Weir v Matthews

[2001] NSWSC 824

CITATION:	Weir v Matthews [2001] NSWSC 824
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 2847/00
HEARING DATE(S):	13/09/01
JUDGMENT DATE:	13 September 2001
PARTIES :	John Leslie Weir, Merrilyn Williams and Dianne Robin Rubach (P) Faye Elizabeth Matthews (D1) Earl Olley Weir (D2) John Goodwin (D3)
JUDGMENT OF:	Young CJ in Eq

COUNSEL :	C Harris (P) First defendant in person
SOLICITORS:	Stone & Partners (P) First defendant in person
CATCHWORDS:	EQUITY [125]- Trustees- Removal- One of three trustees bankrupt- Principles considered re removal of bankrupt trustees- Order made.
LEGISLATION CITED:	Trustee Act 1925, s 70
CASES CITED:	Bainbrigge v Blair (1839) 1 Beav 495; 48 ER 1032 In re Matheson (1994) 121 ALR 605 Miller v Cameron (1936) 54 CLR 572
DECISION:	Order made.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

2847 of 2000
YOUNG CJ IN EQ
Thursday 13 September 2001

WEIR & ORS v MATTHEWS & ORS

Judgment

: This is an application brought by some of the beneficiaries of the trust of the will of Albert John Weir.

2 This case has some history in this Court, but it is not necessary to go fully into it. In simple terms the estate of Mr Weir, in the events which have happened, now consists of two parcels of real estate. The beneficiaries are the first defendant as to one third, the second defendant as to one third, and the plaintiffs as to one ninth each.

3 The present trustees are the first and second defendants and, following an order of Santow J in these proceedings, Mr Page.

4 On 20 July 2001 the first defendant was declared bankrupt. The plaintiffs now seek that she be removed as a trustee.

5 There is an amount of authority that a trustee who becomes bankrupt is removed almost as of course: Bainbrigge v Blair (1839) 1 Beav 495; 48 ER 1032 and the judgment of Latham CJ in Miller v Cameron (1936) 54 CLR 572, 575. However, the majority in Miller v Cameron, as analysed by Spender J In Re Matheson (1994) 121 ALR 605 puts the rule a little more softly, ie that the key question in all cases of removal of a trustee is the operation of the trust and there is no strict rule that a bankrupt trustee must be removed from office, but that one must consider all the circumstances.

6 The circumstances will usually include whether the impecunious position of the trustee which brought her bankruptcy is likely to have an effect on the trust, and whether she may be tempted in her control and direction of the trust and its operations. However, still the mere fact of bankruptcy and the absence of any particular circumstances, at least where there are other trustees, is a strong reason for removing a trustee.

7 In the present case there do not appear to be any particular circumstances of relevance. There are two other trustees, one of whom is a solicitor, and there are only two assets left which can be sold relatively easily.

8 Accordingly, in my view, I should remove the first defendant as trustee.

9 The first defendant, by her son, says that if that order is made he should be appointed as a new trustee so that there will be someone to have a watching brief over the interests that will flow to the first defendant. Mr Harris, for the plaintiffs, opposes that order on the basis that this Court under s 70 of the Trustee Act 1925 only appoints a new trustee where it is necessary or expedient, and there has not been material to show that it is necessary or expedient in view of the fact that there are two assets and there is a trustee solicitor in virtual charge. Mr Harris also says that this matter was raised when the matter was before the Registrar on 31 August 2001 when he (Mr Harris) indicated that if this application were to be made it was to be made formally with evidence. That has not happened; it was merely raised from the floor of the court.

10 A further factor is that at present the first defendant's trustee in bankruptcy is the person who will receive her interest under the trust, not the first defendant herself.

11 It is still open to the first defendant or any interested person to apply for the appointment of a new trustee by motion in these proceedings if they may satisfy s 70 of the Trustee Act 1925. I do not consider that I should appoint a further trustee at this stage. However, I will direct that the trustees notify Mrs and Mr Matthews of the date of any proposed auction sale of either of the parcels of realty in the estate.

12 Accordingly, I make order 1 in the notice of motion. I order that the first defendant pay the costs of the motion. I direct the trustees that they are to notify the first defendant and Stephen Matthews at least fourteen days before any proposed auction of any of the estate properties.

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Last Modified: 09/20/2001