Faulkner, Re [1996] QSC 261 [1999] 2 Qd R 49

o o o 2Q17-CJ IN THE SUPREME COURT OF QUEENSLAND Brisbane O.S. No. 4986 of 1996 IN THE MATTER of the Trusts Act 1973 - and- IN THE MATTER of an application by Patricia Debra Faulkner under Section 8 of the said Act REASONS FOR JUDGMENT - MOYNIHAN J. CATCHWORDS: Counsel: Solicitors: Hearing Dates: Judgment delivered 20 December 1996 WILLS - s.8 Trusts Act - whether claimant for further provision under ss.40, 41 Succession Act 1981 has an interest to found an order under s.8 M. Stewart for the applicant J. Crowley Q.C. and D. Rangiah for the respondent Tobin & Co for the applicant John Murphy & Co for the respondent 17 July 1996 -- 1 of 8 -- o o IN THE SUPREME COURT OF QUEENSLAND Brisbane O.S. No. 4986 of 1996 IN THE MATTER of the Trusts Act 1973 - and- IN THE MATTER of an application by Patricia Debra Faulkner under Section 8 of the said Act REASONS FOR JUDGMENT - MOYNIHAN J. Judgment delivered 20 December 1996 The applicant is a beneficiary under the will of her father Patsy Eugene Bleney who died on 18 September 1995. The respondents are the executors who proved the will. The first respondent John Eugene Bleney is the son of the deceased, the brother of the applicant and the principal beneficiary under the will. The second respondent John Joseph Murphy is a solicitor who o acted on behalf of the executors in the administration of the estate, he had apparently drawn the will and was one of the attesting witnesses. The applicant seeks an order pursuant to s.8 of the Trusts Act 1973 setting aside the distribution of the estate. The circumstances giving rise to the application are as follows. The will gave the estate to the respondents on "the following trusts II. These included bequests of $1,000 to the applicant and her sisters. After other provisions of no present concern the balance of the estate which comprise real estate and some other assets, worth approximately $700,000 in all, went to the respondent John Eugene Bleney. The deceased died on 18 September 1995. The applicant contacted a solicitor regarding the provision made by the will in October and on the 20th of that month the -- 2 of 8 -- 2 solicitor wrote to the second respondent indicating that he held instructions "to consider the matter of the bequest" to the applicant and seeking a copy of the will. On 3 November 1995 the solicitor wrote giving notice of a possible claim against the estate under ss.40 and 41 of the Succession Act 1981 and seeking an undertaking that the assets of the estate should not be distributed until the claim had been resolved. There was no response to either of these letters. The applicant retained her current solicitors and on 8 January 1996 they wrote to the n respondents asking that the letter be accepted as notice of an intention to apply for relief '-.j under s.41 of the Succession Act and seeking details of the assets and liabilities of the estate, C) the period limited for bringing such an application expired on 18 June 1996. There was no response to this letter. After investigation into the worth of the estate, an originating summons and supporting material were filed by which the applicant sought further provision out of the estate of the deceased. This was served on 17 April and was returnable on the 29th of that o month. On the return of the summons, counsel for the respondents declined an opportunity to make submissions to the effect that the applicant's material failed to disclose a prima facie o case. Directions along the usual lines were given with a timetable for the filing and serving of material. After the order was made and on the same day, the respondents distributed the estate. The distribution of the real property comprising the bulk of the estate was effected by lodging transfers to the second respondent at the Land Titles Office, a bill of mortgage in favour of the National Australia Bank over the most valuable of the properties was also lodged. The documents were executed by the respondents on 29 April. On 4 June 1996 the respondents filed and served their affidavits pursuant to the -- 3 of 8 -- 3 directions order of 29 April. The applicant's bequest of $1,000 was paid to her under cover of a letter of 4 June 1996. The first respondent deposed that he was unable to comment on the values the applicant has ascribed to property admittedly the testators at the time of his death. The affidavit went on to depose that the property had been distributed and that there was no property in the trustee's hands for distribution. That was the first notice the applicant or her solicitors had of the distribution. Section 41 of the Succession Act empowers the Court to make an order for further o provision "out of the estate". Since the estate has been fully distributed, there is nothing out of which provision can be made and the application will be defeated; Re: Donkin o (deceased) 1; Re McPherson 2 , Holmes v. Webb 3 • Note however Gibbs J in Donkin "says nothing" in respect of distribution within six months of probate or after notice of a claim for further provision4 ; see also per Connolly J in McPherson 5. On 6 June 1996 the applicant lodged a caveat in respect to the number of properties but at the time of hearing no notice had been served on her requiring her to start proceedings o to establish the interests claimed under the caveat or to have it removed. Absent any other explanation it is impossible to avoid the conclusion that the purpose o of course followed was to defeat a successful claim by the applicant. Section 8 of the Trusts Act provides: "Application to court to review acts and decisions 8.(1) Any person who has, directly or indirectly, an interest, whether vested (1966) Qd. R. 96 per Gibbs J. at 114.3 2 (1987) 2 Qd.R. 393 3 (unreported) Court of Appeal, 18 August 1992 at 4.9 4 at 114 5 at 399 -- 4 of 8 -- o C) 4 or contingent, in any trust property or who has a right of due administration in respect of any trust, and who is aggrieved by any act, omission or decision of a trustee or other person who in the exercise of any power conferred by this Act or by law or by the instrument (if any) creating the trust, or who has reasonable grounds to apprehend any such act, omission or decision by which the person will be aggrieved, may apply to the court to review the act, omission or decision, or to give directions in respect of the apprehended act, omission or decision; and the court may require the trustee or other person to appear before it and to substantiate and uphold the grounds of the act, omission or decision which is being reviewed and may make such order in the premises (including such order as to costs) as the circumstances require. (2) An order of the court under subsection (1) shall not- (a) (b) disturb any distribution of the trust property, made without breach of trust, before the trustee became aware of the making of the application to the court; or affect any right acquired by any person in good faith and for valuable consideration. (3) Where any application is made under this section, the court may- (a) if any question of fact is involved-determine that question or give directions as to the manner in which that question shall be determined; and (b) if the court is being asked to make an order which may adversely affect the rights of any person who is not a party to the proceedings-direct that that person shall be made a party to the proceedings. " To come within the section the applicant must show either- (i) she has, directly or indirectly an interest, whether vested or contingent in trust property; or (ii) she has a right of due administration in respect of the trust. At the time of the distribution of the trust the applicant had a current application for further provision out of the estate of which the respondents had notice. That provision was contingent on a judge being satisfied in accordance with s.41 (1) of the Succession Act that adequate provision had not been made for the proper maintenance and support of the -- 5 of 8 -- 5 applicant by her father's will so that the court might order "such provision as it thought fit". The right had not accrued since it was dependent on the exercise of a discretion; Director of Public Works v. Ho Po Sang6 ; and see Collector of Customs v. Albany InternationaP. The applicant had however taken appropriate steps to enable her to take advantage of the right conferred by the statute cf. Abbott v. Minister for Lands 8; Esber v. The Commonwealth 9• In my view therefore she had an "equitable right vested by statute"; Barker v. Westminster Trust Co. 10; Peebles v. Oswald Urban District Councilll ; Family Provision in Australia and New (~) Zealand (de Groot v. Nichol)12, Esber 13 . At least she had "directly or indirectly" an interest~~~ " .. vested or contingent" .. of s.S. The applicant has more than "a mere hope or o contingency Sugden v. Sugden 14. In that case a mere hope or contingency did not constitute a cause of action but the mere fact that a cause of action was discretionary "did not automatically mean there was no cause of action" to survive death and injured party. Sugden v. Sugden 15. In my view therefore the first of the requirements referred to has been satisfied. C) The applicant also has a right of due administration in respect of the trust constituted 6 (1961) A.C. 901 C~) 7 (1991) 31 S.C.R. 194 8 (1895) A.C. 425 at 431 9 (1991-92) 174 C.L.R. 430 10 (1941) 4 C.L.R. 514 at 517 11 (1896) 2 Q.B. 159 12 para.204.12 13 at 440 14 1957 p.120 15 at 135 -- 6 of 8 -- 6 by the will. A trustee who has received notice that a fund in his possession is or may be claimed is liable to the claimant for dealing with the property in disregard of the notice should the claim prove well founded. Guardian Trust and Executors Company of New Zealand Ltd v. Public Trustee of New Zealand 16 • The obligation is to preserve the estate until the claim is resolved; Re Simson 17; Re Crowley18. Distribution with notice of claim under similar legislation was held to be a failure by the executors to provide for contingent liabilities so as to constitute a breach of trust in Re Winwood (deceasedj19. C) The respondent's submission that the application fails because it was brought after the distribution and hence there was no trust or property places too narrow a construction on s. 8, o particularly the reference to a right of due administration. It does not in any event follow that the distribution defeats the applicant'S "interest" in terms of s.8 as I have characterised it earlier, even if ultimately effect could not be given to that interest. The only reason the applicant can be said not to have a present interest in the trust is because of the respondents' action which she seeks to have reviewed. This is not a case where the existence of the trust is contentious as was the case in Re Whitehouse 20 • This section is to be widely construed Re Whitehouse 21 • The distribution was made in breach of an obligation imposed consequent on notice of the applicant's claim not to distribute, see the cases cited earlier. There is moreover in 16 (1942) A.C. 115 at 127 17 (1950) 1 Ch. 38 at 42 18 (1949) St. R. Qd. 99 at 192 19 (1959) N .Z.L.R. 246 20 (1975) Qd.R. 65 21 (1982) Qd.R. 196 -- 7 of 8 -- 1 7 my view, merit in the contention that the distribution constituted an interference with the administration of justice; cf. Supreme Court Registrar, Equity Division v. McPherson Z2 ; Re: Septimous Parsonage & C0 23 • For these reasons section 8(2) does not operate to inhibit the granting of the relief sought. I therefore order that the transfers of the properties identified in para. (a) of the (j summons be set aside and in terms of (a) I order that the respondent pay the costs of retransferring the properties and of the application including the reserved costs of 3 July 1996 o to be taxed on a solicitor and client basis. o o 22 (1980) 1 S.W.L.R. 688 23 (1901) 2 Ch. 424 -- 8 of 8 --