Re Public Trustee Qld

[1998] QSC 5

IN THE SUPREME COURT

OF QUEENSLAND  O.S. No. 10947 of 1997

Brisbane

Before Mr Justice Shepherdson

[Re Public Trustee Qld]

IN THE MATTER of the Public Trustee of Queensland           

- and -

IN THE MATTER of the Public Trustee Act 1978

CATCHWORDS: TRUSTS - s.134 Public Trustee Act 1978 - advice and direction of   court in relation to undistributed moneys in a trust

Counsel:  Mr Koppenol

Solicitors:  Official Solicitors to the Public Trustee

Hearing Date:              19 December 1997

REASONS FOR JUDGMENT INCLUDING
ADVICE AND DIRECTIONS - SHEPHERDSON J.

Judgment delivered 20 January  1998

In this application brought pursuant to s.134 of the Public Trustee Act 1978, the Public Trustee of Queensland has sought the opinion or direction of this Court with respect to the method of disposition of certain trust moneys. Those moneys comprise the balance held by the applicant in the "Torres Strait and Cape York Boats Account Trust" (hereinafter called “the Boats Trust”).

In the above numbered originating summons the applicant has posed the following questions:-

"With respect to the moneys held by the Public Trustee as trustee of the Torres Strait and Cape York Boats Account Trust, should the Public Trustee:

(a)proceed with any and if so which of the options set out in the accompanying Statement of Facts;

(b)take any other, and if so, what action."

It is necessary to say something concerning the history of events appearing in the Statement of Facts and which leads to the matter before me.  On 13 May 1994, I ordered that The Public Trustee of Queensland be appointed trustee of the Torres Strait and Cape York Boats Account Trust and that the property of the Torres Strait and Cape York Boats Account Trust be vested in the Public Trustee of Queensland as sole trustee.  This order was made on originating summons 265 of 1994. 

In about 1904 the London Missionary Society commenced a scheme on Badu Island whereby funds provided by the Government enabled the Torres Strait Islanders, on a pay as you earn system, to acquire boats needed to participate in the then lucrative pearl shell and trochus shell and beche-de-mer fishing industry.  The Statement of Facts before me shows that in literature describing this early period, the Crews' Insurance Fund and the Boats Insurance Fund are specifically mentioned.

In 1930 the London Missionary Society withdrew from the venture.  The Torres Strait Islanders purchased the ancillary operations of the venture and the Government provided managers and an accountant.  The venture was run wholly by the Torres Strait Islanders; in 1948 the operating headquarters of the venture were transferred to Thursday Island and the operations declined in the 1970's.

In about 1923 the Crews' Insurance Fund had been created with a set percentage of each boat's earnings being deducted and paid to the Fund which was controlled by the person then known as the Protector of Islanders.  The fund was used to pay injured workers and the dependants of workers fatally injured.  The Crews' Insurance Fund did not come within the ambit of the Workers' Compensation Act 1916.  Because of shortcomings of the Crews' Insurance Fund representations were made to the Insurance Commissioner to provide a special workers' compensation policy to cover the Torres Strait Islanders.  On 8 August 1959 this special cover was granted.

The Torres Strait Islanders Act of 1939 (s.6) specifically refers to the power to make regulations "providing for the establishment of insurance funds for the purpose of indemnifying against the loss of or damage to vessels or plant the property of islanders used for fishing or other purposes and compensating islanders or dependants of islanders engaged on vessels or plant in such industries who may suffer personal injury which is not otherwise covered by ‘The Workers’ Compensation Acts 1916-1936' (or any Act amending or in substitution for such Acts) setting out the basis on which such indemnity or compensation shall be paid and the manner in which such funds shall be maintained by contributions from the earnings of islanders or of such vessels or plant.”

It appears that the premium paid to the State Government Insurance Office for Marine Insurance related to various boats of different values although the same percentage was deducted from all boat owners.  When a boat was destroyed or damaged a claim was made under the Marine Insurance policy.  Often the amount recovered was not sufficient (presumably to meet the total amount of a claim) and the balance of the claim was paid from what was called the Boats Insurance Fund.  By way of example, I have been provided with a file copy of a letter from the Deputy-Director of Aboriginal and Islander Affairs to the Director of Aboriginal and Islander Affairs dated 21 February 1967 requesting approval for the transfer of money from the Boats Insurance Fund to the boat owners of a sunken lugger because the State Government Insurance Office Marine Policy covered only one-third of the value of the lugger.

The produce from the pearling boats was marketed through “The Island Industries Board”.  That Board was established as “The Aboriginal Industries Board” by “The Aboriginal Protection and Restriction of the Sale of Opium Acts Amendment Act of 1934" and continued under the name “The Island Industries Board” by “The Torres Strait Islanders Act of 1939"

The Board distributed the net proceeds of the marketed produce by credits to various sub-accounts for the boats to clear drawings of the season and subscribe to the two funds - Workers’ Compensation Fund and Boats Insurance Fund.  The Workers’ Compensation Fund was formerly known as the Crews’ Insurance Fund.  Exhibit F to the Statement of Facts is a copy of what is said to be a typical ledger card completed by the Department of Native Affairs. This particular card, and which I infer is representative of boat sub-accounts, is in respect of 11 boats and shows the amounts paid to each of the above two funds as well as amounts paid to various sub-accounts, “Works”, “Reserve”, “Gear”.  Although Exhibit F bears no date the amounts are shown in pounds shilling and pence and I infer the card predated 14 February 1966.

At the end of each season there was to be a “sign-off” and all accounts in use were to be cleared but in reality these events did not always occur.

In 1973 the Department of Aboriginal and Island Affairs wound up what are called in the Statement of Facts the boat accounts and apparently did so by refunding the balance of moneys in each boat sub-account to the respective boat owners in accordance with the shares held by the boat owners in the particular boat.  Exhibit G to the Statement of Facts is a file copy of a letter dated 30 October 1973 from the Department of Aboriginal and Island Affairs at Thursday Island to one of the boat owners, Mr Ben Nona, dealing with the winding up and distribution of funds then remaining in the accounts of the boat “Tilona Nona”.

The skipper and crew on the pearling vessels did not directly contribute to funds in what is now The Boats Trust.  The skipper and crew were paid a set percentage of the net earnings of the vessel.  The skipper signed an agreement specifically stating (inter alia) that he had no liability for workers’ compensation payments and that no title to the vessel was conferred on him.

The Boats Trust at present derives from the two funds - the Workers’ Compensation Fund and the Boats Insurance Fund.  As already mentioned the Torres Strait Islands pearling boat owners ("the boat owners") paid premiums into what were known as the Crews’ Insurance Fund (later known as the Workers’ Compensation Fund) and the Boats Insurance Fund.  The premiums were a set percentage of the proceeds of sale of the product landed by each boat and were automatically deducted from the proceeds of sale by the Department of Native Affairs.  The money was then held in trust by the Department of Native Affairs during the period that that Department managed the commercial fishing venture conducted by the Torres Strait Islanders ("the islanders") and payments were made from time to time for the purposes of the trust.  In about 1982 trochus and pearl shell fishing ceased and unused premiums at that time amounting to some $375,000  were transferred to the Public Trustee from the Department of Families Youth and Community Care which department apparently succeeded the Department of Native Affairs.

In order to ascertain the amounts of the moneys to be distributed to each boat owner and the identity of the boat owner, the Public Trustee employed a Mr James Stephens, a former Government employee previously stationed on Thursday Island to peruse and summarise the voluminous files and ledgers belonging to the Department of Native Affairs and which had been retrieved from State Archives.  Mr Stephens prepared a schedule indicating the approximate share to which each boat owner was entitled and also the name of the owner at a particular time.  A copy of that schedule (Exhibit I) is before me.  The schedule commences only in 1948 and the Statement of Facts shows that  due to incomplete records it is impossible to ascertain the owners of some of the boats and how much of the moneys in the Workers’ Compensation Fund and Boats Insurance Fund were attributable to the period prior to 1948.  Exhibit I names 55 boats.

The Public Trustee has attempted to distribute the funds to the persons entitled thereto.  The Statement of Facts details those attempts.  In early 1996 representatives from the Public Trustee visited Yam Island and there met with the chairman of the Island Coordinating Council a Mr Lui, to determine a method for the Public Trustee to obtain sufficient information to enable the trust moneys to be distributed.  Mr Lui agreed that the Island Coordinating Council would make representatives of each island aware that islanders whose families had owned boats in the fleets that were managed by the Department of Native Affairs were to lodge a formal claim with the Public Trustee.  The intention was that funds to which each boat owner was entitled would be paid to the eldest person in each family for the  purposes of distribution among family members.  This attempt to distribute the funds was unsuccessful . The Public Trustee drafted a document described in the Statement of Facts as a Claim Form for completion by persons who believed they were entitled to certain moneys in the Boats Trust.  The Public Trustee issued the Claim Form to the Thursday Island branch of the Office of Aboriginal and Torres Strait Islander Affairs, the Thursday Island Electoral Office of Mr Entsch, the Federal Member of Parliament for Leichhardt and to those persons who had previously contacted the Public Trustee and claimed an entitlement to share in the Boats Trust.

The Public Trustee says newspaper advertising is not effective as a means of communication because some islanders cannot read.  Furthermore, newspaper advertisements are not satisfactory because those islanders who read do not necessarily have access to a newspaper.  Mr Entsch used the local radio station to disseminate the contents of  what are called News Releases concerning moneys held in the Boats Trust and encouraging claims to be made to the Public Trustee.  The News Release of 3 February 1997 (a copy of which is before me) is quite detailed, naming 30 boats in respect of which no claims had then been made.

Nevertheless the Public Trustee received numerous claim forms some of which showed undisputed claims from surviving owners.  The Public Trustee has been able to distribute about 57% of the funds held.  The amount currently held in the Boats  Trust is approximately $183,000 and this represents the following:-

(a)contributions to the funds which contributions are the subject of claims disputed by persons; or

(b)contributions where the sole claimant has not evidenced his or her right to claim the entire proceeds attributable to a particular boat; or

(c) where no claim has been received.

The majority of the boat owners are no longer alive and various members of the family of the original boat owner have made claims for the same funds.  Some of these claims indicate to the Public Trustee that there will be disputes within the same family as to which family member is to receive the funds.  In addition, the Public Trustee has received various claims from different island families in relation to the same vessel. 

The Public Trustee has prepared, and I have seen, a table in respect of the boats for which claims have not been satisfactorily concluded; this table (Exhibit 0 to the Statement of Facts) shows the names of the boats, the name of the boat owner as shown in records available to the Public Trustee, the percentage of the fund to which the boat owner is entitled, the names of the claimants, the alleged boat owner, the alleged relationship of the claimant to the boat owner, and the name of the person to whom the Public Trustee has been asked to pay the relevant share of the fund. Exhibit O names 35 boats. 

I should at this stage add that according to the Statement of Facts the Public Trustee has received numerous claims from persons who crewed the boats or from family members of persons who crewed the boats and the Public Trustee intends, in respect of these claims, to notify the claimants that it is only the boat owners and not the crewmen who are entitled to make a claim because crewmen were paid wages during their employment whereas the payments to the funds now constituting the Boats Trust were paid from profits earned by the boat.

The Public Trustee has reached an impasse in respect of the distribution of the remaining funds of the Boats Trust.  The Public Trustee says the cost to formally trace the boat owners' families would be considerable and this process may not achieve a result that is in accordance with the native customs and tradition of the islanders; that significant costs have already been incurred in employing an outside consultant to review the boxes of records from State Archives and for representatives of the Public Trustee's Office to visit Yam Island in an attempt to obtain the information necessary to enable the Public Trustee to ascertain the persons entitled to a distribution of the funds in the Boats Trust.

The Public Trustee is right to be concerned with cost.  Cost is a relevant consideration (see in the Estate of Cave-Brown-Cave (1906) VLR 283). The proposal which the Public Trustee seeks to have the court authorise is as follows. It proposes to advertise the contents of the table (ex.O) using the provisions of s.132 of the Public Trustee Act 1978. Section 132 reads:-

"S.132(1)  When the Public Trustee is in doubt as to the existence of any person or any class of persons who, if in existence at some particular time, would be entitled to share in any estate under administration by the Public Trustee, or as to the identity of any person entitled to any estate or part of an estate, the Public Trustee may, after such inquiries, including newspaper advertisements, as the Public Trustee considers necessary, pay, deliver or distribute the assets in the estate having regard only to the persons whose claims have then been established to the Public Trustee's satisfaction, or who then appear to the Public Trustee to have the best claim in law (including, in a case where the existence of a person at a particular time has not been established to the satisfaction of the Public Trustee) persons who would only have a lawful claim if such first mentioned person was not in existence at such particular time.

(2)  Nothing in this section shall affect the right of such person or persons to follow the estate or any part thereof into the hands of the persons who have received the same pursuant to such payment, delivery or distribution."

Section 132 uses the word “estate” and at first impression one may be tempted to limit the meaning of “estate” to that of the estate of a deceased person. “Estate” is not defined in s.6 of the Public Trust Act 1978 although “estate under administration” (used in s.132) is defined as follows:-

“‘estate under administration’ means any property held, administered, managed or controlled by the Public Trustee in any capacity (including, for example, as personal representative, trustee, administrator, guardian, committee, manager, liquidator or receiver), and includes–

(a)an estate under management as defined in section 64;  and

(b)an estate under administration that is administered jointly with someone else;”

This definition does not purport to be exhaustive - the word “includes” appears. In my view there can be no doubt that the Public Trustee is holding, administering and managing the funds of the Boats Trust and does so as a trustee. In my view s.132 applies to the Boats Trust and the Public Trustee may safely proceed to act under that section but as will later appear it should also act under s.67 of the Trusts Act 1973 (as amended).

The Public Trustee intends to advertise by notice through newspapers locally, statewide and Australia-wide, on the local radio and also by notice through the Island Coordinating Council seeking to identify and calling for claims to the remaining funds.  The Public Trustee proposes that the notice will also state:-

(a)that where there is only one payee listed in the notice, if no objections are received within 30 days from the date of the advertisement, the Public Trustee will proceed to pay the funds to the person listed on the notice upon the payee providing an indemnity to the Public Trustee;

(b)if there is a dispute regarding the name of the payee, the Public Trustee will not make any payments until such time as an agreement is reached by the claimants as to the person who is to receive and give a discharge for such funds.

The Public Trustee further proposes to notify individually  each of the competing claimants (in respect of claims already received and in respect of which there is a dispute) that there is a dispute in relation to the funds which they are claiming and notify them of the name or names of each person or persons making a claim on the funds.  In the event that the dispute cannot be resolved or that no claim is received in respect of funds for a particular boat, the Public Trustee proposes to pay the funds attributable to the particular boat into its unclaimed moneys fund under the provisions of s.103 of The Public Trustee Act 1978.

The Public Trustee also puts before me alternate proposals in the event that the Court does not authorise the proposal so far set out. The first is that the Island Coordinating Council, a body corporate, having perpetual succession and capable of holding property on trust pursuant to s.44(2) of the Community Services (Torres Strait) Act 1984 be appointed a new trustee of the Boats Trust with the Public Trustee retiring therefrom.

The Statement of Facts discloses that the Island Co-ordinating Council:-

(a)has access to information in relation to local family history,

(b)has the local knowledge and authority to rule on any internal disputes concerning who is the appointed Elder of the family,

(c)has agreed to consult with the families of the boat owners prior to the distribution of any funds, . . .”

I reject this first alternate proposal as unsuitable.  If implemented the second proposal will result in the Island Co-ordinating Council becoming the new trustee of the Boats Trust.  If that were to occur, the Statement of Facts discloses that the Public Trustee wishes the Island Co-ordinating Council, in the event of a dispute being “authorised to make a final decision”.

In my view a situation should not arise where a trustee is in effect expected to determine competing claims to the same fund.  The competing claimants or one or more of them may be beneficiaries or a beneficiary in the relevant fund.

A trustee has a duty to act fairly by all the beneficiaries - he is required to “act with perfect impartiality as between his cestuis que trust” (Jacobs’ Law of Trusts in Australia 6th ed. at para 1711).

In my view, disputes between claimants must be resolved otherwise than by the trustee of the Boats Trust whether that trustee be the Public Trustee of Queensland or the Island Co-ordinating Council.

I consider that the Public Trustee must remain as trustee of the Boats Trust. Disputing claimants to any fund must themselves resolve their dispute and may well wish to use the services and abilities of the Island Co-ordinating Council to help resolve their dispute.  The trustee must not take any part in the resolution of any dispute.

The second alternate proposal is that the Public Trustee retire as Trustee of the Boats Trust and appoint the Island Co-ordinating Council as new Trustee of that trust, that the funds be distributed by the new trustee in accordance with the Schedule prepared by Mr Stephens and the claim forms received and that, in the event of a dispute, the Island Co-ordinating Council be “authorised to make a final decision”.

For reasons already given, I reject this second alternate proposal as unsuitable because it primarily involves the same difficulty encountered by the first alternate proposal.

I now return to the questions posed in the Originating Summons.

I answer question (a) “No”.

I advise the Public Trustee to take the following action:-

1.Make enquiries pursuant to s. 132 of the Public Trustee Act 1978 such enquiries being by written notice published in a newspaper published in the Torres Strait Islands, and in newspapers circulating throughout the State of Queensland and throughout the Commonwealth of Australia and in the Queensland Government Gazette. It should also use radio stations broadcasting in the Torres Strait Islands for the purpose of such enquiries.

2.The notice referred to in paragraph 1 should be based on the contents of Exhibit O  (other than referring to and identifying claimants already known whose details appear in Exhibit O).  The notice should state the name of each boat in Exhibit O and in respect of each boat named in Exhibit O:-

(a)must require any person having any claim to any part of the Boats Trust funds in respect of that boat to send to the Public Trustee at an address to be specified in the notice particulars of that person’s claim not later than the date fixed in the notice being a date at least 8 weeks after the date of publication of that notice;

(b)must require that the particulars of that person’s claim identify the basis of that person’s claim and if the claim is not made by a person claiming to be the owner of the boat showing how the claimant says he or she derives from the boat owner the right to make his or her claim;

(c)must require each claimant to state what percentage or part of the fund attributable to the particular boat is claimed by the claimant;

(d)must state the name and the address of the claimant and whether or not that claimant is authorised to give a discharge for the moneys claimed;

(e)must state that after the date fixed by the last of the notices to be published that the Public Trustee may  distribute the funds of the Boats Trust having regard only to the claims whether formal or not of which the Public Trustee has notice at the time of distribution and that the Public Trustee shall not, as respects any of the said funds so distributed be liable to any person of whose claim the Public Trustee shall not have had notice of the time of such distribution;

(f)must contain such other information as the Public Trustee may deem necessary.

I advise the Public Trustee to ensure that the advertisements to which I have referred also comply with s.67 of the Trusts Act 1993 (as amended).

In order to contain the costs of such advertisements by avoiding advertising particulars of the whole of Exhibit O the Public Trustee may compose the notice in such a way that any potential claimant asking to obtain a copy of Exhibit O may do so on application to a named address within a specified time.

3.Where a Boat Owner shown in Ex. O is dead the Public Trustee may, if probate of the will or letters of administration of the estate of a deceased owner has not been granted, decide not to require production of such probate or letters of administration to prove the title of any claimant to the percentage of the funds to which the particular boat is entitled. In this aspect of the matter, the question of costs will loom large and costs of obtaining probate or letters of administration may well outweigh the percentage of the funds in question.  I advise the Public Trustee to use its discretion on this aspect bearing in mind any evidence it has as to native customs of Torres Strait Islanders (Refer to In re Noel Tedman Holdings Pty. Ltd. (1967) Qd.R. 561 at p.566 as to the attitude of a Court).

4.Where there is more than one claimant to a particular boat’s percentage of the funds and those claimants are in dispute, the Public Trustee:-

(a)must notify each claimant that if the dispute is not resolved within a specified time then the Public Trustee will pay the amount of money representing the boat’s percentage into Court pursuant to s.102 of The Trusts Act 1873 (as amended);

(b)should if necessary, exercise the power in s.102;

(c)must not become involved or otherwise take part in any dispute nor should it engage in any conduct which puts it at risk of having a costs order made against it;

(d)must ensure as far as possible that any person giving a discharge for a particular boat’s percentage of the funds is the proper person to give such discharge.

5.In the event that a particular boat’s percentage of the funds is unclaimed then, in respect of such unclaimed percentage the Public Trustee may utilise the provisions of s.103 of The Public Trustee Act 1978.

If the Public Trustee has any difficulty in respect of the above advice it has liberty to apply.