HARRIS -v- THE PUBLIC TRUSTEE as executor and trustee of the estate of JOSEPH PENNINGTON [2025] WASC 128 (17 April 2025)

(1) two affidavits of Joseph Pennington, sworn 17 May 2024 and 11 February 2025;

(2) two affidavits of Bernice Harris, sworn 12 June 2024 and 13 February 2025;

(3) affidavit of Arya Ryan Ashoorian, solicitor for the plaintiffs, sworn 3 December 2024;

(4) affidavit of Mark Raymond Harris, affirmed 26 February 2025; and

(5) two affidavits of Shaun William Conlin, Director of Trustee Services at the Public Trustee office, sworn 14 June 2024 and 25 March 2025.

1. The background facts are not in dispute.
2. The late Joseph Pennington senior died on 12 October 2023. Mr Pennington senior's wife, Melita, predeceased him on 13 August 2023.
3. Mr Pennington senior prepared a will dated 7 August 2009 (the Will) appointing the Public Trustee as executor and trustee. Probate was granted to the Public Trustee on 4 April 2024.
4. The Will relevantly provided:

(1) for some specific bequests which are not material to the present application;

(2) that the residuary of the estate would be held on Trust by the Public Trustee for division into three equal parts - one for each of Melita, Bernice, and Joseph;

(3) if Melita did not survive Mr Pennington senior, that part of the Trust would fall equally into and form part of those held on Trust for Bernice and Joseph;

(4) the income of the parts held on Trust for Bernice and Joseph would be paid annually to each of them for so long during the period between the first and twenty‑first anniversary of Mr Pennington senior's death (being 12 October 2044) as they survived him;

(5) upon the twenty‑first anniversary of Mr Pennington senior's death, the capital and income of the Trust would vest absolutely in Bernice and Joseph equally;

(6) if either Bernice or Joseph died before the twenty‑first anniversary of Mr Pennington senior's death leaving children, then their share of the Trust property would vest equally between such children as survived the deceased; and

(7) if either Bernice or Joseph died before the twenty‑first anniversary of Mr Pennington senior's death leaving no children, then their share of the Trust assets would fall into and form part of the their sibling's share.

1. Bernice is 42 years of age. Bernice married Mark Harris on 5 May 2008 and they have two children: Braxton, born 3 July 2012 (12 years of age) and Landry, born 21 October 2022 (being two years of age). Braxton and Landry are represented by their guardian ad litem, being their father Mark Harris. Bernice has deposed that she does not intend to have any more children.
2. Bernice has prepared a will dated 11 February 2025. In that will, Bernice:

(1) appoints Mark as her executor and trustee, and Joseph as her substitute executor and trustee;

(2) gives all motor vehicles, her superannuation benefits and entitlements, and her interest in a residential property in Queensland, to Mark;

(3) directs her executor to hold the balance of her estate on trust to divide it in equal shares between Braxton and Landry if they attain 21 years of age and survive Bernice, and in the event that either Braxton or Landry predecease Bernice leaving children, dividing their share equally among such children as they attain 21 years of age; and

(4) provides that her executor may, at their discretion, apply for the maintenance, education, advancement or benefit of a beneficiary the whole or any part of the capital and income of that part of the estate to which that beneficiary is entitled or may in the future be entitled.

1. Joseph is 37 years of age. Joseph is not currently married and does not have any children, but it is his intention to have children someday. Joseph has prepared a will dated 11 February 2025. In that will, Joseph appoints Bernice to be his executor and trustee, and Mark to be his substitute executor and trustee. Joseph directs his executor to hold his estate on trust to give to Bernice, or in the event that Bernice should predecease Joseph leaving children, to divide his estate equally among such children as they attain 21 years of age and survive him. Joseph's will also provides that his executor, may at their discretion, apply for the maintenance, education, advancement or benefit of a beneficiary the whole or any part of the capital and income of that part of his estate to which that beneficiary is entitled or may in the future be entitled. Joseph deposes that if he has children, that he undertakes to amend his will to make his children the sole beneficiaries of his father's estate.
2. Each of Bernice and Joseph depose that they wish for the Trusts to be terminated and to vest in them now for the following reasons:

(1) each are in good health and of sound mind and are fully capable of managing their share of the Trust property for their benefit and/or for that of their family;

(2) if the Trusts are not terminated, the assets the subject of each trust will not vest for 21 years from the date of their father's death by which time Bernice will be 62 years of age and Joseph will be 56 years of age;

(3) the Public Trustee charges fees for the administration of each Trust, which will dimmish the overall assets that will be available to the beneficiaries of the Trusts over time. Those fees are not insignificant, and the termination of the Trusts will eliminate these fees; and

(4) the elimination of these fees will mean that Bernice and Joseph can manage their respective shares of the property the subject of each Trust, free of fees, by themselves for future growth.

1. The Public Trustee does not oppose the application and will abide by the decision of the court. The Public Trustee seeks its legal costs in connection with the application be paid from Mr Pennington senior's estate.
2. Mark, as guardian at litem for his children, deposes that:

(1) he and Bernice do not intend to have any further children, and Mark does not have any other children or dependents or other persons eligible to benefit from or claim against his estate in priority to Bernice, Braxton and Landry;

(2) he fully supports Bernice applying any funds she receives from the trust for the benefit of Braxton and Landry and to the extent his consent is required by law he will provide it;

(3) he has considered Joseph and Bernice's wills and their contents has been explained to him. Mark deposes that if, under either will, Mark becomes the executor and either Braxton or Landry have not yet attained 21 years of age, he undertakes to exercise the powers conferred on him under the relevant will to provide for the maintenance, education, advancement or benefit of Braxton and Landry until they attain the age of 21 years and are eligible to receive their bequests; and

(4) he undertakes, if requested by Bernice, to execute a binding financial agreement that quarantine's Bernice's share of the trust property for the benefit of Bernice, Braxton and Landry if he and Bernice ever separated.

1. Mark also deposes that based on the information available to him, he considers that terminating the Trust will provide an indirect benefit to Braxton and Landry by:

(1) avoiding the payment of management fees to the Public Trustee, leaving additional funds to be applied for the maintenance, support, education and advancement of Bernice;

(2) allowing Bernice to pay down the mortgage on their residential property which will provide security of accommodation for Braxton and Landry and reduce the amount of interest paid to the Bank, leaving additional funds to be applied for the maintenance, support, education and advancement of Bernice; and

(3) allowing Bernice's share of the Trust to be applied generally for the maintenance, support, education and advancement of Bernice in life as and when required.

1. Mark also deposes that if the Trust is not terminated, there may be a detriment to Braxton and Landry because:

(1) the investments held in the Trust are subject to market forces and there is no guarantee that Bernice will receive income in any given year;

(2) income distributed to Bernice from the Trust in any given year may not be sufficient to provide for expenses related to Braxton and Landry's maintenance, support, education and advancement (eg to provide for private school fees); and

(3) the capital of the Trust would not be available to Bernice to use for the maintenance, support, education and advancement in life of Braxton and Landry until they are 32 and 21 years old respectively. Mark deposes that he considers it would be in the best interests of Braxton and Landry if Bernice were able to apply the capital of the Trust for the children's benefit during their developmental years.

1. Mark deposes he considers that it would be in the best interests of Braxton and Landry if Bernice were able to apply the capital of the trust for the children's benefit during their developmental years.

1. Bernice, Joseph and the Public Trustee have entered into a Deed of Arrangement dated 28 November 2024 to reflect the termination of the trust.
2. The Deed of Arrangement relevantly provides that:

(1) Bernice and Joseph direct the Public Trustee to terminate the trust and consent to its termination;

(2) the Public Trustee must wind up the trust and transfer the trust property to Bernice and Joseph forthwith, subject to the payment of all proper expenses and allowances;

(3) the Public Trustee's obligations under the deed are subject to the condition precedent that this court make orders under s 90 of the Trustees Act, which in effect proves the arrangement on behalf of Braxton, Landry and any unborn children of Joseph and Bernice; and

(4) the Public Trustee's costs of proceedings in this court and of the negotiation, preparation, execution and delivery of the deed shall be paid from the estate.

1. Details regarding the value of Mr Pennington senior's estate, and the fees of the Public Trustee, have been provided in the affidavits of Mr Conlin.
2. Following the sale of Mr Pennington senior's residential property, the estate currently consists of the following assets and liabilities:

1. The shares are valued as at the date of Mr Pennington senior's death.
2. In addition, the following further fees have been charged for the Public Trustee's work in the administration of the estate:

1. It will also be necessary for the Public Trustee to prepare a tax return for the current financial year. The costs of such a tax return will be charged by the Public Trustee's taxation department. It is expected that there will also be a taxation liability payable for that return.
2. Mr Conlin deposes that from the Public Trustee's perspective, the matter is now ready to move into the trust phase of management. Mr Conlin deposes that the Public Trustee would open two trusts - one for each beneficiary. Further, that the Public Trustee's management fees would likely be as follows (approximately) pursuant to the Public Trustee Scale of Fees (for the 2024/2025 financial year):

Transaction fee (dependant on number of transactions per year)

1. The Public Trustee also charges a cessation fee upon the termination of a trust. This fee is determined based on the number of assets in the trust. Presuming that all shareholdings from the date of death are kept, the Public Trustee's cessation fee would be $15,030 per trust.
2. Finally, Mr Conlin deposes that the Public Trustee has received $205,095.87 in income as at 19 March 2025. No distributions have been made to the beneficiaries to date as the administration phase of the matter was incomplete until recently.

1. Section 90 of the Trustees Act provides, relevantly:

(1) Without limiting any other powers of the Court, it is hereby declared that, where any property is held on trusts arising under any will, settlement or other disposition ..., the Court may, if it thinks fit, by order approve on behalf of -

(a) any person having, directly or indirectly, an interest, whether vested or contingent, under the trusts who, by reason of infancy or other incapacity, is incapable of assenting; or

any arrangement (by whomever proposed, and whether or not there is any other person beneficially interested who is capable of assenting thereto) varying or revoking all or any of the trusts, or enlarging the powers of the trustees of managing or administering any of the property subject to the trusts.

(2) ... the Court shall not approve an arrangement on behalf of any person if the arrangement is to his detriment; and, in determining whether any such arrangement is to the detriment of a person, the Court may have regard to all the benefits that may accrue to him directly or indirectly in consequence of the arrangement, including the welfare and honour of the family to which he belongs.

...

(4) Any rearrangement approved by the Court under subsection (1) is binding on all persons on whose behalf it was so approved, and thereafter the trusts as so rearranged shall take effect accordingly.

1. In Public Trustee as Executor of the Will of Fiedler (decd) v Fiedler,[1] Jenkins J outlined the relevant mandatory factors that the court must consider in making orders under s 90(1)(c) of the Trustees Act, being:

(1) that property is held on trust arising under (relevantly) a will;

(2) the arrangement seeks to vary or revoke all or any of the trusts; and

(3) the arrangement must not be to the detriment of any unborn children.

1. These mandatory criteria apply to unborn children. In addition, in so far as the application is brought in relation to Braxton and Landry under s 90(1)(a) of the Trustees Act, it is also necessary for me to be satisfied that Braxton and Landry are persons having, directly or indirectly, an interest, whether vested or contingent, under the trusts who, by reason of infancy are incapable of assenting to the arrangement.
2. Bernice and Joseph have standing to bring this applicable, being persons beneficially interested in the Trust property.[2]
3. The function of the court and nature of the power under s 90 of the Trustees Act was helpfully outlined by Hasluck J in Muhling v Perpetual Trustees WA Ltd as Executor and Trustee of the Estate of Herbert Ross Andrew (Dec),[3] and affirmed by Jenkins J in Fiedler,[4] as follows:

It is clear that the power to approve conferred by s 90(1) is discretionary. In essence, the power of the Court is to give its consent or approval on behalf of those beneficiaries or potential beneficiaries, infants, unborn and ascertained persons who, by reason of those and other disabilities, are incapable of consenting. The process is one in which the Court, in effect, joins with beneficiaries who are sui juris and entitled to the trust property so that they may exercise their proprietary rights to modify the intention of a testator: Palmer v McAllister (1991) 4 WAR 206.

A function of the Court on an application of this nature is to act as a substitute for the persons who are incapable, either because they lack capacity or because they are not born, to signify their consent. The proposal for variation is to be considered as a whole and, although the application may be designed to interfere with or modify the intention of the settlor, if there is no detriment likely to accrue to any person contingently interested and all interests will best be served by carrying into effect the proposed modification, then the application will be approved: Faye & Ors v Faye & Ors [1973] WAR 66.

Where, whilst the scheme proposed would be generally beneficial, there is a risk of detriment to the person or class of persons in respect of whom the Court's approval is sought, the Court may have regard to the degree of risk and, if it is a risk that an adult would be prepared to take to achieve the benefits to be derived from the scheme of rearrangement, then the Court may take that risk on behalf of the person or persons for whom its approval is sought: Re Cohen's Will Trusts [1959] 3 AER 523.

1. In Fiedler, Jenkins J also had regard to and summarised various other cases which have considered a power of this nature.[5] Her Honour concluded that the question of whether the proposed arrangement is to the detriment of any unborn children must be determined by contrasting, so far as possible, the position of such children if the arrangement not be approved with their position should it be approved.[6]
2. I respectfully agree with these propositions and have applied these to the present application.

1. A preliminary issue arises in relation to the lack of legal representation of any unborn children.
2. In this regard, I observe that in Fielder, the court requested that the Attorney General appear as amicus curiae to provide legal submissions on this issue. Ultimately, counsel for the Attorney General submitted that the appointment of the Attorney General to represent unborn children in a matter which does not raise broad public interest issues is not consistent with the established understanding of the parens patriae jurisdiction of this court as it has developed and is exercised. Rather, it was submitted, that should the court be of the view that any unborn children requires representation, the court should adopt the practice used in other jurisdictions in which an appropriate individual is appointed to represent any unborn children.[7] I observe that a further alternative is an opinion of counsel.
3. Jenkins J concluded that it was not appropriate in Fiedler to determine the rights, duties or obligations of the Attorney General in respect to the parens patriae jurisdiction. It was also not necessary to consider appointing another appropriate individual to represent the unborn children, as counsel for the Attorney General had, nonetheless, made extensive submissions.[8]
4. In the present case, I do not consider it is necessary for the unborn children to be separately represented. This is because I have had the benefit of the helpful submissions made by counsel for Mark. Whilst Mark is not the guardian ad litem for the unborn children, he is the guardian ad litem for Braxton and Landry. Whilst there are some factual differences between Braxton and Landry and any unborn children, there is nonetheless a large degree of overlap between the issues relevant to each category of children. I also have before me affidavit evidence which addresses factual matters relevant to any unborn children. No counsel or parties submitted otherwise.
5. In these circumstances, I am satisfied that the interests of the unborn children have been appropriately and adequately addressed before me.

1. There is no question in the present case that the relevant property is held pursuant to a testamentary trust and that the proposed arrangement seeks to revoke that trust.
2. There is also no question that Braxton and Landry have a contingent interest in the trust property, and are unable to consent to the arrangement as they are under the age of 18 years. To this, Braxton and Landry do not have a present interest in the trust property. Rather, they have a contingent interest. Their interest only arises if Bernice dies before the anniversary date in 2044, and Braxton and Landry each attain 21 years of age.
3. That leaves two questions for the court, being

(1) whether the arrangement is to the detriment of Braxton, Landry or any unborn children, and

(2) if the answer is in the negative, whether the arrangement be approved as a matter of discretion.

1. Turning to the question of detriment, the arrangement will extinguish the children's interest in the trust property. However, it is important to assess the question of detriment in the context of the children's interest in the trust property. None of the children have any present interest in the trust property. Each only have a contingent interest that applies to both Braxton and Landry and the unborn children.
2. For Braxton and Landry, that interest only arises if their respective parents die before 2044, and they each attain 21 years of age. Additionally, for any unborn children that interest is also contingent upon each being born. Accordingly, the interest that the arrangement will extinguish for each child is a contingent interest only.
3. It is not possible to predict the future for Bernice, Joseph, Braxton, Landry and any future children. However, I accept the submission by Bernice and Joseph that the possibility of the contingent interest crystalising in the present case - and therefore the children suffering actual loss of a vested interest in the trust property - is remote given that:

(1) both Bernice and Joseph are relatively young, and the only evidence before me is that they are in good health. There is nothing before to suggest that they each would not live to beyond 2044, which is less than the average life expectancy in Australia;

(2) Bernice has deposed that she does not intend to have any future children; and

(3) whilst Joseph has deposed that he intends to have children some day - he does not at present and there is no evidence that he has a partner or of any particular timeframe etc in this regard.

1. I also accept the submission by counsel for Braxton and Landry that the extinguishment of the children's contingent interest is mitigated by the content of the wills made by Bernice and Joseph, as well as Mark's affidavit deposing to undertake to exercise the powers conferred on him under each will as substitute executor and trustee to provide for the maintenance, support, education and advancement of Braxton and Landry, and that he would execute a binding financial agreement at Bernice's request that quarantines her share of the trust property if they were to separate.
2. Turning to the question of benefit, there no direct benefit to any of the children if the arrangement is approved. However, there are several indirect benefits.
3. First, approving the arrangement will mean that the children will receive indirect financial benefit in that Bernice and Joseph will receive an immediate equal share of Mr Pennington senior's estate. I conclude that, out of natural love and affection or as required by law, Bernice and Joseph would financially support their children with that money if the arrangement were approved.[9]
4. Further, Bernice has deposed that she intends to use her share of the Trust to the ultimate benefit of Braxton and Landry and by paying down the mortgage of their house and by otherwise investing the trust property. Braxton and Landry would stand to immediately benefit from this money, for example in terms of their maintenance, support, education and advancement during their developmental years, rather than waiting until they are 32 and 21 years of age for the trust property to vest either in Bernice or themselves.
5. In addition, Braxton and Landry are currently beneficiaries of Bernice's estate. Bernice is also currently the beneficiary of Joseph's estate, however, in the event that Joseph has children in the future, he has deposed that he undertakes to amend his will to make his children the sole beneficiaries of his father's estate, which I take to mean Joseph's estate including the amount he would receive if the trust is revoked. To the extent Joseph has any children, then these children also stand to immediately benefit from the trust property, as opposed to waiting until 2044, or until they attain 21 years of age.
6. Secondly, I agree that the welfare of Braxton and Landry and any unborn children would be immediately enhanced because of their parent's increased wealth. This would be so even in regard to any part of the estate that was not used to directly support the children. The welfare and honour of the family to which the children belong is a relevant factor. As observed by Jenkins J in Fielder, there is undoubtedly a benefit to any unborn children in the limited assets of the estate being distributed in a fair manner between the testator's family as soon as possible and with as little cost to the estate and the various members of the family as possible. Any unborn children are members of the family and receive an indirect benefit from such a result.[10] I consider the same position applies in relation to children who have already been born.
7. Thirdly, approving the arrangement would avoid the payment of fees to the Public Trustee. I have detailed the 2024/2025 fees earlier in my reasons and will not repeat them here. Those fees may vary in the future. Avoiding the payment of fees will allow for a greater amount of the capital to be used and/or invested by Bernice and Joseph on their own behalf and also for the benefit of their children. In this regard, I do not draw any conclusions that there is anything inappropriate in the Public Trustee's fees.
8. Fourthly, the immediate vesting of the trust property avoids a situation arising where the trust capital does not generate sufficient income to derive a distribution in any one year, or does not derive sufficient income to meet expenses associated with the maintenance, support, education and advancement of the children as and when they fall due.
9. Fifthly, there is no evidence before me of any indication that Bernice, Joseph or Mark are not likely to take the steps that they have deposed to in their affidavits. Bernice and Joseph depose that they are fully capable of managing their share of the trust property and Mark deposes that if called upon, he will exercise the powers conferred on him for the maintenance, advancement or benefit of Braxton and Landry until they attain the age of 21 years. There is no evidence before me that calls into question their evidence. For example, there is no evidence of disability, or any significant or unusual debts or any other issue that might cause any adult to consume the funds in a way that is not for the benefit of themselves and their children.
10. Therefore, having had regard to the proposed variation as a whole, I am satisfied that the arrangement is generally beneficial to the children. Whilst there is a risk of detriment to the children - in the form of the extinguishment of their contingent interest - I have had regard to the degree of risk, and I am satisfied that it is a risk that an adult would be prepared to take to achieve the benefits to be derived from the arrangement. I have reached that conclusion having had regard to the very small likelihood that the children's contingent interest will ever crystallise; the immediate indirect benefits to the children from the arrangement; the immediate benefits to the welfare and honour of the family to which the children belong; the removal of the requirement to pay fees to the Public Trustee for 21 years; and the various mitigating factors.
11. In all the circumstances, I therefore also consider it is appropriate to exercise my discretion to approve the arrangement and grant the application of Bernice and Joseph. I am satisfied that the departure from Mr Pennington senior's intention is warranted in circumstances where the arrangement proposed is otherwise consistent with Mr Pennington senior's evident intention that his children and grandchildren ultimately be the recipients of his estate, and it will result in those benefits being immediately realised.
12. For those reasons, the application is granted.
13. I will hear further from parties as to the precise form of the orders to give effect to my reasons.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Public Trustee as Executor of the Will of Fiedler (decd) v Fiedler [2007] WASC 296 [21] (Fiedler).

[3] Muhling v Perpetual Trustees WA Ltd as Executor and Trustee of the Estate of Herbert Ross Andrew (Dec) [2001] WASC 225 [25] - [27].

[4] Public Trustee as Executor of the Will of Fiedler (decd) v Fiedler [2007] WASC 296 [32].

[5] Public Trustee as Executor of the Will of Fiedler (decd) v Fiedler [2007] WASC 296 [34] - [41].

[6] Public Trustee as Executor of the Will of Fiedler (decd) v Fiedler [2007] WASC 296 [34] - [44].

[7] Public Trustee as Executor of the Will of Fiedler (decd) v Fiedler [2007] WASC 296 [4] - [6].

[8] Public Trustee as Executor of the Will of Fiedler (decd) v Fiedler [2007] WASC 296 [8] - [9].

[9] Public Trustee as Executor of the Will of Fiedler (decd) v Fiedler [2007] WASC 296 [46].

[10] Public Trustee as Executor of the Will of Fiedler (decd) v Fiedler [2007] WASC 296 [47] and [60].