Telford v Telford [2003] VSC 8

5. The deceased's estate is said to consist of a property of some 35 acres in two titles at Maldon, farming equipment and personal effects.

8. Whilst the material is incomplete, it seems that Probate has been granted but that administration is incomplete.

11. By originating motion filed 27 November 2002 Christopher Telford, one of deceased's four sons by his first marriage, relevantly sought - "(1) an order pursuant to s.48 of the Trustee Act 1958, insofar as the same is necessary, that the plaintiff be appointed as a co-trustee of the Will and estate of the deceased... (3) Alternatively, an order that the defendant be directed to appoint an additional trustee pursuant to s.30 of the Settled Land Act 1958." [1] Consequential orders were also sought. I need not refer to them. The defendant, it must be self-evident, is the deceased's widow, sued as executrix of his Will and trustee of his estate.

14. Affidavits have been sworn in support of the application by the plaintiff and his three brothers. Affidavits have been sworn in opposition by the defendant and the solicitor, Mr Heydon, who prepared the will to which I have referred. A good deal of material set out in the affidavit of the plaintiff and his brothers is of hearsay character. Mr Boaden of counsel for the defendant did not seek to have that material deleted, or that I should not consider it. Neither party required cross-examination of the deponents for the other side. The absence of cross-examination and the presence of hearsay material does not create an altogether satisfactory situation but the answer to the application is clear enough.

17. In my opinion the plaintiff faces an insuperable problem in that at the present time there is no trust and the defendant does not act as trustee. Administration of the estate is incomplete.

20. In Re Whitchurch[2], Young CJ ordered that applicants be appointed as trustees of an estate, its administration having been completed. His Honour said this at 721 to 722:

"Re Ponder [1921] 2 Ch. 59 is authority for the proposition that an executor, where the estate has been fully administered, becomes a trustee. In that case Sargant J held that the court might appoint a new trustee to act jointly with him. That decision was followed by Danckwerts J in Re Cockburn's Will Trust [1957] Ch. 438 where his Lordship said at pp.439-40: 'Whether persons are executors or administrators, once they have completed the administration in due course, they become trustees holding for the beneficiaries either on an intestacy or under the terms of the will and are bound to carry out the duties of trustees ... and are entitled to appoint new trustees in their place and must clear themselves from those duties which were not expressly conferred on them under the terms of the testator's will and which, for that purpose, they are not bound to accept'."

"An executor who has become a trustee can thus appoint a new trustee in his place. The court can also in such a situation appoint a new trustee in place of the executor/trustee. That is what was done by Herring CJ In the Estate of Dunn [1963] VicRp 27; [1963] V.R. 165."

26. Consistent with what the learned Chief Justice there said it seems to me impossible in the presently revealed factual situation to make the order which the plaintiff seeks. I should not wish however to let the matter rest there, in case the plaintiff should treat it as an invitation to launch some fresh proceeding in the future.

29. I think, with respect, that Mr Morrison of counsel for the plaintiff said everything that could possibly have been said today in support of his client's application, that is, as to the merits of the matter. But I am far from persuaded that the application had any merit at all. It is possible, I think, to trace a distinct shift in the plaintiff's position since this proceeding commenced in November last year, and I think that shift in position reveals the essential weakness of the plaintiff's position.

32. When the matter commenced the plaintiff in his first affidavit at paragraph (7) boldly asserted that the defendant was convicted in the Magistrates' Court at Castlemaine about 12 years ago of social security fraud. Presumably the purpose of that assertion was to show that if the defendant was not disqualified from being a trustee, see s.48(1) of the Trustee Act 1958, she was at least a most unsatisfactory person to be solely in control the deceased's estate. When the defendant deposed that the had been no such conviction the plaintiff and his brothers swore affidavits, in the plaintiff's case a second affidavit, to the effect that there had been some social security fraud committed by the defendant but that it had been covered up by a payment made by the deceased. Today in his submissions Mr Morrison did not refer to that matter, whichever version be considered, at all.

35. Looking again to the plaintiff's first affidavit, I note that he alleged that the land was not being looked after properly and had considerable grass growth presenting a fire risk. The defendant and her solicitor responded that by reason of the drought the land is virtually bare and presents no fire risk at all. Nothing about that matter was mentioned by Mr Morrison in the course of his submissions today.

38. Again, by paragraph (8) of his first affidavit the plaintiff deposed that the defendant is a pensioner and had said to one his brothers that she would need to sell plant and equipment on the farm to pay outstanding rates. Not so, deposed the plaintiff. This was another matter not raised by Mr Morrison. I make it clear that I do not in any way blame Mr Morrison for not raising these matters. They can be compared, however, with the case was that was advanced today.

41. I should mention other aspects of the plaintiff's first affidavit. He deposed that the defendant was not properly looking after the hobby farm. The defendant denied that allegation. Nothing more has been said about it. Further again, the plaintiff deposed by paragraph (12) of his first affidavit that there was a dispute in existence relating to plant and machinery. He exhibited in support of that assertion a letter from the defendant's solicitor to his solicitor dated 15 November 2002. As I read it, however, that letter, Exhibit CGT6, sought to resolve any dispute as to the ownership of items of equipment on the deceased's land - not to perpetuate a dispute. Today, Mr Morrison told me from the Bar table that there is no extant dispute.

44. So much for the case as initiated by the plaintiff, noting also that the plaintiff sought simply that he be appointed a co-trustee, there being no suggestion that the further trustee ought be a professional trustee.

47. Let me turn to what Mr Morrison submitted today. He contended, first, that the deceased was at the least unwise to appoint a sole executor/trustee and that the deceased's solicitor ought not have advised him that it was proper to make such an appointment. Second, he submitted that the Will was complicated by the defendant being given absolutely one-fifth of the land as well as a life interest in the remaining four-fifths. Third, he argued that in the event that the defendant predeceased the plaintiff and his three brothers, as might be thought likely, there would be no-one to deal with the arrangements necessary for the land.

50. Counsel referred to in Re Tempest[3]. Looking to the matters there said to be relevant, he sought to deflect consideration of what Turner LJ said was the first matter to be considered in exercising a discretion to appoint new trustees, that is, regard to the wishes of the author of the trust. Here, according to Mr Heydon's affidavit, the wishes of the deceased were perfectly clear. He wanted the defendant to be his executor and trustee and no-one else. Mr Morrison sought to meet that problem by drawing attention to what he said was the lack of wisdom of appointing a sole executor/trustee. That does not seem to me to meet the first consideration to which the Court of Appeal referred to in Re Tempest at all.

53. I turn to the second of the matters mentioned in Re Tempest, that is, and I quote from the headnote: "The court will not appoint a person with a view to the interests of some of the cestuis que trust, in opposition to the interests of others." Recognising that the plaintiff and his brothers are apparently not well disposed to the defendant Mr Morrison abandoned, in effect, his client's initial claim that his client ought be appointed a co-trustee. He proposed that an independent trustee be appointed. The likely fact that an independent trustee would be a substantial cost burden upon the estate, which it seems clear is of small dimensions, did not seem to bother him, or at least bother his client. But I do not consider it to be insignificant, particularly in circumstances where nothing has been placed before the court that persuades me that the plaintiff is unlikely to abide her obligations, first as executor and then as trustee.

56. Mr Morrison then went to the third of the considerations mentioned in Re Tempest, that is, that the court will have regard to the question whether the appointment will promote or impede the execution of the trust. He submitted in that connection that the proposed appointment would promote the trust because there is a troubled relationship between the defendant, the plaintiff and his brothers such that cooperation may prove difficult. He mentioned that there had already been problems with questions of ownership of machinery. He submitted that the defendant has no disclosed history of business type activity or expertise. He contended that if the defendant predeceases the plaintiff and his brothers then a problem of the administration of the land will arise. Finally, he submitted that if the defendant wished to sell the land it would be desirable to have an independent co-trustee in place.

59. Some of the matters that Mr Morrison raised to support the proposition that appointment of a further trustee would promote the trust seemed to me to very problematic. It can be accepted that there is a troubled relationship between the defendant, the plaintiff and his brothers. But how that would be solved by the appointment of a further trustee, whether the plaintiff or an independent trustee, is not at all clear. Next, the reference to problems with questions of ownership of machinery refers to a problem that apparently existed in the past but has now been resolved.

62. Counsel's next submission, that the defendant has no disclosed history of business type of activity or expertise, arose so far as I can see for the first time in his submissions today. It does not seem to be either supported or disclaimed by the affidavit material but simply to be a matter of speculation. In any event, I should not have thought that it would take any great business expertise to run 35 acres of land at Maldon.

65. At the heart of Mr Morrison's submissions as to why the appointment of a new trustee would promote the trust was an apparent concern that the defendant could borrow on the property up to the hilt, dissipate the borrowings, and so leave the plaintiff and his brothers with no equity in the land which is to be theirs one day. It really is no more than an exercise in speculation to imagine that the defendant will do any such thing. The same might be said of any executor/trustee with the power of sale and power to borrow. In any event, the executor by his will, consonant with his expressed intentions in conversation between and he and his solicitor, appointed the plaintiff and none other to be his executor and trustee, and that is surely something that is of importance in considering whether a further trustee should be appointed.

68. In this portion of my reasons I have referred to a further trustee as if there were a trust already in existence with the plaintiff as an existing trustee. I have done so in order to deal with the substance of the argument raised, as distinct from the threshold question. But I am not to be taken as having deviated from my conclusion that there is not yet a trust and that the defendant is not yet a trustee. The proceeding must be dismissed.

74. In my opinion the plaintiff should pay costs on a solicitor and client basis. I think it was wrong for the plaintiff to make an allegation that the defendant had been convicted of a criminal offence if that was not the case. Such an allegation should not lightly have been made. The defendant has deposed that the allegation was untrue. It was obviously made with a view to blackening the defendant's reputation and thus bearing upon the propriety of her remaining a sole trustee once administration of the estate was complete.

77. That is not the only reason why, in my opinion, solicitor and client costs ought be paid here. I have referred in my reasons to the pretty remarkable change of position of the plaintiff in the period since the proceeding was commenced. Allegations were raised that have been specifically abandoned or not pursued. They have been replaced by reliance on other considerations, some raised very recently indeed. It is difficult to avoid a conclusion that the plaintiff has been animated by his disaffection for the defendant and has been prepared to shift his case around. That sort of conduct on the part of a litigant ought to be strongly discouraged by the courts. One way of discouraging it is to make an order for solicitor and client costs. The proceeding, then, is dismissed and the plaintiff must pay the defendant's costs on a solicitor and client basis.

[1] The claim raised by paragraph 3 of the Originating Motion was not pursued before me.

[2] [1990] VicRp 61; [1990] VR 719.