Kirk v Kirk [2002] QSC 310

Jones Lawyers as Town Agents for Paul Loane for the respondent executors

[1] Ben Calvert Kirk ("Ben"), an infant born 12 July 1987, is the son of the deceased David Christopher Kirk who died on 20 November 2000. His mother, Tracey Ann Kirk, was the second wife of the deceased and is Ben's litigation guardian.

[2] The deceased's daughter from his first marriage, Melanie Kirk ("Melanie") who is a university student, is the co-executor of her father's estate with the deceased's brother Christopher Kirk and is the residuary beneficiary of the estate. The deceased's third wife, Debra McEwan, ("Debra") received a $10,000 legacy under the will as did Ben.

[3] The net value of the estate has been variously estimated but the most recent affidavit of the executors deposes to approximately $1.6 million. The trustees of the deceased's Suncorp Metway death benefit policy with a gross value of $540,800 have determined to apply the proceeds as to 50 per cent to Ben, 25 per cent to Melanie and 25 per cent to Debra.

[4] Both Ben and Debra have sought further provision from the estate for their maintenance and support. Ben's mother had been in receipt of maintenance from the deceased for Ben pursuant to an order of the Family Court which ceased upon his death. She works as a nurse at the Wesley Hospital in Brisbane but her failing health as revealed in her affidavit and various medical reports suggests that the level of her financial support for her son will diminish as she is able to work fewer hours in the future. Ben lives much of the time with his maternal grandparents, Mr and Mrs Calvert, at Caloundra where he attends secondary school.

[5] The parties have resolved matters subject to the sanction of the court. The agreement provides for a payment for Ben of $500,000 made up of $230,000 from the estate and $270,000 from the insurance policy plus costs to be assessed on the indemnity basis. Debra is to receive an mount of $165,000 from the estate and the policy. Ben's mother, the solicitor, Mr Ian Charles Griffiths and Ben's grandfather, Mr Adrian Calvert, indicate that each is of the view that this constitutes adequate provision for Ben and will allow effect to be given to his late father's, his mother's and Ben's wishes for Ben to complete his education at a private secondary school in Brisbane and to undertake tertiary studies at university. I indicated earlier when the matter first came before me I am persuaded that the settlement reached ought to be sanctioned and that so far as Ben is concerned it is in his best interests.

[6] The outstanding issue which has caused the Public Trustee to be represented before the court relates to the identity of the trustees of Ben's fund. It was originally proposed that Mr Adrian Calvert, Ben's grandfather, and Mr John Calvert, Ben's uncle, be appointed trustees. Subsequently Mr John Calvert indicated that he was unable to take up that position. In his stead Mr Ian Griffiths, the solicitor retained by Ben's mother, was requested by her and by Mr Adrian Calvert to act as trustee jointly with Mr Adrian Calvert.

[7] When the matter was before me initially I indicated some concern that the provisions of s 59(1) of the Public Trustee Act 1978 had not been adverted to, namely:

"In any cause or matter in any court ... no settlement ... shall, as regards the claim of [a] person under a legal disability, be valid without the sanction of a court or the Public Trustee, and no money ... awarded in any such cause or matter in respect of the claims of any such person under a legal disability ... shall be paid to the next friend of the plaintiff or to the plaintiff's solicitor or to any person other than the Public Trustee unless the court otherwise directs."

"A person under a legal disability" pursuant to s 59(1A)(a) means "a child".

I directed that the solicitor for the Public Trustee be served with the material in this application and invited submissions. Mr D Hayes has appeared for the Public Trustee and has assisted with detailed submissions.

[8] Mr Ian Griffiths has agreed to accept appointment as a joint trustee for Ben. He deposes:

"In the event that I am required to perform a service in the role as Trustee for [Ben] I have agreed to charge fees for such services upon the basis of the Queensland Law Society Conveyancing Item Charges Scale of Fees."

Mr Griffiths deposes that depending upon the services which are required to be performed by him as trustee he estimates that the annual cost to the trust fund would not be likely to exceed $1,000.

[9] Mr Adrian Calvert, I discern from his affidavit, is now retired. His initial training was at Gatton Agricultural College. He worked for Australian Estates Co. Ltd, who were wool brokers and stock and station agents from 1948 until 1980. He became a registered valuer in 1967 and a Justice of the Peace in 1976. In 1980 he purchased and operated a motel in Dalby for five years and then purchased and operated the management rights in a home unit complex in Caloundra for eight years.

[10] Mr Calvert deposes that during the last 20 years or so he has invested in the stock market and other associated investments and deposes that he has a sound knowledge of business principles, trust accounts and taxation. He has made inquiries with the Public Trustee, Perpetual Trustees Limited and Permanent Trustees Limited to ascertain their respective charges and commissions for administering a trust fund of approximately $500,000 for a minor. Permanent Trustees have indicated that their estimated annual charges would $6,231. The total charge of the Public Trustee for the period of the trust, depending on the number of transactions per year, but at the high end would be approximately $7,708 for the period of the trust, that is until Ben attains his majority in July 2005 (erroneously said to be the fees per annum in paragraph 7 of Mr Calvert's affidavit).

[11] Mr Calvert deposes that he is adequately experienced in business principles and investment strategies to administer the trust fund jointly with Mr Griffiths and that he would make no charge for acting as a joint trustee for his grandson until he reaches his majority. Mr Lew Draper, associate director of Macquarie Financial Services in a letter dated 11 July 2002 writes that Mr Calvert has been a client of his firm and its predecessor, Nevitts Limited, for over 20 years and during that period Mr Calvert has been involved in investing considerable sums in shares and associated investments with the firm. Mr Draper writes that the firm has assisted Mr Calvert in his investment dealings during which he has acted in a competent and capable manner and has discharged all his obligations and commitments promptly and in a business like manner.

[12] Mr Calvert deposes that he has sought advice from Macquarie Financial Services about their recommendation for the investment of the trust fund on behalf of Ben. He exhibits an investment plan proposal prepared by a Mr Scott Mitchell of Macquarie Financial Services. Mr Calvert deposes that if appointed a joint trustee for Ben he intends to follow a moderately conservative investment strategy which would generally follow the Macquarie Financial Services investment plan proposal.

[13] Whilst Mr Calvert does not say so in as many words it can fairly be inferred that he will use the expertise of Macquarie Financial Services with respect to the investment of the fund. There is no indication in the material as to the fees which would be charged by Macquarie for any advice which they might give or brokerage fees.

[14] Ben's family asked Mr Somers to place before the court a cutting from the Courier Mail dated 23 July 2002 relating to criticism of an increase in fees levied against a particular person whose pension was administered by the Public Trustee. This, of course, does not constitute evidence of which the court can take cognisance but I mentioned it because the family is concerned to ensure that Ben's fund is not eroded by exorbitant fees which they see as being incurred unnecessarily when Mr Calvert has made himself available and Mr Griffiths' fees are modest. My only comment is to hope that the family read the whole of the news item and not just the sensational first two-thirds.

[15] The court in its protective jurisdiction is concerned to protect the interests of persons under a legal disability. A brief history of this jurisdiction is to be found in the judgment of Philp J in Katundi and Katundi (infants) v Hay [1940] St R Qd 39 at 41 and ff. The legislature has recognised this role in s 59 of The Public Trustee Act 1978 by requiring the payment of any award of damages or sum by way of settlement or compromise to the Public Trustee "unless the court otherwise directs". That is, in effect, that the court must be persuaded that it is to the greater benefit of the person under a disability that a trustee(s) other than the Public Trustee be appointed, Fowler v Grey [1982] Qd R 334 at 344.

[16] The court is concerned to ensure that the estate of an infant is duly protected against well meaning but improvident investments; innocently misapplying the estate for "family needs" rather than exclusively for the needs of the infant; and wrongful misappropriation to mention the most obvious, Fowler v Gray [1982] Qd R 334 at 344 per Senior Master Lee QC; H v The Nominal Defendant (Queensland) BC 9707535, decision of Lee J No. 966 of 1994 of 19 December 1997 at pp 2, 20 and 21; Re Public Trustee of Queensland [2000] 1 Qd R 409 at 418 per Lee J.

[17] The experience of the court over centuries shows that where a fund has been dissipated by incompetence or want of prudence or wrongdoing the beneficiary is often left with no recourse. There is often a reluctance to involve close family members in litigation, or the trustee has no assets. Whilst there is nothing to impugn Mr Calvert's and Mr Griffiths' good faith they do not depose to their worth to satisfy any claims should the fund be eroded by any of these means.

[18] Mr Calvert and Ben's mother are rightly concerned to maximise the fund so that Ben's financial future is secure. The major concern appears to be the fees expected to be charged by the Public Trustee (or, indeed, any commercial trustee). There may have been a misunderstanding as to the amount the Public Trustee would charge which I have referred to above. Mr Griffiths will, as he is entitled to, charge a fee and, at the least, brokerage fees will be charged to Mr Griffiths if and when he purchases shares on behalf of the trust. If financial planners are involved, as seems to be anticipated, they too will charge fees. The period of minority is relatively short so that the fees will not be great and there is the very important matter of the security to the fund against loss.

[19] I am not persuaded that, in the words of s 59, the court should "otherwise direct" and, accordingly, the amount of the compromise should be paid to the Public Trustee to hold for the benefit of the infant, Ben Calvert Kirk during the period of his minority.

[20] Mr Hayes has indicated that the Public Trustee will not charge a fee for this appearance.

[21] Counsel and Mr Hayes are invited to settle draft orders so far as concerns Ben. The balance will be as per draft.