Perry v Nicholson

[2017] QSC 163

SUPREME COURT OF QUEENSLAND

CITATION:

Perry v Nicholson [2017] QSC 163

PARTIES:

SONIA MAY PERRY

(applicant)

v
JENNIFER MARY NICHOLSON

(respondent)

FILE NO/S:

No BS5747 of 2017

DIVISION:

Trial Division

PROCEEDING:

Originating application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

1 August 2017

DELIVERED AT:

Brisbane

HEARING DATE:

22 June 2017

JUDGE:

Boddice J

ORDER:

I shall hear the parties as to the form of orders and costs. 

CATCHWORDS:

TRUSTS AND EQUITY – TRUSTEES – REMOVAL OF TRUSTEES – APPOINTMENT OF TRUSTEES – whether the applicant was validly removed as trustee of the relevant fund – whether the respondent was validly appointed as trustee of the relevant fund

Trust Act 1973 (Qld)

COUNSEL:

CA Brewer for the applicant

RD Williams for the respondent

SOLICITORS:

Dillon Legal for the applicant

Attwood Marshall for the respondent

1. By originating application, filed 8 June 2017, the applicant seeks declarations in relation to the trustees of a superannuation fund and a binding death benefit nomination form in respect of that Fund.  The respondent opposes the making of any such declarations. 

2. At issue is whether the applicant, a trustee of the superannuation fund, was validly removed in 2015, whether the respondent was validly appointed at that time as a trustee and whether a binding nomination dated 4 January 2017 is invalid. 

   Background

3. Colin Velmond Maurice (“the deceased”) died on 7 March 2017.  He was survived by his two adult children, the applicant and a son, Ramon.  He was also survived by the respondent, his defacto spouse. 

4. The deceased and the respondent began living together in October 2010.  They ceased cohabitation in or around September/October 2015 when the respondent left their residence. 

5. In late 2016, the deceased was diagnosed with melanoma.  On 10 December 2016, he moved in with the respondent.  He resided with her until his admission to hospital on 4 or 5 January 2017.  On 6 January 2017, he underwent surgery for brain cancer.  Subsequent to that surgery, he was paralysed and unable to speak or communicate.  He died in hospital on 7 March 2017. 

   Will

6. The deceased’s last Will was dated 5 January 2017.  It was prepared by the deceased’s solicitor.  The deceased had met with his solicitor on 28 December 2016.  He instructed his solicitor he wanted to appoint the respondent as his enduring power of attorney and as sole executor of his new Will.  The deceased said he wanted to leave each of his children 15% of his estate with the respondent to receive the balance. 

7. The deceased’s solicitor advised that such a distribution raised a potential for the children to make a claim on his estate.  He recommended that if he wanted to avoid such a difficulty it would be better to leave his children more.  The solicitor further advised the deceased that his superannuation fund was most likely to be outside the terms of the Will.  He recommended the deceased liaise with his accountant to check upon its terms and to ensure that any binding death nominations were up to date as they lapse after three years.  The solicitor’s diary note recorded that the deceased’s intention was that the respondent get the entire contents of the superannuation fund, which was purely cash, as he wanted her to be well looked after following his death. 

8. The deceased’s solicitor attended the deceased at the hospital on 5 January 2017.  His diary note of that attendance records that the deceased advised he had seen his accountant about the superannuation fund and he had left the entire contents of it to the respondent in case there was any challenge to his Will.  He wanted the respondent to be well looked after financially as he feared his children may challenge the Will. 

9. The solicitor took instructions for the preparation of his Will.  The deceased instructed he wanted to leave his estate equally between his two children and the respondent, with an adjustment in favour of the applicant to take account of the fact that he had provided financial assistance of $150,000 to his son for the purposes of buying a house. 

10. The solicitor returned to the hospital later that same day with the Will, a power of attorney and a form to revoke his previous 2012 power of attorney (which appointed his two children as attorneys).  The deceased executed each of those documents at that time.  A medical registrar has confirmed by letter that the deceased was reviewed by the consultant neurosurgeon at the hospital on that day and was considered to be of sound mind to make such decisions. 

    The Fund

11. The Colin Maurice Superannuation Fund (“the Fund”) was established by Trust Deed on 17 September 2009.  The original trustees of the Fund were Colin Velmond Maurice and his daughter, the applicant.  Both signed consents to be appointed as trustees of the Fund.  The only member of the Fund was Colin Velmond Maurice.  The Fund was established using monies from an inheritance the deceased received from his second wife. 

12. The deceased’s son assisted with setting up the Fund, prepared its accounts and looked after the administration of the Fund thereafter.  In late 2014 or early 2015, the deceased’s son indicated he no longer wished to administer the Fund.  On 3 February 2015, the deceased engaged accountants to administer the Fund. 

13. On 23 April 2015, the deceased arranged for those accountants to prepare a number of documents.  Those documents were minutes of a meeting of the trustees of the Fund, which were subsequently signed by the deceased, the applicant and the respondent, a confirmation of resignation as trustee, signed by the applicant, an application to become a member, signed by the respondent and a consent to appointment as trustee, signed by the respondent. 

14. The minutes of meeting were in the following terms:

    “The trustees of the fund refer to the deed of the fund dated 17 September 2009.

    It is decided to remove Sonia May Perry as a trustee of the fund.

    It is decided to appoint Jennifer Mary Nicholson as a trustee of the fund.”

15. The confirmation of resignation as trustee read:

    “I confirm my resignation as a trustee of the Colin Maurice Superannuation Fund.”

16. The consent to appointment as trustee read:

    “I consent to being appointed as a trustee of the Colin Maurice Superannuation Fund.”

17. Each of those signed documents were returned by the deceased to the office of the accountants.  Upon their return, a member of the accountants’ administration staff inserted the date, 23 April 2015, on the minutes and on the resignation.  Thereafter the Fund was administered by the deceased and the respondent as trustees.  From time to time the respondent signed documents in that role. 

18. On 4 January 2017, the deceased signed a binding death benefit nomination form in which he directed the trustees of the Fund to pay 100% of the death benefit to the respondent.  The binding nomination form was signed by the deceased at the offices of the accountants, in the presence of two of its staff members. 

19. In February 2017, the deceased, the applicant and the respondent signed a further document titled “Change of Trustee Deed for Self-Managed Superannuation Fund”.  Whilst that document bears the date 23 April 2015, it is common ground it was only prepared in February 2017, as a consequence of the accountants having noticed that a change of trustee deed had not been supplied to them in respect of the resignation of the applicant as trustee of the Fund and the appointment of the respondent as trustee of that Fund.  The accountants had advised such a document was necessary before they would be able to prepare an updated trust deed to have regard to recent budget changes concerning self-managed superannuation funds. 

20. There is a divergence of recollections as to how the date 23 April 2015 became to be written on the document.  The respondent recalls signing an undated deed on 23 February 2017.  She was told the accountants would insert the date.  The respondent recalls that after she had signed the document she took the deed to the hospital where it was signed by the applicant.  The deed was subsequently returned to the accountants. 

21. A member of the accountant’s staff recalls the signing occurred on 10 February 2017.  She advised the respondent the document had to be dated the same date as the minutes of meeting and resignation as trustee document.  The respondent then inserted the date 23 April 2015. 

    Submissions

22. The applicant submits that notwithstanding the execution of the minutes, the resignation, the application and the consent, all dated 23 April 2015, the applicant remains a trustee of the Fund.  Further, the respondent has never been validly appointed a trustee of the Fund.   

23. The applicant submits she has not been validly removed as trustee of the Fund as clause 183 of the trust deed required the appointment and removal of a trustee to be in writing.  The documents in question do not comply with that clause.  Accordingly, the binding nomination purportedly made on 4 January 2017 is invalid. 

24. The respondent submits the applicant has been validly removed as trustee in accordance with clause 183.  The applicant resigned the position as trustee in writing.  Further, the appointment of the respondent as trustee has been confirmed in writing.  Accordingly, the binding nomination is valid. 

    Discussion

25. Clause 183 of the trust deed provides:

    “The trustee will determine who acts as trustee in accordance with this deed and superannuation law for the fund to continue as a self managed superannuation fund and will take the necessary steps to appoint or remove the persons or body to or from the office of trustee.  The trustee may accept the trustee’s resignation in writing for this purpose.

    •     The appointment or removal of a trustee must be in writing and must immediately be advised to any other trustee. 

    •     Where the trustee is unable or unwilling to determine who will act as trustee then the majority of members of the fund will determine who will act as trustee.  If there are no members in the fund, the former members of the fund (or their legal personal representatives) will determine who acts as trustee of the fund.”

26. The trust deed also has definitions for certain terms. Relevantly, it provides that “binding death benefit notice means a notice given by a member or beneficiary to the trustee in accordance with Regulation 6.17A of the Superannuation Industry (Supervision) Regulations and with this deed”.

27. At law, a distinction is drawn between the removal of a trustee and the retirement of a trustee.  A trustee may only be removed from office pursuant to either an express power contained in the trust instrument, pursuant to statutory powers for the appointment of new trustees under the Trust Act 1973 or other relevant statutory power or pursuant to the Court’s inherent jurisdiction. 

28. By contrast, a trustee may retire where the trust instrument expressly or impliedly authorises the trustee to do so, as a consequence of the appointment of new trustees under the relevant statutory power, where the trustee exercises a statutory right to retire or is permitted to retire by the Court. 

29. Clause 183 of the trust deed expressly authorises a trustee to retire.  Such retirement must be by way of “a resignation in writing”.  Clause 183 further specifically provides for the appointment or removal of a trustee.  That also must be in writing, with any other trustee being advised immediately. 

    Was the applicant validly removed as trustee?

30. Whilst the applicant executed a document entitled “confirmation of resignation as trustee” on 23 April 2015, the minutes of a meeting of the trustees of the Fund signed the same day did not record an acceptance of the applicant’s resignation as trustee.  It recorded the trustees had decided to remove the applicant as trustee of the Fund. 

31. Whilst it may well have been the intention of the parties that the resignation be accepted by the Trustees, the resolution recorded in the Minutes is consistent with the trustees not accepting that resignation.  

32. Whilst the respondent contends that reliance can properly to be made on the applicant’s resignation in writing as a trustee of the Fund, there is no acceptance of that resignation in any of the documentation signed by the trustees at that time.  I do not accept that acceptance of that resignation is evidenced by delivery of the signed resignation to the accountants.  That appears to be the view of the accountants as they required the applicant to sign the change of trustee deed prepared by them in 2017. 

33. The minutes dated 23 April 2015 record that the meeting decided to remove the applicant as a trustee.  Under clause 183 of the deed, any removal of a trustee must be in writing.  None of the documents signed on 23 April 2015 are in terms of a formal notification to the applicant of her removal as trustee.  There is also no document purporting to immediately advise the other trustee of the removal of the applicant as trustee.  Both are requirements of clause 183 of the trust deed. 

34. However, clause 183 of the deed does not require any particular method of notification of the removal of a trustee, other than that it be in writing.  The minutes of meeting, signed by the deceased, the applicant and the respondent on 23 April 2015, properly read, constitute a removal of the applicant as trustee of the Fund.  That removal is in writing in that it is recorded in those minutes.  As the minutes are signed by the deceased, the minutes also record that the deceased as the other trustee was advised immediately. 

35. The applicant was validly removed as trustee in accordance with clause 183 of the trust deed on 23 April 2015. 

    Was the respondent validly appointed as trustee?

36. The respondent signed a confirmation of her consent to be appointed as a trustee of the Fund on 23 April 2015.  The minutes of the meeting record that it was “decided” to appoint the respondent as trustee of the Fund.  There is no formal document entitled “Appointment of Trustee”, appointing the respondent as trustee.  However, the minutes of the meeting, properly read, constitute an appointment of the respondent as trustee, which appointment is in writing.  Those minutes satisfy that requirement of clause 183 of the trust deed. 

37. As the deceased signed those minutes, he was advised at that time of the respondent’s appointment as trustee immediately.  That satisfies the remaining requirement of clause 183 of the trust deed. 

38. The respondent was validly appointed as a trustee of the Fund on 23 April 2015. 

    Binding death benefit nomination

39. It is not in dispute that the deceased completed and signed a binding death benefit nomination.  However, there remains in issue whether that notice was given to the trustees of the Fund.  I shall hear the parties further on this issue. 

    Orders

40. I shall hear the parties as to the form of orders and costs.