Re Tracey

Case [2016] QCA 194

SUPREME COURT OF QUEENSLAND

CITATION:

Re Tracey [2016] QCA 194

PARTIES:

IN THE MATTER OF AN APPLICATION BY THE PUBLIC TRUSTEE OF QUEENSLAND AS TRUSTEE FOR LISA MARIE TRACEY AND AS FINANCIAL ADMINISTRATOR OF LISA MARIE TRACEY FOR ADVICE AND DIRECTION PURSUANT TO SECTION 134 PUBLIC TRUSTEE ACT 1978 (QLD) AND/OR SECTION 96 TRUSTS ACT 1973 (QLD)

FILE NO/S:

Appeal No 9262 of 2014
SC No 5240 of 2013

DIVISION:

Court of Appeal

PROCEEDING:

Case Stated

ORIGINATING COURT:


Supreme Court of Queensland at Brisbane

DELIVERED ON:

2 August 2016

DELIVERED AT:

Brisbane

HEARING DATE:

9 November 2015

JUDGES:

Holmes CJ and Fraser JA and Boddice J
Separate reasons for judgment of each member of the Court, Holmes CJ and Fraser JA concurring as to the orders made, Boddice J dissenting

ORDERS:

The questions in the Case Stated are answered as follows:

1.   Whether The Public Trustee of Queensland, administrator for all financial matters of an adult under a legal disability may, without an Order of the Court, terminate a trust established by Court Order:

(a)   Which, by its terms is expressed to operate until further Order; and

(b)   Pursuant to which the Public Trustee holds assets on trust for that adult; and

(c)    Under the terms of which the adult would, but for the adult’s legal disability, have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

No

2.   Whether the Public Trustee of Queensland, as administrator for all financial matters of an adult under a legal disability may, without an Order of the Court, terminate a trustee established by Court Order:

(a)   Which, by its terms is not expressed to operate until further Order; and

(b)   Pursuant to which the Public Trustee holds assets on trust for that adult; and under the terms of which the adult would, but for the adult’s legal disability, have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

(c)    Under the terms of which the adult would, but for the adult’s legal disability, have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

No

3. Whether The Public Trustee of Queensland, as administrator for all financial matters of an adult under a legal disability may, without an Order of the Court, terminate a trust established under s 43(6) of the Public Trustee Act 1978 (Qld):

(a)   Pursuant to the terms of which the Public Trustee holds assets on trust for that adult; and

(b)   Under the terms of which the adult would, but for the adult’s legal disability have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

Yes

4. Whether The Public Trustee of Queensland, as administrator for all financial matters of an adult under a legal disability may, without an order of the Court terminate a trust established under s 44 of the Public Trustee Act 1978 (Qld):

(a)   Pursuant to the terms of which he holds…

Continue reading Re Tracey

Sign in free to access the full text

Details
AGLC
Re Tracey [2016] QCA 194
Case
[2016] QCA 194
Decision Date

CaseChat Overview and Summary

In the case of Re Tracey, the Full Court of the Supreme Court of Queensland addressed the issue of whether the Public Trustee of Queensland could terminate trusts without a court order, where the trusts were established for adults under a legal disability. The court was required to determine whether the Public Trustee, acting as the financial administrator for these adults, could invoke the rule in Saunders v Vautier to terminate various types of trusts without court intervention. These included trusts established by court order, under specific sections of the Public Trustee Act 1978 (Qld), and by settlement or agreement.

The court found that the Public Trustee could not terminate any of these trusts without a court order. The reasoning behind this decision was grounded in the necessity for court supervision to protect the interests of incapacitated beneficiaries. The court emphasised that the rule in Saunders v Vautier requires the beneficiary to be sui juris, a condition not met by adults under a legal disability. Additionally, the Guardianship and Administration Act 2000 (Qld) did not confer on substitute decision-makers the authority to invoke the rule in Saunders v Vautier to terminate such trusts. The court concluded that the legislative framework did not support the notion that the Public Trustee, in their administrative capacity, could unilaterally terminate these trusts.

In light of the above findings, the court answered the questions posed in the case as follows: the Public Trustee could not terminate a trust established by court order, regardless of whether it was expressed to operate until further order; nor could they terminate trusts established under sections 43(6), 44, or 59 of the Public Trustee Act 1978 (Qld), or by settlement or agreement. These conclusions highlight the court’s commitment to ensuring that the interests of incapacitated beneficiaries are protected through its supervisory role.

The court made orders reflecting its findings, specifying that the Public Trustee could not terminate any of the mentioned trusts without a court order. This decision underscores the importance of judicial oversight in matters concerning incapacitated individuals and the need to safeguard their interests.

Orders

Orders of the court

The questions in the Case Stated are answered as follows:

1. Whether The Public Trustee of Queensland, administrator for all financial matters of an adult under a legal disability may, without an Order of the Court, terminate a trust established by Court Order:

(a) Which, by its terms is expressed to operate until further Order; and

(b) Pursuant to which the Public Trustee holds assets on trust for that adult; and

(c) Under the terms of which the adult would, but for the adult’s legal disability, have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

No

2. Whether the Public Trustee of Queensland, as administrator for all financial matters of an adult under a legal disability may, without an Order of the Court, terminate a trustee established by Court Order:

(a) Which, by its terms is not expressed to operate until further Order; and

(b) Pursuant to which the Public Trustee holds assets on trust for that adult; and under the terms of which the adult would, but for the adult’s legal disability, have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

(c) Under the terms of which the adult would, but for the adult’s legal disability, have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

No

3. Whether The Public Trustee of Queensland, as administrator for all financial matters of an adult under a legal disability may, without an Order of the Court, terminate a trust established under s 43(6) of the Public Trustee Act 1978 (Qld):

(a) Pursuant to the terms of which the Public Trustee holds assets on trust for that adult; and

(b) Under the terms of which the adult would, but for the adult’s legal disability have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

Yes

4. Whether The Public Trustee of Queensland, as administrator for all financial matters of an adult under a legal disability may, without an order of the Court terminate a trust established under s 44 of the Public Trustee Act 1978 (Qld):

(a) Pursuant to the terms of which he holds assets on trust on behalf of that adult;

(b) Under the terms of which the adult would, but for the adult’s legal disability have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

Yes

5. Whether the Public Trustee of Queensland, as administrator for all financial matters of an adult under a legal disability may, without an order of the Court, terminate a trust established under s 59 of the Public Trustee Act 1978 (Qld):

(a) Pursuant to the terms of which he holds assets on trust on behalf of that adult;

(b) Under the terms of which the adult would, but for the adult’s legal disability have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

Yes

6. Whether the public Trustee of Queensland, as administrator for all financial matters of an adult under a legal disability may, without an order of the Court, terminate a trust established by settlement or agreement:

(a) Pursuant to the terms of which he holds assets on trust on behalf of that adult;

(b) Under the terms of which the adult would, but for the adult’s legal disability have an absolute, vested and indefeasible interest as sole beneficiary in the assets of the trust.

Yes

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

There is no good reason why the Court’s recognised responsibility to retain a supervisory role over whether a beneficiary, previously subject to a legal incapacity, ought to be able to terminate a Court ordered trust, should not also extend to trusts established pursuant to provisions of the Public Trustee Act 1978 (Qld). Each of those trusts is established in circumstances where there is a recognised need to protect the property of the adult incapacitated beneficiary. A substitute decision-maker regime, whilst itself subject to supervision by the Queensland Civil and Administrative Tribunal, does not overcome the important role Court supervision provides in ultimately protecting the interests of the adult incapacitated beneficiary.Conclusion Whilst there may be good administrative reasons for the Public Trustee, in its role as administrator of financial matters of an adult incapacitated beneficiary, to seek the termination of a trust of which that adult beneficiary is a sole beneficiary with an absolute, vested and indefeasible interest in that trust property, the rule in Saunders v Vautier requires two pre-conditions for its operation. One pre-condition is that the adult beneficiary be sui juris. An adult beneficiary subject to a legal incapacity is not sui juris. That pre-condition is not met by reason of the circumstance that there is a substitute decision maker who may consent on behalf of the adult but legally incapacitated beneficiary. There is nothing in the legislative scheme established by GAA which supports a conclusion that s 33(2) of that Act, even construed liberally, empowers a substitute decision maker to invoke the rule in Saunders v Vautier to terminate a trust in which the adult incapacitated beneficiary has an absolute vested and indefeasible interest. It does not matter whether that trust was established pursuant to Court Order or pursuant to s 43, s 44 or s 59 of the Public Trustee Act 1978 (Qld). These conclusions render it unnecessary to consider whether the exercise of such power by the Public Trustee as administrator would give rise to an insoluble conflict of interest. I would answer the questions in the case stated as follows:Question 1: No.Question 2: No.Question 3: No.Question 4: No.Question 5: No.Question 6: No.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.