McMahon v Aynsley

Case [2022] QSC 140

SUPREME COURT OF QUEENSLAND

CITATION:

McMahon & Ors v Aynsley & Ors [2022] QSC 140

PARTIES:

SEAN PATRICK MCMAHON as trustee for the JOINT VENTURE TESTAMENTARY TRUST

(First Applicant)

AND
SEAN PATRICK MCMAHON and BRADLEY HELLEN as executors of the ESTATE OF LESLIE WILLIAM AYNSLEY

(Second Applicant)

AND
SEAN PATRICK MCMAHON and BRADLEY HELLEN as the trustees for the LESLIE AYNSLEY TESTAMENTARY TRUST

(Third Applicant)

v
CLEMENT AYNSLEY

(First Respondent)

AND
GREGORY AYNSLEY

(Second Respondent)

AND
JENNIFER DE BOOY

(Third Respondent)

AND
CHRISTOPHER O’CONNOR

(Fourth Respondent)

AND
DEANNA AYNSLEY

(Fifth Respondent)

AND
THE COUNCIL OF THE QUEENSLAND INSTITUTE OF MEDICAL RESEARCH

(Sixth Respondent)

AND
TOC H AUSTRALIA INCORPORATED

(Seventh Respondent)

AND
GWM PROPERTIES PTY LTD (ACN 102 379 135)

(Eighth Respondent)

FILE NO/S:

BS 6722 of 2022

DIVISION:

Trial

PROCEEDING:

Originating application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

8 July 2022

DELIVERED AT:

Brisbane

HEARING DATE:

Determined on the papers without an oral hearing

JUDGE:

Bradley J

ORDER:

THE ORDER OF THE COURT IS THAT:

1. Pursuant to s 96 of the Trusts Act 1973 (Qld), the first applicant:

(a)     has power to sell the real property comprised in Lot 112 on SP 191057 (the “Land”) on the terms contained in the written agreement for the sale of the Land executed by the first applicant on 6 June 2022 (the “Sale Contract”);

(b)     is permitted to sell the Land on the terms contained in the Sale Contract; and

(c)     is otherwise justified in entering into and performing the Sale Contract.

2.   The second applicants are to pay out of the assets of the Estate of Leslie William Aynsley:

(a)     The costs of the first applicant, on the indemnity basis;

(b)     The costs of the second and third applicants, on the indemnity basis; and

(c)     The costs of the eighth respondent up to and including 24 June 2022, on the standard basis.

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – APPLICATIONS TO COURT FOR ADVICE AND AUTHORITY – where the Sale Contract is conditional upon the first applicant obtaining an order in respect of an application to the Court for directions pursuant to s 96 of the Trusts Act 1973 (Qld) or the Court dismissing the application for directions - whether the first applicant has power to enter into the Sale Contract, to perform the Sale Contract and to complete the transfer of the Land pursuant to the Sale Contract

Succession Act 1981 (Qld), s 21, s 26, s 45(1)

Trusts Act 1973 (Qld), s 94(1), 96

Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER 198, cited.

COUNSEL:

J D McKenna QC and S L Walpole for the first applicant
J Otto QC and K Kluss for the second and third applicants
C Jennings QC for the eighth respondent

SOLICITORS:

Piper Alderman for the first applicant
McInnes Wilson Lawyers for the second and third applicants
Clayton Utz for the eighth respondent

  1. These reasons concern an application under the Trusts Act 1973 (Qld) for directions…

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McMahon v Aynsley [2022] QSC 140
Case
[2022] QSC 140
Decision Date

CaseChat Overview and Summary

McMahon v Aynsley was an application for directions pursuant to s 96 of the Trusts Act 1973 (Qld) or, in the alternative, for an order authorising and conferring power on a trustee pursuant to s 94. Leslie William Aynsley, a World War II veteran, purchased a parcel of land on the Gold Coast and entered into a Joint Venture Agreement with GWM Properties Pty Ltd for its development. After Mr Aynsley lost capacity, Sean Patrick McMahon, who had been appointed as Mr Aynsley's attorney, continued to act on his behalf. The application related to a Sale Contract for the Land executed on 6 June 2022. The legal issues the Court needed to decide included whether the first applicant had the power to enter into the Sale Contract, whether the sale was permitted by the relevant legal instruments, and whether the applicant was justified in entering and performing the Sale Contract.

The Court found that the first applicant had the power to enter into the Sale Contract, perform the Sale Contract, and complete the transfer of the Land pursuant to the Sale Contract. The Court was satisfied that this conduct was permitted by the terms of the Joint Venture Trust, the Statutory Will, and the Joint Venture Agreement. The Court also found that entering and performing the Sale Contract was justified, as the applicant had obtained proper professional advice, followed appropriate marketing processes, and secured the agreement of the Joint Venture partner and primary beneficiaries of the Joint Venture Trust.

The Court ordered that the first applicant had the power to sell the Land on the terms contained in the Sale Contract, was permitted to sell the Land on those terms, and was justified in entering into and performing the Sale Contract. Additionally, the Court ordered that the costs of the first, second, and third applicants, as well as the costs of the eighth respondent up to and including 24 June 2022, were to be paid out of the assets of the Estate of Leslie William Aynsley.

Orders

Orders of the court

THE ORDER OF THE COURT IS THAT:

1. Pursuant to s 96 of the Trusts Act 1973 (Qld), the first applicant:

(a) has power to sell the real property comprised in Lot 112 on SP 191057 (the “Land”) on the terms contained in the written agreement for the sale of the Land executed by the first applicant on 6 June 2022 (the “Sale Contract”);

(b) is permitted to sell the Land on the terms contained in the Sale Contract; and

(c) is otherwise justified in entering into and performing the Sale Contract.

2. The second applicants are to pay out of the assets of the Estate of Leslie William Aynsley:

(a) The costs of the first applicant, on the indemnity basis;

(b) The costs of the second and third applicants, on the indemnity basis; and

(c) The costs of the eighth respondent up to and including 24 June 2022, on the standard basis.

Background

Background to the litigation

These reasons concern an application under the Trusts Act 1973 (Qld) for directions pursuant to s 96 or, in the alternative, for an Order authorising and conferring power on a trustee pursuant to s 94. In exercising the jurisdiction to give directions on a trustee’s application, the Court is determining what ought to be done in the best interests of the trust estate. The Court is not determining the rights of adversarial parties.[1] [1]Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER 198, 201, cited in KordaMentha Pty Ltd atf LM Managed Performance Fund v Members of the LM Managed Performance Fund (No 2) [2021] QSC 55, [56] (Williams J). Background Leslie William Aynsley was a World War II veteran. He purchased a parcel of land at 502 Hope Island Road, Helensvale on the Gold Coast (the Land), which had been the Oxenford Racetrack. It comprises approximately 20.87 hectares. Mr Aynsley lived very frugally. In his later life, he was a widower with three adult children, Clement, Jennifer and Greg, and grandchildren. Mr Aynsley had no background or experience in property development. Nor did any of these family members. The Land is held as a freehold estate in a single title registered under the Land Title Act1994 (Qld). It is currently described as Lot 112 on SP 191057. Appointment of attorney and entry into the Joint Venture Agreement On 11 May 2007, Mr Aynsley appointed Sean Patrick McMahon as his attorney under an enduring power of attorney. Mr McMahon is a solicitor. He has been in practice as such for about 23 years. On 20 June 2007, Mr Aynsley entered into a Joint Venture Agreement (JVA) with GWM Properties Pty Ltd (GWM) in relation to a project for the development of the Land. By the JVA, Mr Aynsley and GWM agreed that they would keep the contents of the JVA and all documents and information relating to the JVA confidential. There are a few exceptions to this obligation of confidence, including seeking legal advice. On 26 June 2007, a mortgage of the Land, granted by Mr Aynsley in favour of GWM was registered over the title. By the JVA, Mr Aynsley and GWM made provision for their Joint Venture to develop the Land progressively over time. The Joint Venture parties have designated them as sub-stages 1 to 9. Between about 17 December 2008 and 27 March 2013 leases granted by Mr Aynsley to various tenants were registered on the title to the Land. Mr Aynsley loses capacity In 2013, Mr Aynsley lost capacity. The Queensland Civil and Administrative Tribunal (QCAT) affirmed Mr McMahon’s appointment as Mr Aynsley’s attorney for matters relating to or connected with the joint venture, the Land and the JVA. Mr McMahon continued to be the attorney for Mr Aynsley in those respects. He continued to represent Mr Aynsley’s interests in relation to the JVA and made decisions in relation to the JVA on behalf of Mr Aynsley as a Joint Venture party. Between 1 July 2013 and 9 August 2017, leases granted by Mr Aynsley, through Mr McMahon as his attorney, to various tenants were registered on the title to the Land. The Statutory Will of Mr Aynsley

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

GWM also sought an order for its costs to be paid from the estate of Mr Aynsley. I will deal with matters of costs at the conclusion of these reasons. Consideration of the application I have considered the statement of facts and the open and confidential affidavits and submissions filed on behalf of the first applicant. I have also considered the submissions filed on behalf of the second and third applicants and the eighth respondent. I set out below my conclusions. Powers of the LAT Trustee I am satisfied that, on a proper construction of the JVA and the Statutory Will, Mr McMahon as trustee of the JVT Trust and Mr McMahon and Mr Hellen as executors of the Estate have power to make decisions under the JVA to effect a sale of the Land in the circumstances set out in the statement of facts and in the open and confidential affidavits filed on behalf of the first applicant. I am also satisfied that they have power to agree to a variation of the JVA to enable or facilitate a sale of the Land, to the extent it may be necessary or appropriate to do so to effect a sale of the Land. I am satisfied Mr McMahon as trustee of the JVT Trust has power to enter into the Sale Contract, to perform the Sale Contract, and to complete the transfer of the Land pursuant to the Sale Contract.Whether this conduct is permitted by the LAT Trust, the Statutory Will and the JVA A sale of the Land by Mr McMahon on the terms contained in the Sale Contract, in addition to being within his power as trustee of the JVT Trust, would also be permitted by the terms of that trust and the terms of the Statutory Will and the JVA.Whether entering and performing the Sale Contract is justified Mr McMahon has obtained confidential and privileged legal advice from leading and junior Counsel. Counsel have satisfied themselves that they hold the information, evidence, and instructions necessary and appropriate to provide such advice. Mr McMahon has acted on advice from the selling agents that the marketing process was the most appropriate way to market the Land for sale. On the evidence before the Court the sale process has been measured and guided by appropriate professional advisers to achieve the best price for the Land. It has achieved that purpose. Mr McMahon has obtained an opinion as to the value of the Land from an independent valuer. The independent valuer has also advised that the marketing process was the most appropriate way to market the Land for sale, and that the Sale Contract, including the sale price, represents an appropriate sale at an appropriate time. It avoids exposing the JV Trust to risks associated with potential changes in interest rates and inflation. Mr McMahon has also obtained the agreement of GWM as a Joint Venture partner to this course of action. He has provided non-confidential information about the Sale Contract to the primary beneficiaries of the LAT Trust. Each has supported Mr McMahon proceeding with the sale. I am satisfied that Mr McMahon has had proper professional advice on the risks and benefits of the options for continuing to hold and develop the Land in accordance with the JVA and selling the Land on the terms of the Sale Contract.