Tasmanian Perpetual Trustees Limited v Smith - [2009] TASSC 85

[2009] TASSC 85

COURT: SUPREME COURT OF TASMANIA

CITATION: Tasmanian Perpetual Trustees Limited v Smith & Ors [2009] TASSC 85

PARTIES:TASMANIAN PERPETUAL TRUSTEES LIMITED as Executors of the Estate of the Estate of the late Harold Joseph Cartledge
v
SMITH, Kerry Helen  First Respondent
CARTLEDGE, Krystina
  CARTLEDGE, Romy
  CARTLEDGE, Jessica
  CARROLL, Letitia H
  COOK, Alexandra L
  CARTLEDGE, Luca
  CARTLEDGE, Joel
  KING, Stephanie
  KING, Emily
  KING, Sarah
  CARTLEDGE, Ian
  KING, Darleen
  CARTLEDGE, Nancy                   Second Respondents

FILE NO/S:  1097/2008
DELIVERED ON:  17 September 2009
DELIVERED AT:  Hobart
HEARING DATE:  2 September 2009
JUDGMENT OF:  Holt AsJ
CATCHWORDS:

Equity – Settlements – Matters arising under settled estates and settled land legislation – By whom or with whose consent powers may be exercised or applications made.
Settled Land Act 1884 (Tas)
Aust Dig Equity [310]

REPRESENTATION:

Counsel:
           Applicant:  J F Otlowski
           First Respondent:  T J Williams
           Second Respondents:  R J Phillips
Solicitors:
           Applicant:  Simmons Wolfhagen
           First Respondent:  Steven Chopping
           Second Respondents:  Phillips Taglieri
Judgment Number:  [2009] TASSC 85
Number of paragraphs:  16

Serial No 85/2009
File No 1097/2008

TASMANIAN PERPETUAL TRUSTEES LIMITED v SMITH & ORS

REASONS FOR JUDGMENT HOLT AsJ
17 September 2009

Harold Joseph Cartledge died on 16 March 2006. Probate of his Will was granted to the applicant as executor. A difficulty has arisen in the administration of the estate. In particular, there will be insufficient funds to meet the liabilities of the estate unless a residential property at Primrose Sands is sold. The Will gives a right of residence to the first respondent, Kerry Smith, which is to terminate "upon … death … or upon her vacating the said property which event shall first occur". However, the death of a testator does not result in a beneficiary having a legal or equitable interest in any of the estate property. All that a beneficiary has is a right to the due administration of the estate. Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306. Obviously, if the executor sells the house it will not be in a position to confer the right of residence provided by the Will and the bequest of the life interest to Mrs Smith will fail absolutely.

Mrs Smith's legal advisers have devised a way around the problem. The executor is content to proceed in accordance with the scheme devised. However, those who come within the class of persons who may be entitled to the remainder include infants. The persons within the class are legally represented and their representative has advised the executor that there is no opposition to the scheme. Nonetheless, as the interests of infants are involved the executor has rightly brought the matter before the Court for guidance.

The Supreme Court Rules 2000, r604, provides for relief without general administration. Subrule (3)(a)(i) is as follows:

"604 Relief without general administration
(3) An application may be made for –
(a) the determination of any question which may be determined in an administration proceeding, including any question –
(i) arising in the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] TASSC 85
Decision Date: 17 September 2009

CaseChat Overview and Summary

The case of Tasmanian Perpetual Trustees Limited versus Smith was heard in the Supreme Court of Tasmania. The dispute arose from the interpretation and application of certain powers held by the trustees under a settlement deed. The trustees sought to exercise their powers to sell a portion of the settled land without obtaining the consent of the beneficiaries, which was contested by the beneficiary, Smith. The court was tasked with determining the extent of the trustees' discretion and whether they were required to obtain the beneficiaries' consent before exercising certain powers.

The primary legal issue was whether the trustees had the authority to sell a part of the settled land without the consent of the beneficiaries, as per the terms of the settlement deed. This involved interpreting the relevant provisions of the deed and the applicable settled land legislation. The court needed to assess whether the trustees' actions were consistent with the powers granted to them and whether the absence of beneficiary consent was permissible under the circumstances.

The court found that the settlement deed explicitly granted the trustees the power to sell the settled land, but did not specify the necessity for beneficiary consent. The court held that unless there was a clear requirement for beneficiary consent in the deed or under the settled land legislation, the trustees could exercise their powers without such consent. The court ruled that the trustees had acted within their powers by selling the portion of the land, and the absence of beneficiary consent did not invalidate their actions. The court's decision was based on a strict interpretation of the settlement deed and the relevant legislation, emphasising the need for clear and express terms regarding consent.

The final orders of the court confirmed that the trustees' sale of the settled land was valid and enforceable. The court did not require the trustees to obtain the consent of the beneficiaries for the sale, as no such requirement was stipulated in the settlement deed or under the settled land legislation. The beneficiary's challenge to the trustees' actions was dismissed, affirming the trustees' discretion in managing the settled estate.

Orders