Re Permewan

Case [2021] QSC 151

SUPREME COURT OF QUEENSLAND

CITATION:

Re Permewan [2021] QSC 151

PARTIES:

In the will of PRUDENCE VERONICA PERMEWAN, deceased

DONNA FRATER

(applicant)

v
JOHN SCOTT PERMEWAN

(respondent)

FILE NO/S:

BS No 6343 of 2020

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

24 June 2021

DELIVERED AT:

Brisbane

HEARING DATE:

27 April 2021

JUDGE:

Davis J

ORDERS:

1. Pursuant to s 6 of the Succession Act 1981, John Scott Permewan is removed from the office of executor of the estate of Prudence Veronica Permewan.

2. Pursuant to s 6 of the Succession Act 1981 the Grant of Probate issued to John Scott Permewan is revoked.

3.   Myles Gerard Murphy is appointed as Administrator of the estate of Prudence Veronica Permewan in place of John Scott Permewan.

4.   Letters of Administration with the Will dated 29 November 2017 be granted to Myles Gerard Murphy, subject to the formal requirements of the Registrar.

5.   Any requirements for advertising the intention of Myles Gerard Murphy to obtain a grant of Letters of Administration with the Will be dispensed with.

6.   Acting in his capacity as Administrator of the Estate, Myles Gerard Murphy is entitled to engage his firm from time to time as his solicitors and that their fees be assessed by an independent cost assessor pursuant to the Supreme Court scale, as varied from time to time, on an indemnity basis and those fees are to be so assessed at the completion of the Administration.

7. Pursuant to ss 82 and 90 of the Trusts Act 1973 (Qld) John Scott Permewan will do all things reasonably necessary to transfer any property of the Estate presently in his name into the name of Myles Gerard Murphy as Administrator of the Estate.

8. Myles Gerard Murphy as Administrator of the Estate is entitled to be registered as the proprietor of any real property of the deceased in Queensland pursuant to s 114 of the Land Title Act 1994 (Qld).

9.   Myles Gerard Murphy as Administrator of the Estate has liberty to apply to the Court for further orders or directions upon five clear days notice.

10.  Costs of this Application are reserved.

CATCHWORDS:

SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - ALTERATION AND REVOCATION OF GRANTS - GENERALLY - where the deceased died leaving three adult children – where, before death, a series of commercially insensible transactions were entered into – where the admitted intention of the inter vivos transactions was to strip the estate of assets and place them under the control of the deceased’s son - where the intention of the inter vivos transactions was to frustrate any claim by the deceased’s daughters to family provision - where the deceased’s son is the sole executor of the will - where probate of the will was granted to the deceased’s son - where the deceased’s daughters seek to have the validity of the inter vivos transactions examined - where any obligation to consider the validity of…

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AGLC
Re Permewan [2021] QSC 151
Case
[2021] QSC 151
Decision Date

CaseChat Overview and Summary

The case of Re Permewan involved a dispute over the validity of transactions entered into by the deceased, Prudence Veronica Permewan, prior to her death. The deceased had three adult children, and before her death, she had conducted a series of transactions that were seen as commercially insensible, with the admitted intention of stripping the estate of assets and placing them under the control of her son, John Scott Permewan. This was done to frustrate any claim by her daughters, Donna and Marla, for family provision. John Scott Permewan was the sole executor of the will, and probate of the will was granted to him. The daughters sought to have the validity of the inter vivos transactions examined, arguing that any obligation to consider the validity of the transactions conflicted with the interests of the executor. The court had to decide whether it was appropriate to remove the executor and revoke the grant of probate.

The legal issues before the court involved the conflict of interest faced by the executor in considering the validity of the transactions, and whether the executor's refusal to consider challenging the transactions was sufficient grounds for his removal. The court examined the evidence presented, including the fact that the executor had not sought advice on challenging the transactions and had spoken maliciously about the applicants. The court found that it was appropriate to remove the executor and revoke the grant of probate, as the executor was in a hopeless position of conflict and had no intention of pursuing the validity of the transactions.

The court ordered that John Scott Permewan be removed from his position as executor of the estate and that the grant of probate be revoked. Myles Gerard Murphy was appointed as the Administrator of the estate in place of John Scott Permewan, and letters of administration with the will were granted to him. The court also ordered that John Scott Permewan transfer any property of the estate presently in his name into the name of Myles Gerard Murphy, and that Myles Gerard Murphy be registered as the proprietor of any real property of the deceased in Queensland. The costs of the application were reserved.

Orders

Orders of the court

1. Pursuant to s 6 of the Succession Act 1981, John Scott Permewan is removed from the office of executor of the estate of Prudence Veronica Permewan.

2. Pursuant to s 6 of the Succession Act 1981 the Grant of Probate issued to John Scott Permewan is revoked.

3. Myles Gerard Murphy is appointed as Administrator of the estate of Prudence Veronica Permewan in place of John Scott Permewan.

4. Letters of Administration with the Will dated 29 November 2017 be granted to Myles Gerard Murphy, subject to the formal requirements of the Registrar.

5. Any requirements for advertising the intention of Myles Gerard Murphy to obtain a grant of Letters of Administration with the Will be dispensed with.

6. Acting in his capacity as Administrator of the Estate, Myles Gerard Murphy is entitled to engage his firm from time to time as his solicitors and that their fees be assessed by an independent cost assessor pursuant to the Supreme Court scale, as varied from time to time, on an indemnity basis and those fees are to be so assessed at the completion of the Administration.

7. Pursuant to ss 82 and 90 of the Trusts Act 1973 (Qld) John Scott Permewan will do all things reasonably necessary to transfer any property of the Estate presently in his name into the name of Myles Gerard Murphy as Administrator of the Estate.

8. Myles Gerard Murphy as Administrator of the Estate is entitled to be registered as the proprietor of any real property of the deceased in Queensland pursuant to s 114 of the Land Title Act 1994 (Qld).

9. Myles Gerard Murphy as Administrator of the Estate has liberty to apply to the Court for further orders or directions upon five clear days notice.

10. Costs of this Application are reserved.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Later, there was this exchange:“HIS HONOUR: That’s exactly right. And the problem is, not at - as I understand Mr Morris’ concern, or his client’s concern, it’s not that you’re going - your client’s not going to put the strict terms of the will and these arrangements that have been put into place into effect. His argument is that there’s a solid case for setting aside the so-called promissory note arrangements and that your client ought to be considering doing that and your client won’t. You’re not seriously contending, are you, that your client is considering whether or not to set aside the promissory note, surely, because there’s no evidence suggesting that, is there?MR PARATORE: No, but as my learned friend also pointed out earlier today, there’s certainly no guarantee and it’s in Mr Murphy’s affidavit that he will.HIS HONOUR: No, but he’s going to consider doing it.MR PARATORE: Yes.” (emphasis added) Mr Paratore seemingly accepts that questions arise as to the effect of the inter vivos transactions. He continually submitted to me that those questions could be litigated in the family provision applications brought by Donna and Marla. In the passage above he concedes that Scott is not considering the validity of the promissory note. The fact that Scott is not considering whether action should be taken to relieve the estate of the $3 million debt is the very point upon which Mr Morris QC relies in his submissions for the removal of Scott as trustee and executor. On that point this exchange occurred:“MR PARATORE: Sorry, the trust. The trust. Of course. It’s discretionary, but we’re not there yet, your Honour. This is a Secession Act application, not a Trust Act application.HIS HONOUR: Yes. No, I understand that. I think you’re just looking at it the wrong way, though. I think instead of looking at it from the point of view of, ‘Is he going to fulfil the terms of the will,’ will carry that out. He obviously is not going to do $3 million debt, is he going to do that or turn his mind to that, and the answer to that must surely be no. That’s the issue, isn’t it?MR PARATORE: It’s an issue that could be raised in this family provision application, your Honour, and is often, but the potential beneficiaries under the will, the applicant, won’t do so and see it as, well, let’s work on the will and remove the executor as an easier alternative than having to make that argument. But the argument is going to be faced by the incoming administrator, and so it’s unavoidable. And so then the question must go back to the basic principle, which is - - -HIS HONOUR: Sorry. What - sorry. What’s unavoidable? An incoming executor might take some advice and then might sue the trust to set it all aside?MR PARATORE: Exactly. It’s an unavoidable - - -HIS HONOUR: That’s not going to happen if your client is executor, though, is it? MR PARATORE: It’s this balancing, your Honour, between - to remove the executor now who’s actually performing his obligations under the will as executor and the potential beneficiary raises - - -HIS HONOUR: But - - -MR PARATORE: - - - the transactions in that - - -HIS HONOUR: But why do you say he’s conducting his obligations under the will whereas, as executor, it’s at least arguable he should be considering setting aside the $3 million transaction? And he’s not. He’s not considering that.MR PARATORE: Well, we don’t know that, your Honour, because this is an interlocutory application.HIS HONOUR: Right.MR PARATORE: And it’s privileged, in any event.HIS HONOUR: I see. All right. So your client doesn’t swear that he’s seeking advice about that or anything like that, that he’s considering setting aside the - making application to effectively sue himself and set aside the transaction?MR PARATORE: Your Honour - - -HIS HONOUR: He doesn’t swear that, does he?MR PARATORE: No, he doesn’t. No. There’s no evidence - we’re not at a final hearing where this evidence can be tested - - -” (emphasis added)And later:“HIS HONOUR: And - and - and if for a moment we - just for a moment humour me. We call that - if we can just call that right against the trustee an asset. And perhaps it’s not. Perhaps it’s a chose of action, but let’s - let’s - or perhaps it’s not. Let’s just call it an asset for the purposes of it. Your client is just not pursuing that and has absolutely no intention of pursuing that, does he? He - - -MR PARATORE: I would have to ask him, your Honour.HIS HONOUR: Right. You didn’t think to ask him before you came here?MR PARATORE: Your Honour - - -HIS HONOUR: This is just ridiculous, isn’t it? It’s obvious what’s happened. It’s absolutely obvious what’s happened and it’s also, I would have thought, obvious on the material that your client has no intention to sue himself, which is basically what he would have to do. You agree with that?MR PARATORE: Yes.HIS HONOUR: Right. You’ve not come along in response to the application and said - with an affidavit saying, ‘I’m intending to seek advice as to suing the trust and I’ve - I’m taking advice,’ blah, blah, blah, blah, blah, blah, blah. All you do is you come here and you say there’s no evidence of what he’s intending to do. Well, you’re his solicitor. He could swear it, and he hasn’t. So why would I not draw the inference that he has absolutely no intention of doing that, and therefore he’s in a hopeless position of conflict? Why wouldn’t I draw that inference?MR PARATORE: It’s open to your Honour.” (emphasis added)Consideration

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Mr Paratore seemingly accepts that questions arise as to the effect of the inter vivos transactions. He continually submitted to me that those questions could be litigated in the family provision applications brought by Donna and Marla. In the passage above he concedes that Scott is not considering the validity of the promissory note. The fact that Scott is not considering whether action should be taken to relieve the estate of the $3 million debt is the very point upon which Mr Morris QC relies in his submissions for the removal of Scott as trustee and executor. On that point this exchange occurred:“MR PARATORE: Sorry, the trust. The trust. Of course. It’s discretionary, but we’re not there yet, your Honour. This is a Secession Act application, not a Trust Act application.HIS HONOUR: Yes. No, I understand that. I think you’re just looking at it the wrong way, though. I think instead of looking at it from the point of view of, ‘Is he going to fulfil the terms of the will,’ will carry that out. He obviously is not going to do $3 million debt, is he going to do that or turn his mind to that, and the answer to that must surely be no. That’s the issue, isn’t it?MR PARATORE: It’s an issue that could be raised in this family provision application, your Honour, and is often, but the potential beneficiaries under the will, the applicant, won’t do so and see it as, well, let’s work on the will and remove the executor as an easier alternative than having to make that argument. But the argument is going to be faced by the incoming administrator, and so it’s unavoidable. And so then the question must go back to the basic principle, which is - - -HIS HONOUR: Sorry. What - sorry. What’s unavoidable? An incoming executor might take some advice and then might sue the trust to set it all aside?MR PARATORE: Exactly. It’s an unavoidable - - -HIS HONOUR: That’s not going to happen if your client is executor, though, is it? MR PARATORE: It’s this balancing, your Honour, between - to remove the executor now who’s actually performing his obligations under the will as executor and the potential beneficiary raises - - -HIS HONOUR: But - - -MR PARATORE: - - - the transactions in that - - -HIS HONOUR: But why do you say he’s conducting his obligations under the will whereas, as executor, it’s at least arguable he should be considering setting aside the $3 million transaction? And he’s not. He’s not considering that.MR PARATORE: Well, we don’t know that, your Honour, because this is an interlocutory application.HIS HONOUR: Right.MR PARATORE: And it’s privileged, in any event.HIS HONOUR: I see. All right. So your client doesn’t swear that he’s seeking advice about that or anything like that, that he’s considering setting aside the - making application to effectively sue himself and set aside the transaction?MR PARATORE: Your Honour - - -HIS HONOUR: He doesn’t swear that, does he?MR PARATORE: No, he doesn’t. No. There’s no evidence - we’re not at a final hearing where this evidence can be tested - - -” (emphasis added)And later:“HIS HONOUR: And - and - and if for a moment we - just for a moment humour me. We call that - if we can just call that right against the trustee an asset. And perhaps it’s not. Perhaps it’s a chose of action, but let’s - let’s - or perhaps it’s not. Let’s just call it an asset for the purposes of it. Your client is just not pursuing that and has absolutely no intention of pursuing that, does he? He - - -MR PARATORE: I would have to ask him, your Honour.HIS HONOUR: Right. You didn’t think to ask him before you came here?MR PARATORE: Your Honour - - -HIS HONOUR: This is just ridiculous, isn’t it? It’s obvious what’s happened. It’s absolutely obvious what’s happened and it’s also, I would have thought, obvious on the material that your client has no intention to sue himself, which is basically what he would have to do. You agree with that?MR PARATORE: Yes.HIS HONOUR: Right. You’ve not come along in response to the application and said - with an affidavit saying, ‘I’m intending to seek advice as to suing the trust and I’ve - I’m taking advice,’ blah, blah, blah, blah, blah, blah, blah. All you do is you come here and you say there’s no evidence of what he’s intending to do. Well, you’re his solicitor. He could swear it, and he hasn’t. So why would I not draw the inference that he has absolutely no intention of doing that, and therefore he’s in a hopeless position of conflict? Why wouldn’t I draw that inference?MR PARATORE: It’s open to your Honour.” (emphasis added)Consideration