Public Trustee re Estate of T [1999] NSWSC 1027

New South Wales Supreme Court CITATION : Public Trustee re Estate of T [1999] NSWSC 1027 CURRENT JURISDICTION : Equity FILE NUMBER(S) : 2887 of 1999 HEARING DATE(S) : 6 July, 2 and 23 August and 11 October 1999 JUDGMENT DATE : 11 October 1999

PARTIES : Public Trustee Re Estate of T JUDGMENT OF : Windeyer J at 1

COUNSEL : Mr. L. Ellison SOLICITORS : P.J. Whitehead, Solicitor for the Public Trustee CATCHWORDS : TRUSTS - judicial advice sought pursuant to s63 of the Trustee Act 1925 - whether funds held on trust for children should be used to bring proceedings against their mother for the benefit she took from deceased's estate - reasonable chance of establishing that mother was involved in unlawful killing of deceased - children living with mother - insufficient evidence as to benefit flowing to children from such proceedings. Compensation to Relatives Act, 1897 ACTS CITED : Forfeiture Act 1995 Public Trustee Act 1925, ss 43, 44, 47, 63 DECISION : Paragraph 12

1 THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WINDEYER J

MONDAY 11 OCTOBER 1999

2887/99 PUBLIC TRUSTEE (APPLICATION OF) - ESTATE OF T

JUDGMENT

1 HIS HONOUR: These proceedings were commenced by way of summons under which the Public Trustee sought judicial advice under Section 63 of the Trustee Act 1925 as to whether funds which the Public Trustee holds on trust for three infant children of T, deceased, should be applied or part of them should be applied for the purpose of bringing proceedings against CT, the widow of the deceased, claiming first, that she having been involved in the unlawful killing of her husband has forfeited the interest which she would otherwise take by survivorship upon his death, and second, for a claim on behalf of the children under the Compensation to Relatives Act 1897 for the loss to those children caused by their mother having brought about the death of their father. In the first instance the question is whether funds should be expended in obtaining evidence to assess the strength of any claim. 2 On the facts available to this Court on the two Statements of Facts dated 25 June 1999 and 28 July 1999, there is material which would indicate that there was a reasonable chance of establishing that CT was directly involved in bringing about the unlawful killing of her husband. 3 In those circumstances, if that were established then in the ordinary course she would not be entitled to take the benefit which she took by survivorship, namely, the passing of her husband's interest in a property at Northmead to her as surviving joint tenant. The value of that one half interest would go into the estate and be held by the Public Trustee as administrator of the estate for the persons entitled on intestacy, but in the particular circumstances which would then have occurred, for the children of the deceased rather than the widow of the deceased who would have forfeited her benefit subject to any order made under the Forfeiture Act. 4 The Public Trustee, the administrator of the estate of the deceased, in the statements of facts before the Court said there were no assets of any value in the estate, but as a consequence of the death of the deceased certain moneys were payable from a superannuation fund from the deceased's employer, namely, Johnston's Transport Industries Retirement Fund. The relevant deed or rules are not before the Court but correspondence shows that the trustees of that fund have apparently determined that the sum of $110,110.80 less some costs be paid for the benefit of the three children of the deceased, and pursuant to Section 47 of the Trustee Act that sum has been paid by the trustee to the Public Trustee to be held on behalf of the children. 5 The terms of the superannuation trust deed or rules under which that payment was made are still not available to the Court in spite of the requirement for them having been made clear when this matter was first before the Court, but be that as it may, it seems almost certain that the funds are to be held for each of the children until that child attains the age of 18 years. What happens if one of the children does not attain that age is quite unclear. No explanation has been given for this lack of evidence obviously required. 6 Once those moneys were in the hands of the Public Trustee, then pursuant to Section 47 of the Trustee Act, the Public Trustee has the powers under that Act applicable to moneys held in trust for a minor. It follows that the powers available under Section 44 of the Trustee Act are available, in which case assuming that each of the children is entitled to the capital of his or her fund on the age of attaining 18 years, then the Public Trustee would have power to apply one half of the capital of that child's fund for the maintenance, education, advancement or benefit of such child. 7 The question for determination is whether or not the Public Trustee would be justified in using those moneys pursuant to that Section for the purposes of bringing an application to the Court to determine the proper distribution of the estate of the deceased on intestacy or, more properly, to determine whether or not the widow should be entitled to retain the benefit she took by survivorship. That was the original question placed before the Court under the original Statement of Facts of 25 June,1999. The supplementary statement of facts raises the question of possible action by the Public Trustee as administrator on behalf of the children against CT for damages under the Compensation to Relatives Act 1897. 8 Under the new Statement of Facts dated 28 July 1999, there is some estimate of the amount of money which would be expended in costs for the purpose of obtaining evidence and advice to a point where a more considered decision could be made on whether or not the proceedings ought to be pursued but no additional question is posed by the later Statement of Facts. 9 The difficulty with this matter is that the Public Trustee has two positions. One is his position as administrator of the estate of the deceased; the other is his position as trustee pursuant to Section 47 of the funds held by and on behalf of the children. In ordinary circumstances, it is unlikely to be thought that the expenditure of the income or capital of those children's funds for the purpose of pursuing the claim envisaged would be a proper expenditure of those funds unless there was almost absolute certainty of obtaining some beneficial result. In other words, the Public Trustee would only be authorised to take the action proposed by means of making use of the Section 43 or 44 powers if that action were clearly for the benefit of the infant beneficiaries. The other problem is that benefit must at least be given some reasonably wide meaning. It should be noted that the Public Trustee seems in questions 1 and 3 posed in paragraph 7 of the original statement of facts, to be seeking advice in his different capacities. 10 In the circumstances known to the Court at the present time the three children are living with their mother, being the woman against whom the proposed proceedings would be brought and to whom maintenance payments for the children are being made, those payments being intended to be applied towards mortgage payments on the home. Without any further information, it is just not possible for the Court to say that it is necessarily for the benefit of the children that a claim should be made on their behalf against their mother with whom they are living, nor that money should be spent on assessing the strength of possible claims. It might be to their financial benefit but it may not necessarily be to their ultimate benefit. In the absence of the views of some independent person or persons in a position to represent the children's interests in a way that a tutor would do, it is just not possible for the Court to give the advice which is sought by paragraph 27 of the Statement of Facts of 25 June 1999. 11 That does not mean that the Court is advising the Public Trustee that no action ought to be taken, nor absolving him from responsibility if no action is taken. All that the Court is doing is stating that on the facts presented it is not prepared to advise the Public Trustee that it should access the moneys for the purpose put forward. There is an obvious possibility of conflict in the two trusteeships of the plaintiff, and it is difficult to see how the solicitor for the Public Trustee can, even in an advice matter such as this, put all relevant matters before the court. What is certain is that he has not done so. However, the matter has now been before the court on four occasions and it should be disposed of now on the presented facts. It if for the trustee to establish relevant facts and to give serious consideration to the position established by those facts. It is not for the court to give some sort of advice on evidence. 12 The Court advises on questions put forward in paragraph 27 of the Statement of Facts of 25 June 1999 and based on that statement and the supplementary statement of 28 July 1999, as follows: