Grove v Simon DIRK KENWORTHY-GROEN as executor of the estate of William Grove

[2022] WASC 69

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   GROVE -v- SIMON DIRK KENWORTHY-GROEN as executor of the estate of WILLIAM GROVE [2022] WASC 69

CORAM:   MASTER SANDERSON

HEARD:   17 FEBRUARY 2022

DELIVERED          :   1 MARCH 2022

FILE NO/S:   CIV 1369 of 2021

BETWEEN:   JOHN GROVE

Plaintiff

AND

SIMON DIRK KENWORTHY-GROEN as executor of the estate of WILLIAM GROVE

First Defendant

SIMON DIRK KENWORTHY-GROEN

Second Defendant

ANDREW HENDRICK GROVE

Third Defendant

GROVE SUPERANNUATION PTY LTD AS TRUSTEE FOR THE GROVE SUPERANNUATION FUND (ACN 113 205 495)

Fourth Defendant

Catchwords:

Practice & procedure - Application to strike out parts of amended statement of claim - Turn on own facts

Legislation:

Nil

Result:

Application dismissed

Category:    B

Representation:

Counsel:

Plaintiff	:	P D C Robinson
First Defendant	:	L A Tsaknis
Second Defendant	:	L A Tsaknis
Third Defendant	:	No appearance
Fourth Defendant	:	No appearance

Solicitors:

Plaintiff	:	Williams & Hughes
First Defendant	:	Fort Knox Legal
Second Defendant	:	Fort Knox Legal
Third Defendant	:	Dwyer Durack
Fourth Defendant	:	Croftbridge

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

Nil

MASTER SANDERSON:

1. This was the return of the first and second defendants' chamber summons seeking to strike out two paragraphs of the plaintiff's amended statement of claim.  The amended statement of claim was filed 10 August 2021.  The summons was filed 3 September 2021.  Leave was therefore required to bring this application.  As the delay was only three days, I would have extended the time to bring the application although, as counsel for the plaintiff pointed out, there was no application in the chamber summons for an extension of time, and there was no affidavit from either the first or second defendants explaining the delay.  But in the context of a long running series of bitter disputes between these parties, to put the first and second defendants out of court based on a nominal delay would not be in the interests of justice.  In any event, the point is moot.  I have determined the application to strike out the two paragraphs should be dismissed. 

2. Turning then to the amended statement of claim, the plaintiff is identified as the son of William and Margaret Grove, both of whom are deceased.  He is the brother of the second and third defendants.  The fourth defendant is the trustee of the Grove Superannuation Fund.  At all materials times, Simon and Andrew were directors of the fourth defendant.

3. The B.E. Lynn Trust is said to have been established in November of 1971.  The beneficiaries of that trust were John, Simon, Andrew and their sister, the now deceased Sonja.  Originally, Margaret was the trustee of the trust, but in November of 1971 she appointed her then husband, William, as the trustee.  Paragraphs 5 and 6 of the amended statement of claim plead duties owed by the trust to the beneficiaries and duties owed by William in his capacity as trustee to the beneficiaries.  By reference to the terms of the B.E. Lynn Trust, the plaintiff pleads that on and from the date Sonja turned 21, the trustee held the trust assets in equal shares for John, Simon, Andrew and Sonja. 

4. William died on 30 October 2015.  Probate of William's will was granted to Simon on 8 February 2016.  It is said Simon could have applied to be the trustee of the B.E. Lynn Trust in place of William but has declined to do so.  Accordingly, it is alleged, since the death of William, the B.E. Lynn Trust has been without a trustee.

5. The plaintiff pleads that by resolution dated 21 August 2015, William, as trustee of the B.E. Lynn Trust, 'purportedly' resolved that the corpus of the B.E. Lynn Trust be distributed as between the three surviving beneficiaries.  It is said that John received nothing because the distribution was said to discharge John's loan account with the trust and a debt a company associated with John allegedly owed to the trust.  It is alleged Simon and Andrew received all of the assets of the trust.  John says in acting in this way, William was in breach of trust.  The reasons why it is alleged William acted in breach of trust are pleaded at some length.  Based upon this alleged breach of trust, John seeks an account.  Of some significance is paragraph 25 of the amended statement of claim which is in the following terms.

   William did not render a true and full account of all transactions he made in his capacity as the trustee of the B.E. Lynn Trust or involving the B.E. Lynn Trust assets, including the assets distributed pursuant to the August 2015 Resolution.

6. By paragraph 27 in the amended statement of claim, it is pleaded that Andrew knew certain matters, including that John was entitled to at least a quarter share of the assets of the B.E. Lynn Trust.  A similar plea in relation to Simon is made in paragraph 28 of the amended statement of claim.  By paragraph 30 of the amended statement of claim, John pleads that by reason of Andrew and Simon's conduct, and their 'knowing receipt' of money provided to them in breach of trust, resulted in John suffering loss. 

7. Paragraphs 31 to 35 of the amended statement of claim appear under the heading 'Knowing assistance by Andrew'.  Essentially, it is alleged that William involved Andrew in the managing of the affairs of the B.E. Lynn Trust.  That then leads to paragraph 35 of the amended statement of claim which is in the following form (marking up omitted):

   35.By reason of Andrew’s conduct pleaded in paragraph 34 above:

   35.1John and/or the B.E. Lynn Trust have suffered loss and damage; and/or

   35.2 Andrew, Simon and/or Grove Superannuation have profited.

   Particulars

   Particulars of loss and damage will be given after discovery, subpoenas and a taking of accounts.

   35A. On or about 20 October 2015, William in his capacity as trustee of the B.E. Lynn Trust used $55,000 from the B.E. Lynn Trust to purchase shares in Rural Funds Group. Only 1,469 shares were appropriated and $53,384.10 was returned from the share purchase plan and distributed to Andrew.

   Particulars

   Third Defendant’s Defence dated 28 June 2021, paragraph 9(f). Further particulars may be provided after discovery and subpoenas.

   35B. William’s conduct pleaded in paragraph 35A above was in breach of the duties pleaded at paragraphs 5 and 6 above in that:

   35B. 1 to the extent it was purportedly pursuant to the August 2015 Resolution, paragraph 21 above is repeated;

   35B.2 to the extent it was not pursuant, or purportedly pursuant, to the August 2015 Resolution, paragraphs 3.2 and 9 above are repeated.

   35C. In the premises pleaded in paragraph 35B above:

   35C.1John and/or the B.E. Lynn Trust have suffered loss and damage; and/or

   35C.2 Andrew has profited.

   Particulars

   Particulars of loss and damage will be given after discovery, subpoenas and a taking of account.

   Transfer of B.E. Lynn Trust assets to Grove Superannuation

   35D. William in his capacity as trustee of the B.E. Lynn Trust transferred from the BE Lynn Trust to Grove Superannuation the following assets:

   35D.1 17,213 AGL Energy Ltd shares and 118,043 Buru energy Limited shares on or about 9 October 2014; and

   35D.2 370,572 CTI Logistics Limited shares, 2,592 Rio Tinto Limited shares and 15,259 Woodside Petroleum Limited shares on or about 28 August 2015.

   Particulars

   Third Defendant’s Defence dated 28 June 2021, paragraphs 9(c) ‑ 9(d). Further particulars may be provided after discovery and subpoenas.

   35E. On or about 15 September 2015, William in his capacity as trustee of the B.E. Lynn Trust transferred from the BE Lynn Trust to Grove Superannuation the following assets:

   35E.1 3,200 Australian Agricultural Company shares;

   35E.2 342,162 Alchemia Ltd shares;

   35E.3 60,700 Alumina Ltd Fpo shares;

   35E.4 146,667 Clover Corporation shares;

   35E.5 1,301,300 Far Ltd FPO shares;

   35E.6 18,000 Kingsgate Consolidated shares;

   35E.7 133,313 Lynas Corp FPO shares;

   35E.8 66,656 Lynas Corp Ltd options;

   35E.9 30,000 Partcontinental Oil FPO shares;

   35E.10 2,020,000 Resonance Health FPO shares;

   35E.11 16,000 Ramellus Resources Limited shares;

   35E.12 21,332 St Barbara Ltd shares;

   35E.13 13,500 Speciality Fashion Group shares;

   35E.14 3,727 Washington H. Soul Pattinson & Co Ltd shares; and

   35E.15 1,251,999 Tiger Resources Limited shares.

   Particulars

   Third Defendant’s Defence dated 28 June 2021, paragraph 9(e). Further particulars may be provided after discovery and subpoenas.

   35F. William’s conduct as pleaded at paragraphs 35D-35E above was in breach of the duties pleaded at paragraphs 5 and 6 above in that:

   35F.1 to the extent it was purportedly pursuant to the August 2015 Resolution, paragraph 21 above is repeated;

   35F.2 to the extent it was not pursuant, or purportedly pursuant, to the August 2015 Resolution, Grove Superannuation was not a beneficiary of the B.E. Lynn Trust and, further, paragraphs 3.2 and 9 above are repeated.

   35G. By reason of the matters pleaded in paragraph 1A.2(c) above, William’s knowledge of the conduct pleaded in paragraphs 35D ‑ 35F is imputed to Grove Superannuation.

   35H. In the premises pleaded at paragraph 35D-35F and with the knowledge pleaded in paragraph 35G above, Grove Superannuation received at least the assets of the B.E. Lynn Trust referred to in paragraphs 35D and 35E with knowledge of William’s breach of fiduciary duty.

   Particulars

   Further particulars may be provided after discovery and subpoenas.

   35I. By reason of Grove Superannuation’s conduct pleaded in paragraph 35H above:

   35I.1 John and/or the B.E. Lynn Trust have suffered loss and damage; and/or

   35I.2 Simon, Andrew and/or Grove Superannuation have profited.

   Particulars

   Particulars will be given after discovery, subpoenas and a taking of accounts

8. Paragraph 35I.2 really pleads the same matter but does so by reference to the fourth defendant.  In both cases, the defendant's complaint is the same.  They say that whether or not Simon benefited from the actions of Andrew is irrelevant.  No allegation is made against Simon personally.  If there is any fault it does not lie with Simon.  He would not be liable to disgorge any of the funds he received on the distribution.  Any right of action is against Andrew. 

9. The difficulty with the argument is that it overlooks the plea in paragraph 27.  Although Simon may not have been directly involved in the mechanics which led to a distribution from the B.E. Lynn Trust, by reason of matters pleaded in paragraph 27, John says Simon knew he was not entitled to the funds.  So he was not an innocent bystander, rather it is alleged he was involved, even if passively, in the alleged breach of trust.

10. On that basis, it is not appropriate to strike out the paragraphs complained of.  I am satisfied the cause of action alleged against Simon is appropriately pleaded and the paragraphs can stand.  The application of the defendants will be dismissed.  The defendants ought pay the plaintiff's costs of the application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

MM

Court Officer

1 MARCH 2022