Hamilton v Roche (No 3)

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
HAMILTON v ROCHE & ANOR (No 3)
[2023] SASC 65
Judgment of the Honourable Auxiliary Justice Bochner
EQUITY - TRUSTS AND TRUSTEES - APPLICATIONS TO COURT FOR ADVICE AND AUTHORITY
SUCCESSION - ADMINISTRATION OF ESTATE - INTEREST OF BENEFICIARY OR NEXT OF KIN IN UNADMINISTERED ESTATE
SUCCESSION - ADMINISTRATION OF ESTATE - OTHER MATTERS
The applicant and the first respondent are the executors and trustees of the estate.
The first respondent seeks advice and directions that the Executors would be justified in:
1.not opposing the pending application by Serves Pty Ltd in the New South Wales Supreme Court for the appointment of a trustee to sell Unit 4 (known as Unit 3), 9 – 11 Rosemont Avenue, Woollahra 2025, New South Wales (Woollahra Property), pursuant to section 66G of the Conveyancing Act 1919 (NSW);
2. selling the Estate’s 50% interest in the Woollahra Property in order to discharge the Estate’s liabilities to AET as trustee of the JJR Investment Trust totalling $1,089,356, and any other liabilities of the Estate, in circumstances where the Estate’s only remaining asset is its interest in the Woollahra Property; and
3. borrowing monies to permit the Estate to pay its proportion of the ongoing expenses incurred in respect of the Woollahra Property and, if so, from whom and on what terms.

Held
1.The Executors would be justified in not opposing the pending application by Serves Pty Ltd in the New South Wales Supreme Court for the appointment of a trustee to sell the property, pursuant to section 66G of the Conveyancing Act 1919 (NSW).
2.The Executors of the Estate would be justified in selling the Estate’s 50% interest in the property in order to discharge the Estate’s liabilities to AET as trustee of the JJRIT totalling $1,089,356, and any other liabilities of the Estate, in circumstances where the Estate’s only remaining asset is its interest in the property.
3.The Executors would not be justified in borrowing moneys to permit the estate to pay its proportion of the ongoing expenses incurred in respect of the property.

Administration and Probate (Administration Guarantees) Amendment Act 2003 (SA) s 69; Conveyancing Act 1919 (NSW), referred to.
Official Receiver in Bankruptcy v Schultz and Anor (1990) 170 CLR 306; The Estate of the Late Ida Mary Fryer; Stokes v Churchill (1994) NSW ConvR 55-694; Yule v Irwin (No 2) [2016] SASC 178; Union Bank of Australia v Harrison, Jones & Devlin Ltd (1910) 11 CLR 492; Johnson v Trotter; Estate of Trotter [2006] NSWSC 67; Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; Burke v Public Trustee for the State of South Australia [2022] SASCA 64, considered.

HAMILTON v ROCHE & ANOR (No 3)
[2023] SASC 65
CIVIL

On 19 September 2022, I delivered a judgment on an application by the first first respondent to summarily dismiss the originating application in this matter.[1] I dismissed all of the paragraphs of the originating application, except one. That paragraph sought:
An order that Title be transferred forthwith by the Applicant and First First respondent from the name of the Deceased to the Second First respondent, in its capacity as trustee of the JJR Investment Trust.
[1] [2022] SASC 103.
The paragraph refers to the title to a unit in Woollahra in New South Wales (“the property”), which is held as tenants in common, by the estate of the late John Justin Roche (deceased) and Serves Pty Ltd (“Serves”). The applicant and the first first respondent, as the executors of the estate of the deceased, are unable to agree on how the half share of the property owned by the estate should be dealt with. In my September judgment, I summarised this dispute in the following way:
Suffice to say, the applicant wants the property to be transferred to the residuary beneficiary regardless of the likely land tax consequences. The first respondent does not want the property to be transferred until the land tax consequences have been fully investigated and ameliorated if possible. They are clearly deadlocked on this question and have been so deadlocked for many months. It is clear that a court will need to resolve this question.[2]
[2] Ibid, [39].
I found that the deceased’s half share in the property remained vested in the applicant and the first respondent as executors and not as trustees.[3]
A brief recap of the background and some of the issues arising in the various actions involving these parties
[3] Ibid, [38].
The deceased died 24 April 2010, and a grant of probate in common form was obtained by the applicant and first respondent on 22 August 2011. Between 22 August 2011 and 20 October 2011, a substantial part of the estate was administered; the administration of the estate was brough to a halt on 20 October 2011, when Shauna Roche, the sister of the applicant and first respondent, brought an action to revoke the grant and obtain a grant of probate in solemn form of an earlier will. This action went to trial and was finally resolved in 2018. It was only after the final resolution of that action that the estate administration could recommence.
At the time that the administration was suspended, only two assets remained in the estate: a parcel of shares and the half share in the property. The estate’s debts had been assigned to the residuary beneficiary in 2011. As well as reaching a deadlock as to how the property should be dealt with, the parties were also unable to agree on how the shares should be dealt with. The dispute about the shares was resolved after this action was commenced. The only asset now remaining in the estate is the half share in the property, which, in the will of the deceased, is left to the residuary beneficiary, the JJR Investment Trust (“the JJRIT”).
Until 14 September 2022, the trustee of the JJRIT was JJR Holdings Pty Ltd, the directors of which are the applicant and the first respondent. On 14 September 2022, JJR Holdings Pty Ltd was replaced as the trustee by Australian Executor Trustees Ltd (“AET”).
The JJRIT is a discretionary trust. The deceased and his granddaughters, Alexandra and Airlie Hamilton are named as specified beneficiaries. Clause 1.1 of the trust deed also defines “general beneficiaries”; this is a very wide class, and includes a range of charities, trusts, companies and relatives of the specified beneficiaries as well as the specified beneficiaries themselves. Clause 3 of the trust deed gives the trustee absolute discretion in dealing with the income of the trust. The deed does not differentiate between general and specified beneficiaries in the discretion afforded to the trustee in dealing with the income of the trust.
Serves is the trustee of the Rosemont Trust. It has no assets save for its share in the property and it carries on no business. The deceased lent to Serves the purchase price of its half share in the property and, until his death, paid its share of the ongoing expenses and maintenance attributable to the property. From the time of his death until September 2022, the JJRIT has paid its share of the ongoing expenses. The Rosemont Trust’s debt owed to the deceased’s estate was transferred to the JJRIT before the institution of probate action in 2011. AET has advised that it will no longer pay Serves’ share of these expenses.
The directors of Serves are the applicant, the first respondent, Shauna Roche, Mark Balnaves and Andrew Fletcher. Mr Balnaves and Mr Fletcher are independent of the Roche family. The specified beneficiaries of the Rosemont Trust are three companies, each of which is controlled by one of the applicant, the first respondent and Shauna Roche. There is also a large group of general beneficiaries which includes the applicant, the first respondent and Shauna Roche in their personal capacities.
Developments since September 2022
On 25 October 2022, a meeting of the Board of Serves was held, to discuss what Serves should do with respect to its share in the property. The majority of directors resolved to sell the property, either with the consent and cooperation of the estate, or through an application to the court for orders for the appointment of a trustee to manage the sale of the property. The proposal to sell the property was approved on the basis that there was no ongoing arrangement to have the expenses relating to Serves’ share of the property paid, Serves was unable to pay them itself, and in the event that AET, as trustee for the JJRIT called in the loan made to Serves, Serves would be unable to make payment. I note that the applicant voted against the sale of the property and the first respondent abstained.
On 12 November 2022, Mr Balnaves wrote to the applicant and first respondent in their capacity as executors of the estate to advise them of the resolution made by Serves’ Board. Ultimately, on 9 December 2022, Serves commenced an action in the Supreme Court of New South Wales, seeking the appointment of a trustee to sell the property (“the NSW action”). The summons and supporting affidavit were served on the applicant and first respondent in their capacity as executors.
On 14 February 2023, the applicant filed an appearance in the NSW action in her capacity as executor, but noting that the appearance was not filed on behalf of the first respondent and that her lawyers did not act for the first respondent. She also filed an interlocutory application, seeking the cross-vesting of the NSW action to South Australia, an order for the joinder of AET and an order that Serves provide security for costs. On 20 February 2023, the first respondent filed, in this action, an application for advice or directions pursuant to s 69 of the Administration and Probate Act 1919 (SA) (“the Act”).[4] She seeks advice or directions on the following questions:
1.whether the Executors would be justified in not opposing the pending application by Serves Pty Ltd in the New South Wales Supreme Court for the appointment of a trustee to sell Unit 4 (known as Unit 3), 9 – 11 Rosemont Avenue, Woollahra 2025, New South Wales (Woollahra Property), pursuant to section 66G of the Conveyancing Act 1919 (NSW);
2. whether the Executors of the Estate would be justified in selling the Estate’s 50% interest in the Woollahra Property in order to discharge the Estate’s liabilities to AET as trustee of the JJR Investment Trust totaling [sic] $1,089,356, and any other liabilities of the Estate, in circumstances where the Estate’s only remaining asset is its interest in the Woollahra Property; and
3. whether the Executors would be justified in borrowing monies to permit the Estate to pay its proportion of the ongoing expenses incurred in respect of the Woollahra Property and, if so, from whom and on what terms.
[4] FDN 61.
FDN 61 was listed for directions on 15 March 2023. The day before the directions hearing, the applicant lodged an application to have FDN 61 summarily dismissed on the basis of a procedural irregularity. At the commencement of the directions hearing, that application had not yet been accepted for filing. On being accepted for filing, it became FDN 66.
Mr Hoffmann KC, on behalf of the first respondent urged me to list FDN 61 for hearing as soon as possible, to allow the executors to be in a position to formulate their response to the NSW action. Mr Hamilton, on behalf of the applicant, on the other hand submitted that I should adjourn FDN 61 for a period of six weeks to allow the cross-vesting application to be dealt with. He advised that the cross‑vesting application was listed for directions in a few days’ time. After hearing argument from the parties, I said:
What I'm going to do is I'm going to bring this application back. I don't think I can bring it back Friday, I'll bring it back early next week to see what's happening in the New South Wales action, to see whether you've been given a listing time for the cross vesting [application].
But having said that, given that one of the purposes of the application for advice and directions is to receive advice or directions on what would be the appropriate way for the executors to act in the New South Wales action, it really does need to be heard.[5]
[5] T12.16-26.
Mr Hamilton also submitted that he required time to prepare affidavit material in response to FDN 61. I adjourned the directions hearing for a week, and made it clear that, on the next occasion, FDN 61 and FDN 66 would be listed for hearing.[6]
[6] T14.16-28.
The directions hearing resumed on 21 March 2023. At this hearing, Mr Hamilton purported to canvass much of the history of the administration of the estate and submitted that FDN 61 should be adjourned for a further month to allow the parties to attend mediation and to allow AET to determine its course with respect to the property. He reported that the NSW action had not progressed and had simply been adjourned to a further directions hearing. Mr Hoffmann KC pressed for an early hearing date, so that the executors could respond appropriately to the NSW action. Mr Thomas, who appeared on behalf of AET, did not seek an adjournment of the matter and was content to abide the hearing dated fixed by the Court.
When I made it clear that I intended to list FDN 61 and FDN 66, Mr Hamilton submitted that he required a minimum of four, and up to six weeks to prepare the applicant’s affidavit material. He said that, at that time, neither she nor her solicitors had considered the affidavit supporting the application for advice or directions.[7] I listed the applications for hearing on 20 April 2023 and set a timetable for the filing of material. Some days later the applicant advised that she did not press her application for summary dismissal of FDN 61.
[7] T12.18-23.
The matter was called back on urgently at the request of Mr Hamilton on 13 April 2023. At that time, he made a number of complaints. The first was that FDN 61 had been filed without notice. The second was that the “beneficiaries” had not been served with the application. At this point, he pointed to a person in the court room and advised that she was Airlie Victoria Roche Hamilton, one of the specified beneficiaries of the JJRIT. He appeared to contend that she should have been served with FDN 61 and that she had a right to be heard on it, as did her sister. His third complaint was that consideration of FDN 61 involved consideration of the testamentary intentions of the deceased including his wishes about the ongoing ownership of the property. More time was needed to collate this evidence. He then advised that the applicant had in fact filed on 4 April 2023, an application for advice or directions in the NSW action, and he submitted that FDN 61 should be adjourned to allow that application to be heard. This application was filed by the applicant in her capacity as an executor of the estate and a beneficiary of the Rosemont Trust and the JJRIT.
I dismissed the applicant’s application to adjourn the hearing of FDN 61. I did this on the basis that I considered that, by filing an application for advice or directions in the NSW action after FDN 61 had been listed for hearing, the applicant had deliberately created a multiplicity of proceedings which amounted to an abuse of process. I further considered that there was no obligation to serve the beneficiaries of the JJRIT with FDN 61 and the supporting affidavit material.
At this hearing, I also made orders for the filing by AET of an application for advice and directions, to be heard on the same day as FDN 61. AET did in fact file an application for advice and directions which was heard on 20 April 2023. I will deal with that application in a separate decision.
FDN 61 was heard on 20 April 2023. This decision deals with the questions raised in it.
A number of preliminary issues
Before I deal with the questions, it is necessary that I address a number of preliminary issues.
The first of those issues is the capacity in which the estate holds its share of the property. As I have already set out, I found in September 2022 that the applicant and first respondent held the property in their capacity as executors not trustees. During the deceased’s lifetime, he paid all of the expenses related to the property, including those expenses attributable to Serves. Since his death, the expenses have been met by the JJRIT. They have been recorded in the books of JJRIT as a loan to the estate. A copy of the estate’s loan account with the JJRIT is exhibited to FDN 62, at pages 12 to 20 of FR9; there are many entries that appear to relate to the property. The loan account also records amounts lent to the estate to pay the legal fees related to the probate action.
It is well-established that property which is the subject matter of a bequest or devise does not vest in the named beneficiary on the death of the testator. In Official Receiver in Bankruptcy v Schultz and Anor,[8] the High Court said:
Not only does the legal ownership in the property not vest in the named beneficiary at the time of death of the testator, nor does the equitable ownership. That emerges from the Privy Council’s decision in Commissioner of Stamp Duties (Q) v Livingston. The reason for this is that, prior to administration of the deceased estate, there is no specific property capable of constituting the subject property of any trust in favour of the beneficiary. It could not be said at that stage what part or parts of the testator’s property would need to be realized for the purposes of administration. So it was held that the beneficiary does not have a proprietary interest in each of the assets which are the subject of the devise or bequest such that he or she can say “this is mine” or “this belongs to me”.
[Citations removed]
[8] (1990) 170 CLR 306.
It went on to say:
The right which any beneficiary has to an unadministered estate springs from the duty of the executor to administer the estate, to preserve the assets and to deal with them in the proper manner. Each beneficiary has an interest in seeing that the whole of the assets are treated in accordance with the executor’s duties. In that sense, the beneficiaries as a class may be said to have an interest in the entire estate. But it does not follow that each piece of property which goes to make up the estate is held on a particular trust for the beneficiary named as its intended recipient upon completion of administration: Horton v. Jones.
[Citations removed]
This principle was applied by Santow J in The Estate of the Late Ida Mary Fryer; Stokes v Churchill,[9] where he said:
The interest of a beneficiary in an unadministered estate confers no beneficial interest in any particular item of property but rather a right, by way of a chose in action, capable of being invoked for the proper administration of the estate…[10]
[9] (1994) NSW ConvR 55-694, BC9302342.
[10] Ibid at 14.
In Yule v Irwin (No 2),[11] Nicholson J explained the principle in the following way:
The distinction to be drawn is that between the situation where an estate is still being administered by the executors such that the legal and beneficial rights of the estate vest in the executors and the circumstances where the executorial function has ended in respect of a particular asset or assets which ending is evidenced by the assent of the executors to their holding of that asset for a particular beneficiary. When looking at it from the perspective of a beneficiary, the distinction is between the situation where a beneficiary is still to be regarded as having only a right, as against the executors, to the due administration of the estate and the situation where the executors hold a particular asset, having been appropriated by the assent of the executors, to the benefit of a particular beneficiary such that the beneficiary now has an interest in an identifiable asset with respect to which the executors have become trustee.
[11] [2016] SASC 178.

These statements of the law make it very clear that, as executors, the applicant and first respondent hold both the legal and the equitable ownership of the estate’s share of the property. As residuary beneficiary of the estate, the JJRIT holds no interest in it, save for the right to have the estate duly administered. And the beneficiaries of the JJRIT have no interest at all. Thus, Airlie and Alexandra Hamilton, who are the specified beneficiaries of the JJRIT and are not beneficiaries of the estate, are not entitled to be served with the application nor to be heard on it.
I note that AET has not asserted a beneficial interest in the property as a result of the moneys outlaid, first by the deceased in purchasing and maintaining it, and then by the JJRIT to maintain it. In the absence of any contention by AET that the JJRIT holds an equitable interest in the share held by the Rosemont Trust or the estate on this basis, then the JJRIT’s interest rises no higher than the interest of any beneficiary, to have the estate duly administered. AET has not made any assertion that it holds an equitable interest in the property as a result of the loans made by the deceased and JJRIT to the Rosemont Trust and the estate either in respect of the share held by the estate, or the share held by the Rosemont Trust.
The second issue which needs to be dealt with is whether it is possible to bind two executors with opposing views in an application such as this.
It has long been established that, where there is more than one executor, they hold the assets of the estate as joint tenants. In Union Bank of Australia v Harrison, Jones & Devlin Ltd,[12] Isaacs J said of the office of executor:
The office is one and indivisible, no matter whether it is executable by one or several. When it is said that co-executors are to be regarded as an individual person, it is not meant that all must unite in the performance of each act, but that their official personality is not divisible or distinguishable, and that they have individually and collectively all the rights and duties of the office they undertake.[13]
[12] (1910) 11 CLR 492.
[13] Ibid, 516.
He went on to say:
…whether an official act be done by one, or some, or all of the executors, it is equally binding upon all, because in each case the office is discharged, and the testator is fully represented.[14]
[14] Ibid, 518.
These statements were relied on by White J in the New South Wales Supreme Court in Johnson v Trotter; Estate of Trotter.[15]
[15] [2006] NSWSC 67.
This is relevant, because the applicant has suggested that it is neither appropriate nor possible for the Court to provide advice or directions that would bind both executors. In fact, she has submitted that, if the Court is minded to advise that the executors would be justified in acting in the manner set out in FDN 61, such advice should not be given in a way that binds her.
I consider that this misconceives the nature and purpose of an application pursuant to s 69 of the Act. The advice or direction given by the Court does not bind an executor to do something or not to do something. No orders are made in the formal sense. The intention of such an application is not to determine legal rights or obligations, and the advice or direction given is permissive, rather than mandatory.[16] Daniel Clarry in his book The Supervisory Jurisdiction Over Trust Administration, described it in the following way:
The language of ‘directions’ is, strictly speaking, misleading in that the Court generally does not ‘direct’ trustees to do anything. Technically, after giving judicial advice to trustees, it will remain a matter for trustees to decide what to do in trust administration. In doing so, the Court is careful not to encroach upon the discretion of a trustee to decide what to do in the administration of a trust unless the trustee’s discretion has been formally surrendered to the Court – the surrendering of a discretion to the Court is a separate aspect of the supervisory jurisdiction over trust administration that is regulated by a distinct procedure. Thus, the language used by the Court in framing orders for giving judicial advice to trustees is that the trustee ‘would be justified in’, ‘is at liberty to’, or ‘could safely proceed in’ pursuing a certain course of action. In each of these forms of expression in which judicial advice to trustees is usually couched, the Court is not directing trustees to do anything. Instead the Court confirms the scope of lawful activity. As such, judicial advice to trustees is permissive, rather than mandatory. An order of a ‘permissive’ nature does not carry the ordinary consequence of contempt of Court for non-compliance; indeed, ‘it cannot be breached’. Judicial advice operates at a level removed from directing the trustee to pursue, or refrain from pursuing, a certain course of conduct. For example, a ‘Beddoe order’, in which the Court advises whether a trustee would be justified in commencing or defending legal proceedings, in an instance of judicial advice properly so‑called that does not direct the trustee to do anything. A trustee is not duty-bound to commence or defend litigation pursuant to a Beddoe order but retains discretion to do so and may compromise.[17]
[footnotes omitted]
[16] Daniel Clarry, The Supervisory Jurisdiction Over Trust Administration (Oxford University Press, 2018)
[17] Ibid, at [4.17].
Thus, if one of several executors acts in accordance with the advice or directions given by the Court, protection is provided to all of them, in the event that an action is subsequently brought against them for breach of duty. Where executors are in dispute as to the appropriate action to be taken in the administration of an estate, an application pursuant to s 69 gives them guidance as to what should be done in the best interests of the estate. It is an application which allows each of the executors to be heard and to receive the counsel of the Court as to the appropriate action to take. It is a common way for warring executors to resolve their disputes relating to the administration of an estate. Such was the situation faced by Nicholson J in Yule.[18]
[18] Supra.
The advice given to the questions posed by the first respondent will not require the executors to do anything; rather, it will give them advice as to what actions would be in the best interests of the estate. It is advice given to both of them; it is a matter for them what they do subsequently.
The third issue that must be addressed relates to a number of factual contentions made by the applicant.
The first of these contentions is in relation to the dispute as to whether the estate must reimburse the JJRIT the moneys lent to it to fund the probate action. The applicant says that the estate need not repay these moneys; rather than being treated as a loan these payments should be regarded as disgorgements or reimbursements for over distributions made by the executors to the JJRIT.
This contention is not supported by the evidence. The ledger of the JJRIT clearly records these amounts as loans. There is nothing to support the contention that the JJRIT was overpaid its entitlement as a beneficiary of the estate; at the time that the distributions were made to the JJRIT, a grant of probate was in place and no legal action had been commenced. There is no evidence to support any contention that the distributions made to the JJRIT prior to the commencement of the probate action were inappropriate, ill-advised or incorrect. Nor is there any evidence to support the contention that the moneys advanced by the JJRIT to fund the probate action were anything other than loans. The applicant has produced absolutely no evidence to suggest that this is even arguable. Ultimately, this may be a matter that will need to be decided by a Court, and will, to a large extend, depend on the attitude taken by AET. For the purpose of this application, I note merely that it is an assertion unsupported by the evidence and the weight I have placed on it has been determined by this conclusion.
The second contention is that the assets of the JJRIT will be diminished by a “round robin” transaction which will result in the JJRIT paying itself out of an asset that belongs to it. This contention must be rejected because it ignores a number of crucial details. The first is that the half share in the property does not belong to the JJRIT, either legally or beneficially. The second is that it ignores the legal structures put in place by the deceased. The JJRIT and the estate are separate legal entities and must be treated as such. There is no justification for blurring their separate legal personalities.
The third contention is that the sale of the property is contrary to the wishes of the deceased and not in the best interests of the named beneficiaries, including the specified beneficiaries. It may be the case that the deceased wished the property to be held by the JJRIT; this does not override the need for the estate to pay its debts with the assets available to it. Thus, if the only asset available to pay the debts of the estate is the property, then the wishes of the deceased are neither here nor there particularly given that the will gives the executors the discretion to sell any asset of the estate. Further, the best interests of the beneficiaries of the JJRIT are also irrelevant. The purpose of an application for advice or directions is to advise on what action is in the best interests of the estate. The beneficiaries of the JJRIT are not beneficiaries of the estate. The applicant has conflated the two.
The fourth contention is that the JJRIT became the beneficial owner of the estate’s share of the property in around 22 September 2011 when the estate was substantially distributed, as a result of which transmission of the legal title is a mere formality. This contention completely ignores my decision delivered on 19 September 2022,[19] where I expressly found that the estate’s share of the property remained vested in the executors, both as to its legal and equitable interest. The applicant chose not to appeal this decision and so is bound by it.
[19] [2022] SASC 103.
The fifth contention is that the JJRIT in fact is the beneficial owner of the Rosemont Trust’s share of the property. This is on the basis that all of the funds used to purchase the property came from the JJRIT, as did all of the funds used to finance the costs of outgoings, repairs and maintenance. This contention is not supported by the evidence. The purchase moneys were in fact provided by the deceased and recorded as a debt to him; this debt was transferred to the JJRIT after his death. The position is the same with the moneys advanced to fund the ongoing costs associated with maintaining the property during his lifetime. Since his death, the JJRIT has met those costs, but has recorded them as a loan to the Rosemont Trust. Further, this contention is one that is properly made by AET, as trustee for the JJRIT. I note that AET did not support the submissions made by the applicant, including this one. The applicant has not produced any evidence that would allow me to consider that this contention is reasonably arguable.
The nature of an application pursuant to s 69 of the Act
The seminal case in Australia on applications for judicial advice is the decision of the High Court of Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand.[20] Much has been written about this decision and I do not intend to add significantly to the already voluminous commentary and analysis of it. I intend merely to set out the principles established by it.
[20] (2008) 237 CLR 66.
The Court described the purpose of such an application as:
…a procedure which, if adopted will not only protect a trustee from later complaint that he or she should have acted otherwise, but also protect the trustee from personal liability for costs incurred.[21]
[21] Ibid, [45].
The Court also made it clear that the sole purpose of an application for advice or directions is to determine what should be done in the best interest of the trust estate.[22] It went on to say:
…while it was not the court’s purpose to determine the rights of adversaries, that could be done as a necessary incident of determining what course ought to be followed in the best interests of the trust estate.[23]
[22] Ibid, [105].
[23] Ibid.
In considering the breadth of the power conferred by legislation such as s 69 of the Act, the High Court said:
No implied limitations on discretionary factors. Thirdly, there are no express words in s 63, and no implications from the express words which are used in s 63, making some discretionary factors always more significant or controlling than others. In particular, s 63 does not provide that the adversarial nature of the proceedings about which the advice is sought, the tendency of the advice to foreclose an issue in those proceedings, or the fact that the trustees seeking the advice are being sued for breach of trust are of special significance. Hence the discretion is confined only by the subject-matter, scope and purpose of the legislation.70 While it was accepted by the Court of Appeal that the court has power under s 63 to give advice even if the proceedings are “adversarial” in character, their approach was to give that consideration very great significance as pointing to an exercise of the discretion against granting advice.[24]
[24] Ibid, [59].
Kiefel J (as she then was) described the nature of an application for judicial advice in the following way:
It may be inferred that their Honours in the Court of Appeal considered that the connection of the advice to the pursuit, or defence, of the main proceedings to be so important a factor as to foreclose the giving of such advice. I agree with the plurality that the discretion is not to be exercised by reference to some such overriding consideration. In exercising the discretion the court should be guided by the scope and purposes of the section. The principal purpose of the section, and the opinion, advice or direction given under it, is the protection of the interests of the trust. Another purpose is the protection of a trustee who is acting in that regard and upon advice. Securing the latter purpose may ensure the attainment of the principal purpose, by removing the concern of a trustee about exposure beyond their usual indemnity.
It is apparent from the reasons of Palmer J that his Honour considered that it was in the interests of the trust that the uncertainty as to the terms of the trust should be resolved, once and for all. The correctness of that view cannot be doubted, particularly given that the trust is for a charitable purpose. The issues relating to the trustee in the main proceedings should be seen in this perspective. They assume a lesser importance than the attainment of the principal object of the section. His Honour expressed himself as satisfied that opinions of counsel demonstrated that there were sufficient prospects of success to warrant the association defending the question of construction.[25]
[footnotes omitted]
[25] Ibid, [196]-[197].
It is clear that s 69 provides a broad power to give advice in matters involving the administration of an estate. The power to give judicial advice is not limited to non-adversarial proceedings, although it is not the purpose of such an application to decide the issues in dispute between the parties. Rather, the purpose of such an application is to give advice to an executor as to how they should engage in the principal proceedings, whether they should sue or defend or abide the event. The guiding principle is always the best interests of the estate.
In the recent case of Burke v Public Trustee for the State of South Australia,[26] Doyle JA said:
As the authorities have recognised, the provision of judicial advice to trustees serves both to protect a trustee who acts upon the advice provided, and to protect the interests of the trust. It achieves the latter both by ensuring that the interests of the trust do not become subordinated to the fear a trustee might otherwise have of personal liability, and by providing a summary style procedure to assist and guide a trustee (rather than forcing the trustee to rely upon the more cumbersome and expensive exercise of an action for general administration).
Consistent with the above purposes of the Court’s advisory jurisdiction, an application for judicial advice or direction does not involve the determination of a controversy inter partes. It does not involve a trial of the issues that may arise between the trustee and any other interested party. In that sense, the advisory jurisdiction conferred by s 69 may be understood as an exception to the Court’s ordinary practice of deciding disputes between competing litigants.
Advice provided in the exercise of the advisory jurisdiction is in the nature of private advice to a trustee. It does not conclusively determine the substantive issues in relation to which the advice is sought. It is for this reason that the terms of the advice or directions given under s 69 are usually expressed in terms of what the trustee would be justified in doing, or what it would be appropriate for the trustee to do.
The procedure provided for in s 69(2) of the Administration and Probate Act, whereby a trustee may elect to commence an application either without notice to, or upon summons served upon, interested parties reflects the nature of the advisory jurisdiction. Given that the exercise of this jurisdiction does not entail making binding orders that may affect the interests of beneficiaries, the adoption of an ex parte procedure will often be appropriate.[27]
[footnotes omitted]
[26] [2022] SASCA 64.
[27] Ibid, [362]-[365].
This provides, with respect, a useful summary of the purpose and context of an application pursuant to s 69 of the Act.
The questions
I note that AET did not seek to be heard on FDN 61.
Would the Executors be justified in not opposing the pending application by Serves Pty Ltd in the New South Wales Supreme Court for the appointment of a trustee to sell the property, pursuant to section 66G of the Conveyancing Act 1919 (NSW)?
It is the first respondent’s position that the estate is currently indebted to the JJRIT in the sum of $1,095,157.67. This position is supported by the books of the JJRIT. She anticipates that the estate will incur additional debts as its administration is finalised. The estate has no substantial assets save for its share in the property. Given this context, the first respondent contends that the executors would be justified in not opposing the application by Serves for the appointment of a trustee to sell the property. This is the only way in which the estate can discharge its indebtedness to the JJRIT.
I have dealt with the applicant’s contention that the estate is not indebted to the JJRIT. I note, too, that when I asked Mr Lazarevich, who appeared on behalf of the applicant, if the estate had other debts, he was unable to answer. It can be reasonably assumed that the estate does have other debts; lawyers were retained to deal with the issue of the shares and accountants were retained to advise on stamp duty and land tax issues. Further, fees will be incurred when the estate is finalised and the share in the property is transferred. There are no funds in the estate to pay any of these debts.
I consider that it is appropriate to give the advice sought by the first respondent. No evidence has been adduced to support the contention that no debt is owed by the estate to the JJRIT, nor has a source of funds been identified from which other current or future debts of the estate could be paid.
Would the Executors of the Estate be justified in selling the Estate’s 50% interest in the property in order to discharge the Estate’s liabilities to AET as trustee of the JJRIT totalling $1,089,356, and any other liabilities of the Estate, in circumstances where the Estate’s only remaining asset is its interest in the property?

This question becomes relevant only in the event that the Supreme Court of New South Wales does not grant Serves’ application. I consider, in light of the matters that I have set out, the executors would be justified in taking this action.
Would the Executors be justified in borrowing moneys to permit the estate to pay its proportion of the ongoing expenses incurred in respect of the property and, if so, from whom and on what terms?
It is difficult to envisage circumstances in which it would be in the best interests of the estate to borrow moneys, when it has no means of repayment. In the absence of any source of income, such an action would not be justified.
I find as follows:
1.The Executors would be justified in not opposing the pending application by Serves Pty Ltd in the New South Wales Supreme Court for the appointment of a trustee to sell the property, pursuant to section 66G of the Conveyancing Act 1919 (NSW).
2.The Executors of the Estate would be justified in selling the Estate’s 50% interest in the property in order to discharge the Estate’s liabilities to AET as trustee of the JJRIT totalling $1,089,356, and any other liabilities of the Estate, in circumstances where the Estate’s only remaining asset is its interest in the property.
3.The Executors would not be justified in borrowing moneys to permit the estate to pay its proportion of the ongoing expenses incurred in respect of the property.

[2023] SASC 65

4 May 2023