SUCCESSION - FAMILY PROVISION - REQUIREMENT FOR ADEQUATE AND PROPER MAINTENANCE - DUTY OF TESTATOR - DUTY TO CHILDREN
SUCCESSION - FAMILY PROVISION - REQUIREMENT FOR ADEQUATE AND PROPER MAINTENANCE - WHETHER APPLICANT LEFT WITH INSUFFICIENT PROVISION - CLAIMS BY CHILDREN
EQUITY - TRUSTS AND TRUSTEES - APPOINTMENT, REMOVAL AND ESTATE OF TRUSTEES - APPOINTMENT OF NEW TRUSTEES - BY THE COURT
The applicant, Ms Heather Piper, seeks orders pursuant to the IFP Act and the Trustee Act that further provision be made for her out of the estate of the late Dorothy Heather Piper, the testator, who died on 11 June 2018, and for the revocation or variation of a trust over two thirds of the applicant’s inheritance established by the Will of the testator. The respondents, in their various capacities, oppose the application.
[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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AGLC
Piper v Fraser [2020] SASC 239
Case
[2020] SASC 239
Decision Date
CaseChat Overview and Summary
In the matter of Piper v Fraser, Ms Heather Piper, the applicant, sought orders for further provision from the estate of her late mother, Dorothy Heather Piper, pursuant to the IFP Act and the Trustee Act. The respondents, in various capacities, opposed the application. The primary dispute centred around the adequacy of the provision made for the applicant under the will and the trustees' discretion over the Will Trust. The applicant argued that she was left with insufficient provision and that the trustees should distribute the trust corpus to her immediately. The respondents contended that the applicant's claim was not meritorious and that the trustees' actions were within their discretion.
The court had to determine whether the applicant had made out a valid claim under the Family Provision Act for inadequate and improper maintenance and whether the trustees had acted outside their discretion under the Trustee Act. The court considered the testator's intentions, the applicant's credibility, and the nature of the relationships within the family. The court found that the applicant's claims were not credible and that the provision made in the will was adequate and proper. Regarding the Trustee Act, the court held that the trustees were not acting outside their discretion and that the applicant could not compel the distribution of the trust corpus.
The court dismissed the applicant's claims and declined to make any orders under the IFP Act or the Trustee Act. The trustees were permitted to continue their roles until the proceedings were concluded, at which point they would step down. The final orders of the court were to that effect, with no further provision to be made for the applicant and the trustees to continue their duties until the proceedings were concluded.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
The applicant, Ms Heather Piper, seeks orders pursuant to the IFP Act and the Trustee Act that further provision be made for her out of the estate of the late Dorothy Heather Piper, the testator, who died on 11 June 2018, and for the revocation or variation of a trust over two thirds of the applicant’s inheritance (the Will Trust) established by the Will of the testator (the Will). The respondents, in their various capacities, oppose the application.PART A: BACKGROUND AND OVERVIEW The testator had been married to William Edward Piper (who died on 13 December 2008). The couple had three children: the applicant, the first respondent, Julie Fraser (Julie) and John Howie Piper (John Snr). John Snr died on 10 May 2017. The testator had eight grandchildren. The applicant was born on 19 December 1950. She has two children, John Overall (John) and Andrew Overall (Andrew), who are the first and second interested parties respectively. Julie married Steven Fraser (Steven) and they have two children, Benjamin and Bonnie Fraser. John Snr had four children: the third respondent Rhys Piper (Rhys), the fourth respondent Ryan Piper (Ryan), Alison Piper (Alison) and Kira Piper (Kira). The Will provides, inter alia, that the residue of the testator’s estate is divided into three equal shares:-One equal third share to Julie absolutely;-One equal third share to John Snr’s children, subject to a testamentary trust until the age of 25 years. Julie and Steven are the Trustees of the trusts in favour of Alison and Kira, and are respondents in that capacity; and-One equal third share to the applicant divided as follows:- One third to the applicant absolutely; and- Two thirds subject to a testamentary trust for the applicant during her lifetime and then for her children, Andrew and John, as contingent beneficiaries (the Will Trust). Julie and Steven are the Trustees of the Will Trust, with Andrew and then the Public Trustee for the State of New South Wales (NSW Public Trustee) named as alternative Trustees.[1][1] The terms of the Will Trust are contained in clause 5.2.2 of the Will. As Alison and Kira are under the age of 25, they are represented in the proceedings by the Executors of the testator’s estate, Julie and Steven.The applicant’s relationships with members of her family The nature of the applicant’s respective relationships with the testator, her father, her sister Julie, her brother John Snr (and his children) and her sons John and Andrew are important factors to be considered. I will deal with them in turn.The applicant’s relationship with her parents Although the claim only concerns the testator’s estate, it is relevant to address the applicant’s relationship with both of her parents. Indeed, a significant proportion of the correspondence tendered at trial concerns them both. The applicant lived with her parents until she was 20 years old. She gave evidence that she later continued to visit them throughout her studies, and during her three marriages, with varying degrees of frequency. The applicant described the testator as being vital to her obtaining a law degree. The testator lived with her for “months at a time” after Andrew was born. The applicant gave evidence that she helped care for the testator in the 1990s after she had a pacemaker inserted and that later in the testator’s life, when she moved into Walkley Heights Retirement Village, and subsequently Helping Hand Aged Care Facility (Helping Hand), the applicant phoned, wrote and visited her in person.
Evidence
Evidence Before The Court
Nonetheless, the testator also expressed her wish that the discretion granted to the Trustees be “exercised in a generous manner” in favour of the applicant wherever possible during her lifetime.[65][65] Clause 5.2.2(5) of the Will.The applicant’s evidence and credibility During the applicant’s evidence, she made a number of assertions that on their face are simply not believable. I mention the following examples. On 25 November 2001, the applicant’s parents wrote to her,[66] including to assert that she was telling them what to do with their money and their lives and complaining that they were fed up with her continued requests for money. [66] Exhibit R40. When asked generally about her parents being offended by her requests for money, the applicant stated: “They say that, but I don’t know if they truly were because it didn’t stop them shopping, it didn’t stop them socialising or going on holidays, so it’s hard to know how deep the offence was …”. And when asked specifically about this letter of 25 November 2001, and about her parents being fed up with the applicant’s requests for money, she stated in response: “That doesn’t necessarily mean they were fed up with me, they were fed up with whatever was irritating them, including the income tax commissioner, they hated him”. However, when pressed again, she finally accepted her parents’ comments were with respect to her requests for money. In similar vein, in a letter to the applicant dated 12 March 2016 (when the testator was living at Helping Hand), the testator wrote:[67]I know that you do have similar costs but you should by now have been able to work out a budget and stick to it. I have been more than generous and now I must be very careful. [Emphasis added][67] Exhibit R52. When asked what the testator meant when she said, “now I must be very careful”, the applicant denied it was an expression of financial concern and said:A.I think it was much more an expression of emotional distress at being incarcerated involuntarily when she thought she’d gone in for short respite.Q.You mean a woman in her early 90s that’s in an aged facility because she’s not able to look after herself.A.That’s in a matter of opinion [sic]. She was doing very well in the retirement village, and all of the services could have been brought to her. This is clearly not a reasonable interpretation. The entire preceding sentence of the letter concerned the financial situations of the applicant and the testator. There is no reason to suggest that the testator was referring to any concerns about residing at Helping Hand (other than the financial concern of having to pay for such tenure). The applicant made similar assertions about her parents’ treatment when they resided at what she described as “locked” aged care facilities. With respect to her father, the applicant repeated on at least three occasions in evidence that her father was “terrified” when at Helping Hand, but could not give any clear reason for that alleged state of mind. The applicant gave evidence that she visited the testator at Helping Hand in Adelaide for three weeks in 2017. She stated that, unlike other occupants, the testator was not allowed out from Helping Hand to go for a coffee or to the local shops. The applicant said that she did not know what she could to do help the testator, despite her experience as a lawyer. The applicant further stated that the testator had been allowed out with her son Andrew (the testator’s grandson), but that the testator was not allowed out with her. She also said that on the last day of her three-week stay, she was informed that she could have had lunch with the testator each day should she have wanted to do so. The applicant also gave evidence that had the testator stayed in NSW she would still be alive today. I find all of this less than credible.
Decision
Reasons for decision
Nonetheless, I note the applicant’s concerns, which I address below in the context of the Trustee Act application.Conclusion as to the jurisdictional stage I find that it is not demonstrated that the provision made to the applicant is other than adequate and proper in the circumstances and that the inheritance and the conditions imposed are other than those that a wise and just testator would have chosen. I find that the applicant has no “moral claim” against the testator that has not been satisfied by the present terms of the Will. For completeness, I note a somewhat novel aspect of the applicant’s claim, namely an attempt to invoke an IFP Act order as an alternative route to “unlock” the Will Trust by preventing monies presently in the estate from flowing into the Will Trust. There does not appear to be any precedent of an Australian Court taking that approach. I consider that the testator had good reason to implement the trust procedure for reasons discussed elsewhere in this judgment and, therefore, even if the applicant had standing and thereby jurisdiction, it would not be appropriate to make such an order. To do so would plainly be to ignore the principle that Courts should be reluctant to re-write trust instruments. PART D: THE APPLICANT’S CLAIM UNDER THE TRUSTEE ACT The testator set up the protective Will Trust based on the view that the applicant was unable to manage her finances, and the appointment of a trustee would ensure that the applicant would be suitably maintained for the remainder of her life. The four main duties of the Trustees are to: get in Will Trust property; preserve and protect the Will Trust property; not to bind or fetter their discretion; and to carry out the Will Trust in accordance with the terms of the Will Trust instrument (the Will). However, here the applicant is not the sole beneficiary under the Will Trust, as her sons John and Andrew are contingent beneficiaries (the contingent beneficiaries) upon the applicant’s death.[102] Thus, in exercise of their general duty to preserve the trust property, a trustee is obliged to protect all beneficiaries as a whole, including present and future beneficiaries.[103] [102] Clause 5.2.4 of the Will.[103] Mui Pty Ltd v Hoh (No 6) [2017] VSC 730, [405] referring to Cowan v Scargill [1985] Ch 270, 295. In these circumstances, it is not open for the applicant to call for and compel the corpus of the Will Trust property to be distributed to her. This is not a situation like that in Saunders v Vautier (1841) 41 ER 482, as the applicant is not the sole beneficiary, and there is dispute among the applicant and her son Andrew (a contingent beneficiary) as to the complete removal of the Will Trust, which also under the terms of the trust instrument was designed to operate as a protective trust. A trustee is duty bound to prevent others, particularly individual beneficiaries, from dictating the manner in which their fiduciary discretion ought to be exercised.[104] A trustee can only deviate from the terms of the trust where they either have the informed consent of all beneficiaries, being sui juris and together absolutely entitled; or the Court orders them to do so.[105][104] Quinton v Proctor [1998] 4 VR 469, 471.[105] Re Campbell (dec’d); Rowe v McMaster [1973] 2 NSWLR 146, 156.
Ratio Decidendi
Legal Principle Established
The High Court had some years earlier clarified the equitable jurisdiction to remove a trustee in Miller v Cameron thus:[120]It has long been settled that, in determining whether or not it is proper to remove a trustee, the Court will regard the welfare of the beneficiaries as the dominant consideration (Letterstedt v. Broers[121]). Perhaps the principal element in the welfare of the beneficiaries is to be found in the safety of the trust estate. Accordingly, even though he has been guilty of no misconduct, if a trustee is in a position so impecunious that he would be subject to a particularly strong temptation to misapply the trust funds, the Court may properly remove him from his office as trustee. …[120] (1936) 54 CLR 572, 575 (Latham CJ).[121] (1884) 9 App. Cas. 371, at p. 387.Consideration The applicant has made several complaints about the behaviour of the current Trustees (Julie and Steven).[122] It was in that context that the Trustees made an application to a Master of the Supreme Court for advice and directions under the Trustee Act[123] pursuant to the Uniform Civil Rules 2020.[124] The decision of the Trustees not to make a trust distribution until the resolution of these proceedings was taken as a result of receiving that advice. [122] This has extended to complaints as to potential conflict with the respondents’ solicitors acting for them all, which arose for the first time during the commencement of trial and which I find has no foundation on the facts. The lack of conflict is demonstrated by the clear roles of each respondent, the respective capacities in which they act and the particular aspects of the applicant’s claims with which they take issue.[123] The Trustee Act s 91, adopting Administration and Probate Act 1919 s 69. [124] Uniform Civil Rules 2020 r 11.1; Supreme Court Act 1935 ss 7(2), 48(2)(c). See also Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australian and New Zealand (2008) 237 CLR 66, 127-128 [196]. The current Trustees have indicated that once these proceedings are concluded they will step down and cease acting. Under the current terms of the Will, should Julie and Steven no longer wish to act as Trustees the role transfers to Andrew; and if he is no longer able to adopt the role, to the NSW Public Trustee. The applicant positively takes issue with Andrew becoming Trustee on the basis of the apparent conflict of interest that would arise in that Andrew, as one of the contingent beneficiaries, would be seen as having an interest in not distributing the Will Trust funds, which would conflict with the interest of the applicant in receiving such distributions. Of course as a matter of law and equity, a trustee must act in accordance with the express terms of the trust instrument (the Will) and only consider the class of beneficiaries to whom distributions can be made when exercising its discretion.[125] The Will Trust expressly provides that for the duration of the applicant’s lifetime, the applicant herself is the only class of beneficiary to whom distributions may be made;[126] and therefore she is the only beneficiary to whom the appointed Trustee can give real and genuine consideration when exercising its discretion to make a particular distribution. [125] The exercise of a trustee’s absolute and unfettered discretion is only examinable as to whether the discretion is being exercised in good faith; upon real and genuine consideration; and proper (as opposed to extraneous) purposes: Karger v Paul [1984] VR 161, 166. See also Telstra Super Pty Ltd v Flegeltaub (2000) 2 VR 276, [27]; Esso Australia Ltd v Australian Petroleum Agents & Distributors Association [1999] 3 VR 642, [39].[126] Clause 5.2.2(4) of the Will.