Public Trustee v Peter Patrick Bebich (As Executor of the Estate of Yanja Bebich (Dec)) - [2014] WASC 340

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: PUBLIC TRUSTEE -v- PETER PATRICK BEBICH (AS EXECUTOR OF THE ESTATE OF YANJA BEBICH (DEC)) [2014] WASC 340

CORAM: LE MIERE J

HEARD: 19 DECEMBER 2013

DELIVERED : 24 SEPTEMBER 2014

FILE NO/S: CIV 1076 of 2012

MATTER :The Estate of the Late Yanja Bebich (Dec)
Section 13 of the Public Trustee Act 1941 and Sections 4 and 45 of the Administration Act 1903

BETWEEN: PUBLIC TRUSTEE
First Plaintiff
IVY BEBICH (BY HER NEXT FRIEND THE PUBLIC TRUSTEE)
Second Plaintiff
AND
PETER PATRICK BEBICH (AS EXECUTOR OF THE ESTATE OF YANJA BEBICH (DEC))
First Defendant
PETER PATRICK BEBICH
Second Defendant
MATTHEW MARK BEBICH
Third Defendant

Catchwords:

Grant of probate of will - Duties of executor and trustee - Family Provision Act proceedings are pending - Property available to satisfy Family Provision order - Transfers were not made for urgent purposes - Defence under Trustees Act 1962 (WA) s 65(8) does not apply - Relief - Trustees Act 1962 (WA) s 94

Legislation:

Family Provision Act 1971 (WA), s 6, s 8, s 9, s 11
Inheritance (Family and Dependent Provision) Act 1972 (WA)
Inheritance (Family Provision) Act 1938 (UK)
Inheritance (Family Provision) Act 1972 (SA)
Law Reform (Testamentary Promises) Act 1949 (NZ)
Succession Act 1981 (Qld), s 40, s 41
Trustees Act 1962 (WA), s 65, s 94
Trusts Act 1973 (Qld), s 8

Result:

Defendants restrained from selling, disposing of, encumbrancing or otherwise dealing with properties until Family Provision Act 1971 (WA) proceedings are resolved

Proceedings adjourned until Family Provision Act 1971 (WA) proceedings are resolved or further order

Category: B

Representation:

Counsel:

First Plaintiff                  :     Mr J R Brooksby
Second Plaintiff             :     Mr J R Brooksby
First Defendant              :     In person
Second Defendant         :     In person
Third Defendant            :     In person

Solicitors:

First Plaintiff                  :     Public Trustee (WA)
Second Plaintiff             :     Public Trustee (WA)
First Defendant              :     In person
Second Defendant         :     In person
Third Defendant            :     In person

Case(s) referred to in judgment(s):

Blunden v Blunden [2008] SASC 286
Grove v Fisher [2002] WASC 247
Guardian Trust and Executors Company of New Zealand Limited v Public Trustee of New Zealand [1942] AC 115
In the Estate of Gough decd; Gough v Fletcher (1973) 5 SASR 559
Re Faulkner [1999] 2 Qd R 49
Re Simson deceased; Simson v National Provincial Bank Ltd [1950] Ch 38; [1949] 2 All ER 826
Re Winwood (decd); Winwood v Winwood [1959] NZ LR 246
Taylor v Taylor (1870) LR 10 Eq 477
Wendt v Orr [2004] WASC 28
LE MIERE J:

Overview

Yanja Bebich died on 11 August 2007. She was survived by two sons, Peter and Matthew (also known as Mate) and five daughters, Lucy Paslich, Nellie Kukavica, Verna Marijancic, Phyllis Yujnovich and Ivy Bebich. For the sake of convenient reference and without intending any disrespect, I will refer to the family members by their first names.
Probate of Yanja's will was granted to Peter on 19 June 2008. Peter was the sole executor named in the deceased's will. Yanja left the whole of her estate to Peter and Matthew as tenants in common in equal shares. The only assets of any substance in the estate were two properties in Lenore Road, Wanneroo, which I will refer to as Lot 178 and Lot 179.
On 24 October 2008 Verna commenced proceedings under s 6 of the Family Provision Act 1972 (WA) claiming that the disposition of Yanja's estate effected by her will does not make provision for Verna's proper maintenance, support or advancement in life and seeking that the court order that proper provision be made out of the estate for that purpose. The initial defendant in the proceedings was Peter in his capacity as executor of the estate. On 3 April 2009 the court ordered that Peter, in his personal capacity, Matthew, Nellie, Phyllis and Ivy be joined as defendants. Ivy suffers from a number of conditions as a result of which she requires care and supervision in her day‑to‑day living. The Public Trustee has been appointed by the State Administrative Tribunal as the limited administrator of Ivy's estate.
In August 2009 Peter lodged at Landgate applications for Lot 179 to be transferred to himself in his capacity as executor and trustee of Yanja's estate and then to himself and Matthew as tenants in common in equal shares. In September 2009 ANZ Bank lodged for registration a mortgage over Lot 179 granted by Peter and Matthew in favour of ANZ Bank to secure a loan to Invention Technologies Pty Ltd, a company controlled by Peter and Matthew. In January 2010 Peter lodged applications for Lot 178 to be transferred to himself as executor of the estate and then to himself and Matthew as tenants in common in equal shares. In February 2010 ANZ Bank lodged for registration a mortgage over Lot 178 granted by Matthew and Peter to secure a loan facility for the benefit of Peter and Matthew or their businesses. All of these dealings were subsequently registered on the titles of Lot 178 and Lot 179.
On 19 January 2012 the plaintiff, the Public Trustee as administrator of the affairs of Ivy, commenced this action against Peter as executor and trustee of the estate of Yanja and Peter and Matthew in their personal capacities. The relief claimed included that:
•the grant of probate of the will of Yanja to Peter be revoked;
•there be a grant in favour of the Public Trustee of the probate of the will of Yanja;
•Peter and Matthew discharge all encumbrances on Lots 178 and 179; and
•Peter and Matthew transfer to the Public Trustee as executor of the estate of Yanja Lots 178 and 179 free of any encumbrance.
On 26 June 2012 the court ordered, by consent of all the parties, that the grant of probate of the will of Yanja to Peter be revoked and there be a grant in favour of the Public Trustee of probate in solemn form of the will of Yanja.
The plaintiff says that Peter transferred Lots 178 and 179 to himself and Matthew and mortgaged each lot in favour of ANZ in breach of his duty as executor and trustee of Yanja's estate. The plaintiff says that Matthew knowingly received an interest in each of Lot 178 and 179 in breach of Peter's duty as executor and trustee.
The defendants, Peter and Matthew, deny that Peter transferred the properties in breach of trust or that Matthew knowingly received an interest in the properties in breach of trust. Further, the defendants say that they were partially dependent on Yanja at the time of her death and that the transfer of the properties to them was born of financial necessity and that s 11 of the Family Provision Act 1972 (WA) applies and consequently no action lies against them in respect of the distribution to them of the properties from the estate of Yanja.

Duties of executor and trustee

The principal obligations of an executor are to get in the assets of the testatrix, pay expenses and liabilities of the testatrix, and then to distribute the residue of the estate in accordance with the will. An executor should retain sufficient funds to meet any outstanding debts or contingent liabilities of the estate. An executor who distributes the estate with notice of a contingent liability of the estate is personally liable to meet that liability. For example, in Taylor v Taylor (1870) LR 10 Eq 477 the executors of a testator who held shares in a company paid a legacy under his will without providing for any contingent liability in respect of the shares which they retained unsold. The company was subsequently wound up but the testator's estate was insufficient to pay the calls on the unpaid shares. Lord Romilly MR said that the executors had committed a breach of trust in paying the legacy without providing for the liability attaching to the testator's estate at the time of his death in respect of the shares and the executor was liable to pay the outstanding amount to the liquidator.
In Guardian Trust and Executors Company of New Zealand Limited v Public Trustee of New Zealand [1942] AC 115 the executors of a will, having obtained probate, with notice of the fact that the next of kin intended applying for revocation of the grant of probate on the ground of want of testamentary capacity, paid out legacies under the will to persons and institutions not entitled to share in the estate on an intestacy. The next of kin were successful in obtaining a revocation of probate on the ground of want of testamentary capacity and probate was recalled. The deceased had made no other will and letters of administration were granted to the next of kin. The Privy Council held that the executors were liable to the deceased's estate for the sums paid out under the legacies under the will. Lord Romer who delivered the judgment of their Lordships said that the case fell to be decided in accordance with the principles of equity. Lord Romer said:
One of those principles is that if a trustee or other person in a fiduciary capacity has received notice that a fund in his possession is, or may be, claimed by A, he will be liable to A if he deals with the fund in disregard of that notice should the claim subsequently prove to be well founded (127).
Re Simson deceased; Simson v National Provincial Bank Ltd [1950] Ch 38; [1949] 2 All ER 826 was decided the following year. A summons was taken out under the Inheritance (Family Provision) Act 1938 (UK) by the testator's widow asking that such reasonable provision as the court might think fit might be made out of the estate for her maintenance. Vaisey J determined that provisions should be made by way of an annuity of £96 of which £9 a year should be charged on and payable out of the income of the bequests given to the testator's nephews under his will. However, during an interlocutory hearing the widow had conceded that she made no claim against the nephews. Accordingly, Vaisey J held that no order would be made granting the widow £9 a year charged on the nephews' interests. In that context Vaisey J observed that:
… where an application under the Inheritance (Family Provision) Act 1938 is either pending or impending … if it is a case in which there is any risk of such a thing happening, the executor distributes the estate at his risk … Of course, duties and debts, and that sort of thing, can be paid … but no distribution to beneficiaries should be made while there is any possibility or expectation that an application under this Act will be made (43).
In ReWinwood (decd); Winwood v Winwood [1959] NZ LR 246 the plaintiff had a claim under the Law Reform (Testamentary Promises) Act 1949 (NZ), which created a statutory right to enforce promises to reward for services or work by making some testamentary provision in the same manner as if the promise were a promise for payment by the deceased in his lifetime. McGregor J said that the liability of the estate is a contingent liability of the estate enforceable against the personal representative if the action to enforce the claim is commenced within 12 months after the personal representative of the deceased took out representation. McGregor J then concluded:
The duty of the executors includes the duty to provide for contingent liabilities and failure to do so amounts to a breach of trust: Taylor v Taylor (1870) LR 10 Eq 477. If there is a risk of a claim enforceable under the Law Reform (Testamentary) Promises Act 1949, an executor distributing the estate before the expiration of the period of twelve months from the grant of administration does so, in my view, at his own risk (250).
In Re Faulkner [1999] 2 Qd R 49 the applicant sought an order pursuant to s 8 of the Trusts Act 1973 (Qd) setting aside the distribution of the estate made by the respondent executors. The applicant had given notice of a claim against the estate under s 40 and s 41 of the Succession Act 1981 (Qld) which empowered the court to make an order for further provision out of the estate. Moynihan J said:
The applicant also has a right of due administration in respect of the trust constituted by the will. A trustee who has received notice that a fund in his possession is or may be claimed is liable to the claimant for dealing with the property in disregard of the notice should the claim prove well founded. Guardian Trust and Executors Company of New Zealand Ltd v Public Trustee of New Zealand. The obligation is to preserve the estate until the claim is resolved; Re Simson; Re Crowley. Distribution with notice of claim under similar legislation was held to be a failure by the executors to provide for contingent liabilities so as to constitute a breach of trust in Re Winwood (deceased) (52 - 53).
The plaintiff relied upon Grove v Fisher [2002] WASC 247. By his will the deceased left a bequest of $250,000 to his daughter, Kerry, but did not make any provision for his son, Brian. Brian and Kerry brought an application to extend time for the commencement of proceedings under the Inheritance (Family and Dependent Provision) Act 1972 (WA). The effect of the will was that the bequest of $250,000 to Kerry was due and payable by not later than 23 August 2000. The executors did not pay the bequest to Kerry until after the Inheritance Act application was resolved in December 2001. Kerry claimed that the executors should pay to her interest on the bequest to her from 23 August 2000 until December 2001. The central issue in the case was whether the executors were justified in withholding payment of the bequest after 23 August 2000 on the grounds that no payment should be made until the proceedings under the Inheritance Act had been disposed of. Hasluck J referred to the view expressed in Re Simson that an executor should exercise great care before allowing any part of an estate to be paid out to any beneficiary while an application under legislation corresponding to the Inheritance Act is either pending or impending. Hasluck J also referred to In the Estate of Gough decd; Gough v Fletcher (1973) 5 SASR 559 where the executor proposed to sell a portion of real property held by the estate to enable payment out of the proceeds of sale of estate duty and other charges. The widow had applied for an injunction restraining the executor from selling the real property pending the hearing of her application for further provision. Zelling J held that the injunction should be granted. Hasluck J held that the executors were justified in withholding payment of the bequest until the outcome of the Inheritance Act proceedings was known and dismissed Kerry's claim for interest.
Hasluck J said at [55] and [56] that the estate should not be distributed in circumstances where claims are pending and an executor can be held accountable for loss if an estate is distributed while claims are pending. Hasluck J referred with apparent approval to the views expressed in Dickey A, Family Provision after Death (178) that:
Unless statute provides otherwise, an executor or administrator must ordinarily refrain from distributing any part of a deceased's estate to beneficiaries during the period in which an application for family provision can be made either without leave of the court or, semble, pursuant to leave granted by the court. Although there is scant Australian authority on point, it would appear that this rule is subject to reasonable exceptions.
After noting that according to Dickey the circumstances in which it is arguably justifiable for an executor to distribute a legacy include if it is for a trifling amount, or if a beneficiary has a strong moral claim to provision as a matter of urgency, or if others who are eligible to apply for provision have disclaimed their right to do so, or if it is clear that there is no person eligible to apply for provision, Hasluck J reproduced the following further comments of Dickey:
Be that as it may, however, it seems accurate to say that if a personal representative does distribute estate assets during the period in which an application for family provision can be made either without leave of the court or pursuant to leave granted by the court, he or she may be personally liable to a successful applicant who suffers a loss as a result. In appropriate circumstances, an injunction will lie to prevent a personal representative from acting in contravention of the general prohibition on the premature distribution of estate assets.
Most of the cases to which I have referred were also referred to by Bleby J in Blunden v Blunden [2008] SASC 286. The Inheritance (Family Provision) Act 1972 (SA) provided for claims for provision to be made within six months from the date of the grant of probate or letters of administration. Bleby J said:
It would seem that the consequence in equity of an executor distributing an estate before the relevant period has expired is that the executor may be personally liable to a successful applicant who suffers loss as a result. In other words, the executor is at risk if he or she makes the distribution. However the executor is not prevented from doing so [24].
Once probate has been granted to an executor, the executor is under no legal prohibition not to distribute the estate even if the executor has notice of a pending claim under the Family Provision Act. The grant of probate is the executor's authority to deal with the property of the estate in accordance with the will. The application for provision under the Family Provision Act may be unsuccessful. In that event the executor will not be liable for having distributed the estate in accordance with the will. However, the effect of the authorities to which I have referred is that an executor who distributes with notice of an application under the Family Provision Act may be personally liable to a successful applicant for family provision who suffers loss as a result. It is in that sense that an executor who makes the distribution in these circumstances is 'at risk'.
In the circumstances of this case it was a breach of Peter's duty as executor and trustee of Yanja's estate to transfer Lots 178 and 179 to himself and Matthew with notice of the pending Family Provision Act proceedings and in particular the claim of Ivy. In an affidavit sworn by Peter on 16 July 2009 on behalf of himself and Matthew in the Family Provision Act proceedings Peter said that his sister, Phyllis, receives a carer's pension from Centrelink for Ivy. Peter said that the entire family knew about Ivy's predicament for many years and that the family was always discussing the best course of action to implement to help Ivy who has 'special needs'. Peter said that Ivy had been assessed by numerous clinical psychologists and was diagnosed by a clinical psychiatrist as being intellectually handicapped and will remain so for the rest of her life.
Having regard to her circumstances there is a probability that at the trial of the Family Provision Act proceedings the court will consider that Yanja's will does not make proper provision for Ivy's proper maintenance support or advancement and will order that some proper provision be made out of the estate for that purpose. By probability I do not mean that it is more probable than not that at trial provision will be made for Ivy; the evidence shows a sufficient likelihood of success that the executor of Yanja's estate should have retained funds to meet the contingent liability. The contingent liability of the estate to Ivy is not remote; it is probable or reasonably possible. Peter, as executor and trustee, had a fiduciary duty to administer the estate for the benefit of contingent beneficiaries, including Ivy. By distributing the properties to himself and his brother, Peter breached his duty as executor and trustee.

Family Provision Act proceedings are pending

The court has jurisdiction, upon application by an applicant for provision under the Family Provision Act, to grant an interlocutory injunction restraining the executor from disposing of any part of the property forming part of the deceased's estate and from distributing any part of the estate pending the determination of the application for provision.

Property available to satisfy Family Provision order

Where the estate of the deceased, or part of it, has been distributed among the persons entitled under the will, s 8 of the Family Provision Act provides that the court may make an order under s 65 of the Trustees Act 1962 (WA) in lieu of an order under the Family Provision Act. Where the court exercises its power under the Family Provision Act s 8 to make an order under the Trustees Act s 65, the court has the same powers in respect of that order as it has in respect of an order made under the Family Provision Act. The power of the court to make an order under s 65 of the Trustees Act is subject to three relevant qualifications. First, the order can only be made on an application for an order under the Family Provision Act. Secondly, s 9 of the Family Provision Act provides that the court must have regard to the provisions of Trustees Act s 65(8), which subsection enables the court to decline to grant relief where it would be inequitable to do so having regard to the position of those who have been the beneficiaries of a distribution of the trust estate. Thirdly, the power to make an order under the Trustees Act is also, by Family Provision Act s 11, subject to there being no interference where the power preserved to the executor to provide, as may be immediately necessary after the death of the deceased, for any person who was totally or partially dependent upon the deceased at the time of the death.

Transfers were not made for urgent purposes

The defendants submitted that the transfers of Lots 178 and 179 were made to them for urgent purposes, and in accordance with Family Provision Act s 11 no order made under the Family Provision Act or Trustees Act s 65 shall disturb that distribution.
Section 11 of the Family Provision Act does not apply to the transfer of Lots 178 and 179 to the defendants for two reasons. First, they were not totally or partially dependent on Yanja immediately before her death. As best I can make out the defendants' case it is that at the time of the deceased's death the properties in her name were security for a credit facility which provided working capital for the defendants' businesses and the transfers were necessary so that they could use the properties as security for further basis to provide working capital for their businesses.
The meaning of 'dependent' in Family Provision Act s 11 takes its meaning from its context. The provision is directed to the distribution of the whole or any part of the estate to a person who was totally or partially dependent on the deceased immediately before her death for the purpose of providing those things immediately necessary for the maintenance, support or education of the dependent person. A common form of dependence is financial dependence which flows from the fact that housing, food, clothing and other necessities or amenities of life are supplied by the person who owns or is otherwise entitled to the housing and pays for the other things. A businessman might be said to be dependent on another person or persons to provide working capital for his business but that is not the sort of dependence to which s 11 of the Family Provision Act is directed.
The second reason why Family Provision Act s 11 has no application to this case is that Peter did not transfer Lots 178 and 179 to himself and Matthew for the purpose of providing those things immediately necessary for their maintenance, support or education. Section 11 of the Family Provision Act is concerned with a distribution of the whole or part of the estate for the purpose of providing those things immediately necessary for the maintenance, support or education of the dependent person. The word 'immediately' indicates that the distribution is to directly achieve that purpose. The transfer of real property to be used as security for substantial loans to be used as working capital in a substantial business is not a distribution for the purpose of providing those things immediately necessary for the maintenance, support or education of the relevant persons.
Whether or not Peter and Matthew were relevantly dependent upon Yanja immediately before her death and whether or not the transfer of Lots 178 and 179 to them was for the purpose of providing those things immediately necessary for their maintenance, support or education are questions of fact. The evidence is that Peter and Matthew were not relevantly dependent upon Yanja immediately before her death and the transfer of Lots 178 and 179 to them was not for the purpose of providing those things immediately necessary for their maintenance, support or education.

Trustees Act s 65

In the course of his oral submissions Matthew Bebich, on behalf of the defendants, relied upon s 65 of the Trustees Act as a defence to the present action. Section 8 of the Family Provision Act empowers the court to make an order under s 65 of the Trustees Act, in lieu of an order under the Family Provision Act, in any case where the estate of the deceased, or part of it, has been distributed among the persons entitled under the will. Section 9 of the Family Provision Act provides that in determining whether, and in what way, provision ought to be made by an order, the court shall have regard to the provisions of s 65(8) of the Trustees Act. The effect of s 65(8) of the Trustees Act is, in effect, to deny relief, wholly or in part, if the person from whom relief is sought received the assets in good faith and has so altered his position in reliance on his having an indefeasible interest in the assets or interest that, in the court's opinion, having regard to possible implications in respect of other persons, it is inequitable to grant relief or to grant relief in full.
The defence under Trustees Act s 65(8) does not apply to the circumstances of this case. Peter did not receive the properties in good faith. He transferred the properties to himself in breach of his duty as executor and trustee of the estate. He knew that the Family Provision Act proceedings had been commenced. The effect of transferring the properties to himself and his brother and then mortgaging them to the ANZ Bank had the effect of removing all of the assets of the estate in respect of which a family provision order could be made. Matthew did not receive the properties in good faith. He knew that Peter transferred Lots 178 and 179 to Matthew and Peter in his capacity as executor and trustee of the estate of Yanja. Matthew knew that the Family Provision Act proceedings had been commenced and that the transfer of the properties to himself and his brother removed from the estate assets in respect of which a family provision order might be made.
Peter and Matthew have a sense of entitlement. They believe that they are entitled to Lots 178 and 179 because the properties were left to them under their mother's will and the court should not interfere with that devise. In his oral submissions, on behalf of himself and Peter, Matthew denied there was a breach of trust. He elaborated:
We read [the will] to be very simple in the way it explained that the two sole beneficiaries are Peter and myself, notwithstanding that there are other claimants that may want to have a go at it to try and increase their wealth or whatever. But in our, sort of, humble opinion we don't believe that it's the duty of any court to stipulate in wills who shall be provided for in that will.
The defendant's subjective belief that they were, and are, entitled to Lots 178 and 179 does not mean that Peter and Matthew received the properties in good faith.
Furthermore, the court could not come to the opinion, having regard to all possible implications in respect of the trustee and other persons, that if it is otherwise satisfied that adequate provision had not been made for Ivy or the other applicants it is inequitable to grant relief or to grant relief in full to the applicants in the Family Provision Act application. Peter effected the transfers, and Matthew received the transferred properties, knowing of the pending Family Provision Act proceedings and that the transfers removed the assets from the estate in respect of which a family provision order might be made. On any reasonable view there was a likelihood that an order would be made in favour of at least Ivy in the Family Provision Act proceedings. Having regard to Ivy's circumstances and the circumstances in which Peter transferred Lots 178 and 179 to himself and Matthew, the court could not come to the view that it would be inequitable to grant relief.

Relief

The plaintiffs seek relief pursuant to s 94 of the Trustees Act. Section 94(1) relevantly provides:
Any person who has, directly or indirectly, an interest, whether vested or contingent, in any trust property, and who is aggrieved by any act, omission or decision of a trustee in the exercise of any power conferred by this Act … may apply to the Court to review the Act, omission or decision … and the court may require the trustee to appear before it, and to substantiate and uphold the grounds of the Act, omission or decision that is being reviewed, and may make such order in the premises as the circumstances of the case may require.
The power of the court under the Trustees Act s 94 to review a trustee's acts and decisions is one which should not be narrowly construed. The plaintiffs submit that the Trustees Act s 94 empowers the court to make orders requiring Peter and Matthew to transfer Lots 178 and 179 to the Public Trustee as administrator of the estate of Yanja so as to restore those assets to the estate. The plaintiffs further seek orders that Peter and Matthew discharge the mortgages over Lots 178 and 179.
There is an issue whether the Trustees Act s 94 empowers the court to review Peter's act in transferring Lots 178 and 179 to himself and Matthew. It is arguable that the power conferred on the Court by the Trustees Act s 94 is limited to circumstances in which the trustee, or executor, is exercising a power conferred by the Act and does not extend to the exercise of powers conferred by the trust instrument or will. That issue was considered by Commissioner Johnson QC in Wendt v Orr [2004] WASC 28. In that case the decision sought to be reviewed was the decision of an executor to treat the profit on the sale of shares of the estate as income for distribution to the income beneficiary. The relief sought was repayment of the monies by the income beneficiary or, alternatively, by the executor, together with interest. Commissioner Johnson QC said that the conduct of which the plaintiffs complained was the distribution of the profits from the share sales to Mrs Wendt as income from the estate. Commissioner Johnson concluded that distribution of the funds of the estate is a fundamental aspect of an executor's role and integral to the various powers and duties contained in the Trustees Act, in particular the power under s 17 to invest and realise an investment of trust funds. Her Honour concluded at [30] that the application was properly brought under s 94 of the Trustees Act. Her Honour further concluded that in any event the court has an inherent jurisdiction to supervise trusts and trustees and make appropriate orders to protect the interests of beneficiaries of a trust, including making orders compensating for breaches of trust.
I accept that the court has power, whether pursuant to Trustees Act s 94 or its inherent jurisdiction, to make orders compensating for breaches of trust. However, it is not appropriate to make any order for compensation at this time. That is because the proceedings under the Family Provision Act have not yet been determined. Until those proceedings have been resolved it cannot be determined whether the estate or Ivy or any of the other claimants in the Family Provision Act proceedings has suffered any loss as a result of the transfer of the properties to Peter and Matthew.
Whether Ivy, or the other applicants in the Family Provision Act proceedings, have suffered any loss as a result of Peter's breach of trust in transferring the properties to himself and Matthew, and if so the amount of that loss, will only be known after the Family Provision Act proceedings have been resolved. Those proceedings may be resolved notwithstanding that Lots 178 and 179 have been transferred out of the estate. The effect of Family Provision Act s 8 and Trustees Act s 65 is that the court may make an order for proper provision for Ivy, or the other claimants in the Family Provision Act proceedings, that Peter or Matthew pay to the claimant a sum not exceeding the value of the assets which were distributed to them, that is Lots 178 and 179.
It is appropriate that Peter and Matthew be restrained from selling, disposing of, encumbrancing or otherwise dealing with Lots 178 and 179 until the Family Provision Act proceedings have been resolved. That is to preserve those assets pending the resolution of the Family Provision Act proceedings and the final resolution of this proceeding.
If the court has power to order Peter and Matthew to transfer Lots 178 and 179 to the Public Trustee, as executor of the estate of Yanja, and to discharge the mortgages in favour of the ANZ Bank, which I do not decide, it is not appropriate to make any such orders. Peter and Matthew cannot transfer Lots 178 and 179 to the Public Trustee as administrator of the estate of Yanja without discharging the mortgages in favour of the ANZ Bank or obtaining the consent of the ANZ Bank to do so. There is no evidence that Peter and Matthew have the means to discharge the mortgages without using Lots 178 and 179 as finance for any loan for that purpose. There is no evidence, and it is unlikely, that the ANZ Bank would consent to the transfer of the properties to the Public Trustee without the mortgages being discharged. As I have said, Family Provision Act s 8 and Trustees Act s 65 empower the court to make an order for proper provision of Ivy, or the other claimants in the Family Provision Act proceedings, that Peter and Matthew pay to the claimant a sum not exceeding the value of the assets were which were distributed to them, that is Lots 178 and 179. It is not necessary that Lots 178 and 179 be transferred to the estate of Yanja for provision to be made for the claimants in the Family Provision Act proceedings.

Conclusion

Peter and Matthew should be restrained from selling, disposing of, encumbrancing or otherwise dealing with Lots 178 and 179, until the Family Provision Act proceedings have been resolved. The proceedings will otherwise be adjourned until the Family Provision Act proceedings have been resolved or further order. There should be liberty to any party to apply on 4 days' notice to the other parties. That will enable the court to make any necessary or appropriate orders after the Family Provision Act proceedings have been resolved or any further necessary or appropriate orders in relation to Peter and Matthew dealing with Lots 178 and 179.