JPD as Guardian v DMS as Trustee (No 2)

In the matter of JPD as Guardian v DMS as Trustee (No 2), the dispute involved the removal of a trustee and the subsequent costs associated with the litigation. The parties were the litigation guardian, JPD, and the trustee, DMS, in their capacity as the personal representative and trustee of the estate of a deceased person. The dispute was heard in the Supreme Court of Queensland.

The primary legal issue before the court was whether the trustee, who was also a party to the litigation, should be permitted to recover costs from the estate. This issue arose from a cross-application by the trustee against the children of the deceased, which was summarily dismissed. The litigation guardian argued that, given the trustee's misconduct was not substantiated, the general rule allowing trustees to recover costs out of the estate should not apply. Instead, the guardian proposed that the trustee should bear personal responsibility for the costs incurred.

The court considered the nature of the trustee's role and the principles governing costs recovery in such matters. The court noted that while trustees generally have the right to recover costs from the estate, this right is not absolute and may be subject to exceptions based on misconduct or other factors. In this instance, the court found that the trustee's cross-application did not demonstrate misconduct or any other grounds that would warrant a deviation from the general rule. Consequently, the court ordered that the trustee, Ms Bennett, would be responsible for paying the costs of each party from trust assets, to be assessed on an indemnity basis if not agreed. This decision was upheld in both matter 161 of 2022 and matter 211 of 2022.