Hamilton v Roche (No 3) - [2023] SASC 65

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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Hamilton v Roche (No 3)

Details

AGLC: Hamilton v Roche (No 3) [2023] SASC 65
Case: [2023] SASC 65
Decision Date: 4 May 2023

CaseChat Overview and Summary

The matter before the court was Hamilton v Roche (No 3), which involved the administration of the estate of a deceased person and the resolution of disputes over the remaining assets, specifically a half share in a property. The applicants, the executors of the estate, sought guidance and authority from the court regarding the disposition of this asset, as they were unable to reach an agreement with the other beneficiaries. The respondents, who included the sister of the executors, the trustee of a related investment trust, and a related trust, contested the applicants’ proposed disposition of the property.

The primary legal issues before the court were whether the executors had the authority to deal with the half share in the property as they saw fit and whether the court should intervene to resolve the dispute over the asset's disposition. The applicants argued that they had the necessary authority as executors and that the court should provide direction to facilitate the final administration of the estate. The respondents contended that the executors' actions were beyond their authority and that the court should not interfere in the internal affairs of the trusts involved.

The court determined that the executors did not hold the half share in the property as trustees, and thus, they had the authority to deal with it as they saw fit within the scope of their executorial duties. The court further held that it was appropriate to intervene and provide guidance to resolve the deadlock in the estate administration. The court ordered that the half share in the property should be sold, with the proceeds to be distributed according to the terms of the will and the trust deed. The sale was to be conducted under the supervision of the court to ensure fairness and proper administration of the estate.

In conclusion, the court granted the relief sought by the applicants, directing the sale of the half share in the property and providing guidance on the distribution of the proceeds. This decision aimed to facilitate the final administration of the estate and resolve the disputes over the asset's disposition.

Orders

Orders of the court

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Background

Background to the litigation

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.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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