In the Estate of GLENYS ANNE HEYWARD

[2010] SASC 317

Supreme Court of South Australia

(Civil: Application)

In the Estate of GLENYS ANNE HEYWARD

[2010] SASC 317

Judgment of The Honourable Justice Duggan (ex tempore)

17 November 2010

SUCCESSION - EXECUTORS AND ADMINISTRATORS - PROCEEDINGS BY EXECUTORS OR ADMINISTRATORS

EQUITY - TRUSTS AND TRUSTEES - GENERALLY - OTHER MATTERS

Application by executor for advice and direction as to administration of estate – Court previously advised executor that it was proper to continue action in District Court in order to determine the extent of estate – agreement subsequently reached between parties to settle District Court proceedings and compromise related proceedings in Supreme Court – whether within executor’s power to now settle District Court proceeding and compromise related proceeding.

HELD: within executor’s power to discontinue action in District Court and compromise proceedings in Supreme Court.

Administration and Probate Act 1919 (SA) s 69; De Facto Relationships Act 1996 (SA) s 9(4); Inheritance (Family Provision) Act 1972 (SA); Trustee Act 1936 (SA) s 28, referred to.
In the Estate of Glenys Anne Heyward [2010] SASC 247; Re Earl of Strafford Deceased [1980] Ch 28; Dowling v St Vincent De Paul Society Inc [2003] VSC 454, considered.

In the Estate of GLENYS ANNE HEYWARD
[2010] SASC 317

Civil:  Judicial Advice

1. DUGGAN J (ex tempore): This application is made pursuant to s 69 of the Administration and Probate Act 1919 (SA) (“the Administration and Probate Act”) for advice as to certain matters concerned with the administration of the estate of Glenys Anne Heyward (“Glenys”).

2. The background of the matter is set out in the advice I gave in respect of another aspect of the matter. The advice was delivered on 12 August 2010.[1]

   [1]    In the Estate of Glenys Anne Heyward [2010] SASC 247.

3. It is necessary to provide only a brief résumé of the relevant circumstances for present purposes and I repeat some of what I said on the occasion of the previous advice.

4. Glenys was the de facto partner of Neil Heyward. They commenced cohabitation in June 1982 and the relationship ended in approximately 2005. Glenys and Neil Heyward had two sons, Thomas and Matthew.

5. Glenys was murdered on about 12 July 2007. Neil Heyward, Thomas Heyward, Matthew Heyward and Neil Heyward’s employee, Jeremy Minter, were charged with the murder. No case to answer was found against Thomas Heyward. Neil Heyward committed suicide on 6 June 2009. The trial against Matthew Heyward and Jeremy Minter resulted in them being found guilty of the murder of Glenys.

6. Glenys executed a will on 12 December 2006. She appointed her solicitor, Mr Cusack, as her executor and left her estate to be divided equally between Thomas and Matthew. Probate was granted on 6 May 2008.

7. On 4 May 2009 Neil Heyward executed a will also disposing of his estate equally between Thomas and Matthew.

8. Before her relationship with Neil Heyward, Glenys had been married to Edward Valentine. She also had a son from this marriage, Gimili Valentine, who was born on 27 February 1977. Glenys did not make any provision in her will for Gimili and before her death she advised Mr Cusack this was because she was afraid of the consequences if Neil Heyward found out that she had done so.

9. During their relationship Glenys and Neil Heyward operated a dairy farm business in partnership. Through this partnership various farming properties were purchased. Most of them were held in joint names. On 1 June 2004 the properties owned by them were transferred to a family trust (“the trust”). Neil Heyward was the appointor and trustee of the trust. The Trust Deed provided that Thomas was to assume these roles in the event of Neil Heyward’s death. Glenys told Mr Cusack that she agreed to the formation of the trust because of her fear of Neil Heyward.

10. Prior to her death Glenys instituted proceedings against Neil Heyward in the District Court. These proceedings had not resolved at the time of her death. The orders sought in the proceedings include the setting aside of the Deed of Trust pursuant to the De Facto Relationships Act 1996 (SA) (“the De Facto Relationships Act”). It is claimed that the creation of the trust involved unconscionable conduct giving rise to a constructive trust in favour of Glenys. Thomas and Matthew Heyward were joined as defendants in the District Court proceedings.

11. These proceedings have been continued by Mr Cusack pursuant to the power conferred by s 9(4) of the De Facto Relationships Act.

12. On 3 November 2008 Gimili Valentine instituted proceedings in the Supreme Court against the estate of Glenys Heyward seeking relief pursuant to the Inheritance (Family Provision) Act 1972 (SA).

13. The first question upon which I was required to advise was whether it was appropriate for Mr Cusack to continue the District Court proceedings on behalf of the estate. For reasons which it is unnecessary to repeat, I concluded that Mr Cusack, as executor of the estate, would be acting within the bounds of his duty to continue the District Court proceedings commenced by Glenys so as to enable the extent of her estate to be determined.

14. I have now been advised that the parties in the Supreme Court action and the District Court action have reached an agreement which would have the effect of compromising those actions.

15. My advice is sought in relation to Mr Cusack’s role in the compromise and the discontinuance of the proceedings in the District Court.  When I say “compromise” I mean the compromise of both actions and the discontinuance of the proceedings in the District Court.  All relevant parties are represented before me in relation to those aspects of the application.

16. I have perused the terms of the deed which have already been executed by the parties. Mr Cusack has taken independent advice from counsel in relation to his position with respect to the proposed settlement and I have read the opinion of Mr Haines QC which provides that advice.

17. As I see my role in giving advice pursuant to the Administration and Probate Act, it is not to approve the compromise or comment on its appropriateness. If he had not already done so, I would have advised Mr Cusack to obtain that advice.

18. The only other issue which remains is whether Mr Cusack, as executor, has power to compromise the actions on behalf of the estate in the manner set out in the deed.

19. Section 28 of the Trustee Act 1936 (SA) (“the Trustee Act”) empowers an executor or trustee to perform certain functions. Those relevant for present purposes are as follows. Section 28(2)(c) provides that an executor or trustee may:

    compromise, compound, abandon, submit to arbitration, or otherwise settle any debt, account, claim or thing whatever relating to the testator’s or intestate’s estate or to the trust.

    Section 28(2)(d) provides that the executor or trustee may:

    for any of those purposes enter into, give, execute, and do such agreements, instruments of composition or, arrangements, releases, and other things, as to him or them seem expedient, without being responsible for any loss occasioned by any act or thing so done in good faith.

20. It is well settled that the language of s 28 and equivalent provisions in the legislation of other jurisdictions in the United Kingdom and Australia is particularly wide. It has been held that it would be undesirable to restrict its operation in any way unless legal principles required such restrictions. As Buckley LJ said in Re Earl of Strafford Deceased:[2]

    … it seems to me to be advantageous that trustees should enjoy wide and flexible powers of compromising and settling disputes, always bearing in mind that such a power, however wide, must be exercised with due regard for the interests of those whose interests it is the duty of the trustees to protect.[3]

    [2] [1980] Ch 28.

    [3]    See also Dowling v St Vincent De Paul Society Inc [2003] VSC 454.

21. It follows that Mr Cusack is empowered by s 28 of the Trustee Act to compromise, abandon or otherwise settle any claim in relation to the estate. The District Court action is a claim by the estate and the Supreme Court action is a claim on the estate. In my view, the settlement of these claims is within Mr Cusack’s powers under s 28 of the Trustee Act and nothing has been brought to my attention which would have the effect of restricting those powers.  None of the parties before me made any representation to the contrary.

22. Mr Cusack has the power to compromise the actions on behalf of the estate and to discontinue the proceedings in the District Court.

23. I advise accordingly.