Supreme Court of WA|1998-08-31|Before: Mr J, White J

The application has not been diligently pursued; the delays on the part of the plaintiff in pursuing it have resulted in a situation where the conflict of interest has given rise to completed acts on the part of the defendants and it would appear that nothing further is to be done pending the determination of the Action. Nor, in my opinion, would new executors and trustees be able to do anything effective to advance the interests of the Estate pending that determination.

In my opinion, the present situation is that there is the potential for an operative conflict to arise in the event that the decision in the Action is to the effect that the Deed is voidable by the Estate, but not void. That may or may not occur.

I am persuaded that there is no immediate threat of mischief in the continuation of the defendants as executors and trustees of the Will (see: Gowans v Watkins, (supra)) and that there is nothing to indicate that the trust property of the Estate will not be safe pending the determination of the Action. I have come to the conclusion that, in the exercise of my discretion, I should refuse the application at this stage. In saying that, I do not, however, preclude the possibility of a similar application being made if circumstances warrant it in the future.

Administration Act 1879

Administration Act 1908

(Family and Dependants Provision) Act 1972

Rosemarie Porteous & Ors v Georgina Hope Rinehart (as Executor and Trustee of the estate of Langley George Hancock) & Ors [1998] WASC 270 (31 August 1998)

Hackett & Ors v Hackett & Anor [1922] NZLR 242

Hunter v Hunter [1937] NZLR 794

In Re Cloverdale, deceased [1909] VicLawRp 43; [1909] VLR 248

The King v The Registrar of Titles; Ex parte Irish [1915] VicLawRp 92; [1915] VLR 622

It is the defendants' case that they are executors and not trustees. It is, they submit, a question of fact whether a person appointed as both an executor and a trustee is acting in one capacity or the other: Brougham v Poulett [1855] EngR 53; (1855) 19 Beav 119 at 134; [1855] EngR 53; 52 ER 294 at 300; Pagels v McDonald & Anor [1936] HCA 15; (1936) 54 CLR 519 at 526, Burke & Anor v Dawes & Anor [1938] HCA 6; (1937-1938) 59 CLR 1 at 13-14, 19-20 and Commissioner of Stamp Duties v Livingston [1964] UKPCHCA 2; (1964) 112 CLR 12 at 17. That submission is not, as I understand it, in dispute in this case.

Mr Archer, for the defendants, submitted that there is a precise turning point in an estate when an executor becomes a trustee, being the point at which his executorial duties have all been performed but he remains in possession of trust property. I think that that is correct in relation to each item of specific property in an estate. He points out that an executor can become the trustee of estate property at different times so that he may act in both capacities at the same time - in relation to different property. I accept this submission: In re Earl of Stamford; Payne v Stamford [1896] 1 Ch 288 at 297; In re Timmis (supra); In re Cockburn's Will Trusts; Cockburn v Lewis [1957] 1 Ch 438 at 439-450; Attenborough & Son v Solomon & Anor [1912] UKHL 4; [1913] AC 76 at 82-83; Wise v Whitburn [1924] 1 Ch 460 at 468-469; Re Donkin Deceased; Riechelmann v Donkin [1966] Qd R 96 at 119.

Apart from the provisions of the Trustees Act, the Court has an inherent jurisdiction to remove trustees and the dominant consideration in exercising either the statutory or inherent jurisdiction to remove trustees must be the welfare of the beneficiaries: Letterstedt v Broers (1884) 9 AC 371; Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572; Re Matheson; Ex parte Worrell v Matheson [1994] FCA 1021; (1994) 121 ALR 605; Gava & Anor v Grljusich & Anor, unreported; SCt of WA; Library No 960010; 11 January 1996. This is a power which will be exercised cautiously.

It was held in Hunter & Anor v Hunter [1938] NZLR 520 that the jurisdiction of the Court to remove a trustee is ancillary to its principal duty to see that the trusts are properly executed and, if the Court is satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee may be removed. The main guide in the exercise of this jurisdiction must be, not whether the trustee has committed breaches of trust, but the welfare of the beneficiaries. At 530, Myers CJ said:

Mr Archer then submitted that the fact that the testator has chosen particular persons to be executors and trustees, particularly where the potential for conflict must have been apparent to him, is a matter to which great weight must be given by the Court. See: In re Tempest (1866) LR 1 Ch App 485 at 487; In re Wilson [1923] VLR 277 at 278; Monty Financial Services Ltd v Delmo (supra). He submitted that the Court is particularly reluctant to interfere with the testator's choice where he must have appreciated the potential conflict of interest, yet made a deliberate choice of appointing a person with such potential conflict. See Hordern & Anor v Hordern & Anor [1910] AC 465 at 475; Guazzini v Pateson (1918) 18 SR(NSW) 275 at 292-294; Mordecai v Mordecai & Ors (1988) 12 NSWLR 58 at 66-67.

Rosemarie Porteous & Ors v Georgina Hope Rinehart

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Rosemarie Porteous & Ors v Georgina Hope Rinehart (as Executor and Trustee of the estate of Langley George Hancock) & Ors [1998] WASC 270 (31 August 1998)