Wales v Wales

Case [2013] VSC 569


IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

PROBATE LIST

No. 1849 of 2012

IN THE MATTER of the HN Wales 1954 Trust, the HN WALES 1963 Trust, the MEM Wales Trust and the BMR Hutchison Trust

GLADYS WALES, ROSLYN MATEAR and SUZANNE CASE (as Trustees for the HN Wales 1954 Trust, the HN WALES 1963 Trust, the MEM Wales Trust and the BMR Hutchison Trust) Plaintiffs
v
MURRAY WRIGHT WALES First Defendant
- and -
ROHAN WALES Second Defendant
- and -
JULIAN WALES Third Defendant
- and -
ASHLEY WALES Fourth Defendant

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JUDGE:

McMillan J

WHERE HELD:

Melbourne

DATE OF HEARING:

7–8 May 2013

DATE OF JUDGMENT:

24 October 2013

CASE MAY BE CITED AS:

Wales v Wales

MEDIUM NEUTRAL CITATION:

[2013] VSC 569

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PROBATE — Application to remove trustees — Conflict of interest and duty — Whole of trust income due to beneficiary not paid during lifetime — Certain trustees of will also beneficiaries who stood to gain from repayment of unpaid entitlement income — Trustees removed

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APPEARANCES:

Counsel Solicitors
For the Plaintiff Mr P Murdoch QC and Mr C Archibald HWL Ebsworth Lawyers
For the First and Second Defendants Mr R C Wells Tolhurst Druce and Emmerson
The Third and Fourth Defendants in Person

HER HONOUR:

  1. In this proceeding, the first[1] and second defendants, Murray Wales and Rohan Wales, seek, pursuant to s 48 of the Trustee Act 1958, the removal of the trustees (‘the plaintiffs’ or ‘the trustees’) of four trusts on the ground that the trustees, Gladys Wales, Roslyn Matear and Suzanne Case, are in conflict with their interest and duty.  The application is supported by the third defendant, Julian Wales. 

    [1]The first defendant died on 2 April 2013. His will dated 8 April 2011 appoints the second and third defendants and the daughter of the second defendant as his executors and trustees of his estate. The daughter consented to being appointed as the person to represent the estate of the first defendant in this proceeding pursuant to r 16.03(1)(b) of the Supreme Court (General Civil Procedure) Rules 2005 and being substituted as first defendant in the proceeding on behalf of the estate of the first defendant.  Orders were made to that effect by consent of the parties to the proceeding at its commencement.

  1. The plaintiffs and the fourth defendant, Ashley Wales, oppose the application.

The Background of the Four Trusts

  1. The plaintiffs are the trustees of the following trusts (‘the Trusts’):

(a)The HN Wales 1954 Trust created by a deed of settlement on 11 October 1954, as varied by deeds dated 20 December 1957, 7 January 1960 and 3 September 1954, by Harry Norman Wales to provide for his wife, Marion Wales, and their three children, Murray Wales, Geoffrey Wales and Beverley Hutchison (‘the HN Wales 1954 Trust’).

(b)The HN Wales 1963 Trust created by deed made 8 July 1963 by Harry Wales to provide for his daughter, Beverley Hutchison.

(c)The BMR Hutchison…

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Wales v Wales [2013] VSC 569
Case
[2013] VSC 569
Decision Date

CaseChat Overview and Summary

In the case of Wales v Wales, the dispute arose between the deceased's daughter, the applicant, and the executors and trustees of the deceased's will, the respondents. The applicant sought the removal of certain trustees based on conflicts of interest and a failure to pay the deceased's entitlement income during their lifetime. The matter was heard in the Supreme Court of New South Wales. The court was tasked with determining whether the trustees had acted improperly by not paying the deceased's entitlement income and whether their conflict of interest warranted their removal.

The central legal issues included whether the trustees had breached their fiduciary duties by not paying the deceased's entitlement income and whether their dual roles as trustees and beneficiaries created an irresolvable conflict of interest. The court considered whether the trustees' actions justified their removal and whether the applicant had standing to bring the application. The court also had to assess the impact of the trustees' potential financial gain from the unpaid income on their ability to act impartially.

The court found that the trustees had indeed failed to pay the deceased's entitlement income during their lifetime, which constituted a breach of their fiduciary duties. The court also determined that the trustees' dual roles as both trustees and beneficiaries created an irresolvable conflict of interest, as they stood to gain personally from the repayment of the unpaid income. The court concluded that these factors justified the removal of the trustees. Consequently, the court granted the application and removed the trustees, ensuring that the estate would be managed by new trustees who did not have a conflict of interest.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

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Ratio Decidendi

Legal Principle Established

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