Campbell v T. L. Clacher No. 2 Pty Ltd - [2019] QSC 218

SUPREME COURT OF QUEENSLAND

CITATION:

Campbell & Anor v T. L. Clacher No. 2 Pty Ltd & Ors [2019] QSC 218

PARTIES:

SUZANNE CAMPBELL AND WENDY HOOK

(Applicants)

v
T. L. CLACHER NO. 2 PTY LTD ACN 010 253 979 (AS TRUSTEE FOR THE CLACHER FAMILY TRUST)

(First Respondent)

AND

FLOWON 241 PTY LTD ACN 603 200 102 (AS TRUSTEE FOR THE BLUMKE FAMILY TRUST)
(Second Respondent)

AND

THOMAS LAIDLAW CLACHER
(third respondent)

FILE NO/S:

BS No 11662 of 2016

DIVISION:

Trial Division

PROCEEDING:

Claim

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

4 September 2019

DELIVERED AT:

Brisbane

HEARING DATE:

6 and 7 March 2018, 3, 4, 5 and 6 December 2018.

JUDGE:

Jackson J

ORDER:

The judgment of the court is that:

1.   It is declared that the resolutions made by the first respondent as trustee of the Clacher Family Trust on 14 June 2014, 9 October 2014 and 12 December 2014 were made invalidly and in breach of trust;

2.   It is declared that the transfers of the properties, shares and cash identified in the Annexure to these reasons by the first respondent as trustee of the Clacher Family Trust to the second respondent as trustee of the Blumke Family Trust were made invalidly and in breach of trust;

3.   It is ordered that the first respondent be removed as trustee of the Clacher Family Trust;

4.   It is ordered that failing appointment by the Court of an individual as trustee of the Clacher Family Trust within 21 days of this order, the Public Trustee of Queensland be appointed as trustee of the Clacher Family Trust;

5.   It is ordered that the third respondent is restrained from exercising the powers of removal or appointment of a trustee under clause 22 of the Clacher Family Trust;

6.   It is ordered that the second respondent execute such documents and do all such things as the trustee of the Clacher Family Trust reasonably requires to enable the properties, shares and cash identified in the Annexure to these reasons that it holds as trustee of the Blumke Family Trust to be transferred to the trustee of the Clacher Family Trust within 7 days of being so requested;

7.   It is ordered that within 28 days of the appointment of the new trustee of the Clacher Family Trust the second respondent deliver up to such new trustee complete copies of the books and records of the second respondent in its capacity as trustee of the Blumke Family Trust and of the Blumke Family Trust since 16 December 2014;

8.   The proceeding is otherwise adjourned to a date to be fixed in relation to the grant of further or other relief and the determination of any questions of costs;

9.   Liberty to apply;

10. It is directed that the applicants file and serve an outline of submissions as to costs, together with any supporting affidavits, on or before 9 September 2019;

11. It is directed that the respondents file and serve an outline of submissions as to costs, together with any supporting affidavits, on or before 16 September 2019;

12. The applicants file and serve any outline of submissions in reply, on or before 18 September 2019;

13. The applicants are to deliver a bundle of all submissions to his Honour Justice Jackson’s Associate by email by 5pm on 18 September 2019.

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES – LIABILITY FOR BREACH OF TRUST – WHAT CONSTITUTES A BREACH OF TRUST – where the third respondent was the sole director and shareholder of the first respondent – where the first respondent was the trustee of a family discretionary trust - where the third respondent as sole director of the first respondent made a number of resolutions as trustee – where the third respondent was subject to unconscionable conduct – where the resolutions made by the first respondent were not attended by a genuine and proper consideration of the discretionary power – whether the relevant resolutions and transactions were made in breach of trust

EQUITY – TRUST AND TRUSTEES – PROCEEDINGS BETWEEN TRUSTEES AND BENEFICIARIES OR THIRD PARTIES – WHAT REMEDY AVAILABLE – where the third respondent was the sole director and shareholder of the first respondent – where the first respondent was the trustee of a family discretionary trust - where the third respondent as sole director of the first respondent made a number of resolutions as trustee – where the third respondent was subject to unconscionable conduct – where the resolutions made by the first respondent were not attended by a genuine and proper consideration of the discretionary power – whether the relevant resolutions and transactions were invalid and liable to be set aside

EQUITY – TRUSTS AND TRUSTEES – APPOINTMENT, REMOVAL AND ESTATE OF TRUSTEES – RETIREMENT AND REMOVAL – REMOVAL BY THE COURT – GROUNDS FOR REMOVAL – whether the first respondent should be removed as trustee of the Clacher Family Trust

AN v Barclays Private Bank and Trust (Cayman) Ltd (2007) 9 ITELR 630, cited

Attorney-General for the Commonwealth v Breckler (1999) 197 CLR 83, cited

Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd [2015] VSCA 9, cited

Australian Securities and Investments Commission v Kobelt [2019] HCA 18, cited

Barclays Bank plc v Kennedy (1989) 58 P&CR 221, cited

Barnes v Addy (1874) 9 Ch App 244, cited

Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30, cited

Bridgewaterv Leahy (1998) 194 CLR 457, cited

Chennells v Bruce (1939) 55 TLR 422, cited

Cock v Smith (1909) 9 CLR 773, cited

Cornerstone Property & Development Pty Ltd v Suellen Properties Pty Ltd [2015] 1 Qd R 75, cited

Curwen v Vanbreck (2009) 26 VR 335, cited

Edge v Pensions Ombudsman [2000] Ch 602, cited

Elder’s Trustee and Executor Co Ltd v Higgins (1963) 113 CLR 426, cited

Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, cited

Fox v Percy (2003) 214 CLR 118, cited

Gisborne v Gisborne (1877) 2 App Cas 300, cited

Giumelli v Giumelli (1999) 196 CLR 101, cited

Johnson v Buttress (1936) 56 CLR 113, cited

Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392, cited

Karger v Paul [1984] VR 161, cited

Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705, cited

Luddy’s Trustee v Peard (1886) 33 Ch D 500, cited

Lutheran Church of Australia South Australia District Incorporated v Farmers’ Co-operative Executors and Trustees Ltd (1970) 121 CLR 628, cited

McPhail v Doulton [1971] AC 424, cited

Meehan v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146, cited

Mercanti v Mercanti [2016] WASCA 206, cited

Miller vCameron (1936) 54 CLR 572, cited

Ministry of Health v Simpson [1951] AC 251, cited

Pilkington v Inland Revenue Commissioner [1964] AC 612, cited

Platzer v Commonwealth Bank of Australia [1997] 1 Qd R 266, cited

re Diplock; Wintle v Diplock [1948] Ch 465, cited

Re Londonderry’s Settlement [1965] Ch 918, 936, cited

Smith v Glegg [2005] 1 Qd R 561, cited

Thorne v Kennedy (2017) 91 ALJR 1260, cited

Vatcher v Paull [1915] AC 415, cited

Land Title Act 1994 (Qld)

Powers of Attorney Act 1998 (Qld)

Rules of the Supreme Court 1900 (Qld)

Trusts Act 1973 (Qld)

Uniform Civil Procedure Rules 1999 (Qld)

COUNSEL:

R Treston QC and B Reading for the Applicants

D Kelly QC and W LeMass for the First and third respondents on 6 and 7 March 2018
M Martin QC and D Ferraro for the Second Respondent

SOLICITORS:

Thynne & Macartney for the Applicants

Cooper Grace Ward for the First and third respondents
Mills Oakley for the Second Respondent

Jackson J:

This proceeding was started on 11 November 2016. It arises out of a family drama, that erupted between September 2014 and the end of that year, when an old man decided to cut off two of his daughters and their families from contact with him and from any share in his bounty, leaving it instead exclusively to the benefit of a third daughter and her family. Transactions to give further effect to those decisions were made during 2015 and 2016. All the legal transactions happened without the knowledge of the cut off daughters. The cut off daughters claim relief that the transactions by which they were disowned should be set aside, as invalid, by reason of the combination of circumstances that the old man’s cognitive abilities were impaired and the favoured daughter and her husband exercised undue influence over him or engaged in unconscientious conduct in relation to the transactions.
The proceeding has had an unusual course. The applicants are the two cut off daughters. The third respondent is the old man who is their father. The first respondent is a company of which he is the sole director and shareholder and the trustee of the Clacher Family Trust. The second respondent is a company of which the third daughter and her husband are the directors and shareholders and is the trustee of the Blumke Family Trust. The challenged transfers were made by the first respondent as trustee to the second respondent as trustee. The trial began on 6 and 7 March 2018, to hear the third respondent’s evidence before his cognitive powers declined further. It was due to resume in April 2018 but the parties advised that the proceeding was to be settled and requested it to be adjourned. Ultimately, it was agreed between the applicants and the first and third respondents that the first and third respondents would take no further part in the proceeding (except in relation to any question of costs) and the trial proceeded as between the applicants and the second respondent as the only active parties.
Another unusual aspect of this case is the extent of the direct contradictory statements of evidence as to the relevant events as between the applicants and their witnesses and the second respondent’s witnesses, in Janine and Glenn Blumke and the third respondent. Before going further I make three relevant observations that touch upon those contradictions.
First, part of the second respondent’s case was that contrary to the evidence of the applicant’s witnesses, up until September 2014 the applicants and their families did not generally enjoy close and loving relationships with the third respondent. However, so far as the first and third respondents are concerned that fact was admitted as to the past, although they did not admit it persisted until September 2014. In the view I take, the evidence of the second respondent’s witnesses to the contrary should not be accepted on that question. It is not necessary to canvass the detail.
Second, a more substantial part of the second respondent’s case concerned numerous statements that Janine and Glenn Blumke swear were made to them by the third respondent that are inconsistent with the applicants and their witnesses evidence of what occurred in relevant conversations and meetings with the third respondent. Although the third respondent gave evidence, those statements were not sworn to by him and they were not admissible as evidence of the truth of the facts represented by him to Janine or Glenn Blumke. However, they were admitted as evidence of the third respondent’s state of mind at relevant times as potentially going to his reasons for acting in one way or another. In the course of these reasons. I have cause to expressly reject that a number of those statements were made by the third respondent to Janine or Glenn Blumke. And, beyond that, as will appear, I have rejected the evidence of Janine and Glenn Blumke in many respects. Naturally enough, in the circumstances where I find that I have such grave reservations about their evidence in important respects, it is difficult to pick through all the statements that they say were made by the third respondent, to decide whether any and which of them were made. Instead, my approach has been to focus on those that might have affected the conclusions I have reached.
Third, in reaching my conclusions to accept the evidence of the applicants and their witnesses in critical respects, and to reject the contrary evidence or hearsay assertions of Janine and Glenn Blumke or those of the third respondent, I have necessarily made assessments of credibility that affect those conclusions and those assessments have been informed in varying degrees by the demeanour of the witnesses. In approaching those questions, however, I have adhered to Lord Atkin’s famous aphorism made in 1924 that “… an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of comparison of evidence with known facts, is worth pounds of demeanour”, repeated by the High Court with further reference to the scientific research that casts doubt on the ability of judges or anyone else to tell truth from falsehood accurately on the basis of such appearances.[1] Accordingly, I have approached the questions of credibility with emphasis on the documentary evidence, as well as regard to the lengthy sworn written evidence and the transcript of the oral evidence, by poring over the events anxiously over and again. Still, I cannot escape that the poor impression made upon me by Janine and Glenn Blumke, in particular, and the third respondent, to a lesser extent, has affected my views. Nevertheless, I have sought not to make more findings adverse to them than is necessary to fairly expose the reasons for my conclusions and findings.
[1]Fox v Percy (2003) 214 CLR 118, 128-129 [30]-[31].
It is appropriate to begin by setting out some uncontentious facts.
Uncontentious facts
The third respondent was born in 1926. He married Pauline Male in 1950 and they remained married until her death in September 2012. The first named applicant (“Wendy”), the second named applicant (“Suzanne”) and Janine Blumke (“Janine”) are daughters of third respondent and Pauline. Each of the daughters is married and has children, who are the grandchildren of third respondent and Pauline. Wendy is married to Charles (“Mac”) Hook. Suzanne is married to Jon Campbell. Janine is married to Glenn Blumke.
Wendy was born on 17 June 1957. Suzanne was born on 10 July 1961. Janine was born on 27 April 1966.
Throughout her teenage years, Wendy resided with her parents and sisters at 17 Melville Court, Wynnum (“the Family home”). It was built by the third respondent and Pauline. The third respondent said to Wendy on numerous occasions that he loved every aspect of that home and that he wanted to live there until his passing.
The third respondent worked as an optometrist carrying on his own practice. Pauline worked as the receptionist in the practice from its establishment until around 1956. After Wendy’s birth, Pauline remained at home, although she did some book keeping for the practice.
Wendy worked as a receptionist in the practice from 1973 to 1983, and from 1991 to 1994. Mac Hook was employed as an optometrist in the practice from 1975 to 1994. In 1994, Wendy and Mac Hook purchased the optometry practice from the third respondent. After that, the third respondent worked for Wendy and Mac Hook, on a part time basis, until about 1996. Wendy spoke with the third respondent every day at work at the practice. He was 69 years old when he retired. He was a private person. He would generally spend his time gardening and assisting Pauline around the Family home. He did not become involved in hobbies after his retirement.
In September 1979, Wendy married Mac Hook. When they purchased a house the third respondent assisted them including, for example, with the painting. The third respondent and Pauline were frequent visitors to Wendy and Mac’s house and vice versa.
In about 1996, Wendy and Mac Hook moved into a new home at 3 Glenshiel Street, Wynnum West, located close to the Family home. Wendy and Mac Hook were able to visit the third respondent and Pauline on a more regular basis.
Wendy, Mac Hook and their children joined the third respondent and Pauline for holidays at Maroochydore. In addition, they played social tennis with the third respondent and Pauline every Friday night. After tennis, they would gather at the Family home for dinner.
Pauline organised Clacher family gatherings, which were held regularly at Easter and Christmas holidays. The gathering was usually at Wendy’s home or the Family home. As Pauline aged, Wendy, Suzanne and Janine would host Christmas celebrations on a rotational basis. Wendy attended every Easter and Christmas celebration hosted by Pauline, Suzanne or Janine after she moved out of home on being married. The Clacher family would also regularly celebrate family birthdays, Mothers’ Day and Fathers’ Day at either the Family home or Wendy and Mac’s home. Wendy cannot recall specifically missing any birthday, Mothers’ Day or Fathers’ Day celebrations, until after the events of September 2014.
Pauline and the third respondent featured prominently in the lives of Suzanne and Jon Campbell from when they were married in 1987, supporting them through various ups and downs including health concerns, career-related issues, pregnancies, child rearing, travel and relocation. Pauline and the third respondent would visit Suzanne and Jon Campbell regularly. Suzanne and Jon Campbell would also visit Pauline and the third respondent, often having dinner, lunch or coffee together.
Pauline and the third respondent maintained a strong interest in Suzanne’s singing career, always attending concerts and listening to recordings. The third respondent also lent Suzanne money to assist with the recording of her first album as a singer.
Following the birth of Suzanne and Jon Campbell’s children, Stephanie and Madeleine, Pauline and the third respondent assisted with babysitting. They also attended birthdays, special occasions, sporting events, musical recitals, grandparents’ days and school events and enjoyed listening to Stephanie play the piano and Madeleine play the violin and piano. The children enjoyed listening to the third respondent’s stories.
The third respondent continued to be interested in the lives of Stephanie and Madeleine as they grew older. Suzanne regularly provided the third respondent with updates on her daughters’ activities, including their studies, jobs and friends. In early 2014, Stephanie was involved in a near fatal skydiving accident. The third respondent was by Stephanie’s side on many occasions while she recovered at home over a two month period.
As an adult, Wendy spent considerable time with the third respondent. They had a close relationship. She would often confide in him and sought his advice regularly regarding various matters including finance, property and investments. She cannot recall specifically ever having had a large argument with the third respondent. They enjoyed a happy and relaxed relationship.
Wendy and Suzanne also enjoyed a close relationship. She spent more time with Suzanne than she did with Janine. Wendy and Mac would regularly travel to visit Suzanne and Jon Campbell at their home. However, Janine and Glenn Blumke and their children were always included in the celebrations hosted by the Clacher family over the years. Although Wendy’s relationship with Janine was not as close as with Suzanne, she still saw her regularly.
After Janine moved out of the Family home in 1992, she lived in a house directly behind the Family home which she bought from the third respondent and Pauline. Wendy would therefore regularly see Janine when she visited her parents.
To the best of Wendy’s recollection, before the events of this case, Wendy, Suzanne and Janine did not have significant arguments as adults.
In about mid-2005, the third respondent spoke to Wendy about an enduring power of attorney so that if he were unable to make decisions on his own, Wendy, Suzanne and Janine could make decisions for him, by majority. At that time, Pauline was having increasing difficulties with her memory. The third respondent said that he wanted the power of attorney implemented sooner rather than later, so that if anything happened to Pauline and he was not able to assist, Wendy, Suzanne and Janine were able to make decisions.

From late 2007 or early 2008, Wendy was informed by the third respondent that Pauline had been diagnosed with dementia. Thereafter, the third respondent’s focus was caring for Pauline.
Wendy and Mac Hook still visited the third respondent and Pauline regularly during this period. Wendy would speak to the third respondent on the phone at least three or four times per week. In addition, the third respondent and Pauline took a keen interest in Wendy’s daughter’s work and social activities.
During this period, while the third respondent was Pauline’s primary care giver, Wendy informed him on numerous occasions that she was only one phone call away. She set up his phone so that he could reach her on speed dial. He would often call her to seek advice regarding what he could do to help in certain situations. On occasions, it was necessary for her to visit or call an ambulance to assist Pauline. On the occasions that Pauline was taken to hospital by ambulance, she stayed with them at the hospital while Pauline recovered.
Between 2008 and 2011, Wendy assisted the third respondent with Pauline’s care significantly. In addition to the above, she attended Pauline’s various appointments with the third respondent. She would drive the third respondent to the appointments and help Pauline and the third respondent understand the advice being given to them.
After Pauline’s diagnosis, Wendy does not recall any significant arguments between herself, Suzanne and Janine.
By late 2011, Pauline’s dementia became more severe. Wendy observed that it was difficult for the third respondent to manage caring for her on his own, even with the ad hoc assistance of Wendy, Suzanne and Janine. When she visited the Family home, Pauline was largely confined to her bed. She was also informed by the third respondent that Pauline required around the clock care. However, the third respondent rejected any suggestion that Pauline should be placed in a nursing home. Wendy, Suzanne and Janine discussed the matter and agreed that Pauline should be placed in a nursing home. However, they were reluctant to suggest it to the third respondent.
Around this time, Wendy visited her parents more regularly, particularly if either was unwell. She took time off work to assist the third respondent with Pauline’s appointments such as when Pauline’s mobile hairdresser would visit the Family home. Wendy discussed with her sisters Pauline’s deteriorating health and the inevitable outcome that the third respondent would no longer be able to care for her. Wendy and Suzanne attended meetings with representatives of several nursing homes to discuss availability and the services they could offer. Wendy and Suzanne told the third respondent that they were attending those meetings, however he did not attend with them.
Wendy was very worried about the impact caring for Pauline was having on the third respondent. Pauline was fainting randomly. The third respondent telephoned Wendy and asked her to come over to assist which she did.
On 27 April 2012, Pauline was extremely ill. Wendy, Suzanne and Janine were called to the Family home and it was immediately decided that an ambulance should be called. That day, Pauline was admitted to Greenslopes hospital and was subsequently diagnosed with lung cancer. She stayed in hospital for around three weeks. It became apparent that she could not return to the Family home. Shortly after that, a family meeting between the third respondent, Wendy and Mac, Suzanne and Jon Campbell, and Janine and Glenn Blumke was held. It was agreed that Pauline should be transferred from hospital to a nursing home.
After Pauline moved into the nursing home, Wendy drove the third respondent to visit Pauline at least twice per week. She continued regularly to visit the third respondent at the Family home.
In late July 2012, Wendy attended a medical appointment with the third respondent. At the appointment, the doctor asked the third respondent a series of questions and informed Wendy that the third respondent was suffering from depression and required anti-depressant medication.
On 11 September 2012, Pauline died. Immediately after the funeral, the third respondent lived at Wendy and Mac’s home. That continued for approximately a week, after which the third respondent said that he wanted to return to the Family home.
For the next few months, the third respondent was visibly distraught. During this period, Wendy assisted as best she could. She spoke regularly on the phone with the third respondent and visited him often. She also prepared and delivered meals to him from time to time. As well, at some point he arranged to receive Meals on Wheels.
The applicants allege that after Pauline’s death, the third respondent suffered periods of depression, lost confidence in dealing with daily affairs, became reliant to a substantial degree on others for the management of his daily affairs including making and attending doctors’ appointments, paying bills, buying presents for family members and licence renewals, became forgetful as to daily matters and had difficulty properly managing his health including his hypertension.
It is common ground that he regularly stated he did not ever wish to leave the Family home which he had shared with Pauline because it made him feel close to her. Otherwise the second respondent denies all of those matters except whether the third respondent became forgetful as to daily matters, which they do not admit.
Clacher Family Trust and the third respondent
The third respondent and Pauline managed their investments together. Wendy was aware that they had purchased investment properties including a number of residential units in 188 Shafston Avenue, Kangaroo Point and another investment property located at 8 Johnston Street at West Ipswich.
The first respondent is a company of which the third respondent and Pauline were directors and shareholders until Pauline’s death. After that, the third respondent was the sole director, shareholder and secretary.
By deed dated 29 June 1981, the Clacher Family Trust was settled with the first respondent as trustee. The Clacher Family Trust was settled for the purpose of assisting and making provision for members of the third respondent and Pauline’s family and the other beneficiaries referred to in the deed.
The Clacher Family Trust was amended by variations made from time to time, including those made by the first respondent on 3 September 2012 and 4 December 2014. Other instruments that may have varied the trust in 2014 are in dispute.
The Clacher Family Trust defined the beneficiaries to mean any child, grandchild or remoter issue or step child or foster child of the third respondent, any spouse of any child or grandchild or remoter issue or step child or foster child of the third respondent, and any person or corporation (not being the settlor) nominated in writing by the trustee or third respondent to be a beneficiary for the purposes of the trust deed. By cl 2, it was provided that until the vesting day the trustee shall stand possessed of the income of the trust fund derived by it upon trust absolutely to pay or apply such income to or for the benefit of the beneficiaries then living or any one or more of them exclusive of the other or others of them and in such shares and proportions as the trustee shall in its absolute discretion determine and on other trusts.
Accordingly, each of Wendy and Mac Hook and their children and Suzanne and Jon Campbell and their children was a beneficiary of the Clacher Family Trust. The second respondent contends that they were removed as beneficiaries by a series of resolutions made by the third respondent as sole director of the first respondent, in effect made reiteratively on 27 June 2014, 9 October 2014 and 12 December 2014.
From about 1995, Wendy was aware of the existence of the Clacher Family Trust, but received only one distribution around that year when she and Mac Hook purchased the practice and business in about 1994.
As at 30 June 2014, the assets of the Clacher Family Trust, according to the balance sheet in the financial statements for that year, comprised cash in the amount of approximately $316,981, and financial assets being shares in listed companies and other securities and investments valued at approximately $2,151,701, and a number of real properties (at cost), including related plant and equipment identified in Annexure A to the Statement of Claim valued at $1,138,790. The liabilities included a loan from the third respondent of $245,165, an unpaid present entitlement of the third respondent as beneficiary of $2,911,275 and unpaid present entitlements of the first respondent as beneficiary of $824,569.
The applicants allege that the material assets and liabilities were materially unchanged as at 4 December 2014. That is not admitted by the second respondent but no evidence to the contrary was led.
As at 4 December 2014, substantial assets were held by the third respondent (in addition to the amounts owed to him by the first respondent as trustee of the Clacher Family Trust). They included:
(a)land located at 71 Melville Terrace, Wynnum, comprising of a single dwelling which was the Family home, valued at approximately $980,000 although the value is not admitted by the second respondent;
(b)land located at 19 Dixon Street, Morningside comprising 6 residential units valued at approximately $1,600,000, although the value is not admitted by the second respondent (“the Dixon Street Units”);
(c)superannuation benefits of approximately $724,000, although the second respondent does not admit the value; and
(d)land located at Burnett Heads owned as tenants in common with Suzanne, valued at approximately $300,000.
From about 2007 Janine, either alone or with Glenn Blumke’s assistance, took an active role in the financial affairs of the third respondent and Pauline and the Clacher Family Trust, although Janine said in evidence that was focussed upon their real property interests.
Until about September 2012, and for some time afterwards, the third respondent was in reasonable physical and mental health and managed his day to day finances by himself.
In about April 2014, Janine informed Suzanne that the third respondent had a tax problem as a result of large investment returns. The second respondent says that was information provided by Chris Burrell to Janine. Chris Burrell had been the third respondent’s stock broker for many, perhaps 30, years.
It was during the following events that the third respondent’s relationship with Wendy and Suzanne and their families fractured and he made a number of resolutions and dispositions as sole director of the first respondent that objectively were intended to disown them and their families and, as well, later made similar dispositions in his personal capacity. Surprisingly, as will appear, I do not consider that the third respondent clearly appreciated that he was disowning his grandchildren by Wendy and Suzanne.
As these reasons will show, in fact the third respondent had no reason to do those things. His actions were brought on by what appears to have been a combination of paranoia and anger based on false allegations that Wendy or Suzanne or Jon Campbell or some combination of them was attempting to take advantage of or pressure him in some unfair way. In this, I have concluded that Janine and Glenn Blumke were both prepared to encourage the third respondent and to take advantage of his irrational fears. It will be necessary, accordingly, to set out the facts in some detail.
Before doing so, it is useful to summarise some relevant legal principles.
Principles relating to trust powers to exclude beneficiaries and to distribute assets
It is appropriate to characterise the powers exercised by the first respondent at the instance of the third respondent as sole director to remove beneficiaries, and to transfer the assets of the Clacher Family Trust to others, before proceeding to the basis or bases on which the court may interfere with or declare invalid the exercise of such powers.
The general rule is that every power that is given to a trustee in virtue of their office is a fiduciary power.[2] To the extent that there are legal differences that flow from characterising the class or category of the relevant power, a trustee’s power to remove a beneficiary is classified as a dispositive power,[3] as is a power to distribute trust property to a beneficiary. Each of those powers may be discretionary, meaning that the trustee is under no duty to exercise it. Where the relevant power is conferred upon and held by a company, it is exercisable by the directors, or in the case of a sole director, by that director.[4] The state of mind of the person exercising the power on behalf of the corporation will be the state of mind of the corporate trustee.[5]
[2]McPhail v Doulton [1971] AC 424, 449 and 456-457; Jacob’s Law of Trusts, 8 ed, [1607].
[3]Tucker et al, Lewin on Trusts, 19 ed, [29-012].
[4]Elder’s Trustee and Executor Co Ltd v Higgins (1963) 113 CLR 426, 452-453; Mercanti v Mercanti [2016] WASCA 206, [171].
[5]Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd [2015] VSCA 9, [261]-[266]; Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705, 713.
There are a number of possible bases on which the court may interfere with the exercise of such powers by finding that the exercise of the power is invalid, but it is appropriate to confine attention to those that may be relevant to the facts of this case.
In exercising such a power the trustee is under a duty to act responsibly and in good faith,[6] including that the trustee may not exercise it “irresponsibly, capriciously or wantonly”.[7] In this context, capriciousness may be equated to irrationality,[8] but irrationality is to be distinguished from unreasonableness or unfairness, which are not enough.[9] Although there may not be a bright line distinguishing those concepts as a matter of fact, the distinctions in law are well established.[10]
[6]Tucker et al, Lewin on Trusts, 19 ed, [29-152]; Gisborne v Gisborne (1877) 2 App Cas 300, 305.
[7]Lutheran Church of Australia South Australia District Incorporated v Farmers’ Cooperative Executors and Trustees Ltd (1970) 121 CLR 628, 639; Pilkington v Inland Revenue Commissioners [1964] AC 612, 641.
[8]Tucker et al, Lewin on Trusts, 19 ed, [29-153];
[9]Attorney-General for the Commonwealth v Breckler (1999) 197 CLR 83, 99-100 [7].
[10]Re Londonderry’s Settlement [1965] Ch 918, 936; Cock v Smith (1909) 9 CLR 773, 844.
An overlapping or discrete basis for invalidity is that the trustee took into account an irrelevant matter or committed a fraud on the power. It is suggested that these are related concepts.[11] Some cases would prohibit taking irrelevant matters into account;[12] other cases would prohibit an equitable fraud on the power, meaning that the power has been exercised for a purpose or with an intention beyond the scope of the power.[13]
[11]Tucker et al, Lewin on Trusts, 19 ed, [29-160]; See Mercanti v Mercanti [2016] WASCA 206, [244].
[12]Edge v Pensions Ombudsman [2000] Ch 602, 627-628.
[13]Vatcher v Paull [1915] AC 372, 378.
The exercise of a power of exclusion of a beneficiary is subject to the same constraints as other fiduciary powers,[14] meaning it must not be exercised capriciously[15] and, in particular, not to deny the beneficiary access to information.[16] The same principles apply to a power to distribute trust property.
[14]Tucker et al, Lewin on Trusts, 19 ed, [30-063].
[15]AN v Barclays Private Bank and Trust (Cayman) Ltd (2007) 9 ITELR 630, [47].
[16]Curwen v Vanbreck (2009) 26 VR 335, 351 [36].
These principles are conveniently summarised in two useful statements. First, in Attorney-General v Breckler[17] the plurality of the High Court approved the following:
“Where a trustee exercises a discretion, it may be impugned on a number of different bases such as that it was exercised in bad faith, arbitrarily, capriciously, wantonly, irresponsibly, mischievously or irrelevantly to any sensible expectation of the settlor, or without giving a real or genuine consideration to the exercise of the discretion. The exercise of a discretion by trustees cannot of course be impugned upon the basis that their decision was unfair or unreasonable or unwise. Where a discretion is expressed to be absolute it may be that bad faith needs to be shown. The soundness of the exercise of a discretion can be examined where reasons have been given, but the test is not fairness or reasonableness.”[18]
[17](1999) 197 CLR 83.
[18](1999) 197 CLR 83, 99-100 [7].
Second, in Karger v Paul[19] McGarvie J said:
“… it is open to the Court to examine the evidence to decide whether there has been a failure by the trustees to exercise the discretion in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred. As part of the process of, and solely for the purpose of, ascertaining whether there has been any such failure, it is relevant to look at evidence of the inquiries which were made by the trustees, the information they had and the reasons for, and manner of, their exercising their discretion. However, it is not open to the Court to look at those things for the independent purpose of impugning the exercise of discretion on the grounds that their inquiries, information or reasons or the manner of exercise of the discretion, fell short of what was appropriate and sufficient. Nor is it open to the Court to look at the factual situation established by the evidence, for the independent purpose of impugning the exercise of the discretion on the grounds that the trustees were wrong in their appreciation of the facts or made an unwise or unjustified exercise of discretion in the circumstances.”
[19][1984] VR 161, 164.
Relevance of undue influence and unconscionable dealing
The applicants’ case is pleaded, inter alia, on the basis that the powers to distribute the property of the Clacher Family Trust by the transfers made to the second respondent were invalidly exercised by the first respondent because of the undue influence or unconscionable conduct that Janine and Glenn Blumke exercised upon the third respondent.
In putting the matter that way, the applicants set up the alleged undue influence or unconscionable conduct as the basis for invalidity, presumably on the ground that it satisfies the requirements for invalidity in the exercise of a trust power previously identified. No particular case to that effect was relied upon, although undue influence was considered as a possible basis for invalidity in relation to the exercise of a trust power in 2016 in Mercanti v Mercanti.[20]
[20] [2016] WASCA 206, [276]-[290].
The principles as to undue influence are of relatively long standing and have been recently revisited by the High Court.[21] As to unconscionable conduct, the applicants rely upon the principles identified in recent High Court cases.[22]
[21] Johnson v Buttress (1936) 56 CLR 113, 134; Thorne v Kennedy (2017) 91 ALJR 1260, [31]-[36].
[22]Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; Thorne v Kennedy (2017) 91 ALJR 1260; and Australian Securities and Investments Commission v Kobelt [2019] HCA 18.
The applicants also rely upon the presumption of undue influence in relation to a transaction under s 87 of the Powers of Attorney Act 1998 (Qld). However, that section applies to “a transaction between a principal and any one or more of an attorney under an enduring power of attorney or advance health directive” or “a relation, business associate or close friend of the attorney.” The “principal” is the person who authorises one or more other persons to do anything that the principal can lawfully do by an attorney. The first respondent was not the principal under the power of attorney given by the first respondent to Janine. Section 87 does not apply to the transfers made by the first respondent.

Where a voluntary transfer is made by a child to a parent, the relationship of parent and child is a per se presumptive relationship of undue influence.[23] But where a voluntary transfer is made by a parent to a child, the relationship of parent and child is not a per se presumptive relationship of undue influence, for obvious reasons. However, a particular relationship from which the presumption of undue influence arises can be established by proof of the dependence and trust that are sometimes the hallmark of an elderly parent becoming wholly reliant on a child for domestic assistance, company, transport and management of financial and personal affairs, particularly in the absence of contact with other family members and friends.[24]
[23] Johnson v Buttress (1936) 56 CLR 113, 134.
[24] Smith v Glegg [2005] 1 Qd R 561, 564 [7] and 570 [40].
In the present case, there is a further question as to the application of the principles of undue influence or unconscionable conduct to the relevant parties. The transferor of the challenged transactions was the corporate first respondent, not the third respondent, and the transferee was the second respondent, not Janine or Glenn Blumke. As to the first respondent acting by the third respondent, the person influenced or affected need not be the owner of the property. It is sufficient if he or she controls it on behalf of the owner.[25] As to the second respondent, it does not appear to matter that the property is transferred to a third party volunteer[26] as a result of the undue influence or unconscionable dealing of a defendant and that is also true if the person exerting the undue influence or unconscionable dealing is the agent of the transferee.[27]
[25]Chennells v Bruce (1939) 55 TLR 422; Luddy’s Trustee v Peard (1886) 33 Ch D 500, 522.
[26] Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30.
[27]Platzer v Commonwealth Bank of Australia [1997] 1 Qd R 266, 290; Barclays Bank plc v Kennedy (1989) 58 P&CR 221.
These summarised principles as to the invalidity of the exercise of the relevant powers are sufficient to proceed to the disputed facts and related issues.
Impugned exercises of power and transactions
The statement of claim alleges the invalidity of the transactions by the first respondent whereby:
(a)Units 401, 410, 819, 918, 1015, 1016 and 1020 of the Shaftson Units held as investments by the first respondent as trustee of the Clacher Family Trust were transferred to the second respondent as trustee of the Blumke Family Trust by way of distribution to a beneficiary;
(b)8 and 8A Johnston St West Ipswich held as an investment by the first respondent as trustee of the Clacher Family Trust were transferred to the second respondent as trustee of the Blumke Family Trust by way of a distribution of trust to a beneficiary;
(c)The shares in listed companies and trusts held as investments by the first respondent as trustee for the Clacher Family Trust were transferred to the second respondent as trustee for the Blumke Family Trust by way of distribution to a beneficiary;
(d)The whole of the cash held by the first respondent as trustee for the Clacher Family Trust was transferred to the second respondent as trustee for the Blumke Family Trust by way of distribution of trust to a beneficiary.
The transactions by the first respondent are challenged upon the basis that:
(a)each of the first respondents’ decisions to transfer the relevant property, shares or cash was not made with a real and genuine consideration by the first respondent; or
(b)independently by the first respondent,
by reason of the undue influence or unconscionable conduct of Janine and Glenn Blumke over the third respondent.
The statement of claim also alleges grounds of invalidity of the transactions by the third respondent whereby:
(a)the Family home held by third respondent was transferred to himself and to Janine as joint tenants by way of gift to Janine; and
(b)the Dixon St Units held by the third respondent were transferred to himself and Janine as joint tenants by way of gift to Janine.
However, no relief is sought in respect of those transactions. Janine is not a party to the proceeding.
The statement of claim alleges that Wendy and Suzanne are beneficiaries of the Clacher Family Trust. The defence of the second respondent denies that allegation on the ground that they were removed as beneficiaries by resolutions of the first respondent made on 27 June 2014, 9 October 2014 and 12 December 2014.
The reply denies that any of the resolutions was valid to exclude either Wendy or Suzanne or their families as beneficiaries of the Clacher Family Trust, on the ground that the resolutions were made by the first respondent by mistake as to their purpose or effect and as a result of Janine or Glenn Blumke’s undue influence or unconscionable conduct and not upon a real and genuine consideration by the first respondent as trustee.
Additionally, the applicants allege that the 12 December 2014 resolutions were made without the benefit of legal advice, and inconsistently with a will made by the third respondent on 4 December 2014, a special resolution to distribute the trust fund of the Clacher Family Trust, a deed of removal of trustee and appointment of a new trustee of the Clacher Family Trust, an option to purchase and a deed of variation of the Clacher Family Trust all made by the first respondent on 4 December 2014 in circumstances where there was no material change in circumstances between 4 December 2014 and 12 December 2014.
The applicants’ case is that before about September 2014 family relationships between the applicants and their families and the third respondent and Janine and Glenn Blumke and their family were close or relatively so, but that from early September 2014 they rapidly spiralled downwards and out of control until December 2014, as the third respondent accused them of wrongdoing, withdrew from their society, and eventually cut them off in all respects, both personally and (as they learned much later) financially.
The second respondent’s case is that the applicants were the authors of their own misfortune, because of their mis-behaviours in a number of respects. Because different allegations are made by the second respondent as to the relevant relationships between the third respondent and Wendy, on the one hand, and Suzanne (and her husband Jon Campbell) on the other hand, it is necessary and appropriate to separately consider them.
27 June 2014, 9 October 2014 and 12 December 2014 Resolutions
However, it is appropriate to put the subsequent discussion in the context of the three sets of resolutions by which the third respondent, acting as the sole director of the first respondent, sought to remove the applicants, their children and the spouses of any of them as beneficiaries of the Clacher Family Trust.
The first set of resolutions were made on 27 June 2014 (“27 June 2014 resolutions”). The sequence was as follows:
(a)on 26 June 2014, the third respondent signed a written record of instruction to Glenn Blumke stating that he was unhappy that Jon Campbell had been given information about his tax records and properties purchased and rental income statements and to make it clear that Wendy and Mac Hook, inter alia, were to have no more involvement in his personal tax matters or his company or his family trust. The document recorded that he had informed Janine of his instruction as well;
(b)Glenn Blumke says that on 26 June 2014 the third respondent requested him to prepare a trust resolution that Wendy and Mac Hook, inter alia, were to have no involvement in the family trust and he did not want them listed as beneficiaries in the family trust;
(c)on 27 June 2014, the third respondent as sole director of the first respondent executed a Deed of Variation of the Clacher Family Trust that qualified the definition of the beneficiaries listed in cl 1(c) by adding the words “unless specifically excluded from being a beneficiary by a decision of the trustee” after the words “any child, grandchild or remoter issue or foster child of the said Thomas Laidlaw Clacher” and in cl 1(d) adding the words “unless specifically excluded from being a beneficiary by a decision of the trustee” after the words “any spouse of any child or grandchild or remoter issue or stepchild or foster child of the said Thomas Laidlaw Clacher”;
(d)on 27 June 2014, the third respondent as sole director of the first respondent resolved that henceforth Wendy Hook and Suzanne Campbell are no longer beneficiaries of the Clacher Family Trust, and henceforth any spouse, child or grandchild of Wendy Hook or Suzanne Campbell, or any spouse of any child or grandchild of Wendy Hook or Suzanne Campbell are no longer beneficiaries of the Clacher Family Trust;
(e)on 27 June 2014, the third respondent as sole director of the first respondent passed a further resolution or resolutions in the same terms as (d) above, but with the added “Condition of resolutions” that “The invoking of the abovementioned resolutions is subject to confidential legal advice to the trustee, and confirmation of the trustee’s discretion to make the resolutions”.
The second set of resolutions were made on 9 October 2014 (“9 October 2014 resolutions”). The sequence was as follows:
(a)on 9 October 2014, the third respondent as sole director of the first respondent resolved that it was confirmed that Wendy Hook and Suzanne Campbell were not beneficiaries of the Clacher Family Trust, that any child or grandchild of Wendy Hook were not beneficiaries of the Clacher Family Trust, that any child or grandchild of Suzanne Campbell were not beneficiaries of the Clacher Family Trust, that any spouse of Wendy Hook and any spouse of any child of Wendy Hook were not beneficiaries of the Clacher Family Trust and that any spouse of Suzanne Campbell and any spouse of any child of Suzanne Campbell were not beneficiaries of the Clacher Family Trust. It was noted that Wendy Hook and Suzanne Campbell had no unpaid present entitlements or any other monies owing to them under the Clacher Family Trust;
(b)on 9 October 2014, the third respondent as sole director of the first respondent passed further resolutions identical to (a) above but adding a “Condition of resolutions” in identical terms to the “Condition of resolutions” passed on 27 June 2014;
I also note that on 12 October 2014, the third respondent as sole director of the first respondent resolved to vary the Clacher Family Trust so that cl (iii) of the definitions was replaced by the following: “The Principal means the said Thomas Laidlaw Clacher or in the event of incapacity or death of Thomas Laidlaw Clacher, the Principal means Janine Marie Blumke being a legal personal representative and enduring power of attorney of Thomas Laidlaw Clacher”.
The third set of resolutions were made on 12 December 2014 (“12 December 2014 resolutions”). The sequence was as follows:
(a)on 12 December 2014, the third respondent as sole director of the first respondent resolved that the “Special resolution to distribute” and “Irrevocable Resolution” made at 2:38pm on 4 December 2014 was thereby revoked;
(b)on 12 December 2014, the third respondent as sole director of the first respondent resolved and confirmed that Wendy Hook and Suzanne Campbell were not beneficiaries to the Clacher Family Trust, that any child or grandchild of Wendy Hook were no longer beneficiaries of the Clacher Family Trust, that any child or grandchild of Suzanne Campbell were not beneficiaries of the Clacher Family Trust, that any spouse of Wendy Hook and any spouse of any child of Wendy Hook were not beneficiaries to the Clacher Family Trust and that any spouse of Suzanne Campbell and any spouse of any child of Suzanne Campbell were not beneficiaries of the Clacher Family Trust;
(c)on 12 December 2014, the third respondent as sole director of the first respondent resolved in identical terms to (b) above, except with the addition of the “Condition of resolutions” in identical terms to the corresponding resolutions made on 27 June 2014 and 9 October 2014.
In order to understand paragraph (a) of the 12 December 2014 resolutions set out above, it is necessary to identify the resolutions that were revoked and their context as follows:
(a)on 4 December 2014, the third respondent as sole director of the first respondent resolved to vary the Clacher Family Trust by the addition of cls 14(ao), 14(ap), 14(aq) and 14(ar) to the trust deed, that included a power to restrict the powers of the trustee in some respects;
(b)on 4 December 2014, the third respondent as sole director of the first respondent passed a resolution to distribute all of the trust funds of the Trust upon the death of the third respondent, the distribution of such assets to be made within six months of the third respondent’s date of death, as to one third share to each of Wendy, Suzanne and Janine, or in the event that any of them fail to survive the third respondent, then her share to be distributed to such of her children as survive the third respondent and if more than one, then in equal shares (“Special Resolution to Distribute”);
(c)on 4 December 2014, it was further resolved that the Special Resolution to Distribute should become irrevocable on the third respondent’s death, if not earlier revoked and that no revocation will be effective unless notice in writing of it has been given to de Groots Guardian Services Pty Ltd before the date of death of the third respondent (“Irrevocable Resolution”);
(d)on 4 December 2014, the third respondent as sole director of the first respondent executed a “Deed of Removal of Trustee and Appointment of New Trustee” of the Clacher Family Trust, by which the third respondent as appointor appointed the second respondent as the new trustee of the Clacher Family Trust, from the date of death of the third respondent.
There are some remarkable features of each of the 27 June 2014 resolutions, 9 October 2014 resolutions and 12 October 2014 resolutions. Looked at objectively, in circumstances where the applicants and their husbands and children for many years had been in a continuing and close relationship with their father, father-in-law and grandfather, and were beneficiaries under his family trust, they were a means by which an aging man apparently sought to disown them, without any prior communication to any of them of his intention to do so or, in the case of the 27 June 2014 resolutions, any prior or contemporaneous expression of any dissatisfaction to any of them.
Second, during the period from September 2014 to December 2014 the third respondent had two sets of lawyers and an accountant as advisors, but there is no suggestion that he informed any of them of these resolutions at the time. In fact, his dealings with them were not consistent with the content of the resolutions in some respects.
Third, in giving evidence in this proceeding, the third respondent himself showed no real appreciation of the circumstances in which, or reasons for which, he passed these resolutions, or of the extent of their effect.
Fourth, the only witness who claimed any knowledge of these resolutions at the time when they were made or to have been involved in their making was Glenn Blumke. He drafted them (and the two deeds of amendment of the trust deed) even though he is not a lawyer, and did not obtain or seek any legal advice before doing so, or suggest to the third respondent that he obtain legal advice before doing so. Another remarkable suggestion is that neither the third respondent nor Glenn Blumke informed Janine that the resolutions were to be made or had been made.
Fifth, in between the 9 October 2014 resolutions and 12 December 2014 resolutions, the third respondent attended upon the solicitors who acted for him in connection with his estate, including the disposition of the assets in his family trust, and with their assistance (but not that of Janine or Glenn Blumke) on 4 December 2014 made a will that included dispositions and passed resolutions of the first respondent as trustee of the Clacher Family Trust (the Special Resolution to Distribute and the Irrevocable Resolution) inconsistent with any intention to disown the applicants or their husbands or children at that time.
Sixth, the proceedings of 4 December 2014 were completely undone, in effect, by the third respondent, again with the assistance of Glenn Blumke, by the 12 December 2014 resolutions. Notwithstanding the double volte-face involved over a period of 8 days, the third respondent did not seek any legal advice for the 12 December 2014 resolutions and neither Janine nor Glenn Blumke suggested that he should do so. At the trial, the circumstances that explain how all that came about were not clearly elucidated by any evidence that I accept, except to say that the third respondent changed his mind yet again, and I will deal with this question in greater detail later.
It is impossible to avoid the objective circumstances that many of the decisions embodied in these resolutions were made in secret, were not made with the assistance of legal advice, were made with the sole assistance of the husband of the principal remaining beneficiary, who was a beneficiary himself and, as will appear, were not made for reasons that were objectively apparent, despite the second respondent’s attempts to show that they were.
That may not be enough to carry the applicants to success, but it is as well to measure the disputed events canvassed by the evidence without leaving out of account the extraordinary nature of the three sets of resolutions made on 27 June 2014, 9 October 2014 and 12 December 2014 and the context of the uncontested events in this case.
Wendy and the third respondent
Wendy considered that after Pauline’s passing, her relationship with the third respondent grew stronger. She supported and grieved with the third respondent. They both travelled to visit Pauline’s grave on a regular basis. The third respondent regularly visited Wendy to have a cup of tea and a chat. Wendy observed that the third respondent had lost some confidence in terms of making arrangements for matters such as doctor’s appointments or prescriptions. He relied on her to drive her to medical appointments and to accompany him during the consultations.
She attended to other things for him, including purchasing clothes and groceries and presents for family occasions that he could give to his grandchildren. She made it a priority to visit him on her day off every week.
The third respondent continued to attend Clacher family gatherings, including Wendy’s daughter’s wedding in Maroochydore, Christmas, Easter and birthday celebrations, either at Wendy’s house or Suzanne’s house.
On 7 April 2014, Wendy was admitted to hospital as a result of a collapsed lung following a biopsy. She remained in hospital until 14 April 2014.
On 12 June 2014, Wendy was admitted to hospital for surgery to remove a malignant tumour.
On 17 June 2014, Wendy was discharged from hospital. It was her birthday. The third respondent gave her a birthday card which read, “To my wonder woman Wendy, with all my love Dad”.
During the following approximately eight weeks, Wendy was off work and recovered from the surgery. The third respondent spent a lot of time with her during this period, going to her house regularly on a day by day basis. On a few occasions, he took Wendy out for coffee. He offered financial assistance to Wendy and Mac Hook, which she declined.
7 September 2014 was Fathers’ Day for that year. Wendy and Mac Hook, their daughter Sally and her husband David, Suzanne and Jon Campbell, their daughters Stephanie and Madeleine, and Janine and Glenn Blumke and their son James visited the third respondent at the Family home. The evening before, Suzanne had informed Wendy in a telephone conversation that the third respondent was upset about a report that Jon Campbell was preparing and during a conversation had said to Suzanne that Wendy had said to him that she could sell the Family home pursuant to her powers under the 2005 power of attorney, without his knowledge or consent.

This was the first occasion that Wendy heard about any question relating to the 2005 power of attorney. She decided not to raise the subject matter at the Fathers’ Day gathering of the Clacher family on the following day. She waited until 10 September 2014 to do so, when she visited the Family home to speak with the third respondent.
This was the beginning, so far as Wendy or Suzanne or Jon Campbell was aware, of any deterioration in the relationship between Wendy and the third respondent.
The second respondent submits, through affidavits of the third respondent, Janine and Glenn Blumke that the third respondent was unhappy with Wendy in some respects. The third respondent said in his affidavit that:
(a)he had received little assistance from Wendy and her family;
(b)Wendy had ben disrespectful towards him and had tried to exploit him at various times;
(c)Wendy began to seek information about his financial affairs;
(d)Wendy was upset with him about not accepting Chris Burrell’s advice to transfer $450,000 to each of his children;
(e)he tried to get the message across to Wendy that he did not want her involved in his financial affairs;
(f)he decided after many hours of private thought and reflection to pass on all of his assets and financial resources to Janine and her family trust to the exclusion of Wendy and Sue;
(g)that he did so in consultation with his solicitors Luke Comino and Dr John de Groot.
I do not accept any of that evidence from the third respondent. All or nearly all the objective evidence points against it, in my view. I bear in mind that the affidavit was made within a couple of weeks of his giving oral evidence before me. When he gave oral evidence, the third respondent was apparently cognitively impaired. He was argumentative and suspicious. He challenged documents that bore his signature (for example the authorities he signed addressed to his accountant and stockbroker for Jon Campbell to make inquiries of them to prepare a report and the 27 June 2014 resolutions excluding the applicants and their children as beneficiaries of the Clacher Family Trust) on the ground that he did not recognise them and it did not look to him like his signature, when the signatures look just like that on his affidavit. Tellingly, he did not seem to comprehend that by the 27 June 2014 resolutions and 9 October 2014 resolutions he (as sole director of the first respondent) excluded the applicants and their children as beneficiaries or remember why he had done so.
In forming those views I have not overlooked the report of Dr Anthony French. He saw the third respondent on 9 November 2017 for geriatric medicine review of his cognition and function and spent about 1.5 hours speaking to him. The third respondent was accompanied by Janine, who provided unidentified information about “background context… including regarding [the third respondent’s] involvement in a court action”. There is no evidence that Dr French had any awareness of the actual events of this case. Some of the matters addressed in Dr French’s affidavit and report go to the question of capacity, which is not in issue in this proceeding and may be put to one side. Of greater relevance is the opinion expressed by Dr French that the third respondent is “at a very significant disadvantage in his cognition and function in relation to matters concerning the court case given its emotional impact on him and his reaction to the subject matter. He is therefore far less likely willing or able to defend himself when he is challenged regarding these matters because he becomes overwhelmed, distressed and pressured.”
Whatever may be the basis for Dr French’s opinion, that opinion does not reflect how the third respondent behaved in the witness box. He was not unwilling to defend himself. He was suspicious of the questions he was asked and at times combative. He was not unable to “defend” himself, assuming that means able to give evidence in his case, other than by his reduced cognitive capacity. That reduction was not confined to giving oral evidence. It is evident from the terms of his affidavit, prepared with the assistance of his lawyers presumably without any time pressures or constraints. It is also consistent with his behaviour during the contested events of the case. Some of his accusations of wrongdoing against the applicants and Jon Campbell were the product of him having forgotten things he had done.
Janine swears that on 5 June 2014 she had a conversation with the third respondent in which he said a number of things to her about his dissatisfaction with the involvement of Wendy, Suzanne and Jon Campbell in his affairs. Among the matters to which she deposes was that the third respondent said that he had been having arguments with Wendy and that Wendy had said that the $450,000 Chris Burrell had proposed be distributed from the Clacher Family Trust was her money and she should have it. I reject that the third respondent said those things to Janine. I reject that the third respondent spoke to her, looked straight at her and his tone was stern and emphatic or that she felt chastened. Her conduct towards her sisters at that time, to whom she said nothing of this, is inconsistent with those assertions.
Up to the time of her discharge from hospital, on 17 June 2014, there is no other suggestion from the third respondent that Wendy engaged in any conduct that displeased the third respondent or triggered any change of attitude by him towards her or her family.
As I have found, in the succeeding weeks, the third respondent attended closely and regularly upon Wendy to assist in her recovery from cancer surgery. Yet, the second respondent’s case is that she somehow caused the third respondent to pass the 27 June 2014 resolutions, disowning Wendy and her family as beneficiaries of the Clacher Family Trust.
Janine swears, in effect, that she was not aware of the instruction given and resolutions made by the third respondent as director of the first respondent on 26 and 27 June 2014, with the assistance of Glenn Blumke, removing Wendy and Suzanne and their families as beneficiaries of the Clacher Family Trust. That could have happened only if neither the third respondent nor Glenn Blumke told her that the resolutions were being made or had been made. In the typewritten instruction to Glenn Blumke dated 26 June 2014, that was prepared by Glenn Blumke, the third respondent stated, inter alia, that Wendy and Mac Hook were to have no further involvement in his family trust and that he had informed Janine of that instruction. As well, in correspondence signed on 17 September 2014, the third respondent stated the extent of the reliance that he placed on Janine throughout this period. I find it most unlikely that neither the third respondent, nor Glenn Blumke, told Janine of the 27 June 2014 resolutions and I reject her evidence to that effect.
In June 2014 (and afterwards) there were outwardly normal relationships being conducted between the three families (the Hooks, Campbells and Blumkes) and between them and the third respondent.
Janine also swears that in late August 2014, the third respondent telephoned her and said that Wendy had been questioning him on how much she got paid to look after his properties, that Wendy had said she wanted to take over doing management work on his properties, that she had the power to sell his home if she wanted to, but she never would, and that he said that if what she was saying was right he would have that part of his “EPA” wiped. First, I find that Wendy did not say those things to the third respondent. Second, I reject that he said those things to Janine then or that she “forgot about it for a couple of weeks”.
Janine further swears that, after a couple of weeks, the third respondent asked her about it again and she got out his 2005 power of attorney and informed him that it was exercisable by a majority of two of the three attorneys and he said that was what he had been saying for the last three weeks and he was going to get it wiped. I reject that the third respondent said that to Janine. I also reject that Janine made a calendar entry perhaps a day or two later that the third respondent phoned her on 24 August 2014 at 1800 hours to 1900 hours and said that Wendy told him she could sell his house with her power of attorney.
The analysis so far leads to the following conclusions as to the third respondent’s relationship and his challenged decisions concerning Wendy.
First, there was no issue or concern that had arisen between the third respondent and Wendy as at 26 or 27 June 2014 so as to give rise to any concern by the third respondent as to Wendy interfering in his affairs in any way. No basis has ever been given by the third respondent for any concern up to that time that Wendy had any involvement in his personal tax or financial matters, or about the first respondent or the Clacher Family Trust. No request had been made by Wendy to see the first or third respondent’s business or tax records or for copies of his financial, tax or rental information.
In reaching that conclusion, I am fortified by the fact that the evidence of Janine and Glenn Blumke on some occasions includes a suggestion that Mac Hook was also the subject of some dissatisfaction by the third respondent. Yet, there is not a single event identified as conduct by Mac Hook of that kind.
Accordingly, so far as Wendy is concerned:
·the written instruction from the third respondent to Glenn Blumke dated 26 June 2014;
·the request by the third respondent to Glenn Blumke on 26 June 2014 to prepare a trust resolution that Wendy and Mac, inter alia, were to have no involvement in the family trust and he did not want them listed as beneficiaries in the family trust;
·the resolution of the third respondent as sole director of the first respondent made on 27 June 2014 to vary the Clacher Family Trust to confer power on the trustee to exclude beneficiaries;
·the resolution of the third respondent as sole director of the first respondent made on 27 June 2014 that Wendy and her family, inter alia, were no longer beneficiaries of the Clacher Family Trust; and
·the further resolution of the third respondent as sole director of the first respondent made on 27 June 2014 to the same effect with the added condition that the resolution was subject to confidential legal advice (which had not occurred) and confirmation of the trustee’s discretion to make the resolution (whatever that may have meant to the third respondent),
all came out of the blue (in fact she learned of them only after her first affidavit in this case had been filed) and were made without any apparent reason. As well, the third respondent in no way, shape or form communicated any concern that he may have had to Wendy at that time. In short, his conduct towards her (and Mac Hook and her children) in removing them as beneficiaries of the Clacher Family Trust lacked any basis and was wholly irrational.
The first difference or dispute I find that arose between the third respondent and Wendy stemmed from his accusation, first made to Suzanne on 6 September 2014, so far as the applicants are aware, that Wendy said or threatened that she could sell the Family home. I reject that Wendy said or threatened that to the third respondent. At the best for the third respondent, the allegation was something suggested to him by someone else or imagined by him. Another possible but less flattering explanation is that it was something he made up to justify to himself and others actions by him that he knew were unwarranted and unjustified by any conduct on Wendy’s part.
I accept Wendy’s evidence that 10 September 2014 was the first occasion when she discussed with the third respondent her alleged threat to sell his house. She went to see the third respondent at the Family home and raised it with him. She said to the third respondent that she had never threatened to sell the Family home and that the 2005 power of attorney would require either Suzanne or Janine to agree before that could be done. He said to her that he did not believe that she would sell his home. However, he needed to guard against that risk and he did not want her to have that power over him. He said that he never wanted to leave his home and that he would like a person to live with and help him. Wendy said that she could assist with organising that.
The following day, 11 September 2014, was the second anniversary of Pauline’s death. Wendy telephoned the third respondent a number of times before she got through to him. He said to her that he had been speaking to Janine. He said that he and Janine had been (that day) to see a solicitor to amend his 2005 power of attorney. He said that this was necessary so that Janine had the same power as Suzanne and Wendy (a statement that inaccurately implied that Janine did not already have the same power as each of them). He said further that he could not have anyone saying that he was not capable (although it is not alleged that at that stage Wendy or anyone else had said the he was not capable) and Wendy would get a letter in the mail from his solicitor explaining the changes. Wendy said that the 2005 power of attorney was fair because it required a majority (of Wendy, Suzanne and Janine) to agree and nothing untoward had occurred since it was executed.
From that point the downward spiral in the relationship between Wendy and the third respondent accelerated.
On 12 September 2014, Wendy received a letter from the office of Luke Comino, Solicitor, dated 11 September 2014 stating that the third respondent had executed a new power of attorney, that the new power stipulated that his attorneys would only have power once a medical certificate was presented from his doctor to the office of Luke Comino Solicitor stating that he was no longer capable of running his affairs, Wendy was required to attend Luke Comino Solicitor’s offices to sign the new power, Wendy was requested to bring the 2005 power of attorney to those offices as soon as possible and that the new power of attorney would be held in Luke Comino Solicitor’s safe custody.
On 15 September 2014, in the morning, the third respondent called Wendy to congratulate her upon her 35^th wedding anniversary with Mac Hook. Wendy said to the third respondent that things were a mess. She was very upset and began to cry. The third respondent said he hoped it was not anything that he had done. She said that she wanted to visit him to discuss what she was upset about.
On that afternoon, Wendy visited the third respondent at the Family home. She reiterated that she had never said that she would sell the Family home. She said that she knew he loved living there. She said that she felt betrayed that he had visited Luke Comino Solicitor regarding a new power of attorney without her involvement. He said that he could not take the risk of her selling the Family home and that he was frightened. He repeated that she had threatened to sell the Family home. She said she would seek legal advice regarding the new power of attorney. He said he did not recall instructing Luke Comino that she was not permitted to have a copy of the new power of attorney. During the conversation, the third respondent appeared to Wendy to be confused, repeated himself, and appeared to have difficulty recalling what he had previously said to Wendy. He said there was something he was worried about.
Also during this conversation, Wendy said that she could not sign the new power of attorney if she felt that the third respondent did not trust her. He asked whether she was going to wipe him. She said no. She asked why he still wanted her to be one of his attorneys. He responded that he did not want to remove her completely, just ensure that she could not act on her threat. If the third respondent had any awareness at all of the 27 June 2014 resolutions, that was a misleading statement.
On 18 September 2014, the third respondent called Wendy and told her that he had been to see a Dr Saleh who had assessed him as competent to run his own affairs and that the consultation had something to do with the new power of attorney.
Between 15 September and 27 September 2014, Wendy spoke on the telephone with the third respondent on several occasions about inconsequential matters.
On 28 September 2014, Wendy went with Suzanne to see the third respondent at the Family home to discuss the new power of attorney. The third respondent said that his solicitor had told him that if they did not sign the new power of attorney it would mean that they were up to something. He did not say what that was. He said that Janine had said to him that Wendy and Suzanne had not assisted him over the years but that now they were showing an interest because money was involved. At some point during the conversation, Janine telephoned the third respondent. Wendy heard the third respondent ask Janine if she could calm down enough to speak with them all. For whatever reason, the call became disconnected shortly thereafter.
Janine swears that she heard Wendy say that “Its come to a legal battle and it is you and Janine versus Sue and I.” I reject that was said by Wendy or heard by Janine. In addition to Wendy and Suzanne’s denials, at that stage Wendy had not consulted any lawyer, although she did so three days later about the subject of the new power of attorney.
This meeting on 28 September 2014 was the last time that Wendy saw the third respondent until he gave evidence at the trial.
On 1 October 2014, Wendy and Suzanne went to see Kylie Tate solicitor about the new power of attorney.
On 2 October 2014, Luke Comino, Solicitor, wrote a further letter to Wendy informing her that the third respondent had revoked the 2005 power of attorney and requiring Wendy to deliver it to his offices. Significantly, the letter no longer proposed that Wendy (or Suzanne) would be the third respondent’s attorney under a new power of attorney.
On 9 October 2014, the third respondent as the sole director of the first respondent made the 9 October 2014 resolutions, without informing Wendy or Suzanne then, or later, that he had done so.
On 10 October 2014, the locks were changed on the Family home. This was arranged by Janine without any mention to either Wendy or Suzanne. It prevented Wendy or Suzanne from being able to enter the Family home with the keys they had been given and used previously. They did not know of this until about seven weeks later.
On 10 October 2014, Kylie Tate telephoned Luke Comino, Solicitor, to discuss the power of attorney issue. The third respondent went to see Luke Comino later that day.
Between 12 October and 28 November 2014 Wendy telephoned the third respondent on six occasions. He had stopped calling her. She recorded her calls, except for one. A full reading of the transcripts is illuminating, but for the purposes of these reasons a summary of some relevant points is:
(a)on 12 October 2014, the third respondent said that there was a worry he could not talk to her about, that his solicitor was worried, that it would all come out and that certain inquiries were being made to protect him. He said that he did not start the lawyer stuff (which was untrue). She asked him who did and he said that he could not tell her but it was someone close to her (again an untrue statement) and that somebody had done something pretty horrible and that he had to be protected (there is no credible evidence that Wendy or anyone else did anything towards the third respondent that could be viewed rationally as horrible);
(b)on 19 October 2014, the third respondent said that Wendy knew very well what she had done (but did not say what). Wendy said that she had not done anything wrong and the third respondent replied “you must have a twin”. He said that the matter was in the hands of his solicitors who had uncovered something that Wendy had done. Again he did not say what, and nothing of that kind was ever identified. The third respondent informed Wendy that he did not want to speak to her again and that she should speak to him through Janine in the future. I find that this extraordinary severing of relations with his eldest daughter, with whom he had always had good relations in the past, was entirely without a rational basis;
(c)on 9 November 2014, the third respondent said that Wendy was very evil. She asked if they could talk about it and he said she should ring Janine, that he could not believe the things she was doing to him (she had not done anything since his statement that he did not want to speak to her again). He said that someone had been forging his signature (which was not true)[28] and that she had put all false charges against him (another untrue assertion). Wendy said she did not know what he was talking about;
(d)on 23 November 2014, the third respondent said that he was confused why Wendy had not spoken to him for months (which was not true). He stated that Wendy was attempting to transfer him into a home (which was also not true but seems to have been a suggestion either made to him or encouraged by Janine and Glenn Blumke); and
(e)on 27 November 2014, the third respondent repeated the sting of the accusation that somebody was going to try to put him into a home and said that he had discussed a form found in his home about that subject with Wendy before. She said that he had not and she knew nothing about it, which he seemed to accept, and she ended the conversation on the basis that she would speak to him soon;
(f)on 28 November 2014, he said that he knew exactly what evil things Wendy was doing and that she had been at it for a while. He said that she needed to withdraw the case she had against him (no case had been threatened at that time). He said that his solicitors had informed him about the case. Wendy said that she did not have any case against him (as then was the fact) and whoever was telling him that was lying. He said that Wendy was going to go ahead with something more horrific and that his solicitors had already asked her solicitors to withdraw. He said that he had been given this information by Janine who had told him that he had to believe it. He said that he did not want to be put in the madhouse but that Wendy was fighting to achieve this (another untrue statement). Wendy said that she wanted him to stay in the Family home. The third respondent said that he wanted to believe that but he could not in the light of all the evidence (of which, in fact, there was none).
[28]This may have been a reference to the authorities signed by the third respondent dated 19 and 20 May 2014 that Jon Campbell could obtain information from the third respondent’s stockbroker and accountant. If so, it shows that already the third respondent was prepared to make an allegation of forgery to back up his untrue accusation that Jon Campbell had not been given authority.

I reject Janine’s evidence that Suzanne yelled at the third respondent and scared him during the encounter.
On 11 September 2015, the third respondent met with Luke Comino Solicitor and executed transfers of Unit 1016 of the Shafston Units and 6 and 6A Johnston Street, West Ipswich by the first respondent as trustee of the Clacher Family Trust to the second respondent as trustee of the Blumke Family Trust.
On 5 January 2016, the third respondent as sole director of the first respondent resolved to make allocations to the third respondent to reduce the unpaid present entitlements due to the third respondent from the Clacher Family Trust. The resolution recorded that the amount of the unpaid present entitlements held in the trust of the third respondent were to be reduced by the value of the transfers, the transfers were to be made from the Clacher Family Trust to the Blumke Family Trust and that all such allocations and transfers were to be completed by 1 March 2016.
The third respondent obtained no legal advice or advice from any person other than Janine and Glenn Blumke before making that resolution.
On 20 January 2016, the third respondent as sole director of the first respondent sent a letter to Tim Evans drafted by Glenn Blumke as follows:
“Further to my letter of July 2015, I am wanting to rationalise the share portfolios held in the Clacher Family Trust Account and Blumke Family Trust Account managed by Morgans.
For ease of management and accounting I think it is better that the shares be bundled together in one shared trading account. I am a listed beneficiary of both trusts.
[The letter listed the shares to be transferred and continued]
All funds held in the Macquarie account relating to account 649010 are to be transferred across to the Macquarie account relating to account 649783.”
The third respondent obtained no legal advice or advice from any person other than Janine and Glenn Blumke before sending that letter.
On 4 February 2016, shares identified in the Annexure to these reasons held by the first respondent as trustee of the Clacher Family Trust were transferred to the second respondent as trustee of the Blumke Family Trust.
On 6 April 2016, the third respondent as sole director of the first respondent resolved that the funds invested with the IOOF Unit Trust be fully withdrawn and paid to a NAB bank account. The resolution provided further that a number of properties were to be transferred to the Blumke Family Trust being Units 819, 918 and 1020 of the Shafston Units. The resolution noted that the transfer of the above properties reduces the unpaid present entitlements owed by the Clacher Family Trust for the third respondent.
The third respondent obtained no legal advice or advice from any person other than Janine and Glenn Blumke before making that resolution.
On 8 April 2016, the third respondent met with Luke Comino. During the consultation, the third respondent executed transfers of Units 819, 918, 1020 of the Shafston Units.
On 10 June 2016, the third respondent as sole director of the first respondent resolved that the ten dollar settlement capital of the Clacher Family Trust be distributed to the third respondent on the vesting of the Clacher Family Trust and that any remaining assets in the Clacher Family Trust (if there are any) were to be distributed to the third respondent on the vesting of the Clacher Family Trust.
The third respondent obtained no legal advice or advice from any person other than Janine and Glenn Blumke before making that resolution.
On 30 June 2016, the third respondent as sole director of the first respondent passed a resolution that the income of the (Clacher Family Trust) for the year ending 30 June 2016 be paid, applied or set aside to or for the benefit of the Blumke Family Trust as to 100 percent.
The third respondent obtained no legal advice or advice from any person other than Janine and Glenn Blumke before making that resolution.
On 1 July 2016, the third respondent as sole director of the first respondent passed a resolution that on the vesting of the Clacher Family Trust the ten dollar settlement capital was to be distributed to the third respondent and any remaining capital was to be distributed to the third respondent.
The third respondent obtained no legal advice or advice from any person other than Janine and Glenn Blumke before making that resolution.
On 7 July 2016, Janine and Glenn Blumke as directors of the second respondent executed a deed of variation of the Blumke Family Trust, inserting a clause purporting to render deliberations of the trustee confidential and to provide that any document recording such deliberations was confidential.
On 25 or 29 August 2016, the third respondent executed a transfer or transfers of the Dixon St Units from the third respondent to the third respondent and Janine Blumke as joint tenants.
Consistently with those facts, the Annexure to these reasons lists the transfers of properties, shares and cash by the first respondent as trustee of the Clacher Family Trust to the second respondent as trustee for the Blumke Family Trust that are challenged by the applicants.
On the six occasions between 1 March 2015 and 29 August 2016, when the third respondent attended on Luke Comino Solicitor and executed a transfer of real property, as sole director of the first respondent, or personally, Luke Comino says that he satisfied himself of the voluntariness and independence of the third respondent’s instructions to proceed with the transfer by speaking to the third respondent directly and ensuring that he received his direct confirmation and did not act via an intermediary. That may be so. But in no way do I accept that Luke Comino’s affidavit amounts to a statement that he gave the third respondent any advice as to the wisdom of any of the transactions or that he made any assessment as to whether in giving instructions the third respondent may have been subject to undue influence and unconscionable dealing. There is nothing in Luke Comino’s affidavit that suggests any real awareness of the true factual context in which these transactions were carried out. I observe that Luke Comino also executed each of the transfers as the solicitor for the transferee, being the second respondent or Janine and that he acted otherwise for Janine and Glenn Blumke, including in the preparation of their wills.

Reasons for the transfers and unconscionable conduct

Because of the range and number of the third respondent’s accusations against Wendy, Suzanne and Jon Campbell, and because of the encouragement of Janine and Glenn Blumke of some or all of the accusations, it is difficult to form an accurate view as to the third respondent’s precise reasons for making the challenged transfers. That difficulty is added to by my rejection of much of the evidence of Janine and Glenn Blumke as to what the facts surrounding what the third respondent said and did were.
Even so, some broad generalisations are possible. First, the third respondent formed a view that Wendy, Suzanne and Jon Campbell were trying to put him into a home. Second, he formed a view that they had mounted some case against him. Third, he formed a view that the way to protect himself from the threat he believed they represented was to transfer all of the property of the Clacher Family Trust and all or most of his property to Janine and Glenn Blumke’s Family Trust or to Janine with him as a joint tenant, where he considered it would be safe from any claim by the applicants. Of course, in doing so, the third respondent placed himself completely at the mercy of Janine and Glenn Blumke. They would have it that he did so because he trusted them completely. It seems likely that he did. But, in my view, the third respondent was also acting in retaliation against the applicants because of his delusional beliefs about their actions and intentions. As well, in doing so, he seems to have been incapable of distinguishing between the applicants and Jon Campbell on the one hand and other family members on the other hand, particularly his grandchildren by them, or to have been insensitive to that distinction.
Although the transactional context was different, in my view, some assistance can be obtained from the circumstances in Bridgewater v Leahy.[29] In that case, an old man disposed of farm land for the benefit of a favoured nephew (and his wife) by transferring it to them for an undervalue. That had the effect of reducing the value of the old man’s estate. After his death, the man’s wife and children brought a proceeding against the nephew and his wife. One of the principal issues was whether the man was subject to unconscionable conduct by the nephew, in circumstances where the transactions had been carried out with the assistance of a solicitor acting for the man and where the man’s capacity to make the relevant transfers was assessed by a medical practitioner.
[29](1998) 194 CLR 457.
At trial, the plaintiffs failed on alternative causes of action for undue influence and unconscionable conduct. That judgment was set aside on appeal to the High Court by majority. Although they differed on the application of the facts to the case, all members of the High Court agreed as to the applicable principles.
The discussion of unconscionable conduct in Bridgewater emphasises that it may be constituted by no more than passive acceptance of a benefit in unconscionable circumstances, as follows:
“In Commercial Bank of Australia Ltd v Amadio, Deane J spoke of unconscionable conduct as occurring where, in the circumstances, it is unconscientious to ‘procure, or accept, the weaker party's assent to the impugned transaction’. It also should be noted that in Hart v O'Connor… the Privy Council described unconscionable conduct which provided a basis for equitable relief as ‘victimisation, which can consist either of the active extortion of a benefit or the passive acceptance of a benefit in unconscionable circumstances’. … In any event, it will become apparent from the facts of this case that more was involved than passive acceptance by Neil of Bill's bounty and that, at a crucial juncture, the initiative came from Neil.”[30] (footnotes omitted)
[30](1998) 194 CLR 457, 479 [76].
As well, the reasons considered the relevant position of disadvantage of the disponor as follows:
“The position of disadvantage which renders one party subject to exploitation by another such that the benefit of an improvident disposition by the disadvantaged party may not in good conscience be retained may stem from a strong emotional dependence or attachment. Louth v Diprose was such a case. In his judgment in the South Australian Full Court, a decision which was upheld in this Court, Jacobs A-CJ said (99):
‘It is an oversimplification to say that because the respondent acted as he did with his eyes open, and with a full understanding of what he was doing, he was not in a position of disadvantage, and therefore not the victim of unconscionable conduct.’
There are passages in the reasons of the primary judge which appear to suggest that the existence of such a position of disadvantage necessarily involves physical frailty and enfeeblement with diminished knowledge by the party in question of that party's property and affairs generally. That will not necessarily be the case.”[31] (footnotes omitted)
[31](1998) 194 CLR 457, 490 [115]-[116].
Third, the reasons consider the role of independent advice to the disponor as follows:
“As Manning J put it in Re Levey; Ex parte Official Assignee, ‘the Court does not allow any person to take advantage of any known weakness of the vendor’ and the Court asks whether that party had ‘the opportunity’ of professional advice as to ‘the effect of what he [was] doing’. This denial of the opportunity to have ‘the assistance of a disinterested legal adviser’, rather than speculation as to what might have followed had it been pursued, is an element in the unconscientious conduct in respect of which equity intervenes to deny the entitlement of the disponee to retain the property in question, unless the disponee shows the disposition to have been ‘fair, just and reasonable’.[32] (footnotes omitted)
[32](1998) 194 CLR 457, 485-486 [100].
No real and genuine consideration
Because the first respondent was trustee of the Clacher Family Trust and held the assets on trust for the beneficiaries of that trust, it was not entitled to give away the assets of the trust to a non-beneficiary. By cl 2 of the trust deed, the trustee had discretionary power to pay or apply the income of the trust fund for the benefit of the beneficiaries then living or any one or more of them exclusive of the others, in such shares and proportions as the trustee should in its absolute discretion determine prior to 30 June of the year. As well, by cl 4, the trustee had power from time to time to pay or apply such part or parts of the capital of the trust fund as the trustee, in its absolute discretion, deemed fit to or for the benefit of the beneficiaries or such one or more of them, exclusive of the others and in such shares or proportions as the trustee in its discretion determined.
By the definition of the “beneficiaries” in cl 1 of the trust deed, a trustee of any other trust, the capital or income of which was or may be held in whole or in part for any one or more of persons referred to in the preceding paragraphs of the definition was a beneficiary, as defined. Paragraph (a) of the preceding paragraphs specified the third respondent was a beneficiary. Accordingly, because the third respondent was a secondary beneficiary of the Blumke Family Trust, on settlement of the Blumke Family Trust the second respondent as trustee became a beneficiary of the Clacher Family Trust, as defined. Therefore, the first respondent had the constitutional power to make distributions of income or capital of the Clacher Family Trust to the second respondent, in accordance with cl 2 and 4 of the trust deed.
However, in my view, the exercises of power by the third respondent as sole director of the first respondent to make those transfers, were not attended by a real and proper consideration of the discretionary power to make the relevant distributions, because the third respondent as sole director of the first respondent was subject to unconscionable conduct by Janine and Glenn Blumke.
Prima facie, that would lead to the conclusion that the transactions should be set aside. However, the second respondent sets up a number of grounds that it submits would lead to refusing that relief.
Defences
First, the second respondent alleges that the applicants, Wendy and Suzanne were validly removed as beneficiaries of the Clacher Family Trust by the 27 June 2014 resolutions, the 9 October 2014 resolutions or the 12 December 2014 resolutions, and as a consequence lack standing to bring the proceedings.
In my view, having regard to the findings of facts previously made, each of the 27 June 2014 resolutions, the 9 October 2014 resolutions and the 12 December 2014 resolutions was invalid because it was not made by a real and genuine consideration of the third respondent as sole director of the first respondent as trustee of the exercise of the power to amend the trust deed or to remove a beneficiary (if the trust deed was validly amended to add that power). It follows that the applicants do not lack standing to bring the proceeding, and it should be declared that each of those resolutions was invalid.
Second, the second respondent denies that the transfers were invalid by reason of any undue influence, unconscionable conduct or breach of trust. For the reasons previously given, I have determined that they were invalid by reason of unconscionable conduct by Janine and Glenn Blumke towards the third respondent which resulted in the first respondent failing to give real and genuine consideration to the exercise of the powers to distribute either the income or the property of the Clacher Family Trust.
Third, the second respondent alleges that relief should be refused on discretionary grounds being:
(a)to grant or set aside the transfers as invalid would make the Clacher Family Trust insolvent because its liabilities comprising the unpaid present entitlements and other loans owing to the third respondent would exceed the value of its assets;
(b)in any event, there is no prospect of the applicants receiving any distribution from the Clacher Family Trust;
(c)the third respondent has ratified and confirmed the decision to transfer the trust property by his defence of the proceeding;
(d)on 23 December 2016, the third respondent executed a will, leaving his entire estate on trust for Janine.
At the trial, no up to date financial statements of the Clacher Family Trust were produced. The most recent financial statements were for the year ending 30 June 2016. As at 30 June 2016, the balance sheet stated the assets as $18,423.62 in a bank account and preliminary expenses of $550. The liabilities were stated as $9,369.97 for a sundry creditor and $9,593.65 for an amount for unpaid present entitlements. Accordingly, the net assets were $10. A statement of the beneficiaries profit distribution for the year disclosed that $265,310.66 was distributed to the Blumke Family Trust.
The financial statements for the Clacher Family Trust for the year ended 30 June 2015 included a balance sheet that showed total assets of $1,286,222.18 and liabilities of $5,399.00 for a sundry creditor, $361,994.58 for a loan from the third respondent, and $918,818.60 as unpaid present entitlements, leaving net assets of $10. For that year, the beneficiaries profit distribution was $114,240.13.
No distribution of capital of the trust was identified in either year.
The resolutions mentioned previously made during 2015 and 2016 for transfers by way of gift from the Clacher Family Trust to the Blumke Family Trust were accompanied, generally speaking, by a note of a reduction of the unpaid present entitlements of the third respondent. That may have been meant to operate by way of release by the third respondent of the debts owed to him personally by the first respondent as trustee of the Clacher Family Trust to that extent, from time to time.
No other documents identifying the amounts of those releases or their calculation is in evidence.
The second respondent’s submissions assume, I think rightly, that it would be inequitable to avoid the challenged transfers of the properties, shares and cash under the resolutions of the first respondent without also setting aside any releases given by the third respondent to the first respondent of the third respondent’s unpaid present entitlements. The applicants did not contend to the contrary.
Accordingly, it is true to say that by setting aside the relevant transactions, the Clacher Family Trust should be restored to a position where the value of the assets to be retransferred to the trustee of the Clacher Family Trust would be approximately equal to the value of the unpaid present entitlements of the third respondent as a creditor of the trustee of the Clacher Family Trust in at least approximately the same amount. However, I do not accept the second respondent’s submission that it is a discretionary reason to refuse the restoration of the status quo before the transfers were made that the trustee of the Clacher Family Trust will be indebted to the third respondent in an amount commensurate to the value of the restored assets. What happens in respect of the debt owed by the trustee of the Clacher Family Trust to the third respondent is a future matter.
Second, although the third respondent executed a will on 23 December 2016, leaving his personal estate on trust to Janine, that is not a reason to dismiss the application, in my view. First, the capacity of the third respondent to make a will as at 23 December 2016, or whether he may have been subject to undue influence in making such a will, were not matters in dispute in this proceeding. It would be entirely inappropriate to say anything directed towards such questions. Nevertheless, in my view, it would be equally inappropriate to decide, for the purposes of refusing relief to the applicants in this proceeding, that the will is valid or that it will be the final will and testament of the third respondent. Those too are future matters.

Lastly, as to the third respondent’s defence of its proceeding, I noted at the outset of these reasons that by agreement between the applicants and the first and third respondents, the first and third respondents ceased to defend the proceeding after the first two days of hearing, on the basis that they will abide the decision of the Court, subject to any argument on the question of costs.
Accordingly, in my view, none of the discretionary grounds relied upon by the second respondent for denying relief to the applicants generally is made out.
Removal of the first respondent as trustee
Paragraph 4 of the relief claimed seeks an order that Bernard Francis Ponting, the Public Trustee, or such other person as the Court considers appropriate, be substituted with the first respondent as trustee of the Clacher Family Trust. The applicants submit that relief should be granted.
The second respondent submits that the third respondent retains capacity to direct the first respondent as trustee as the Clacher Family Trust, and that even if the challenged transfers are set aside, there is no evidence that the third respondent will or is likely to exercise his powers and make future decisions in breach of trust such that removal and replacement of the trustee is justified.
In my view, the persistent pattern of the decisions made by the third respondent as sole director of the first respondent as trustee of the Clacher Family Trust during 2014, 2015 and 2016, not upon a real and genuine consideration of the exercise of the relevant powers, is such that the first respondent should be removed as trustee.
The court has both statutory[33] and inherent or general jurisdiction[34] to remove a trustee and to appoint a new trustee where it is expedient. The jurisdiction to do so is exercised with a view to the interests of the beneficiaries, the security of the trust property and to an efficient and satisfactory execution of the trust, and a faithful and sound exercise of the powers conferred upon the trustee.[35]
[33]Trusts Act 1973 (Qld), s 80(1).
[34] Miller vCameron (1936) 54 CLR 572 at 580 – 581.
[35] Miller vCameron (1936) 54 CLR 572, 580.
Having regard to the findings of fact made above, in my view, there can be no doubt that it is expedient to replace the first respondent as trustee. However, I will give the parties an opportunity to nominate an agreed individual, rather than the Public Trustee, by making an order that in default of another individual being appointed as the trustee vis the Public Trustee, to be appointed to replace the first respondent.
Relief against the second respondent
The applicants claim orders that the second respondent transfer back to the trustee of the Clacher Family Trust each of the trust properties and the shares transferred to the second respondent under the challenged transfers still held by the second respondent free from all encumbrances, and that the second respondent pay an amount equal to the challenged cash transfer to the trustee of the Clacher Family Trust.
Further, the applicants claim an order that the second respondent transfer all shares obtained directly or indirectly from the property of the Clacher Family Trust to the trustee of the Clacher Family Trust and an order that the second respondent account as constructive trustee in respect of all benefits obtained by reason of the challenged transfers to the trustee of the Clacher Family Trust.
Neither of the parties made submissions as to the legal basis of the liability of the second respondent, if any, to those orders. On one view, the second respondent is a beneficiary of the Clacher Family Trust that has received distributions that the trustee was not authorised to make because of the invalid exercises of power by that trustee. That is a basis for it to restore or account for the trust property it received.[36] On another possible view, it received property by way of gift as a volunteer under voidable transfers and the persisting equitable title of the trustee and beneficiaries of the Clacher Family Trust for the beneficiaries of that trust takes priority to the second respondent’s title and may be vindicated by orders following the trust property received by the second respondent and still held by the second respondent and by tracing into any property acquired by use of the original trust property. A third possible view is that the second respondent is to be treated as a “stranger” to the Clacher Family Trust that was a recipient of trust property with notice of the first respondent’s breach of trust that is subject to liability under the first limb of the rule in Barnes v Addy.[37]
[36]re Diplock; Wintle v Diplock [1948] Ch 465, 524; see also Giumelli v Giumelli (1999) 196 CLR 101, 112, [3]–[6].
[37](1874) 9 Ch App 244.
Whatever analysis is advanced, the second respondent did not plead or submit that the title it holds to the transferred properties is indefeasible[38] or that it is not subject to an order for retransfer on that ground[39] or that there is any other defence or reason that would prevent such an order.[40]
[38]Land Title Act 1994 (Qld), s 184(1) and s 185(1)(a). Compare Cornerstone Property & Development Pty Ltd v Suellen Properties Pty Ltd [2015] 1 Qd R 75, [71]-[72].
[39]As in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, 167-172 [190]-[198].
[40]For example, whether personal recovery from an innocent beneficiary is subject to first exhausting any remedies against the defaulting trustee – compare, in the case of estates, Ministry of Health v Simpson [1951] AC 251, 267.
In any event, in the present case, in my view, Janine and Glenn Blumke as directors of the second respondent were aware of the infirmities of the third respondent in making the resolutions and decisions of the first respondent upon the challenged transfers of properties, shares and cash to the second respondent as trustee of the Blumke Family Trust, so as to repel any legal analysis on the basis that the second respondent is to be treated in equity as an innocent volunteer without knowledge or notice.
In my view, orders should be made that the second respondent retransfer the property which it still holds that was the subject of the challenged transfers. As well, the second respondent should account for any dealings by it with the property the subject of those transfers that it no longer holds. Depending on the result of that account, it may be appropriate to grant further relief against the second respondent of either a proprietary or personal nature, including relief as against the assets of the Blumke Family Trust.
The second respondent is, in my view, an accounting party. The question of in what form any further order for an account is required should be deferred until the new trustee is appointed and has obtained the records of the Clacher Family Trust. In particular, it does not presently appear whether the applicants or the new trustee would seek to press a tracing claim to any property into which the property the subject of the challenged transfers has been converted and whether they would claim an account of profits in respect of any dealings with or income earned from that property or a claim for equitable compensation as an alternative thereto.
Relief against the first respondent
The applicants claim an order that the first respondent account to the applicants for all transfers and other dealings in the trust assets of the Clacher Family Trust by the provision of particulars of transfers and documents recording and explaining the transactions or transfers and an order that the first respondent provide financial accounts of the Clacher Family Trust, including all journals and detailed ledger accounts, tax returns and financial statements for the financial years ending 30 June 2014, 30 June 2015, and 30 June 2016, and all documents varying or amending, or purporting to vary or amend the trust deed.
A beneficiary is usually entitled to obtain an order for an account against a defaulting trustee and may be entitled to an order that the account be taken on the footing of wilful default,[41] although an order on that basis is not sought by the claim for relief in this proceeding. Under the Uniform Civil Procedure Rules 1999 (Qld) an order for an account must specify the transactions of which the account is to be taken, the basis of the account and the period of the account.[42] Separate provision is made for an account of a trust estate to be assessed and passed.[43] The form and verification of the account are provided for[44] and the account must be filed unless the court orders otherwise.[45] Provision is made for service of the account on the persons entitled to be heard on the taking of the account[46] and for a person to challenge the accuracy of the account. [47] The account is to be taken and the balanced determined, including examination of any witnesses[48] before a registrar or special referee or the court itself.[49] These provisions were not invoked by the applicants but inform the orders that might be made.
[41]Meehan v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146.
[42]Uniform Civil Procedure Rules 1999 (Qld), rr 527.
[43]Uniform Civil Procedure Rules 1999 (Qld), rr 645, 648 – 657B.
[44]Uniform Civil Procedure Rules 1999 (Qld), rr 530.
[45]Uniform Civil Procedure Rules 1999 (Qld), rr 531.
[46]Uniform Civil Procedure Rules 1999 (Qld), rr 531
[47]Uniform Civil Procedure Rules 1999 (Qld), rr 532.
[48]Uniform Civil Procedure Rules 1999 (Qld), rr 534 and 533.
[49]Uniform Civil Procedure Rules 1999 (Qld), rr 536.
However, having regard to the financial statements for the Clacher Family Trust as at 30 June 2016, at this stage there seems to be no point in granting relief against the first respondent that it provide an account of the dealings by it of the property of the trust. The transfer of all of the substantial assets of the Clacher Family Trust to the second respondent as trustee of the Blumke Family Trust seems not to be a matter of dispute or which now necessarily requires an account to ascertain. Upon appointment of the new trustee, that trustee will be required to get in the trust property and will be entitled to all of the books and records of the Clacher Family Trust as part of that property and will be able to review the appropriate records, to the extent necessary, to ascertain whether there have been any other dealings which may require further relief or claims.
Further, it seems to me that the relevant order is not, as the applicants claim, that the respondents should be required to account to the applicants. Traditionally, an order for an account required that the accounting party leave the account at the court, in this court by filing it, and for the account to be taken and passed in the court.[50] In the language of the current rules, that process is for the account to be filed, taken or assessed and passed.
[50]See, for earlier forms, Rules of the Supreme Court 1900 (Qld), O 67 rr 1, 15, 19-22, 24-28, 49 and 58 and Forms 328 and 337-340.
The applicants’ rights are held in the capacity of discretionary objects or beneficiaries of a discretionary trust, prior to vesting. They have no right to the trust assets as such. Their right is simply characterised as an entitlement to have the Clacher Family Trust duly administered and breaches of trust by the trustee remedied. The case law recognises that where a beneficiary brings a claim for breach of trust, an order may be made that the defaulting trustee account to the beneficiary, but in the manner described above. Here, a new trustee is to be appointed. The new trustee will be a necessary party to any taking or assessment of the account.
Perhaps for a different reason, the applicants submit that they ought not to take on the role of tracing the trust transfers, incomes and outgoings. Whatever the reason, to that extent, I accept the substance of that submission. The applicants submit, however, that it is appropriate that the respondents pay the costs of an independent accountant or auditor to receive the documentation and prepare the account. I do not agree that is necessary.
In my view, at this stage, the appropriate order as to an account is that the second respondent account to the new trustee in respect of any dealings by the second respondent with any property transferred to it by the first respondent as trustee of the Clacher Family Trust between 1 January 2015 and the present day, including the properties, shares and cash identified in the Annexure to these reasons.
Otherwise, the question of further relief by way of inquiries or accounts or otherwise in the proceeding that follows from these reasons should be stood over to a future date.

ANNEXURE
Property transfers

Date of transfer

Real property

Instrument of transfer

23 April 2015

Unit 401, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169
More particularly described as Lot 401 on SP142469, County of Stanley, Parish of South Brisbane

Registered instrument of transfer No. 716600268

30 June 2015

Unit 410, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169
More particularly described as Lot 410 on SP142469, County of Stanley, Parish of South Brisbane

Registered instrument of transfer No. 716600285

30 June 2015

Unit 1015, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169
More particularly described as Lot 1015 on SP142469, County of Stanley, Parish of South Brisbane

Registered instrument of transfer No. 716600309

14 September 2015

8 Johnston Street, West Ipswich, QLD, 4305
More particularly described as Lots 4 and 5 on RP 51716, County of Stanley, Parish of Ipswich.

Registered instrument of transfer No. 716754942

14 September 2015

Unit 1016, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169
More particularly described as Lot 1016 on SP142469, County of Stanley, Parish of South Brisbane

Registered instrument of transfer No. 716754938

8 April 2016

Unit 918, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169
More particularly described as Lot 918 on SP142469, County of Stanley, Parish of South Brisbane

Registered instrument of transfer No. 709494950

8 April 2016

Unit 1020, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169
More particularly described as Lot 1020 on SP142469, County of Stanley, Parish of South Brisbane

Registered instrument of transfer No. 711765065

8 April 2016

Unit 819, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169
More particularly described as Lot 819 on SP142469, County of Stanley, Parish of South Brisbane

Registered instrument of transfer No. 712912706

Share transfers

Transfer date

Shares transferred from the CFT to Flowon

Quantity

06/01/2015

AGL Energy Limited FPO

2200

06/01/2015

ALS Limited FPO

2600

06/01/2015

ANZ Banking Group Limited Cnv Pref Shares

600

06/01/2015

NZ Banking Group Limited Convertable Preference Shares CPS3

500

06/01/2015

ANZ Banking Group Limited Unsec Sub FR Notes

400

06/01/2015

Atlas Iron Limited FPO

20800

06/01/2015

Bank of Queensland Limited CPS

300

06/01/2015

BKI Investment Company Limited FPO

14413

06/01/2015

Commonwealth Bank of Australia PERLS VI

600

06/01/2015

Dexus Property Group Stapled Security

4134

06/01/2015

Insurance Australia Group Ltd FPO

5500

06/01/2015

iShares S&P Asia 50 ETF

300

06/01/2015

iShares S&P Europe ETF

280

06/01/2015

Mesoblast Limited FPO

3300

06/01/2015

National Australia Bank Income Securities

630

06/01/2015

National Australia Bank Subordinated Notes

300

06/01/2015

Orica Limited FPO

500

06/01/2015

PanAust Limited FPO

5000

06/01/2015

ResMed Inc CDIs

2750

06/01/2015

Santos Limited FPO

2221

06/01/2015

SPDR S&P/ASX 200 Fund ETF Units

900

06/01/2015

Stockland Stapled Securities

8200

06/01/2015

Trade Me Group Ltd FPO

4200

06/01/2015

Westpac Banking Corporation CPS

500

06/01/2015

Westpac Trust Preferred Security

300

20/01/2015

AMP Limited FPO

13996

20/01/2015

ANZ Banking Group Limited FPO

4477

20/01/2015

Bank of Queensland Limited FPO

4514

20/01/2015

Challenger Limited FPO

5950

20/01/2015

Computershare Limited FPO

3635

20/01/2015

Crown Resorts Limited FPO

2000

20/01/2015

Mirvac Group Stapled Security

22000

20/01/2015

National Australia Bank Ltd FPO

3932

20/01/2015

Newcrest Mining Limited FPO

2400

20/01/2015

Novogen Limited FPO

1100

20/01/2015

Oil Search Limited FPO

3319

20/01/2015

Prana Biotechnology Limited FPO

20000

20/01/2015

QBE Insurance Group Limited FPO

2709

20/01/2015

Rio Tinto Limited FPO

1090

20/01/2015

Russell High Div Aus Shares ETF

1500

20/01/2015

Sims Metal Management Limited FPO

3412

20/01/2015

Sirtex Medical Limited FPO

1000

20/01/2015

SPDR S&P/ASX 200 Listed Property Fund ETF

10200

20/01/2015

Suncorp Group Limited FPO

6290

20/01/2015

Telstra Corporation Limited FPO

11000

20/01/2015

Wesfarmers Limited FPO 1,025.00

1025

20/01/2015

Woodside Petroleum Limited FPO

2680

04/08/2015

AMP Limited FPO

284

04/08/2015

ANZ Banking Group Limited FPO

648

04/08/2015

BHP Billiton Limited FPO

4145

04/08/2015

Medibank Private Limited FPO

1800

04/08/2015

National Australia Bank Ltd FPO

132

04/08/2015

QBE Insurance Group Limited FPO

464

04/08/2015

South32 Limited FPO

4145

04/08/2015

Suncorp Group Limited FPO

301

Woolworths Limited FPO

1135

04/02/2016

Commonwealth Bank of Australia Limited FPO

1140

04/02/2016

Lendlease Group Stapled Security

2000

04/02/2016

Nanosonics Limited FPO

10,000

04/02/2016

Russell High Div Aus Shares ETF

700

04/02/2016

Westpac Banking Corporation FPO

4504

Cash transfer
The sum of $231,479.00 which was transferred on 19 January 2015.

CITATION:	Campbell & Anor v T. L. Clacher No. 2 Pty Ltd & Ors [2019] QSC 218
PARTIES:	SUZANNE CAMPBELL AND WENDY HOOK (Applicants) v T. L. CLACHER NO. 2 PTY LTD ACN 010 253 979 (AS TRUSTEE FOR THE CLACHER FAMILY TRUST) (First Respondent) AND FLOWON 241 PTY LTD ACN 603 200 102 (AS TRUSTEE FOR THE BLUMKE FAMILY TRUST) (Second Respondent) AND THOMAS LAIDLAW CLACHER (third respondent)
FILE NO/S:	BS No 11662 of 2016
DIVISION:	Trial Division
PROCEEDING:	Claim
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	4 September 2019
DELIVERED AT:	Brisbane
HEARING DATE:	6 and 7 March 2018, 3, 4, 5 and 6 December 2018.
JUDGE:	Jackson J
ORDER:	The judgment of the court is that: 1. It is declared that the resolutions made by the first respondent as trustee of the Clacher Family Trust on 14 June 2014, 9 October 2014 and 12 December 2014 were made invalidly and in breach of trust; 2. It is declared that the transfers of the properties, shares and cash identified in the Annexure to these reasons by the first respondent as trustee of the Clacher Family Trust to the second respondent as trustee of the Blumke Family Trust were made invalidly and in breach of trust; 3. It is ordered that the first respondent be removed as trustee of the Clacher Family Trust; 4. It is ordered that failing appointment by the Court of an individual as trustee of the Clacher Family Trust within 21 days of this order, the Public Trustee of Queensland be appointed as trustee of the Clacher Family Trust; 5. It is ordered that the third respondent is restrained from exercising the powers of removal or appointment of a trustee under clause 22 of the Clacher Family Trust; 6. It is ordered that the second respondent execute such documents and do all such things as the trustee of the Clacher Family Trust reasonably requires to enable the properties, shares and cash identified in the Annexure to these reasons that it holds as trustee of the Blumke Family Trust to be transferred to the trustee of the Clacher Family Trust within 7 days of being so requested; 7. It is ordered that within 28 days of the appointment of the new trustee of the Clacher Family Trust the second respondent deliver up to such new trustee complete copies of the books and records of the second respondent in its capacity as trustee of the Blumke Family Trust and of the Blumke Family Trust since 16 December 2014; 8. The proceeding is otherwise adjourned to a date to be fixed in relation to the grant of further or other relief and the determination of any questions of costs; 9. Liberty to apply; 10. It is directed that the applicants file and serve an outline of submissions as to costs, together with any supporting affidavits, on or before 9 September 2019; 11. It is directed that the respondents file and serve an outline of submissions as to costs, together with any supporting affidavits, on or before 16 September 2019; 12. The applicants file and serve any outline of submissions in reply, on or before 18 September 2019; 13. The applicants are to deliver a bundle of all submissions to his Honour Justice Jackson’s Associate by email by 5pm on 18 September 2019.
CATCHWORDS:	EQUITY – TRUSTS AND TRUSTEES – POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES – LIABILITY FOR BREACH OF TRUST – WHAT CONSTITUTES A BREACH OF TRUST – where the third respondent was the sole director and shareholder of the first respondent – where the first respondent was the trustee of a family discretionary trust - where the third respondent as sole director of the first respondent made a number of resolutions as trustee – where the third respondent was subject to unconscionable conduct – where the resolutions made by the first respondent were not attended by a genuine and proper consideration of the discretionary power – whether the relevant resolutions and transactions were made in breach of trust EQUITY – TRUST AND TRUSTEES – PROCEEDINGS BETWEEN TRUSTEES AND BENEFICIARIES OR THIRD PARTIES – WHAT REMEDY AVAILABLE – where the third respondent was the sole director and shareholder of the first respondent – where the first respondent was the trustee of a family discretionary trust - where the third respondent as sole director of the first respondent made a number of resolutions as trustee – where the third respondent was subject to unconscionable conduct – where the resolutions made by the first respondent were not attended by a genuine and proper consideration of the discretionary power – whether the relevant resolutions and transactions were invalid and liable to be set aside EQUITY – TRUSTS AND TRUSTEES – APPOINTMENT, REMOVAL AND ESTATE OF TRUSTEES – RETIREMENT AND REMOVAL – REMOVAL BY THE COURT – GROUNDS FOR REMOVAL – whether the first respondent should be removed as trustee of the Clacher Family Trust AN v Barclays Private Bank and Trust (Cayman) Ltd (2007) 9 ITELR 630, cited Attorney-General for the Commonwealth v Breckler (1999) 197 CLR 83, cited Australasian Annuities Pty Ltd v Rowley Super Fund Pty Ltd [2015] VSCA 9, cited Australian Securities and Investments Commission v Kobelt [2019] HCA 18, cited Barclays Bank plc v Kennedy (1989) 58 P&CR 221, cited Barnes v Addy (1874) 9 Ch App 244, cited Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30, cited Bridgewaterv Leahy (1998) 194 CLR 457, cited Chennells v Bruce (1939) 55 TLR 422, cited Cock v Smith (1909) 9 CLR 773, cited Cornerstone Property & Development Pty Ltd v Suellen Properties Pty Ltd [2015] 1 Qd R 75, cited Curwen v Vanbreck (2009) 26 VR 335, cited Edge v Pensions Ombudsman [2000] Ch 602, cited Elder’s Trustee and Executor Co Ltd v Higgins (1963) 113 CLR 426, cited Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, cited Fox v Percy (2003) 214 CLR 118, cited Gisborne v Gisborne (1877) 2 App Cas 300, cited Giumelli v Giumelli (1999) 196 CLR 101, cited Johnson v Buttress (1936) 56 CLR 113, cited Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392, cited Karger v Paul [1984] VR 161, cited Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705, cited Luddy’s Trustee v Peard (1886) 33 Ch D 500, cited Lutheran Church of Australia South Australia District Incorporated v Farmers’ Co-operative Executors and Trustees Ltd (1970) 121 CLR 628, cited McPhail v Doulton [1971] AC 424, cited Meehan v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146, cited Mercanti v Mercanti [2016] WASCA 206, cited Miller vCameron (1936) 54 CLR 572, cited Ministry of Health v Simpson [1951] AC 251, cited Pilkington v Inland Revenue Commissioner [1964] AC 612, cited Platzer v Commonwealth Bank of Australia [1997] 1 Qd R 266, cited re Diplock; Wintle v Diplock [1948] Ch 465, cited Re Londonderry’s Settlement [1965] Ch 918, 936, cited Smith v Glegg [2005] 1 Qd R 561, cited Thorne v Kennedy (2017) 91 ALJR 1260, cited Vatcher v Paull [1915] AC 415, cited Land Title Act 1994 (Qld) Powers of Attorney Act 1998 (Qld) Rules of the Supreme Court 1900 (Qld) Trusts Act 1973 (Qld) Uniform Civil Procedure Rules 1999 (Qld)
COUNSEL:	R Treston QC and B Reading for the Applicants D Kelly QC and W LeMass for the First and third respondents on 6 and 7 March 2018 M Martin QC and D Ferraro for the Second Respondent
SOLICITORS:	Thynne & Macartney for the Applicants Cooper Grace Ward for the First and third respondents Mills Oakley for the Second Respondent

Date of transfer	Real property	Instrument of transfer
23 April 2015	Unit 401, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169 More particularly described as Lot 401 on SP142469, County of Stanley, Parish of South Brisbane	Registered instrument of transfer No. 716600268
30 June 2015	Unit 410, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169 More particularly described as Lot 410 on SP142469, County of Stanley, Parish of South Brisbane	Registered instrument of transfer No. 716600285
30 June 2015	Unit 1015, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169 More particularly described as Lot 1015 on SP142469, County of Stanley, Parish of South Brisbane	Registered instrument of transfer No. 716600309
14 September 2015	8 Johnston Street, West Ipswich, QLD, 4305 More particularly described as Lots 4 and 5 on RP 51716, County of Stanley, Parish of Ipswich.	Registered instrument of transfer No. 716754942
14 September 2015	Unit 1016, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169 More particularly described as Lot 1016 on SP142469, County of Stanley, Parish of South Brisbane	Registered instrument of transfer No. 716754938
8 April 2016	Unit 918, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169 More particularly described as Lot 918 on SP142469, County of Stanley, Parish of South Brisbane	Registered instrument of transfer No. 709494950
8 April 2016	Unit 1020, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169 More particularly described as Lot 1020 on SP142469, County of Stanley, Parish of South Brisbane	Registered instrument of transfer No. 711765065
8 April 2016	Unit 819, Shaftson Mansions, 188 Shaftson Avenue, Kangaroo Point, QLD, 4169 More particularly described as Lot 819 on SP142469, County of Stanley, Parish of South Brisbane	Registered instrument of transfer No. 712912706

Transfer date	Shares transferred from the CFT to Flowon	Quantity
06/01/2015	AGL Energy Limited FPO	2200
06/01/2015	ALS Limited FPO	2600
06/01/2015	ANZ Banking Group Limited Cnv Pref Shares	600
06/01/2015	NZ Banking Group Limited Convertable Preference Shares CPS3	500
06/01/2015	ANZ Banking Group Limited Unsec Sub FR Notes	400
06/01/2015	Atlas Iron Limited FPO	20800
06/01/2015	Bank of Queensland Limited CPS	300
06/01/2015	BKI Investment Company Limited FPO	14413
06/01/2015	Commonwealth Bank of Australia PERLS VI	600
06/01/2015	Dexus Property Group Stapled Security	4134
06/01/2015	Insurance Australia Group Ltd FPO	5500
06/01/2015	iShares S&P Asia 50 ETF	300
06/01/2015	iShares S&P Europe ETF	280
06/01/2015	Mesoblast Limited FPO	3300
06/01/2015	National Australia Bank Income Securities	630
06/01/2015	National Australia Bank Subordinated Notes	300
06/01/2015	Orica Limited FPO	500
06/01/2015	PanAust Limited FPO	5000
06/01/2015	ResMed Inc CDIs	2750
06/01/2015	Santos Limited FPO	2221
06/01/2015	SPDR S&P/ASX 200 Fund ETF Units	900
06/01/2015	Stockland Stapled Securities	8200
06/01/2015	Trade Me Group Ltd FPO	4200
06/01/2015	Westpac Banking Corporation CPS	500
06/01/2015	Westpac Trust Preferred Security	300
20/01/2015	AMP Limited FPO	13996
20/01/2015	ANZ Banking Group Limited FPO	4477
20/01/2015	Bank of Queensland Limited FPO	4514
20/01/2015	Challenger Limited FPO	5950
20/01/2015	Computershare Limited FPO	3635
20/01/2015	Crown Resorts Limited FPO	2000
20/01/2015	Mirvac Group Stapled Security	22000
20/01/2015	National Australia Bank Ltd FPO	3932
20/01/2015	Newcrest Mining Limited FPO	2400
20/01/2015	Novogen Limited FPO	1100
20/01/2015	Oil Search Limited FPO	3319
20/01/2015	Prana Biotechnology Limited FPO	20000
20/01/2015	QBE Insurance Group Limited FPO	2709
20/01/2015	Rio Tinto Limited FPO	1090
20/01/2015	Russell High Div Aus Shares ETF	1500
20/01/2015	Sims Metal Management Limited FPO	3412
20/01/2015	Sirtex Medical Limited FPO	1000
20/01/2015	SPDR S&P/ASX 200 Listed Property Fund ETF	10200
20/01/2015	Suncorp Group Limited FPO	6290
20/01/2015	Telstra Corporation Limited FPO	11000
20/01/2015	Wesfarmers Limited FPO 1,025.00	1025
20/01/2015	Woodside Petroleum Limited FPO	2680
04/08/2015	AMP Limited FPO	284
04/08/2015	ANZ Banking Group Limited FPO	648
04/08/2015	BHP Billiton Limited FPO	4145
04/08/2015	Medibank Private Limited FPO	1800
04/08/2015	National Australia Bank Ltd FPO	132
04/08/2015	QBE Insurance Group Limited FPO	464
04/08/2015	South32 Limited FPO	4145
04/08/2015	Suncorp Group Limited FPO	301
Woolworths Limited FPO	1135
04/02/2016	Commonwealth Bank of Australia Limited FPO	1140
04/02/2016	Lendlease Group Stapled Security	2000
04/02/2016	Nanosonics Limited FPO	10,000
04/02/2016	Russell High Div Aus Shares ETF	700
04/02/2016	Westpac Banking Corporation FPO	4504