Re Estate of Hurren [2023] QSC 287 (22 December 2023)

EQUITY - TRUSTS AND TRUSTEES - APPLICATIONS TO COURT FOR ADVICE AND AUTHORITY - PETITION OR SUMMONS FOR ADVICE - GENERALLY - where the

administrator of a deceased estate sought directions from the court pursuant to s 96 of the Trusts Act 1973 (Qld) or alternatively s 6 of the Succession Act 1981 (Qld) - where the administrator entered into a compromise with one of the beneficiaries with respect to a claim by the estate against the beneficiary relating to the use and occupation of a house property forming part of estate - whether the administrator should proceed in accordance with the compromise

Succession Act 1981 (Qld), s 6

Trusts Act 1973 (Qld), s 5, s 80, s 96, s 97

Baldwin v Greenland [2006] QCA 293; [2007] 1 Qd R 117, cited

Ban v The Public Trustee of Queensland [2015] QCA 18, cited

Colston v McMullen [2010] QSC 292, cited

Corbiere & Anor v Dulley & Ors [2016] QSC 134, cited

Coore v Coore [2013] QSC 196, cited

Glassock v The Trust Company (Australia) Pty Ltd [2012] QSC 15, cited

Kordamentha Pty Ltd v LM Investment Management Ltd (in liq) [2015] QSC 4, cited

Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand & Anor [2006] NSWCA 160; [2006] 66 NSWLR 112, cited

Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66, followed

Manchester Diocesan Council for Education v Commercial & General Investments Ltd [1970] 1 WLR 241, cited

Re Franks [2021] QSC 134, cited

Salmi & Anor v Sinivuori & Anor [2008] QSC 321, cited

Stephens & Anor v Chee [2015] QSC 138, cited

Tinn v Hoffman & Co (1873) 29 LT 271, cited

AP Collins for the applicant The respondents in person

• [1] This application for directions pursuant to s 96 of the Trusts Act 1973 (Qld) or alternatively s 6 of the Succession Act 1981 (Qld) concerns the administration of the deceased estate of Veronica Muriel Hurren.

• [2] Mrs Hurren died on 6 March 2009 and was survived by three children - John Francis Hurren ("John"), Peter James Hurren ("Peter") and Lynne Mary Hurren (also known as Mary Lynne Sommers) ("Lynne"). By her last will dated 19 September 2005, Mrs Hurren appointed Ian Allan Jacobs as executor and trustee and, after some bequests of personal property in favour of Lynne, left the residue of her estate to her children as tenants in common in equal shares.

• [3] On 24 September 2018, in a proceeding commenced by John against Mr Jacobs, the latter was removed as executor and the present administrator, John William Fradgley, was granted letters of administration with the will attached. He now brings this application for directions.

• [4] The issue about which relief is sought is whether the administrator should proceed in accordance with the compromise of a claim by the estate against Lynne (and Mr Jacobs) relating to the use and occupation of a house property forming part of the estate. Under that compromise, Lynne is required to pay to the estate (at least notionally) the sum of $133,573.00. The administrator seeks directions from the court to pave the way for him to implement the compromise and then finalise the administration.

• [5] Section 6(1) of the Succession Act confers jurisdiction on the court "to hear and determine all matters relating to the estate and the administration of the estate of any deceased person", and "to make all such declarations and to make and enforce all such orders as may be necessary or convenient in every such respect".

• [6] Section 96(1) of the Trusts Act enables a trustee1 to apply upon a written statement of facts to the court for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee. By s 96(2), an application made under this section is required to be served upon, and the hearing thereof may be attended by, all persons interested in the application or such of them as the court thinks expedient.

• [7] Although s 6 of the Succession Act and s 96 of the Trusts Act are functionally equivalent,2 s 96 is primarily engaged by this application because the administrator has proceeded (in part) on a written statement of facts. As I have previously said,3 in contrast to the court's usual function of deciding disputes between competing

1 By s 5 of the Trusts Act, "trustee" is defined to include "personal representative".

1. Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66, [48].

3 Corbiere & Anor v Dulley & Ors [2016] QSC 134, [2]-[4], [23]-[29].

litigants, the jurisdiction conferred by s 96 permits the giving of "private advice"4 and directions to a trustee regarding the discharge of his or her duties and, once given, a trustee acting under any such direction will be deemed to have discharged those duties notwithstanding that the order giving the direction is subsequently "invalidated, overruled, set aside or otherwise rendered of no effect, or varied".5 Indeed, the only circumstances where such a direction will not have that effect are where the trustee is guilty of fraud, wilful concealment or misrepresentation in "obtaining the direction or in acquiescing in the court making the order giving the direction".6 Section 96 of the Trusts Act therefore offers a considerable safety net to trustees, but it also serves to protect the corpus of the trust from being wasted on proceedings that should not be prosecuted or defended and ensures that the interests of the trust will not be "subordinated to the trustees' fear of personal liability for costs".7

• [8] Furthermore, as I have just touched on, an application pursuant to s 96 proceeds on a "written statement of facts to the court" which is prepared by the applicant,8 and those facts are then assumed to be correct for the purposes of deciding the application.9 Often, as was the case here, the stated facts are considered with the legal principles applying to the proposed or existing proceeding in a written opinion of counsel which is provided to the court but not to the beneficiaries.10 Importantly though, it is not the function of the court to decide disputed questions of fact any more than it is to decide the ultimate issues in the proceeding in question; the sole purpose in giving advice is to determine what should be done in the best interests of the trust estate.11 As Morrison JA observed in Ban v The Public Trustee of Queensland:12

"The right to approach the court in this way has been held to apply where the trustee is in genuine doubt as to the question to be answered. In my view this follows from the words of the statute themselves, requiring that the court's opinion or advice be in relation to a 'question, whether of law or of fact, arising under this Act or in the course of the Public Trustee's duties'." [References omitted]

• [9] Accordingly, in much of what follows, particular reliance is placed on the accuracy of the further amended statement of facts provided by the administrator.13 Of course I have, in addition, considered the written opinion of counsel as well as the affidavit material filed by the administrator and the respondent beneficiaries.

1. Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66, [64]-[65] per Gummow ACJ, Kirby, Hayne and Heydon JJ.

5 Trusts Act 1973 (Qld), s 97(1).

6 Ibid s 97(2).

1. Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66 at 93 - 94 [71]-

8 Trusts Act 1973 (Qld), s 96(1).

1. Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66 at 95 - 96 [79]-

10 See, eg, Coore v Coore [2013] QSC 196 at [21]; Stephens & Anor v Chee [2015] QSC 138, [16].

11 Glassock v The Trust Company (Australia) Pty Ltd [2012] QSC 15, [14]; Coore v Coore [2013] QSC 196, [11]; Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66, [71].

12 [2015] QCA 18, [57].

• [10] The receipt of affidavit evidence on an application such as this is not uncommon.14 That is because in any given case it might be thought desirable by an applicant to verify some of the stated facts by affidavit or for a respondent to advance sworn evidence that might bear on the exercise of the court's discretion. Here, a considerable body of affidavit material was received from the administrator, Peter and Lynne. Nevertheless, it should not be overlooked that the application is to be determined primarily "upon a written statement of facts" and that is the approach I have taken.

• [11] At the time when the applicant was appointed as administrator, the principal assets of the estate were two adjoining blocks of land in Biggera Waters, one of which had a dwelling house constructed on it. Lynne and, on occasion, Mr Jacobs resided in that house. They were asked to vacate but refused.15 Lengthy, contested proceedings in both the Magistrates Court and the Queensland Civil and Administrative Tribunal ensued and it was not until 19 October 2019 that vacant possession was obtained. The properties were then sold in early 2020. The net proceeds of sale totalled $1,485,510.

• [12] Thereafter, consideration was given by the administrator to potential claims by the estate against each of Lynne and Mr Jacobs arising out of their ongoing occupation of the house and use of the adjoining block as well as the apparent failure by Mr Jacobs to properly discharge his duties as executor of the estate, that is to say, by failing to promptly realise the assets of the estate or, relevantly, obtain market rent for the properties while that was occurring. A rental appraisal for the properties for the period 7 March 2009 to 14 October 2020 from a registered valuer came to

• [13] Although demand was made on Lynne on behalf of the administrator to consent to the sum of $267,146.8716 by way of occupation rent or mesne profits being deducted from the share of the proceeds of the residuary estate to which she would be entitled but for the claim, and draft recovery proceedings prepared, the administrator formed the view that any further pursuit of Lynne with respect to this claim would not be worthwhile from the point of view of the estate and would only serve to further delay its administration. Pursuit of Mr Jacobs was also rightly seen to be foolhardy given that he is in all probability a man of straw. An application for directions from the court was accordingly made and, on 12 August 2021, Applegarth J agreed, ordering that the administrator would be "justified in taking no further action against [Lynne and/or Mr Jacobs] in respect of or relating to the possession of the properties ...".

• [14] Notwithstanding these directions, the administrator continued to deal with Lynne in an attempt to negotiate some contribution from her with respect to the claim for the overall benefit of the estate. It appears that the administrator continued to do so because he was faced with ongoing demands from Peter to proceed against Lynne (and Mr Jacobs) on the one hand and cross-demands from Lynne on the other. If he

14 See, eg, Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand & Anor [2006] NSWCA 160; [2006] 66 NSWLR 112, [13]; Salmi & Anor v Sinivuori & Anor [2008] QSC 321, [15]-[17]; Glassock v Trust Company (Australia) Pty Ltd [2012] QSC 15, [26]; Kordamentha Pty Ltd v LM Investment Management Ltd [2015] QSC 4, [8]-[10].

15 By transmission application lodged on 5 October 2018, the administrator caused the title to both blocks to be transferred into his name as personal representative.

proceeded in accordance with the directions made by Applegarth J, those claims and cross-claims would be left unresolved whereas it must have been thought that this would likely not be the case if he was able to negotiate a payment from Lynne for at least a portion of the estate's claim against her for occupation rent. Eventually, on 1 September 2022, the administrator communicated an invitation to treat to Lynne to compromise the estate's claim on the basis that she agrees to pay the estate $133,573 from the distribution she would otherwise have received as the beneficiary of one- third of the residue. In her response on 5 September 2022, Lynne accepted the invitation to treat - and therefore made an offer - on certain conditions which included the administrator paying outstanding Council rates owing by her on another property.

• [15] The conditions attaching to Lynne's offer require some elaboration. According to Lynne, the outstanding rates were in the sum of $12,891.25 and needed to be paid "in cash only to a branch of the Commonwealth Bank convenient to the administrator by no later than 3 pm that day ...". Unless that occurred, Lynne believed, her property would be sold by the Council at auction. After receiving this offer, there were further exchanges between the solicitors for the administrator and Lynne about the mode of payment as well as other matters, after which the sum of $13,000 was paid directly to the Council on behalf of Lynne.17 On the following day, Lynne forwarded an email to the solicitor for the administrator in these terms:

"Dear Ms Miller, please accept my heartfelt thanks for all your efforts to pay my outstanding rates in time to stop the auction.

I have not long received a message from the council confirming that they received your $13,000 payment today and that they have now removed my property from the council auction list."

• [16] By letter dated 21 September 2022, the solicitors for the administrator advised John and Peter of the compromise. Since then, John has supported the administrator proceeding in accordance with it and then finalising the estate, Peter has opposed the administrator doing so (still wishing for him to proceed against Lynne and Mr Jacobs on behalf of the estate) and Lynne has attempted to step away from it.

• [17] As for Peter, much of the content of the material (and submissions) advanced by him to the court is devoted to criticism of the administrator about a range of matters that are best summarised as complaints to the effect that the administrator has not actively or properly administered the estate. Peter remains steadfast in his view that the compromise be ignored, that his sister and Mr Jacobs be sued by the estate and that the administrator be removed and replaced by someone else. In what seems to me to have been an attempt to placate him following an exchange of correspondence after the compromise was communicated, on 27 October 2022 the solicitors for the administrator put this proposal:

17 This payment was made by credit card and, although that did not accord with the mode of payment originally stipulated by Lynne, its object - the immediate payment of the rates using cleared funds - was still achieved. It was therefore effective to fulfill that condition of the offer: Tinn v Hoffman & Co (1873) 29 LT 271, 274, 278; Manchester Diocesan Council for Education v Commercial & General

Investments Ltd [1970] 1 WLR 241, 246.

"[I]n consideration of your wishes and the contents of your correspondence, the Administrator does not wish to enter into a compromise without providing a course which permits litigation to be pursued. As the Administrator does not consider it is in the interests of the estate to incur costs on behalf of the estate for what may prove to be fruitless and costly litigation, the Administrator is prepared to provide you with the opportunity to indemnify the estate for the costs of the proposed litigation. If that indemnity is entered into, the Administrator will obtain further advice as to the prudency of such a course.

In other words, if you are prepared to pay the costs of the litigation from your share of the estate and provide an indemnity to the Administrator, the Administrator will take advice and give due consideration to pursuing that litigation.

However, should you not wish to take up the proposal of indemnifying the Administrator for any legal action and there is continued objection from you to the [compromise], the Administrator will seek directions from the Court pursuant to section 96 of the Trusts Act 1973 (Qld) as to whether he is justified in compromising the proceedings. Unfortunately, if such a course becomes necessary, that will incur yet further costs and delay for the estate administration."

• [18] Peter did not take the administrator up on his offer; no indemnity was forthcoming. Nor has he brought any application to remove the administrator, although he has consistently advanced a submission to the effect that such an order should be made on this application.

• [19] As for Lynne, she has asserted that the compromise is of no effect because, as I understand her claims, she maintains that she was acting under some form of undue influence or duress at the time when she entered into it. In that regard, she was afforded ample time (and more than one adjournment) to make application to set aside the compromise, but she has not done so. In the absence of such an application, it is not for the court on this application to determine disputed questions of fact. Rather, as I earlier explained (at [7] - [10]), when determining what should be done in the best interests of the estate regard must primarily be had to the written statement of facts. In any event, after a review of all the material Lynne has advanced, I could not be satisfied that her entry into the compromise was other than voluntary.

• [20] Here, the further amended statement of facts not only establishes the compromise but also the wisdom of proceeding with it to finally bring the administration of the estate to a conclusion. Even putting to one side the feature that the estate is in all likelihood bound to do so, I have no doubt such a course is in the best interests of the estate. On the stated facts, the cost of proceeding with the claim against Lynne far outweighs the possible benefit that might be secured for the estate, and directions will be made accordingly. To the extent that Peter has actively propounded the view that the estate should abandon the compromise in favour of litigation against Lynne and Mr Jacobs, I reject that view for the same reason.

• [21] Once that conclusion is reached, Peter's other submission that the administrator

should be removed and replaced falls away. In that regard, the feature that Peter has not filed a removal application is somewhat different to the failure on the part of Lynne to do so. That is because the administrator's application was based in part on s 6 of the Succession Act 1981 (Qld) and that provision confers a wide discretion on the court to remove a personal representative in an appropriate case by conferring power on the court to "determine all testamentary matters relating to the ... administration of the estate" and "to make ... all such orders as may be necessary or convenient". The jurisdiction to do so is both supervisory and protective.18 In such a case, the question for the court is whether removal and replacement is necessary to ensure the due and proper administration of the estate,19 and this question must be answered by reference to what is in the best interests of persons who have an interest in the estate, including creditors and beneficiaries, and its due administration.20 Furthermore, the feature that the administrator was appointed by order of the court would make no practical difference because what was done can always be undone and, as such, there is ample power to vary that appointment by removing the administrator and appointing someone else to act in his stead. However, because I will direct that the administrator proceed in accordance with the compromise, very little remains to be done to wind up the affairs of the estate. In fact, once costs are assessed, the only remaining task will be to distribute the residue to the beneficiaries in accordance with my directions and the terms of the will. It would not be in the best interests of the estate to remove and replace the administrator at this late stage, even if there was substance in any of Peter's complaints. Put another way, that would not be necessary to ensure the due and proper administration of the estate.

• [22] The appearances on 3 April 2023, 14 April 2023 and 21 June 2023 would not have been necessary but for Lynne's applications to adjourn the hearing to assemble material to oppose the application. That all came to nought. The administrator's costs thrown away by those appearances, to be assessed on the indemnity basis, should be paid by Lynne from her share of the residuary estate. Otherwise, the administrator's costs, again to be assessed on the indemnity basis, should be paid from the estate of the deceased.

18 Baldwin v Greenland [2006] QCA 293; [2007] 1 Qd R 117, [44]. And see Trusts Act, s 80.

19 Baldwin v Greenland [2007] 1 Qd r 117, [44]; Colston v McMullen [2010] QSC 292, [38]-[40].

20 Re Franks [2021] QSC 134, [44].