Yule v Irwin (No 2)

Case [2016] SASC 178

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

YULE v IRWIN & ORS (No 2)

[2016] SASC 178

Judgment of The Honourable Justice Nicholson

18 November 2016

EQUITY - TRUSTS AND TRUSTEES - APPLICATIONS TO COURT FOR ADVICE AND AUTHORITY - PETITION OR SUMMONS FOR ADVICE - PARTICULAR CASES

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - STRIKING OUT - OTHER CASES AND MATTERS

SUCCESSION - ADMINISTRATION OF ESTATE - OTHER MATTERS

The late James Campbell Irwin died on 4 November 2005 leaving an estate with a net value according to the executors’ affidavit at time of death estimated to be $14,943,096.39.  The primary beneficiaries are the deceased’s sons James, Angus and Campbell.  These three together with a solicitor, with no interest in the estate, Ms Yule, are the four executors and trustees.  As at the present day the estate remains only partially administered largely because of disagreements emerging between Campbell and the other three executors (referred to in the judgment as “the proponent executors”).

In 2008 an agreement was entered into by all four executors to facilitate the final administration of the estate (“the 2008 Agreement”).  Substantial aspects of that arrangement were implemented in 2008 largely to the then benefit of Angus and Campbell.  However, other aspects, including the transfer of a valuable farming property to James, have not yet been implemented due to Campbell’s lack of cooperation.  A number of applications came before the Court.

James with the support of Angus and Ms Yule has sought advice and direction together with a large number of complex interlocking orders pursuant to section 69 of the Administration and Probate Act 1919 aimed at effecting further implementation of the 2008 Agreement. Campbell has brought three applications also purportedly seeking advice and direction aimed in large part at delaying or preventing the 2008 Agreement from being further implemented together with a second application seeking my recusal.

Ms Yule has sought orders permitting her, in her capacity as an executor, to pay from estate funds longstanding accounts for work done on behalf of the estate by two firms of solicitors.

Held:

1.  Campbell’s second application that I recuse myself from further involvement in this matter, FDN 65, is dismissed.

2.  Apart from some minor aspects relating to costs, Campbell’s three interlocutory applications, FDN 45, FDN 52 and FDN 55 are an abuse of process and are dismissed.

3.  The minor aspects of Campbell’s interlocutory applications relating to costs, as identified in paragraphs [112], [115] and [117] are stood over for further consideration.

4.  Ms Yule’s application is allowed.  The executors or any one of them would be justified in meeting and it would be within their power to meet out of estate assets the Treloar & Treloar account in the amount of $40,647.00 and the Lynch Meyer account in the amount of $95,521.99.

5.  As far as James’ application is concerned, I am satisfied that those parts of the 2008 Agreement not yet implemented should be implemented.  However, before making…

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Yule v Irwin (No 2) [2016] SASC 178
Case
[2016] SASC 178
Decision Date

CaseChat Overview and Summary

In the matter of Yule v Irwin (No 2), the dispute involved executors of an estate seeking advice and authority from the court to implement an agreement regarding the distribution of estate assets. The case was heard in the Supreme Court of South Australia, where the executors petitioned for guidance on how to proceed due to the refusal of one of the beneficiaries to cooperate in executing necessary documents. The primary issue before the court was whether the 2008 Agreement should be implemented, and if so, what legal steps could be taken to achieve this in light of the non-cooperation of one beneficiary.

The court was required to determine whether it had the authority to provide the requested advice and orders under the Trustee Act 1936, particularly considering the refusal of one beneficiary to participate in the implementation of the agreement. Additionally, the court needed to assess whether the proposed orders were within its power and if there were alternative methods to facilitate the agreement's execution that might be more convenient or appropriate. The court also had to consider the implications of its powers under section 40 of the Trustee Act, which allows for the appointment of a person to convey land if it is more convenient than making a vesting order.

The court concluded that it should implement the 2008 Agreement and provide the requested advice and orders, provided they were within its power. While the court was satisfied that appointing Ms Yule to execute necessary documents under section 40 of the Trustee Act would be more convenient, it expressed concerns about its power to make all the proposed orders. The court decided to defer the consideration of costs until all principal matters were resolved and requested further submissions on certain issues to ensure the orders were appropriate and within its jurisdiction.

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

Reasons for decision

NICHOLSON J
The primary difficulty for the proponent executors in implementing the 2008 Agreement, bearing in mind the complexities involved in arranging for the transfer of the various assets concerned arising by virtue of the provisions of the Real Property Act and otherwise, is the fact that Campbell is not willing to participate further by way of executing any necessary instruments, or otherwise, in order to implement the 2008 Agreement. If by nothing else, this is to be inferred by Campbell’s continued opposition to these proceedings and the orders sought by James. The practical problem before the three proponent executors is how to proceed in these circumstances.Conclusion to this point For the reasons given to this point, I am satisfied that the 2008 Agreement should be implemented. I am also satisfied that, provided they are within power, advice and direction and orders in the nature of those sought in the proposed Minutes of Order should be made. However, I do have some residual concerns with the process envisaged by those Minutes. These are matters with respect to which I will need to receive further submissions before finalising any form of orders. Returning to the proposed Minutes of Order previously set out, and in terms of the advice sought, I am prepared to answer “Yes” to the questions 1(a), 1(b), 1(c), 1(d), 1(e), 1(f), 1(g) and 1(i). As far as the advice sought by question 1(j) is concerned, I would be assisted by further submissions from the parties. As far as the machinery orders (proposed orders 2 to 14) are concerned, whilst I accept the position of the proponent executors that a means to implement the 2008 Agreement must be identified and given effect to, I still have concerns as to my power to make all of the orders sought; hence the need for further submissions. I will defer consideration of costs issues (proposed orders 15 and 16) until all matters of principle have been resolved. I turn now to briefly address the matters on which I would be assisted by further submissions.Matters requiring further submissions The proponent executors submit that the circumstances before the Court are such as to empower the Court, pursuant to section 37 of the Trustee Act 1936, to make an order vesting the land in question in the three proponent executors for the purpose of giving effect to the 2008 Agreement. However, the proponent executors submit that a preferable and more practical approach is for the Court to order, pursuant to section 40 of the Trustee Act 1936, that Ms Yule be appointed to execute documents which would otherwise have to be executed by Campbell for the purposes of the Real Property Act. Section 40 of the Trustee Act provides as follows:40–Power to appoint person to conveyIn all cases where a vesting order can be made under any of the foregoing provisions the Supreme Court may, if it is more convenient, appoint a person to convey the land or release the contingent right, and a conveyance or release by that person in conformity with the order shall have the same effect as an order under the appropriate provision.Section 40 has been considered recently by this Court in JD & KJ Zohs Properties Pty Ltd v Ferme.[73] In that case, Stanley J observed:[74]The exercise of the power conferred upon the Court pursuant to s 40 to appoint a person to convey land is conditional upon two factors. First, the Court must be satisfied a vesting order could be made pursuant to the Trustee Act. Secondly, the Court must be satisfied it is more convenient to make an order pursuant to s 40 than to make a vesting order. . . . .The question of convenience in s 40 of the Trustee Act does not erect a high threshold. It merely requires a Court to be satisfied in a relative sense that it is more convenient to make one form of order over another. That is to say that there is an advantage to making an order pursuant to s 40 rather than a vesting order. In Meier v Dorzan Pty Ltd ... Slattery J considered the test was met on the basis that the plaintiff had structured the orders she sought pursuant to the equivalent provision in the Trustee Act 1925 (NSW) and had made arrangements for that conveyance. [citation omitted]I have no doubt that it would be significantly more convenient simply to appoint Ms Yule to execute documents which would otherwise have to be executed by Campbell in order to comply with the requirements of the Real Property Act, pursuant to any power available under section 40 of the Trustee Act. However, I have two concerns in this respect. [73] [2014] SASC 146.[74] At [10] and [12].

Ratio Decidendi

Legal Principle Established

Established by: NICHOLSON J

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