Re Estate Of Gavin Partigliani

[1999] WADC 50

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   RE ESTATE OF GAVIN PARTIGLIANI; EX PARTE THE PUBLIC TRUSTEE AS ADMINISTRATOR OF THE ESTATE OF GAVIN PARTIGLIANI [1999] WADC 50

CORAM:   NISBET DCJ

HEARD:   12 JULY 1999

DELIVERED          :   31 AUGUST 1999

FILE NO/S:   CIV 1102 of 1985

MATTER                :Section 59 of the Trustees Act 1962

and

The Estate of GAVIN PARTIGLIANI

EX PARTE

THE PUBLIC TRUSTEE AS ADMINISTRATOR OF THE ESTATE OF GAVIN PARTIGLIANI
Applicant

Catchwords:

Trust and trustees - Public Trustee - Application for approval of advancement out of capital notwithstanding provisions of Trustees Act 1962 s59 - Public Trustee not bound by s59 of Trustees Act 1962 - Application properly brought in any event.

Legislation:

Public Trustee Act 1941

Trustees Act 1962

Result:

Application granted.

Representation:

Counsel:

Applicant:     Mr G Young

Solicitors:

Applicant:     Solicitor for the Public Trustee

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

Re Mitchell (1913) 30 WN (NSW) 137

The Public Trustee v Larkman [1999]WASCA 93

Case(s) also cited:

Nil

1. NISBET DCJ: By notice of motion dated 1 June 1999 the Public Trustee brought an ex parte application for authority to advance to the first plaintiff such amounts of the capital held by it on trust for the first plaintiff as it might from time to time in its discretion decide is appropriate for the maintenance, advancement or benefit of the first plaintiff, without being bound by any limitation under the provisions of s59 of the Trustees Act 1962.

2. The Public Trustee applied pursuant to the provisions of O70 r12(2) of the Rules of The Supreme Court 1971 and s89(1) of the Trustees Act 1962, and as it was a fresh action, it should have been initiated by an originating summons in accordance with O58 r2.

3. The circumstances behind the application are that the Public Trustee was appointed trustee of an award of damages made in this Court in favour of the first plaintiff by order dated 23 May 1988.

4. The damages award (which became the trust estate) was in the sum of $235,101.00.  As a reading of the judgment and an examination of the history of the Public Trustee's expenditure for and on behalf of the first plaintiff discloses, this was on the low side, and it has not been adequate for his needs.

5. Whilst it is always the case that awards of damages which comprise in whole or in part the immediate payment of a capital sum designed to represent the present day value of projected future lost earnings and expenses, that that capital sum is intended to be spent, and, if the sums have been done correctly, that part of the trust estate should be extinguished at the same time as the beneficiary's need terminates, that has not happened in this case and it is unlikely to happen.  The affidavit filed on behalf of the Director of Trust Management of the Public Trustee discloses that the trust estate now comprises a house valued at a little over $79,000.00 and some cash of something over $12,000.00.

6. The Public Trustee is concerned that the trust estate has now been depleted to such an extent that it is concerned that further advances out of the estate will inevitably be being made out of capital as there is little or no income, and that accordingly the provisions of s59 of the Trustees Act 1962 will apply.  In this circumstance the Public Trustee says it would need to come to the court each time it wished to make an advance to the first plaintiff which would make the administration of the trust estate almost impossible and exceptionally burdened by legal expenses.

7. When the matter first came before me counsel for the Public Trustee was unable to offer any submission or refer me to any authority which would guide me in the exercise of my discretion in this particular matter.  I accordingly reserved my decision and since the time that my decision has been reserved the Full Court has delivered its judgment in The Public Trustee v Larkman [1999]WASCA 93. That matter had been argued on 6 April 1999. The respondent in that case was the beneficiary of a trust estate of which the Public Trustee was trustee and he sued the Public Trustee (presumably for equitable compensation) for breaches of the Trustee's trust in making advancements to him unauthorised by the terms of the trust. Central to the determination of that case was whether the Public Trustee's powers of advancement under s49(1)(n) of the the Public Trustee Act 1941 were in any way constrained by the provisions of s59 of the Trustees Act 1962.  The court held that they were not.  As Kennedy J put it:

   "Section 58 and s 59 of the Trustees Act 1962 (WA) provide for the making of payments towards the maintenance, education, advancement or benefit of an infant, whether his interest in the fund is vested or contingent. By s 59, a trustee is given power to pay or apply any capital money subject to a trust for the maintenance, education, advancement or benefit of a person entitled to the capital of the trust property or any share thereof, whether absolutely or contingently, subject to the proviso that the money or assets so paid or applied should not exceed $2,000.00 or half of the presumptive or vested share or interest of that person in the trust property, whichever is the greater. I can find no sufficient reason for restricting the power of the Public Trustee to apply the corpus of the trust fund in this case towards the respondent's maintenance to one-half of the fund.

   I agree with White J that the provisions of s 58 and s 59 cannot diminish the existing powers of the Public Trustee. The powers conferred by the Trustees Act 1962 are expressly said by s 23(1) to be in addition to any other powers conferred by the Public Trustee Act or any other Act.

   Notwithstanding the awkward language of s 49(1)(n) of the Public Trustee Act, in my view, the power which it confers must be taken to relate to trust property vested in the Public Trustee unless excluded by the trust instrument or the order of the Court."

8. It seems to me therefore that the Public Trustee, as a matter of construction of the extent of its powers by reference to each of the Public Trustee Act 1941 and the Trustees Act 1962 does not have to come to court for the approval of this expenditure.

9. This is not to say, however, that this application is not justified on other grounds for it has often been held that where a trustee is any doubt about the limits or proper exercise of a particular power, application should be made to the court for approval. In looking at the matter I had wondered whether the application was properly brought under s89(1) of the Trustees Act for it seems to me that that provision relates to a particular set of circumstances not relevant here. It is not a matter of mere pedantry for me to suggest that the application should have been brought under s92 of the Trustees Act 1962 because these different provisions have different approaches as to notice to parties, service and the principles to be applied.  See for example Re Mitchell (1913) 30 WN (NSW) 137.

10. In any event, whilst it is true that the power that I am being asked to exercise must be properly identified by the applicant, the matter is clearly properly before the court. In this regard I have examined the papers and in particular the statement of income and expenditure and it is clear that the Public Trustee, in order to continue to make advancements to the first plaintiff will need to run down the capital of the fund, as income has never matched outgoings, and accordingly in the circumstances I propose to grant the application. I propose to publish these reasons without requiring any attendance by the Public Trustee unless the Public Trustee wishes to make application for costs pursuant to the provisions of s97 of the Trustees Act 1962 in which case the Public Trustee should re-list the matter for hearing before me.