Serong v Rixon
[2016] QDC 278
•20 October 2016
DISTRICT COURT OF QUEENSLAND
CITATION:
Serong v Rixon [2016] QDC 278
PARTIES:
CHRISTOPHER WARREN CHARLES SERONG
(Applicant)
And
ANITA JOI RIXON
(Respondent)
FILE NO/S:
DIVISION:
Civil
PROCEEDING:
Application
ORIGINATING COURT:
District Court, Ipswich
DELIVERED ON:
20 October 2016
DELIVERED AT:
Dalby
HEARING DATE:
20 October 2016
JUDGE:
Horneman-Wren SC DCJ
ORDER:
1. The Respondent pay the Applicant the sum of $32,531.51 within 21 days.
2. It be declared that upon payment of the sum of $32,531.51 to the Applicant any funds held by the Respondent upon trust for the Applicant in either St George Bank e-cash account number 336-095-650419831 or account number 336-095-650419858 to the extent of $32,531.51 be held beneficially for the Respondent.
3. It be declared that upon the payment of the sum of $32,531.51 to the Applicant any funds held in any account by the Respondent or Warren Edwards Serong upon trust for the Applicant, whether jointly or severally be held beneficially by or for the benefit of the Respondent to the extent of $32,531.51 less any sum held beneficially by her by operation of Order 2.
4. The Respondent obtain and provide to the Applicant statements of any accounts in which funds are held by herself and Warren Edward Serong upon trust for the Applicant within 14 days.
5. The Respondent pay the Applicant’s costs of and incidental to the proceedings on the standard basis.
6. The parties be at liberty to apply.
CATCHWORDS:
TRUSTS AND TRUSTEES-POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES- STANDARD OF CARE- where application pursuant to section 8 of the Trusts Act 1973- where Respondent appointed trustee under a Will- where Respondent to hold $30,000 on trust for the benefit of the Applicant upon the Applicant turning 21- where the Respondent was the Applicant’s mother- where the Applicant turned 21 and no payment under the Will was effected- where order made to effect payment of $30,000- whether interest payable under the order- where given nature of application pursuant to section 8, interest payable from the time at which the omission occurred.
COUNSEL:
V.P Wright for the Applicant.
Self-Represented Respondent
SOLICITORS
Edgar and Wood for the Applicant
Self-Represented Respondent
HIS HONOUR: This is an application brought pursuant to section 8 of the Trusts Act 1973 by the applicant, Christopher Warrant Charles Serong, who was the beneficiary of a will made by his maternal grandmother on 29 August 2006. Under the terms of that will, he was given and bequeathed a sum of $30,000, which was to be held upon trust by the trustee appointed under the will for his sole benefit and to be paid to him with any accrued interest absolutely on his attaining the age of 21 years. That gift and bequest was subject to the powers of advancement set out in the will. However, there is no evidence before me of any powers of advancement having been exercised, which would have diminished the extent of the gift and bequest.
The applicant’s grandmother passed away in February 2007. The trustee appointed under the will was his mother, Anita Joy Rickson, who is the respondent to this application. From the evidence on the application, it would seem that the administration of the testatrix’s estate proceeded quite quickly. On 5 June 2007, a firm of solicitors administering the estate wrote to the respondent, informing her that the administration of her mother’s estate was being completed, except for the sale of the house. With that letter, the solicitors enclosed their trust account cheque in favour of Mrs Rickson in the sum of $231,802.56, being the then balance held by the solicitors after completion of the estate administration. In that letter, they said:
Of this sum, obviously $60,000 should be invested by yourself as trustee for your children in a bank account under your own name as trustee for the children. And obviously, when each of the children turn 21 years of age, the entitlements that are due in respect of that trust fund can be distributed by you to them.
The reference to $60,000 and children in plural reflects the fact that a second and equal gift and bequest was made to another child, being a granddaughter of the testatrix Kerri-Anne Joy Serong, who I understand to be the applicant’s sister.
The applicant was born on 20 May 1994, and thus turned 21 on 20 of May 2015 and under the terms of the will, became entitled to payment of the $30,000 and accrued interest on that date. It is common ground that no payment under the will has been made by the respondent as trustee to the applicant.
Section 8 of the Trusts Act permits a person who has an interest, whether vested or contingent, in any trust property, or who has a right of due administration in respect of any trust and who is aggrieved by any act, omission or decision of a trustee to apply to the Court to review the act, omission or decision. The Court is granted jurisdiction to make such order in the premises, including such order as to costs, as the circumstances require.
In Jacques v Public Trustee of Queensland, as executor and trustee of the estate of Jacques deceased (2008) QSC 108, Justice Margaret Wilson observed that section 8 of the Trusts Act does not contemplate a wide-ranging review of the administration of a trust estate, but rather a review of particular acts, omissions or decisions. It is apparent, therefore, that the particular omission relevant to this review is the failure of the respondent to pay the bequest to the applicant, together with any accrued interest upon his attaining the age of 21 years.
The court directed on 20 July 2016, amongst other things, that the respondent file and serve any material she wished to rely upon at the hearing of the application. The only material which has been filed by the respondent is a statutory declaration filed on 24 August 2016, to which she annexed a bundle of documents relating to an investment with Asgard Managed Profiles and Separately Managed Accounts, in respect of what appears to have been the investment of funds on trust for the applicant. From that material, it appears that the respondent, together with her or then-husband, Warren Edward Serong, applied to invest jointly, but as trustees for the applicant, $30,000 in or about August 2007.
The material is not particularly clear, as the Asgard investment funds account application is unsigned and undated. However, a signed and dated Asgard investment account application, dated the same date, refers to the electronic transfer of $30,000 in respect of the investment.
Amongst the documents annexed is an Australian Standard Transfer Form referring to Asgard investment fund account as a fund manager and identifying a particular account number, being account number 0639263-D5-01. It identifies the transfer of the sum of $24,883 from Warren Edward Serong and Anita Joy Rickson, as trustees for Christopher Serong, to State Nominees Limited. It is signed and dated by each of Mr Serong and Ms Rickson, but not signed by State Nominees.
The material does not disclose how, in the period from an investment which seemingly was made on 23 August 2007 to a transfer which apparently occurred on 15 July 2008, the corpus of the funds invested and any accrued interest to that date had reduced from $30,000 to $24,883. Nor is there any material from State Nominees Limited in respect of what occurred to those funds transferred to them, if in fact such a transfer occurred.
In the course of the hearing today, Ms Rickson tendered two other bundles of documents which relate to two accounts being Asgard Infinity eWRAP investment accounts which respectively bear account numbers including the BSB number 336-095-650419858 and 36 – 336-095-650419831. Ms Rixon has informed me from the bar table that one or other of those accounts – and she is unable to say which – is held for the benefit of the Applicant, the other being held for the benefit of her daughter. They have similar balances as at 15 September 2016 being, respectively, $1249.09 in account 650419858, and $1254.37 in account number 650419831.
Although it is not entirely clear that would seem to be the extent to which any funds are held on trust for the Applicant, although it does remain a possibility that there are further funds held somewhere, perhaps by State Nominees Limited, on his behalf. It is therefore unknown what the extent of those funds in terms of capital and interest accrued might be.
The orders made by the Court in July of this year were intended to allow the matter to proceed with expedition and as little formality as possible given the sum involved being in the order of $30 000.
For that reason pleadings were not ordered. However, the outline of argument filed on behalf of the Applicant and the amended Application identify at least an allegation that there may have been a breach of trust by the Respondent in respect of her duties as a trustee. Certainly there has been a breach of her duty to pay in accordance with the particular omission which I have already identified. Because of the nature of the review, however, and the limits to which I have already referred and the absence of evidence whether or not there has been some broader breach of her duties, it’s not a matter which can or should be further dealt with in these proceedings.
In my view, however, on the limited material which has been placed before the Court by the Respondent in respect of a review of the omission to pay the $30 000, it is clear that at least an order ought be made in respect of the payment by the Respondent of that sum to the Applicant, there being no real answer to the omission provided on the material. A question arises as to whether interest can be ordered to be paid in respect of that matter under the Civil Proceedings Act 2011. Section 58 (3) of that Act provides that the Court may order that there be included in the amount of which judgment is given interest at the rate the Court considers appropriate for all or part of the amount and for all or part of the period between the date when the course of action arose and the date of judgment.
In my view, had the matter been commenced by a claim and statement of claim alleging breach of trust, a cause of action certainly would have been identified and it would have been one which arose quite clearly upon the Applicant’s 21st birthday or the day thereafter. That is a matter for which judgment could have been given. Given that the powers of the Court under section 8 (1) of the Trust Act are expressed in broad terms, that is, to make such orders in the premises as the circumstances require, in my view, that jurisdiction extends to making an order in the nature of interest to be payable from the time at which this omission occurred.
In my view, it would also be appropriate to order that interest on the basis upon which interest is to be calculated according to the applicable practice directions issued under the Civil Proceedings Act 2011. There have been two applicable rates during the relevant period. For the period from the date upon which the omission occurred in May 2015 until 30 June 2016 the applicable rate was six per cent. From 1 July 2016 to today that rate was reduced to 5.75 per cent. On my calculations given that the omission occurred as and from 20 May 2015. There are 406 days at which the six per cent rate applied which would result in the amount of $2002.19 and 112 days at which the rate of 5.75 per cent applied which results in the amount of $529.32 being a total amount of $2531.51.
In my view that is the appropriate amount to order that the Respondent pay by way of interest.
There ought, however, be other orders which are made given that there is one account which has at least been identified by the Respondent as being one which at the present time has monies invested on trust for the Applicant even though on its face the documentation does not identify that those funds are held by the Respondent’s trustee for the Applicant. There is also, as I have already referred to, the possibility that there are other funds currently held on trust for the Applicant. Orders ought be structured so as to relieve those funds that may be invested of the burden of the trust upon the amounts having been paid to the Applicant.
However, of course, the relief of that burden of the trust upon those funds should only be to the extent of the orders that I have made if in what appears the unlikely, but certainly possible, circumstance that there are monies invested on trust for the Applicant which total more than $32 531.51. He would be entitled to those funds also to the extent of that difference.
Therefore the formal orders that I propose are as follows and I’ll hear the parties shortly in respect of them. (1) that the Respondent pay the Applicant the sum of $32 531.51 within 21 days (2) it be declared that upon payment of the sum of $32 531.51 to the Applicant any funds held by the Respondent upon trust for the Applicant in either St George Bank eCASH account number 336-095-65019831 or account number 336-095-650419858 beheld beneficially for the Respondent (3) it be declared that upon payment of the sum of $32 531.51 to the Applicant any funds held in any account by the Respondent or by Warren Edward Serong upon trust for the Applicant whether jointly or severally be held by or for the benefit of the Respondent to the extent of $32 531.51 less any sum held beneficially by her by operation of order 2 (4) the Respondent obtain and provide to the Applicant statements of any accounts in which funds are held by herself and Warren Edward Serong upon trust for the Applicant within 14 days (5) the Respondent pay the Applicant’s costs of and incidental to the proceedings on the standard basis (6) liberty to apply.
Now, Ms Rixon, I’ll hear you in a moment in relation to all of those orders. They include, as you have heard, I am proposing an order that you pay the costs of the application. That would ordinarily be the course, but I will hear you about that shortly. What I am going to do now is just hand you the written – my handwritten copy of those orders so that you can both have a look at them. I will have my Associate photocopy them for you. Have a chance to have a look at them, perhaps discuss them between yourselves if you need to and I will return when you have had a chance to look at them and I will hear you on the orders.
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