Glassock v The Trust Company (Australia) Pty Ltd

In Glassock v The Trust Company (Australia) Pty Ltd, the applicants, who are the executors and trustees of a deceased’s estate as well as the residuary beneficiaries, sought the Court's advice and direction regarding an inter vivos transfer of property made by the deceased to another beneficiary. The primary dispute was whether the applicants should initiate legal proceedings to set aside the transfer and, if so, whether the estate should bear the costs of such proceedings.

The legal issues before the Court involved the interpretation and application of section 96 of the Trusts Act 1973, which allows the Court to provide directions to trustees and beneficiaries. The Court had to determine if the applicants had a legitimate basis to seek the setting aside of the inter vivos transfer and, if proceedings were warranted, whether the costs should be charged to the estate. The Court also considered the implications of the applicants' dual roles as executors, trustees, and beneficiaries, which could potentially create a conflict of interest.

The Court found that the applicants had a valid basis to seek advice regarding the inter vivos transfer, as it could impact the distribution of the estate. The Court concluded that the applicants should indeed commence proceedings to set aside the transfer if there were sufficient grounds to do so. Regarding the costs, the Court held that if the applicants proceeded with the litigation and succeeded, the costs should be borne by the estate. This decision balanced the need for the applicants to protect the estate’s interests with the principle that the estate should bear the costs of litigation aimed at preserving its assets.

The Court’s final orders directed the applicants to initiate proceedings to set aside the inter vivos transfer if appropriate, and specified that the costs of such proceedings should be charged to the estate if successful.