on behalf of the estate of claims to UniSuper that the superannuation benefit should be paid to the estate. By this time, they had become aware of all relevant facts and circumstances. By their conduct, the Brine brothers consented to Ms Carter from mid-March 2013 pursuing her own interests by claiming payment of the benefit in her personal capacity without resigning as an executor.
The Brine brothers contend that they did not have the capacity in their role as executors to consent to Ms Carter’s conduct and only all of the beneficiaries (including their children and presumably Judith) had the capacity to give consent. I reject that contention. The Brine brothers had the capacity and power as three of the four executors with Ms Carter abstaining to bind the estate in relation to Professor Brine’s superannuation. They exercised that power when they lodged the notice of dispute with UniSuper and when they instituted this action. They equally exercised that power when they consented to Ms Carter from mid-March 2013 pursuing her own interests by claiming payment of the benefit in her personal capacity without resigning as an executor.
Liability to account
The next issue is whether Ms Carter is obliged to account to the estate for the benefit received.
In Maguire v Makaronis,[47] Brennan CJ, Gaudron, McHugh and Gummow JJ said:
Different considerations arise where the plaintiff seeks one or other of the further remedies referred to by the Lord Chancellor in Nocton v Lord Ashburton, namely an account of profits, as a personal rather than proprietary remedy, or, as another personal remedy, compensation for that which the plaintiff has lost “by [the fiduciary] acting”, to use the Lord Chancellor’s phrase, in breach of duty. Likewise where what is sought is a proprietary remedy in the nature of a constructive trust. In these instances, there directly arises a need to specify criteria for a sufficient connection (or “causation”) between breach of duty and the profit derived, the loss sustained, or the asset held.
Where the plaintiff seeks recovery of a profit, the necessary connection has been identified in this Court by asking whether the profit was obtained “by reason of [the defendant’s] fiduciary position or by reason of his taking advantage of opportunity or knowledge derived from his fiduciary position”.[48]
[47] (1997) 188 CLR 449.
[48] At 468. (Footnotes omitted).
In Streeter v Western Areas Exploration Pty Ltd (No 2),[49] McLure P (with whom Buss JA relevantly agreed) said:
As the relief sought in this case was an account of profits as a proprietary remedy (a constructive trust), it can be taken that Mr Streeter and Mr Cooper were prohibited by the profit rule from obtaining a profit by reason of his fiduciary position or by reason of his taking advantage of opportunity or knowledge derived from his fiduciary position. That is, the profit rule prohibits a fiduciary from misusing his position for his personal advantage: Chan v Zacharia.
Thus, where the relief sought is an account of profits, there must be a sufficient connection between the breach of the conflict or profit rule and the profit derived: Maguire v Makaronis (468). It is clear from the terms of the profit rule that there must be a causal connection between the profit and use of the fiduciary office. What is a sufficient connection between a profit and a breach of the conflict rule is not as clear. However, a mere temporal connection would seem to be inadequate.
...
The High Court’s formulation of the profit rule in Warman International Ltd v Dwyer and Chan v Zacharia focuses attention on the conduct of the fiduciary. There must be a causal connection between the fiduciary office and the receipt of the benefit. The ‘opportunity’ referred to in the profit rule is that taken by the fiduciary to obtain the profit. If the opportunity is derived by reason of his fiduciary position, it is irrelevant that the company to whom the duty is owed was unwilling, unlikely or unable to make the profits for which an account is taken or that the fiduciary acted honestly and reasonably: Warman International Ltd v Dwyer; Maguire v Makaronis; Boardman v Phipps.[50]
[49] [2011] WASCA 17, (2011) 278 ALR 291.
[50] At [74]-[75], [77]. (Emphasis in original)
In each of these cases, the requirement for a causal connection was expressed in terms of the first limb of the conflict rule. The formulation of the first limb itself incorporates a causal connection. This is not so in the formulation of the second limb. Nevertheless, in each of these cases the Court expressed the requirement for a causal connection generally by reference to the conflict rule not confined to the first limb. As a matter of principle, liability to account for a benefit received when there has been a breach of the second limb of the conflict rule ought also to depend on some connection between the breach and the profit.
The causal connection required for liability to account in equity[51] is different to causation at common law. Thus, for example, equity will not enquire whether the beneficiary would itself have pursued the benefit but for the fiduciary’s breach. Equity takes different approaches to causation in contexts other than the conflict rule or the profit rule: for example, where the trustee has an obligation to restore trust property.[52]
[51] It is not necessary in this case to consider whether equity takes a different approach to causation when there is a liability to account compared to a liability to restore trust property lost as a result of breach of trust: as to the latter see for example Re Dawson (deceased) [1966] 2 NSWR 211 at 214-216 per Street J and Target Holdings Ltd v Redferns (a firm) [1996] AC 421 at 434-439 per Lord Browne-Wilkinson (with whom Lord Keith of Kinkel, Lord Ackner, Lord Jauncey of Tullichettle and Lord Lloyd of Berwick agreed).
[52] Re Dawson (deceased) at 214-216 per Street CJ.
Ms Carter breached her fiduciary duties during the period up to 4 March 2013 when the other executors learnt of the true position. She did not breach her fiduciary duties thereafter. Because the other executors learnt the true position on 4 March 2013, they lodged Statement of Dependants forms contending that UniSuper should exercise its discretion to pay the superannuation benefit to the estate. UniSuper gave no consideration to the exercise of its discretion until it had received the competing contentions from Ms Carter on the one hand and the other three executors on behalf of the estate on the other hand. No recommendation was made by the relevant UniSuper officer until July 2013 and no decision was made by the relevant UniSuper committee until August 2013. In these circumstances, there was no connection between Ms Carter’s breach of duty and the benefit she received.
The position would have been different if the other executors had not learnt the true position and UniSuper had decided to pay the superannuation to Ms Carter in the absence of any competing contention on behalf or in favour of the estate. The prospective possibility that the trustee would have exercised its discretion in favour of the estate if there had been a contention made on behalf of the estate (without the wisdom of hindsight based on the actual recommendations and decisions by the UniSuper officers and committees) was remote given the consistent statements made by the UniSuper officers to Ms Carter, Martin and Matthew about the general exercise of the trustee’s decision and the evidence of Ms McEwin that in her experience trustees of superannuation funds have not exercised their discretion in favour of the estate where there was a competing claim by a spouse. Nevertheless, if no competing contention had been advanced on behalf or in favour of the estate, equity would not have enquired into the prospect that the discretion would have been exercised in favour of the estate and Ms Carter would have been liable to account. The position would have been the same as in McIntosh v McIntosh.[53]
[53] [2014] QSC 99.

Accordingly, notwithstanding her conduct, Ms Carter is not liable to account to the estate for the benefit she received.
Excusal under Trustee Act
Ms Carter contends that, if she would otherwise be liable to account, she acted honestly and reasonably and ought fairly to be excused for her breach of duty and relieved from personal liability for her breach of duty under the Trustee Act.
It is not necessary to address this contention given my conclusions above but I address it briefly.
Section 56 of the Trustee Act provides:
56—Jurisdiction of Supreme Court in cases of breach of trust
If it appears to the Supreme Court—
(a)that a trustee is, or may be, personally liable for any breach of trust (whether the transaction alleged to be a breach of trust occurred before or after the passing of this Act); but
(b)that the trustee has acted honestly and reasonably and ought fairly to be excused for the breach of trust, and for omitting to obtain the directions of the said court in the matter in which he has committed such breach,
then the said court may relieve the trustee, either wholly or partly, from personal liability for the breach of trust.
Section 4(1) defines “trust” to include the duties incident to the office of representative of a deceased person and “trustee” to include a representative of a deceased person. This includes an executor or administrator. Accordingly, the Court has power to relieve an executor from personal liability for breach of fiduciary duty as an executor. The Brines do not contend otherwise.
The Court only has power to relieve the trustee from personal liability for breach of duty if it is satisfied that the trustee acted honestly and reasonably.[54] If so satisfied, the better view is that the Court then considers a single question whether the trustee ought fairly to be excused and relieved wholly or partly of personal liability for the breach of duty notwithstanding that paragraph (b) refers to excusal and the conclusion of the section refers to relief.[55] Whether the court makes an evaluative or discretionary judgment[56] when answering that single question need not be determined.
[54] This follows from the plain words of paragraph (b). See also In Re Morish [1939] SASR 305 at 319 per Murray CJ.
[55] See the approach of Muir J in Ede v Ede [2006] QSC 378 at [33] and [41]-[50]. Contrast the approach of Cohen J in Pateman v Heyen (1993) 33 NSWLR 188 at 199.
[56] For an articulation of the differences between these types of judgment, see Mitchell v The Queen (1996) 184 CLR 333 at 345-347 per Dawson, Toohey, Gaudron, McHugh and Gummow JJ.
During the period up to 4 March 2013, Ms Carter did not act honestly or reasonably. If I had held that she was liable to account as a result of her breach of duty during this period, I would have had no power to relieve her from her liability for that breach of duty.
During the period after 4 March 2013, Ms Carter did not act in breach of duty and so no occasion arises for me to exercise a power to relieve her from liability for breach of duty during that period.
Proper construction of Professor Brine’s will
In Ms Carter’s action, I have been called upon to determine the proper construction of Professor Brine’s will insofar as he granted to Ms Carter a life interest in “my principal residence in Australia at the time of my death”. I have determined in that action that this comprised his property at 440 Gilles Street Adelaide and did not incorporate the adjoining property at 446 Gilles Street Adelaide. In this action, the Brines seek a declaration to that effect. I will hear the parties as to whether a declaration should be made in the exercise of my discretion.
Conclusion
Apart from the declaration sought as to the proper construction of Professor Brine’s will, the action must be dismissed. I will hear the parties as to appropriate orders.

[1966] 2 NSWR 211