SUPREME COURT OF QUEENSLAND
CITATION:
Simmons v Arthritis Queensland Ltd [2023] QSC 251
PARTIES:
WAYNE MURRAY SIMMONS AS TRUSTEE OF THE JULIE MAAS CHARITABLE TRUST
(applicant)
v
ARTHRITIS QUEENSLAND LTD & ORS(respondent)
FILE NO:
9149 of 2023
DIVISION:
Trial
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court
DELIVERED ON:
10 November 2023
DELIVERED AT:
Brisbane
HEARING DATE:
1 November 2023
JUDGE:
Freeburn J
ORDER:
1. The application is dismissed.
2. I will hear the parties on costs.
CATCHWORDS:
EQUITY – TRUSTS AND TRUSTEES – CHARITABLE TRUSTS – POWERS, RIGHTS AND LIABILITIES OF TRUSTEES – REMUNERATION – where the deceased left his residual estate to a charitable trust – where the applicant is an accountant, executor of the deceased’s Will and the sole trustee of the charitable trust – where the applicant seeks an order that his remuneration be a fixed percentage of the value of the trust’s assets at the end of each financial year – where the applicant’s remuneration is already provided for in the trust document – whether the court should authorise a remuneration process that is different to what was contemplated in the trust document
Succession Act 1981
Trusts Act 1973, s 101Foster v Spencer [1996] 2 All ER 672
KordaMentha Pty Ltd v The Members of the LM Management Performance Fund [2022] QSC 12
Nissen v Grunden (1912) 14 CLR 297
Re Duke of Norfolk’s Settlement Trusts [1982] 1 Ch 61
Robinson v Pett (1734) 3 P Wms 249
Zevering v Callaghan [2011] QCA 180COUNSEL:
Mr R Whiteford for the applicant
Mr M Liddy for the first four named respondents
Mr S Richards (Principal Lawyer, Crown Law for the Attorney-General)SOLICITORS:
Merthyr Law (applicant)
Lithic Legal Pty Ltd (first four respondents)
Crown Law (Attorney-General)
REASONS
Johannes Maas died on 12 November 2021. He left a very substantial estate. He left specific bequests to family members. The residual estate, about $6.6m, was left to a charitable trust named after his first wife – the Julie Maas Charitable Trust.
The deceased appointed his accountant, Mr Simmons, to be one of the executors and trustees of his Will and to be a trustee of the charitable trust. Mr Simmons is now the sole trustee of the charitable trust.
The charitable trust has the following six primary beneficiaries:
(a) Arthritis Queensland;
(b) Leukaemia Foundation of Queensland;
(c) The Salvation Army (Gold Coast);
(d) Gold Coast University Hospital;
(e) Spina Bifida Hydrocephalus Queensland;
(f) The Make a Wish Foundation
The first four of those charities were represented at the application. The fifth named respondent is in liquidation and the sixth named charity did not wish to be heard. The trustee has a discretion to appoint other charities as secondary beneficiaries, but there is no evidence of any other charities having been appointed.
As trustee, Mr Simmons has invested the vast majority of the $6.6m in various bluechip shares and managed funds (e.g. BHP Group Limited, Berkshire Hathaway Betashares Australia 200 EFT, CSL Ltd etc).
Mr Simmons seeks an order…
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- Case
- [2023] QSC 251
- Decision Date
CaseChat Overview and Summary
The legal issues in the case centred around whether the court should authorise a remuneration process that was different to what was contemplated in the trust document. The court had to consider the trust instrument's provisions, the settlor's power to direct how the trust property should be dealt with, and whether the obligation of trustees to act gratuitously may deprive the trust of trustees whose experience and skill would benefit the trust. The court also had to consider section 101 of the Trusts Act 1973, which gives the court power to authorise the trustee to be remunerated.
The court held that the trust instrument's provisions on remuneration should be construed strictly, and that the intention of the trust instrument was a relevant factor in determining the remuneration process. The court found that the applicant's proposed remuneration process was different to what was contemplated in the trust document, and that the applicant had not provided sufficient justification for the court to authorise a different process. The court also noted that the settlor's power to direct how the trust property should be dealt with did not operate to oust the court's jurisdiction to award remuneration. As a result, the court dismissed the applicant's application.
The court ordered that the application be dismissed and that the parties would be heard on costs. The court did not provide further details on the costs order.
Orders
Orders of the court
1. The application is dismissed.
2. I will hear the parties on costs.
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
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
In modern times, however, it is recognised that the obligation of trustees to act gratuitously may deprive the trust of trustees whose experience and skill would benefit the trust.[4] For that reason the trust instrument often expressly allows for the trustee to be remunerated, and s 101 of the Trusts Act 1973 gives the court power to authorise the trustee to be remunerated:[5]“101 Remuneration of trustee(1)The court may, in any case in which the circumstances appear to it so to justify, authorise any person to charge such remuneration for the person’s services as trustee as the court may think fit.(2)In the absence of a direction to the contrary in the instrument creating the trust, a trustee, being a person engaged in any profession or business for whom no benefit or remuneration is provided in the instrument, is entitled to charge and be paid out of the trust property all usual professional or business charges for business transacted, time expended, and acts done by the person or the person’s firm in connection with the trust, including acts which a trustee not being in any profession or business could have done personally; and, on any application to the court for remuneration under subsection (1), the court may take into account any charges that have been paid out of the trust property under this subsection.(3)For the purpose of this section –trustee includes a custodian trustee.”[4]See Re Duke of Norfolk’s Settlement Trusts [1982] 1 Ch 61.[5]Even without s 101, the court has inherent jurisdiction to authorise (or increase or vary) remuneration: See for example, Nissen v Grunden (1912) 14 CLR 297 at 304-307. As Peter Lyons J explained in Zevering v Callaghan:“On its face, s 101(1) confers on the Court a discretion to authorise remuneration for a trustee in very broad terms. The breadth of those terms is apparent from the only stated qualification, namely, that the circumstances appear to the Court to justify the payment remuneration to a trustee.”[6][6][2011] QCA 180 at [46] (Peter Lyons J, with whom Fraser JA and White JA agreed). That broad discretion includes a power to allow remuneration by way of payment for work done and services performed, or by way of a percentage commission.[7] The court may authorise the payment of remuneration for past and future services as trustee.[8][7]The legislation in Victoria and Western Australia expressly permits a reasonable commission or percentage, not exceeding 5%: s 77 of the Trusts Act 1958 (Vic) and s 98 of the Trusts Act 1962 (WA). In Foster v Spencer [1996] 2 All ER 672 the court decided that an hourly rate for the services of the trustees was not appropriate but a 5% commission of the proceeds of the sale of the land was appropriate. [8]See Re Duke of Norfolk’s Settlement [1982] Ch 61 (supra) at 72, 80. If the trust instrument expressly provides for the payment of remuneration, then:(a) the court will construe the remuneration clause strictly;(b) but, if the trustee is a professional person, the interpretation of the remuneration clause will be informed by the commercial context;(c) the remuneration clause does not operate to oust the court’s jurisdiction to award remuneration;(d) however, the intention of the trust instrument is a relevant factor.[9][9]The first three of these principles are neatly described by Dal Pont, the author of Halsbury’s Laws of Australia at [430-3960]. The fourth principle has been added because, as Dal Pont (supra) points out, remuneration is not a contractual right; it derives from the settlor’s power to direct how the trust property should be dealt with.