Miller v Cameron

The plaintiffs, beneficiaries of a settlement, sought the removal of the defendant, Ernest Granville Miller, as trustee. Miller, a solicitor, had assigned his estate for the benefit of his creditors in 1927, paying a small dividend. He subsequently became the sole trustee of the settlement upon the death of his co-trustee. The trust property was of considerable value and involved significant discretionary powers for the trustee. Both the settlor and all beneficiaries requested Miller's resignation, which he refused. The Supreme Court of Tasmania ordered his removal, and this decision was affirmed on appeal to the High Court of Australia.

The central legal issues before the High Court were whether the Supreme Court had properly exercised its discretion in removing Miller as trustee, and whether evidence concerning the circumstances leading to his assignment for the benefit of creditors, which was not explicitly pleaded, could be considered. The court was required to determine the dominant consideration in removing a trustee and the impact of a trustee's financial instability and refusal to resign when requested by all interested parties.

The High Court held that the welfare of the beneficiaries is the paramount consideration when deciding whether to remove a trustee. It affirmed that a trustee's impecuniosity, particularly when it arises from circumstances that might create a temptation to misapply trust funds, can be a sufficient ground for removal, even in the absence of proven misconduct in the administration of the trust itself. The court also found that evidence, even if not strictly pleaded, could be considered if it was admitted without objection at trial and was relevant to issues that could have been raised, especially when all parties had the opportunity to address it. In this case, the evidence revealed that Miller's financial difficulties stemmed from substantial debts incurred through his ownership of a dairy farm, which he attempted to manage by wrongfully using clients' money. Given his precarious financial state, the refusal to resign despite requests from all beneficiaries and the settlor, and the significant discretionary powers he held, the court concluded that his removal was a proper exercise of judicial discretion to protect the trust estate and ensure the beneficiaries' welfare.

The appeal was dismissed, and Miller was ordered to pay the costs of the action and the appeal, as his refusal to resign in the circumstances led to avoidable litigation and he had defended his own interests rather than those of the trust.