and T p 77, l 25 - l 39:
"Q. I see, so is what you were doing building up a contingency fund out of [the beneficiary's] entitlement in the estate so when expenses in the future such as tertiary education arose there would be a fund available for that?
A. No, sir. Without the correct planning in place now there would not be funds available for [the beneficiary] for his secondary and tertiary education. If this was stripped of its assets and slowly tied down a bank account, for example, and then the capital asset of that is not growing but it is sinking, then the only result is that there be less funds in the future so to asset strip now is a very short term view for anybody. The longer, I have to take into account the short, medium and long. I have been in business for 25 years and have a proven track record to take all 3 views. To strip the assets to strip anything from that estate in those last couple of years with have been detrimental and that is why I feel my sister's obligations for [the beneficiary], for me to step in personally because I have the ability to do so was, far, far more in the interests of the estate than anything else I could do."
36 The defendant stated that he very much respects Paul as a father, and remains willing to discuss with him the plaintiff's needs.
The principles
37 The jurisdiction of the court to remove a trustee was stated in Miller v Cameron (1936) 54 CLR 572 (pp 580-581) by Dixon J (with whom Evatt and McTiernan JJ agreed) as follows:
"The jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee. In deciding to remove a trustee the Court forms a judgment based upon considerations, possibly large in number and varied in character, which combine to show that the welfare of the beneficiaries is opposed to his continued occupation of the office. Such a judgment must be largely discretionary. A trustee is not to be removed unless circumstances exist which afford ground upon which the jurisdiction may be exercised …"
38 The observations of Latham CJ (p 575) and Starke J (p 579) do not differ in principle. With reference to Letterstedt v Broers (1884) 9 App Cas 371 (pp 386, 387) their Honours emphasised that in determining whether or not it is proper to remove a trustee, the court will regard the welfare of the beneficiaries as the dominant consideration, and a trustee may be removed if the court is satisfied that his continuance would be detrimental to their interest.
39 With regard to these principles Bryson J in See v Hardman [2002] NSWSC 287 said:
"17 Within the principle so stated the court has power to remove a trustee who has not acted in breach of trust and has not been guilty of misconduct, and the court might decide, for the purpose of seeing that trusts are properly executed, to remove a trustee whose conduct had not been improper in any way. This could only happen rarely. A state of conflict with a beneficiary or other interested person might, at least in concept, so interfere with the administration of a trust as to cause the court to remove the trustee. An application for removal naturally tends to take the form of charges of misconduct against the trustee, but is not necessarily to be disposed of according to findings upholding or dismissing those charges. The true issue is not whether there have been breaches of trust or misconduct. See Hunter v. Hunter & Anor [1938] NZLR 520 at 529 (Myers CJ) and at 556 where Northcroft J said:
The court, however, is not concerned with a vindication of the appellants, but with the welfare of those for whom the trust was created."
40 The cases indicate that a state of conflict, tension, friction or dissension between trustees and beneficiaries is not of itself sufficient to justify removal of the trustee. However, where it is likely to hinder the trustee in the performance of his duties to the detriment of the beneficiaries, the court may find that the trustee should be removed (Letterstedt p 389; Craven-Sands v Koch [2000] NSWSC 374 pars 204, 209; Lewin on Trusts 2008 Ed pars 13-50, 13-56).
Determination
41 The relevant terms of the will are set out above. In my opinion the requirements imposed upon the defendant as the trustee of the estate are, as a matter of construction, clear. The testatrix has dealt separately with the assets of Jiwana of which she was the sole shareholder, and also with her share in Motor Direct of which she was a 50 per cent shareholder.
42 In my opinion it was the intention of the testatrix to leave the Jiwana properties at Surry Hills and Alexandria, and the income and profits earned by the company, to the plaintiff. She appointed the defendant as trustee to hold and manage the properties until the plaintiff reached the age of 21 when they are to be transferred to him. Similarly, the defendant is also to manage the companies' money for the same period and then give it over to the plaintiff. He is also to draw on the companies' funds to meet the plaintiff's necessary education and living expenses until he becomes 21.
43 Similar provision was made for the testatrix's share in Motor Direct, the intention being that until the plaintiff reaches the age of 21 the monies referable to her share be managed by the defendant, and be available to meet the plaintiff's living expenses.
44 In my opinion the will manifests the testatrix's intention that the plaintiff should be given the Jiwana properties and her share in Motor Direct in specie. As is evident, the management discretion of the defendant is wide, subject to the general condition that the interests and welfare of the plaintiff are paramount considerations.
45 It may be observed that the will does not guarantee the availability at all times of funds to meet the plaintiff's expenses. It directs the trustee in the exercise of his discretion to provide monies for that purpose, presumably if and when available. It is not for the court to interfere with the trustee's role absent grounds for doing so. The question does not arise in this case as the plaintiff makes no allegation of mismanagement, misconduct or incompetence on the part of the defendant in performance of the trust.
46 For the plaintiff it was submitted that as his legacy consisted of properties of substantial value, the defendant had acted against his interests in declining to contribute to his expenses on the ground that the estate had no money. It was put that the defendant's refusal to liquidate assets to create a stable source of income to meet the plaintiff's living expenses was also contrary to his interests. It was put that an additional consideration relevant to removal was the defendant's evidence that he drew on the income generated by the assets held for the plaintiff to pay estate and other legacies. It was argued that, combined with the fact that Paul and the defendant were not on speaking terms, these matters warranted the conclusion that the continuation of the defendant as trustee would be adverse to the plaintiff's future welfare and, accordingly, he should be removed, and a new trustee appointed.
47 As I understood the plaintiff's case, which was based on the defendant's failure to make any payments before November 2009 and the existence of a state of animosity between Paul and the defendant, the essential question for consideration was whether, in the future, there will be personality difficulties between Paul and the defendant such as to impede the due performance of the trust.
48 Having regard to the totality of the evidence I find that personality differences brought about a tense and poor relationship between Paul and the defendant at about the time of the testatrix's death, and such relationship continued to the time of the hearing of these proceedings. Other than on occasions concerning these proceedings, and the related mediation in September 2009, they have not spoken since June 2008.
49 Although no payments were made for the plaintiff by the defendant from the estate prior to November 2009 there was no evidence that the lack of funds was detrimental to the plaintiff, or was the product of such animosity as may have existed between the defendant and Paul. Relevantly, apart from the occasion on 30 January 2008 Paul provided no information as to the plaintiff's needs, and made no request for funds.
50 The defendant's explanation for the failure to provide funds prior to November 2009 was detailed in his evidence as set out above (pars 32-35). I accept that evidence as truthful. In essence, it reflects the defendant's present view that it is in the plaintiff's interests that the trust property not be sold, and that it be so managed that its liabilities are reduced in order to accumulate for the future a surplus of funds sufficient to meet the costs associated with the plaintiff's secondary and tertiary education, and to contribute towards his living expenses in the interim while his requirements are likely to be less. In my opinion, no criticism can be reasonably made of him for taking this approach, and there was nothing to indicate that it was influenced by his relationship with Paul.
51 At the conclusion of the hearing the court was left with no evidence that the plaintiff's welfare has been adversely affected in any way whatsoever by the conduct of the defendant as the trustee of the estate, or by conduct attributable to his personal relationship with Paul. My conclusion is that there is no evidentiary support for an order for the removal of the defendant by reason of his failure to make any payment towards the plaintiff's maintenance and related expenses and/or attributable to the existence of a state of animosity between himself and Paul. However their relationship may be described, there is no evidence that it has adversely affected the plaintiff's interests.
52 During final submissions I stated (T p 84) that I was satisfied on the evidence (and it was common ground) that both Paul and the defendant are devoted to the plaintiff and each was concerned to act in his best interests.
53 With regard to the future, during the hearing the defendant agreed to provide Paul, on behalf of the plaintiff, accounting information in relation to the trust, Jiwana, and Motor Direct as detailed in Ex B by 31 December each year. He also stated his readiness to discuss with Paul the plaintiff's requirements from time to time. I do not doubt that he will. There is no reasonable basis for doubting that the defendant is well aware of his duties towards the plaintiff, and would fairly consider, and to the extent it is prudent to do so, would attend to providing for, his requirements as and when he is informed of them.
54 It is evident that Paul and the defendant are each concerned to advance the welfare of the plaintiff. As already stated, the evidence does not prove that the past personal relationship between them operated in any way detrimental to the plaintiff. In my opinion, there is no basis for a reasonable apprehension that in the foreseeable future there is a likelihood that the relationship will develop into one of such animosity as to impede the defendant in the discharge of his duty to the plaintiff. In any event, past failures, if established, do not necessarily justify the prediction that similar failures will occur in the future. The evidence in this case is against such a prediction.
55 For the above reasons, in my opinion no case as propounded by the plaintiff has been made out to justify an order for the removal of the defendant as trustee. This claim must be refused.
The claim under the Family Provision Act
56 In the alternative, the plaintiff sought an order that provision be made for his maintenance, education, or advancement pursuant to s 7 of the Act out of the estate. The precise terms of the order sought were not articulated. Various possibilities were suggested, namely: