Lorenz v McGreevy[2022] QDC 212

DISTRICT COURT OF QUEENSLAND

1. [1]
   The Deceased, Baden Just died on 21 March 2018.  He is survived by his four daughters, Ms Fiona Lorenz, the applicant; Ms Brenda McGreevy, the First Respondent; Ms Barbara Thompson; and, Ms Angela Just-McKnight.  He left a last Will dated 1 March 2018 admitted to probate on 3 February 2022 that included the following gifts:

   1. (1)
      He left his farm machinery, plant and equipment to the First Respondent and Second Respondent (the First Respondent’s husband);
   2. (2)
      He left his 1957 Land Rover to the First and Second Respondent;
   3. (3)
      He left a sum of $20,000 to each of the applicant and Ms Angela Just-McKnight;
   4. (4)
      He left a sum of $6,000 to Barbara;
   5. (5)
      He left the residue of his estate to the applicant, First Respondent and Ms Angela Just-McKnight. 
2. [2]
   Clause 7 of the Will stated as follows:

   1. (1)
      I EXPRESSLY declare that I have dealt with my real property by way of addition of [the First Respondent] and [the Second Respondent] as joint tenants on all lots within my lifetime to enable them to continue their farming operations in the future.  It is not my intention that my other daughters be compensated by [the First Respondent] and [the Second Respondent] or from my estate in addition to their current entitlement for any share for the value of such property. 
3. [3]
   The applicant is the executor of the Will. She seeks a direction as to whether, in her position as executor, she should litigate on behalf of the trust. The application is for what is termed a Beddoe Order. 
4. [4]
   Prior to 29 November 2017 the Deceased was the sole owner of two lots of land.
5. [5]
   On 21 June 2017 the Deceased signed an Enduring Power of Attorney appointing the First Respondent as sole attorney in relation to his financial and personal/health matters to commence with immediate effect. 
6. [6]
   On 7 September 2017 the Deceased, First Respondent and Second Respondent signed a Form 1 and Form 24 transferring the two lots of land from the sole name of the Deceased to the First Respondent and the Second Respondent as joint tenants. The Transfer was registered on 29 November 2017. At the time the Transfers were signed and registered the First Respondent was the Deceased’s power of attorney. 
7. [7]
   Pursuant to section 87 of the Powers of Attorney Act 1998 (Qld) there is a presumption that the transfer was induced by undue influence. Unless rebutted, the transfer is void or voidable. The respondents will rely upon the legal assistance the Deceased had in executing the transfer and the confirmation of his intentions in his Will to rebut that presumption. 
8. [8]
   On 6 March 2018 the Deceased’s solicitor sent an email to Angela and Brenda indicating that the Deceased had concerns regarding the transfer of the land and that she was scheduled to meet the Deceased on 15 March 2018 to receive further instructions. The Deceased cancelled that appointment. 
9. [9]
   The Deceased sought to have a Will prepared through the Public Trustee on 20 March 2018. The Deceased attended upon the Dalby courthouse to meet with representatives however a Will was not prepared. The Deceased passed away the following day. 
10. [10]
    After the Deceased’s death, the First and Second Respondents became the registered owners of the land by survivorship. 
11. [11]
    After unsuccessful attempts to resolve the matter without the need for litigation the applicant (plaintiff) commenced proceedings in her capacity as executrix, by Claim and Statement of Claim filed on 12 December 2019 seeking relief against the First and Second Respondents (first and second defendants) in respect of the transfer of the land on the basis of a presumption of undue influence arising by virtue of the operation of section 87 of the Powers of Attorney Act 1998 (Qld).
12. [12]
    The respondents (defendants) filed a Notice of Intention to Defend and Defence on 23 January 2020. 
13. [13]
    On 20 August 2020 the respondents (defendants) sold one of the parcels of land for $215,000.  As a result of that sale the applicant (plaintiff) filed an Amended Claim and Statement of Claim to include a claim for an account of profits in relation to the sale proceeds and damages in an amount equal to the value of that parcel of land or alternatively the amount of $215,000. 
14. [14]
    The applicant seeks a direction from the court pursuant to section 96 of the Trusts Act 1973 (‘Trusts Act’). Section 96 states:

Any trustee may 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.

15. [15]
    The applicant’s application is supported by her two sisters who are the other beneficiaries under the Will. 
16. [16]
    The respondents neither consent nor oppose this Court exercising jurisdiction. The respondents consented to the listing of the application in the District Court. If I determine that they can, they will consent pursuant to section 72 of the District Court of Queensland Act 1967 (Qld) (‘District Court Act 1967’) to this court dealing with the matter. 
17. [17]
    Section 96 of the Trusts Act provides for a trustee to apply to “the court” for directions. “Court” is defined in that Act^[1] to mean “the Supreme Court or a judge thereof”.  
18. [18]
    The applicant relies upon section 69 of the District Court Act 1967 in so far as it confers the powers and authorities of the Supreme Court on the District Court for the purposes of exercising the jurisdiction conferred under section 68 of that Act. 
19. [19]
    The applicant argues that section 68(1)(b)(vii) confers jurisdiction. Section 68(1)(b)(vii) provides the District Court jurisdiction to hear and determine an action involving the administration of the estate of a Deceased person where the estate does not exceed $750,000.  The evidence before me demonstrates that the value of the estate is less than $750,000. 
20. [20]
    In Fenton-Anderson & Anor v Power & Anor (No 3),^[2] Porter QC DCJ said at [20]-[21]:

…this Court does not have a grant of general jurisdiction in administration of estates. That jurisdiction is conferred by s. 6(1) Succession Act on the Supreme Court of Queensland only.

Rather, this Court’s specific succession jurisdiction is relevantly sprinkled through various heads of civil jurisdiction conferred by s. 68 District Court Act 1967, particularly s. 68(1)(b)(vii) District Court Act which confers jurisdiction over the noble, ancient but rarely used administration action where the value of the estate is less than $750,000. (The High Court described the administration action as old fashioned as long ago as 1961.) (citation removed)

21. [21]
    An order for administration of an estate had the effect that the administration would be performed under the Court’s supervision. Nothing could be done without the Court’s approval. Directions would be given as to how the administration would be carried out.^[3] 
22. [22]
    In Law of Succession (3^rd ed 2021) the learned author Professor GE Dal Pont said of administration actions:

The reality, though, is that administration actions, and attendant orders, are rare in the modern environment. Indeed, the High Court has described them as ‘somewhat old-fashioned’, given the other means available to address issues of this kind without the inconvenience of an administration order. There is no need for such an order if the issues can be determined by the exercise of the right of personal representatives to seek the court’s advice and directions, if issues relating to construction of the will may be determined via an originating summons procedure in the court’s equitable jurisdiction, if the matter can be adequately addressed by an order for an account, or if the order would involve the court exercising a discretion given to the personal representatives by the terms of the will itself. ^[4] (footnotes omitted)

23. [23]
    The jurisdiction provided for in section 68(1)(b)(vii) involves an action for the administration of an estate and not an action involving or arising out of the administration of an estate.  As there is no action for administration on foot, the power to grant a Beddoe order cannot be sourced in this provision. 
24. [24]
    Section 69 of the District Court Act 1967 provides:

69 Powers of District Court

1. (1)
   Subject to this Act and to the rules of court, the District Court has, for the purposes of exercising the jurisdiction conferred by this part, all the powers and authorities of the Supreme Court, including the powers and authorities conferred on the Supreme Court by an Act, and may in any proceeding in like manner and to like extent -

   1. grant such relief or remedy; and
   2. make any order, including an order for attachment or committal in consequence of disobedience to an order; and
   3. give effect to every ground of defence or matter of set-off whether equitable or legal;

as may and ought to be done in like cases by a judge of the Supreme Court.

25. [25]
    Section 69 is not an independent source of jurisdiction. As much is apparent from the opening words “Subject to this Act and to the rules of court” and to the additional limitation imposed by the words “for the purpose of exercising jurisdiction conferred”. The ancillary powers provided for in section 69 can only be exercised for the purposes of exercising jurisdiction conferred by section 68.^[5]  The application for a Beddoe order is not a cause of action.  Such an order determines a potential issue between the trustee and the beneficiaries as to whether the costs of the main action should be recoverable by the trustee as expenses of the action.^[6]    The purpose in making the order is to determine what should be done in the best interests of the trust estate and to protect the interests of the trust.^[7]  The court acts in an administrative capacity to determine whether or not the proceedings should be taken.^[8] The making of a Beddoe order does not therefore, impact on the hearing and determination of the substantive action. That the application was brought as an interlocutory application in the existing proceedings is not to my mind sufficient to meet the statutory test given the unique nature of a Beddoe order.  
26. [26]
    I am not satisfied that I have jurisdiction pursuant to section 68(1)(b)(vii) or section 69 of the District Court Act 1967 to make the order sought. 
27. [27]
    Section 72(1) of the District Court Act 1967 provides that if the parties agree by memorandum signed by them or their lawyers that the District Court sitting in a particular district shall have jurisdiction to try any action which might be brought in the Supreme Court, the District Court sitting at that place shall have jurisdiction to try the action.  “Action” is defined to mean a civil proceeding commenced by plaint.^[9]  Actions are now commenced by either originating application or claim. Section 149 of the District Court Act 1967 provides for outdated references. Plaint is taken to be a reference to a claim.
28. [28]
    Section 72(1) confers substantive jurisdiction to try an action over which it otherwise would not have jurisdiction. Section 72(1) also refers to the parties agreeing.  An application for a Beddoe order is not an action. The court does not determine a controversy between two parties. Whilst other interested parties are given notice of a Beddoe application, they are not joined and are not parties to the application.  The making of a Beddoe order does not give rise to a judgment binding on any person.
29. [29]
    I am not satisfied that the parties are able to consent to the jurisdiction of the court pursuant to section 72 of the District Court Act 1967. 
30. [30]
    If I am wrong in that regard and I do have jurisdiction I would be minded to make the order for the reasons which follow. 
31. [31]
    It is not the function of the court in considering a Beddoe application to investigate evidence and make a finding whether or not the trustees will be successful in the litigation.  As indicated, a Beddoe order determines a potential issue between the trustee and beneficiaries as to whether the costs of the main action should be recoverable by the trustee as expenses of the trust.  It is not a predetermination as to the issue of costs as between the trustee and the other party to the main action.^[10]
32. [32]
    The respondents contend that I am not in a position to assess the merits and strengths of the claim because the application is not supported by an advice from a qualified lawyer as to the prospects of success. Whilst that is usually the practice it ought to be borne in mind that usually this application is made prior to any proceedings having been commenced. I am in a position where I have available to me the pleadings that have been filed. Because of that the respondents have been in a position where submissions as to the merits of the action could and have been made.  
33. [33]
    I do not consider that anything turns on the absence of an advice from a qualified lawyer given that I am able to have regard to the pleadings. 
34. [34]
    The properties subject to the transfer to the respondent were the most substantial of the Deceased’s assets prior to his death. The quantum of the estate is otherwise small.  The making of the order has the practical consequence of permitting the applicant to have recourse to property which the respondents have an entitlement to, being the farm equipment and Land Rover.  However, if the applicant is unsuccessful the respondents retain the land and the proceeds of the sale of the land.  Fiona, Brenda and Angela are at risk of receiving nothing in those circumstances.  Brenda and Angela have each sworn affidavits supporting the action taken by the applicant.   
35. [35]
    Having considered each of the applicant’s and respondents’ material and the pleadings I am satisfied that it is in the best interests of the estate as a whole that the proceedings continue.  

Costs

36. [36]
    The respondents did not oppose the court exercising jurisdiction but rather brought the issue of jurisdiction to the court’s attention. It is for the applicant to establish jurisdiction. It has not done so, accordingly costs should follow the event.
37. [37]
    The applicant additionally sought leave to file a further amended claim. That application was not opposed. Whilst the applicant seeks its costs of that application it is not appropriate, given the position of the respondents, for it to bear a costs order in relation to that application. The costs of that application should be reserved. 
38. [38]
    My orders are:

    1. (1)
       The application for a Beddoe order is dismissed;
    2. (2)
       The applicant pay the respondents’ costs of that application;
    3. (3)
       Leave is given to file a further amended claim;
    4. (4)
       Costs of the application to file a further amended claim are reserved.