JPD as Guardian v DMS as Trustee - [2022] QSC 181

SUPREME COURT OF QUEENSLAND

CITATION:

JPD as Guardian v DMS as Trustee [2022] QSC 181

PARTIES:

REDACTED

FILE NO/S:
161 of 2022

211 of 2022

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:
Supreme Court of Queensland at Cairns

DELIVERED ON:

30 August 2022

DELIVERED AT:

Cairns

HEARING DATES:

1 August 2022, 2 August 2022

JUDGE:

Henry J

ORDERS:

1.     The application in matter 211/22 is dismissed.

2.     The application in matter 161/22 to remove the existing trustee and executor and in substitution appoint Renee Anne Bennett is granted on the terms ordered in order 6 hereof.

3.     I will hear the parties as to costs at 9am 2 September 2022.

4.     The part of this decision’s reasons identifying the parties in the coversheet and the content of order 6 hereof be redacted in any publication of these reasons and orders, except for their publication between or to the parties, Renee Anne Bennett and a Court and for the purpose of Renee Anne Bennett assuming and performing her role as administrator and trustee.

5.     Liberty to apply on the giving of two business days notice in writing.

REDACTED

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CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – APPOINTMENT, REMOVAL AND ESTATE OF TRUSTEES – RETIREMENT AND REMOVAL – REMOVAL BY THE COURT – GROUNDS FOR REMOVAL – where the father of the beneficiary children applies for the removal of the trustee under s 80 Trusts Act 1973 (Qld) – where the trustee has made decisions prioritising the children’s wealth in adulthood – where the trustee has breached her undertaking to provide quarterly financial statements of the trust – where the father is not consulted on important trust decisions bearing upon the children’s welfare – where the trustee has made decisions in an attempt to conform to the wishes of the dead mother – where the trustee has attempted to impose a move on the family to a smaller residence also owned by the trust – where the father of the children does not earn working income – where the father sought money from the trust to fund a move to Brisbane from Cairns – where this proposal was rejected – whether it is expedient for the court to interfere – whether the welfare of the beneficiaries is opposed to the trustee’s continuation of office

EQUITY – TRUSTS AND TRUSTEES – APPLICATIONS TO COURT FOR ADVICE AND AUTHORITY – PETITION OR SUMMONS FOR ADVICE – GENERALLY – where the trustee made a decision to require the family to vacate the premises they were living at the time which the trust owns – where the trustee made a decision to refuse to fund a proposed move to Brisbane – where the trustee seeks directions under s 96 Trusts Act 1973 (Qld) in respect of whether the two decisions made were justified – where the application to the court was made after the decisions were made – whether such an order can be made – whether there is any utility in making such orders – whether…

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.

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Details

Case: [2022] QSC 181
Decision Date: 30 August 2022

CaseChat Overview and Summary

The case of JPD as Guardian v DMS as Trustee was heard by the Supreme Court of Queensland. The dispute involves the father of four children, who is the litigation guardian of his children, seeking the removal of the sole executor and trustee of a discretionary testamentary trust established by the children's deceased mother. The trust holds the mother's property, including a residential property at Cultivation Close, Edmonton. The father argues that the trustee has acted contrary to the welfare of the beneficiaries by prioritising their wealth in adulthood, not consulting him on important decisions, and attempting to impose a move to a smaller residence also owned by the trust. The trustee has also breached her undertaking to provide quarterly financial statements of the trust.

The legal issues the court was required to decide included whether it was expedient for the court to interfere with the trustee's decisions and whether the welfare of the beneficiaries was opposed to the trustee's continuation of office. The court also had to determine whether an order could be made under section 96 of the Trusts Act 1973 (Qld) in respect of whether the two decisions made by the trustee were justified, despite the application being made after the decisions were made. The court found that the trustee's actions did not justify her removal, but that the application to remove her and appoint Renee Anne Bennett in her place was granted.

The court's reasoning and outcome were based on the evidence presented, including affidavits and the terms of the deed of settlement. The court found that the trustee's decisions were not unreasonable or unjust, and that there was no evidence to suggest that the welfare of the beneficiaries was opposed to the trustee's continuation of office. However, the court did find that the trustee had breached her undertaking to provide financial statements and had not consulted the father on important decisions. The court also found that the application to remove the trustee and appoint Renee Anne Bennett in her place was appropriate, given the circumstances of the case.

The final orders of the court were that the application in matter 211/22 is dismissed, the application in matter 161/22 to remove the existing trustee and executor and in substitution appoint Renee Anne Bennett is granted, and the parties will be heard as to costs at a later date. The content of order 6 and the identities of the parties are to be redacted in any publication of these reasons and orders, except for their publication between or to the parties, Renee Anne Bennett and a Court and for the purpose of Renee Anne Bennett assuming and performing her role as administrator and trustee. The parties have liberty to apply on the giving of two business days notice in writing.

Orders

Orders of the court

1. The application in matter 211/22 is dismissed.

2. The application in matter 161/22 to remove the existing trustee and executor and in substitution appoint Renee Anne Bennett is granted on the terms ordered in order 6 hereof.

3. I will hear the parties as to costs at 9am 2 September 2022.

4. The part of this decision’s reasons identifying the parties in the coversheet and the content of order 6 hereof be redacted in any publication of these reasons and orders, except for their publication between or to the parties, Renee Anne Bennett and a Court and for the purpose of Renee Anne Bennett assuming and performing her role as administrator and trustee.

5. Liberty to apply on the giving of two business days notice in writing.

REDACTED

Background

Background to the litigation

To remove doubt, the affidavits read in both applications were treated by the parties as cross-admissible at the hearing and accordingly the affidavits read in the cross-application will also be regarded as evidence in the primary application.[1] [1]See, eg, T1-4 L38.Brief background to the primary application The children’s mother died of cancer on 28 August 2017. She was survived by her four children and their father. The children’s present ages and the initials by which these reasons will refer to them are: R 16 years, L 12 years, Sn 12 years and Sa 11 years. L and Sn are twins. The mother and the father were married for many years but had divorced and reached a financial agreement by the time of her death. The mother’s will bequeathed her property to be held on trust pursuant to a discretionary testamentary trust under which the children are the primary beneficiaries. The will had the effect of allowing the creation in due course of a minors’ trust fund to hold the mother’s superannuation benefits on trust for the children as beneficiaries. The will appointed two people as both executors and trustees: the children’s aunt and the mother’s close friend. The aunt renounced in August 2018. The mother’s friend remains the sole executor and the sole trustee of both the trusts. As executor she is the sole shareholder and a director of a company trustee for a trust of the mother’s (the visionary trust) which owns units in an investment unit trust. The children and any trust in which they have an interest are beneficiaries of the visionary trust. One of the testamentary trust’s assets is a five-bedroom residential property at Cultivation Close, Edmonton. It was the mother’s home prior to her death. She and the father had shared custody of the children who, when in the mother’s care, also lived at the Cultivation Close residence. After the mother’s death the children lived in rental premises with their father. There was a dispute in connection with a financial contribution a relative of the mother had made to the purchase of the Cultivation Close residence. That dispute was eventually resolved and the children returned to live at the property with their father. In addition to consolidating ownership of the mother’s home at Cultivation Close by 15 June 2018, the trust also acquired two residential properties in Bentley Park, at Fitzmaurice Drive and Whela Close, in 2020. There have been various legal disputes between the father and the trustee. On 23 November 2017 the father filed a caveat against the grant of probate, which initially resulted in the making of limited administration orders. In February 2018 the father also issued proceedings as the children’s litigation guardian, seeking further provision for them from the estate. That proceeding appears to have been prompted, at least in part, by uncertainty in the wording of the testamentary trust deed annexed to the will about the paramountcy of the children’s interest as beneficiaries. It culminated in a mediation, and, in turn, a deed of settlement dated 22 January 2019, by which it was agreed probate would be granted and that in the absence of a good and valid reason the trustee would treat the beneficiaries equally when exercising discretion under the testamentary trust deed and would not remove beneficiaries or appoint new ones. The settlement terms included the trustee undertaking to provide financial information as part of the deed of settlement. She did not comply with that undertaking.

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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