Re Permewan[2021] QSC 151

SUPREME COURT OF QUEENSLAND

1. [1]
   The applicant seeks the removal of the respondent as the executor of the estate of Prudence Veronica Permewan (deceased) and the revocation of the grant of probate in his favour.  She also seeks other orders to perfect the removal of the respondent and his replacement with a suitably qualified independent person.

History

2. [2]
   Prudence Veronica Permewan (Prudence) was a widow who had three children:

1. John Scott Permewan (known as Scott) who is the respondent;
2. Marla Hurlimann (Marla);
3. Donna Frater (Donna) who is the applicant.

3. [3]
   Prudence died on 21 September 2019 leaving a will.
4. [4]
   By the will:

1. Scott was appointed executor and trustee;
2. shares in a company Zalerina Pty Ltd (Zalerina) were bequeathed to Scott;
3. the rest of the estate was bequeathed to the Lotus Trust.

5. [5]
   The Lotus Trust was established in February 2011.  Its trustee is Zalerina.  The bequeath of the shares in Zalerina to Scott put him in sole control of the company and therefore in sole control of the assets of the Lotus Trust.  The Lotus Trust is a discretionary trust.  The class of beneficiaries include Scott, Marla and Donna.  None of these beneficiaries hold any interest in the trust assets until a distribution is made to them by the trustee.^[1]
6. [6]
   The assets of Prudence at the time of her death were:

1. her residence in Burpengary worth about $725,000;
2. the shareholding in Orion Investments Pty Ltd (Orion) estimated by Scott to be worth about $1,310,636;
3. a loan to Orion of $876,229.62.

7. [7]
   Scott is Orion’s sole director.  The shares in Orion were bequeathed to the Lotus Trust (as part of the residue) which Scott controls.
8. [8]
   Therefore, the effect of the will is to transfer the entire estate of Prudence either to Scott or to Zalerina as trustee of the Lotus Trust in circumstances where Scott controls Zalerina.
9. [9]
   These testamentary arrangements are consistent with what Scott has sworn was said by both his parents in the years leading up to their deaths.  He swore that his parents made various adverse comments about Donna and Marla and said, in effect, that he (Scott) was the responsible one who will “do the right thing and look after everyone who deserves it”.
10. [10]
    Probate of the will was granted to Scott on 29 January 2020.
11. [11]
    Donna and Marla, having effectively been excluded from the estate, have commenced proceedings pursuant to Part IV of the Succession Act 1981 for family provision.
12. [12]
    In all, apart from the impact of a series of transactions which occurred in April 2018, Prudence’s estate is worth approximately $3 million.
13. [13]
    Cleary Hoare Solicitors presently act for Scott.  Mr Paratore of Cleary Hoare appeared for Scott in the current application. In April 2018, those solicitors prepared a series of documents.  They were acting for Prudence and Zalerina (it seems) when they did so.  A principal of Cleary Hoare, Mr Brett Hart, witnessed the signing of the various documents by Prudence.
14. [14]
    On 18 April 2018, some 17 months before Prudence’s death, she swore a statutory declaration in these terms:

“1. It is my intention that all payments whether in cash, by cheque or Bearer Promissory Notes or otherwise, that I make from myself to the trustee of the Lotus Trust being a trust constituted by Deed dated 14 February 2011 are by way of gift unless otherwise recorded in writing.”

15. [15]
    On the same day, Prudence signed a document headed “Bearer Promissory Note No 1”.  That document was in these terms:

“Prudence Veronica Permewan promises to pay to the bearer of this Bearer Promissory Note the sum of $3,000,000.00.”

16. [16]
    On the same day, this time on behalf of Zalerina, she signed a receipt.  The receipt concerns the promissory note.  It is in these terms:

“Received by Zalerina Pty Ltd ACN 623 050 055 as trustee for the Lotus Trust on 18 April 2018 as a gift.”

17. [17]
    Therefore, Prudence has, by the promissory note, promised to pay $3 million to “the bearer” who is Zalerina who has accepted the promissory note “as a gift”.
18. [18]
    Also on 18 April 2018, Zalerina, by its sole director Prudence, resolved as follows:

“IT WAS NOTED that:

A. A Bearer Promissory Note in the amount of $3,000,000.00 has been received from Prudence Veronica Permewan by way of gift of capital to the Trustee of the Trust to be held upon the terms of the Trust.

IT WAS RESOLVED:

1. To acknowledge receipt of the Bearer Promissory Note by execution of the Bearer Promissory Note.

2. To lend the money gifted by Bearer Promissory Note to Prudence Veronica Permewan.

3. That such loan be repayable on demand and secured by way of Mortgage over real property acceptable to the Trustee.

4. To execute a Loan Agreement and Mortgage security documents to effect these Resolutions.”

19. [19]
    A loan agreement was entered into, again on 18 April 2018, between Prudence and Zalerina.  The loan agreement was executed by Prudence on her own behalf as well as on behalf of Zalerina.  By that loan agreement, Prudence was loaned $3 million by Zalerina as trustee for the Lotus Trust. 
20. [20]
    The loan agreement then provides as follows:

“4. Security

4.1 The Borrower shall, when required by the Lender, execute and deliver to the Lender such documents evidencing the Security (if any) as required by the Lender.

4.2 If the Lender requires the Borrower to enter into a separate deed granting the Lender a security interest, then the parties agree that this document is a Transaction Document.”

21. [21]
    The term “security” is defined for the purposes of the loan agreement as:

“Security

1. Mortgage over the Borrower’s interest in the property located at 354-358 Hauton Road, Burpengary, Queensland more particularly described as Lot 3 on Registered Plan 210938 on Title Reference 16957106

2. Security interest over all shares in Orion Investments (Qld) Pty Ltd ACN 082 774 650 held by the Borrower”

22. [22]
    A further document, styled “Security Deed”, was also entered into which provided for a mortgage over the Burpengary property and a charge over the shares in Orion.  On 20 May 2019, a mortgage over the Burpengary property was executed by Prudence and that has since been registered.
23. [23]
    Again on 18 April 2018, Prudence signed a further receipt in these terms:

“Received by Prudence Veronica Permewan on 18 April 2018 as a loan and cancelled by her because of the merger of the right to be paid and the obligation to pay.”

24. [24]
    By this series of extraordinary documents:

1. Prudence purports to gift, through the provision of the promissory note, $3 million to the Lotus Trust.  This is despite the fact that Prudence clearly did not have $3 million in cash and would have to liquidate all of her assets to pay it.
2. The Lotus Trust has loaned $3 million to Prudence.  This is despite the fact that the Lotus Trust clearly did not have $3 million in cash to loan to Prudence.
3. To secure the loan, so as to give effect to the gift evidenced by the promissory note, Prudence mortgaged or otherwise charged her assets.
4. The result of the transactions is that Prudence, who before these transactions had assets worth net $3 million, now has a debt of that amount to the Lotus Trust secured over her assets.

25. [25]
    These transactions have a direct impact upon Donna and Marla because they effectively obliterate the fund upon which provision for them could be made.  As Gleeson CJ explained in Barns v Barns when considering South Australian provisions similar to Part IV of the Succession Act:^[2]

“7 Three matters may be noted. First, provision may be made, and can only be made, out of a deceased’s estate; that is to say, out of property which is beneficially owned by the deceased at the time of death and which passes to the deceased’s legal personal representative. Secondly, contractual obligations undertaken by a deceased during his lifetime, which bind an estate, may affect the property available to meet an order under the Act. For example, if, during his lifetime, a testator contracted to sell Blackacre, and the contract remained on foot at the time of death, although full beneficial ownership of Blackacre had not passed to the purchaser at the time of death, Blackacre would not be an available asset for the purposes of an order for provision, although the purchase price payable under the contract would be. And, of course, if the contract were subsequently rescinded, the position would change. Thirdly, the estate out of which an order for provision may be made is the available estate after meeting the liabilities of the deceased. Obligations incurred by a deceased, and binding upon a legal personal representative, must be taken into account in determining the extent of the estate out of which provision may be made.” (citations omitted and emphasis added)

26. [26]
    Donna submits that there should be an inquiry into whether the transactions, which have effectively stripped Prudence of the value of all her assets, can be challenged.  Donna submits that:

1. the document styled “Promissory Note” is not a promissory note as defined by s 89 of the Bills of Exchange Act 1909 (Cth) and therefore, does not have the legal effect of a promissory note;
2. no gift has been perfected and there is no consideration supporting a promise to pay $3 million to the Lotus Trust;
3. the transactions are a sham.

27. [27]
    It is unnecessary to consider the strength or otherwise of Donna’s assertions that the transactions may be able to be set aside.  Scott seems to accept that is a live issue.  He submits that issue ought to be litigated in the family provision proceedings.^[3]
28. [28]
    Donna submits that she should not have to pursue the family provision proceedings only to learn that there is effectively no fund upon which any order could operate.  She submits that inquiry ought to be undertaken by the trustee and executor and, because of the obvious conflict of interest that should not be undertaken by Scott.  Therefore, he should be removed as trustee and executor and the probate granted to him revoked.
29. [29]
    Donna submits that Scott should be replaced as executor and trustee by a solicitor Mr Myles Murphy.  Mr Murphy was admitted as a solicitor in 1977 and has held an unrestricted principal’s practising certificate since 1984.  He has experience in the administration of estates.
30. [30]
    Marla appeared on the application through Mr LJ Power, a solicitor.  He did not oppose the application for Scott’s removal.  He did not seek to make any submissions and withdrew.

The recorded conversation between Scott and Marla

31. [31]
    Of some significance is a conversation between Scott and Marla on or about 21 November 2019 which was electronically recorded. 
32. [32]
    A transcript of the recorded conversation was exhibited to an affidavit of Glen McFarlane, a solicitor of Simmonds Crowley Galvin, the solicitors for Donna.  Scott took objection to the admission of the transcript, taking the point that evidence of the conversation is inadmissible through Mr McFarlane.  The objection was taken even though there was, it seems, no doubt as to the authenticity of the recording.  Whether a trustee and executor like Scott, acting in the interests of the estate, should take such a point need not be decided.  Mr Morris QC, who appeared with Mr Brennan of counsel for Donna, upon hearing the objection, offered to call Marla as a witness to prove the recording.  The objection was then withdrawn.
33. [33]
    The following exchanges occurred in the conversation:

“[Marla] What do you mean your solicitor has?^[4]

[Scott] Well, she has got her solicitor onto my solicitor.

[Marla] What do you mean? What did she want?

[Scott] I don’t know. I know what she’s done though.

[Marla] What’s she done?

[Scott] She has just lost her brother.

[Marla] Yeah but why?

[Scott] She’s done.

[Scott] Because she is fuckin’ vindictive, fuckin’ evil, thieving, cunt. That’s why she is in the position she is in. And she is gonna stay in it.

[Marla] Oh

[Scott] I would advise her to stay married - because she not going to be able afford not to.”

And later:

“[Marla] Oh no, Scott. What does she want? What did her solicitor want?

[Scott] I don’t know. I don’t know. I don’t know, but I’ve instructed mine to fuckin’ well make it as difficult as possible for her and just keep it, keep her trying to spend money.

[Marla] Oh Scott.

[Scott] What?

[Marla] Oh just, I don’t know, maybe coz I have worked fucking hard for my money, I just, I hate wasting money, it’s just going to be a lawyers’ game love, it is just going to be a lawyers’ game.

[Scott] Won’t be a lawyers’ game from me, only her. Coz she’s got to pay for herself.

[Marla] What don’t you just ring her and ask her what she wants?

[Scott] Nup, nah, don’t trust her; I told that to her face anyway.

[Marla] Oh

[Scott] I said to her, I said fuckin’ I am lookin’ at this person across the kitchen bench from me and I said I don’t even know who the fuck it is, I said I am going to be perfectly honest with you, I don’t trust ya, I said something about me is telling me not to trust ya, she had nuthin’ to fuckin’ say to it. She fuckin’ well went around telling everybody and fuckin’ tellin’ Mum how, and me, how she’s got my back and then she then she went around stabbing me in the cunt to everybody I knew up ‘ere.

[Marla] What did she say?

[Scott] Oh just bagging the fuck out of me, fuckin’ tellin’ people that fucking’ she had to look after Mum fuckin’ all the time, I did nothing, I was never there, just all shit, utter shit, every fuckin’ prick that fuckin’ that knows me and knew Mum, bloody knew I was ‘ere. You know, she can fuckin’, she can go for gold. I reckon fuckin’ the farther she fuckin’ goes, the bigger the hole she’s diggin’ for herself. I’m not going to fuckin’ bother. And neither should you, don’t worry about it, don’t let it fuckin’, don’t even get involved.”

And later:

“[Scott] She stole the fuckin’ property, she stole what was ever fuckin’ in the house that was worth any fuckin’ value, she’s taken it all, stuff that you should have been allowed to fuckin’ look at and fuckin’ go, I wouldn’t mind that, she’s taken it all.

[Marla] It’s alright, Scott.

[Scott] She’s had her fuckin’ share.

[Marla] I am not, not a person for that sort of stuff anyway. It’s alright.

[Scott] Yeah well.

[Marla] What have you done with Mum’s things? Have you done anything yet?

[Scott] What’s that?

[Marla] Have you done anything with Mum’s things yet?

[Scott] With Mum’s stuff?

[Marla] Yeah.

[Scott] Nuh, not touchin’ it, fucking all I am doing is cleaning the fuckin’ property up, I’m doing my job, my job is to fuckin’ maintain the property, clean up the property, keep it in good state of repair, and bloody well, and bloody well keep the fuckin’ everything as it is until it’s fuckin’ settled, doin’ me job, that’s all I’m doin’.

[Marla] Aah

[Scott] That and Donna’s fuckin’ load of horse shit, well whatever Mum fuckin’ wants, remember what you fuckin’ well you read the text messages. I’m going to make sure that’s what Mum wanted and I’m going to follow it through but when it comes to the fuckin’ money, she aint going to follow through is she, she doesn’t want what Mum wanted, it’s a fuckin’ different state of affairs then when it’s cash time. Well she’ll fuckin’ learn, she’ll learn the hard way. She’s going to pay big time.”

And later:

“[Marla] Well, how would you feel if it was you? What if Donna had control of everything?

[Scott] You know what, Marla? If it was me in the other fuckin’ direction, there would have been no fuckin’ going to that solicitor and going oh, what is going on, I want to know, I want my cut, I would have walked, I would have not given a flyin’, fuck. That’s what would’ve happened. That’s exactly what would’ve happened. I would have gone, well fuckin’ I wasn’t there, so fuckin’ I have no fuckin’ entitlement to it. It doesn’t worry me, wouldn’t worry me. If fuckin’ Mum and Dad left everything to fuckin’ you and Donna and left me out of it today, it wouldn’t have worried me. I would have gone, fair enough, that’s what they wanted, that’s what they have. Coz it’s not fuckin’ mine to say or do what with I can and can’t do with it. It fuckin’ was theirs.

[Marla] But you put all the hard work in.

[Scott] Well, it’s, it’s irrelevant, Marla. I can tell you right now, the sort of person I am is that fuckin’ if Mum fuckin’ and Dad said, Marla, Donna, I’m going to leave it all to Marla and Donna, Scott, you’re doin’ ok, I’d say, fair enough, if that’s what you want to do. Do you think it would have changed how I felt about Mum and Dad? Not in the fuckin’ slightest.

[Marla] But what about how you would feel about Donna and I?

[Scott] Wouldn’t give a fuck. So what?

[Marla] Ohh

[Scott] I wouldn’t be any different to fuckin’ you and Donna. But fuckin’ Donna is just a fuckin’ hypocrite, she is a fuckin’ hypocrite, she carried on like a fuckin’ psycho, wouldn’t let you see Mum, it was her fuckin’ pushing me to fuckin’ well exercise the rights as Mum’s power of attorney saying, that I’m not doing what Mum wanted, now she’s in a state where you have to, you have to stop Marla, because that’s what Mum wanted, so I don’t know, you’re directing your fuckin’ frustrations at the wrong fuckin’ person, it wasn’t Mum, it was Donna and let me just guarantee you one thing, fuckin’ over the last few years, do you think fuck there was anything nice that came out of Donna’s fuckin’ mouth about you?”

And later:

“[Scott] oh, big time. Anyway, sis, I better go, get somethin’ fuckin’ done, just thought I’d ring up and see how you’re goin’, fuckin’ don’t let it get you down, just fuckin’ let shit fuckin’ flow and you’ll be fine, it’s gonna take awhile, oh Donna is gonna to throw a spanner in the works, fuckin’ take a while, so fuckin’ with her little escapades of fuckin’ what she wants to do, fuckin’ I will quite happily cost her money.” (emphasis added)

34. [34]
    The fact that Scott, in the recorded conversation with Marla, refers to Donna as a “cunt” does not inspire confidence that he will act honestly and in accordance with his obligations as trustee and executor; neither do his statements that Donna is “vindictive” and “fuckin’ evil”, and a “hypocrite” and a “psycho”.
35. [35]
    The reference to Donna stealing property is a reference to allegations by Scott that Donna removed some of Prudence’s belongings from her house.
36. [36]
    Although not directly relevant to the present application, one can draw the inference that it is unlikely that Donna will receive the benefit of an exercise of Scott’s discretion (as controller of Zalerina) to distribute income or capital of the Lotus Trust to her.
37. [37]
    The recorded conversation clearly shows Scott’s intention, at least as at November 2019:

1. to defend any claim made by Donna;
2. to fund that defence from estate assets .  That is the only inference to draw from the reference that Donna has to “pay [lawyers] for herself”, ie Donna has to pay her own legal fees, a position which Scott is not in;
3. to take advantage of the fact that Donna will have to fund any challenge from her own assets;
4. he is vengeful towards her;
5. he thinks Donna is not worthy of making a claim.  As well as being a “cunt”, she is according to him, a “hypocrite” and a “psycho” as well as being “vindictive” and “fuckin’ evil”;
6. he wishes to inflict financial harm on her presumably by frustrating her claim and “happily cost her money”.

The hearing before me

38. [38]
    Mr Paratore made a series of submissions. 
39. [39]
    He said that there was not a proper basis to remove Scott as trustee.  He pointed to the fact that the proceedings were interlocutory and submitted that no decision could be made to remove Scott until after a trial.  He submitted that the issues concerning the inter vivos transactions could be dealt with at the hearing of the family provision application.
40. [40]
    He submitted, in reliance primarily upon Chesney & Anor v Tognola,^[5] that a conflict of interest by a trustee and executor was not sufficient to warrant removal.
41. [41]
    He further submitted that Scott had acted properly.^[6]  Scott had sworn an affidavit saying that he intended to administer the estate in accordance with advice that he was receiving.  Scott had taken no steps to disperse the assets of the estate or the trust.  As to the recorded conversation between Scott and Marla, he submitted that the statements by Scott on that occasion did not necessarily reflect his present thinking.  They were statements made in anger against Donna in circumstances where she had allegedly taken belongings of Prudence from the house without permission.
42. [42]
    However, in the course of Mr Paratore’s oral submissions, there were some extraordinary exchanges.  This occurred:

“MR PARATORE: I would just make a few points. Firstly, my learned friend mentioned that, clearly, the deceased didn’t have $3 million worth of cash, of course. But $3 million worth of assets.

HIS HONOUR: But isn’t - - -

MR PARATORE: It’s the value of the assets. I don’t mean to make - - -

HIS HONOUR: But isn’t that the point? Isn’t that the point? That by issuing the promissory note and making it as a gift, she’s extinguishing the - she’s extinguishing the assets that she’s got.

MR PARATORE: Absolutely. But it - - -

HIS HONOUR: Just excuse me. That’s your point, isn’t it?

MR MORRIS: Yes. Yes precisely.

HIS HONOUR: Yes.

MR PARATORE: I just wanted to clarify that, of course, we agree that the deceased didn’t have $3 million worth of cash. It was $3 million worth of assets. So I just wanted to make that point, your Honour.

HIS HONOUR: Which, through this arrangement - - -

MR PARATORE: Yes.

HIS HONOUR: - - - she is trying to get into - - -

MR PARATORE: Yes. That’s - - -

HIS HONOUR: - - - the trust before she dies, so that there’s nothing upon which family provision can be made. That’s the whole point, isn’t it?

MR PARATORE: Yes, your Honour. But it’s in line with her testamentary intentions as stated in her will. Your Honour - - -

HIS HONOUR: But her testamentary intentions as subject to the provisions of the Succession Act.

MR PARATORE: Yes.

HIS HONOUR: That’s the whole point of it. And is there any commercial or, for that matter, other motivation that can be suggested for this rather odd transaction, other than, effectively, stripping the estate? Is there anything - is there any other reason that’s apparent?

MR PARATORE: No, your Honour. …” (emphasis added)

And a little later:

“HIS HONOUR: Well, except that haven’t you just accepted that but for the purpose of effectively stripping the estate, there’s no commercial or other reason which is apparent for this transaction involving the promissory note?

MR PARATORE: No, your Honour. Yeah. That’s correct.” (emphasis added)

43. [43]
    That is an admission that the elaborate web of documents entered into some 17 months before Prudence’s death had no commercial purpose but were designed only to avoid the existence of a fund upon which a family provision application could be made.
44. [44]
    Later, there was this exchange:

“HIS HONOUR: That’s exactly right. And the problem is, not at - as I understand Mr Morris’ concern, or his client’s concern, it’s not that you’re going - your client’s not going to put the strict terms of the will and these arrangements that have been put into place into effect. His argument is that there’s a solid case for setting aside the so-called promissory note arrangements and that your client ought to be considering doing that and your client won’t. You’re not seriously contending, are you, that your client is considering whether or not to set aside the promissory note, surely, because there’s no evidence suggesting that, is there?

MR PARATORE: No, but as my learned friend also pointed out earlier today, there’s certainly no guarantee and it’s in Mr Murphy’s affidavit that he will.

HIS HONOUR: No, but he’s going to consider doing it.

MR PARATORE: Yes.” (emphasis added)

45. [45]
    Mr Paratore seemingly accepts that questions arise as to the effect of the inter vivos transactions.  He continually submitted to me that those questions could be litigated in the family provision applications brought by Donna and Marla.  In the passage above he concedes that Scott is not considering the validity of the promissory note.  The fact that Scott is not considering whether action should be taken to relieve the estate of the $3 million debt is the very point upon which Mr Morris QC relies in his submissions for the removal of Scott as trustee and executor.  On that point this exchange occurred:

“MR PARATORE: Sorry, the trust. The trust. Of course. It’s discretionary, but we’re not there yet, your Honour. This is a Secession Act application, not a Trust Act application.

HIS HONOUR: Yes. No, I understand that. I think you’re just looking at it the wrong way, though. I think instead of looking at it from the point of view of, ‘Is he going to fulfil the terms of the will,’ will carry that out. He obviously is not going to do $3 million debt, is he going to do that or turn his mind to that, and the answer to that must surely be no. That’s the issue, isn’t it?

MR PARATORE: It’s an issue that could be raised in this family provision application, your Honour, and is often, but the potential beneficiaries under the will, the applicant, won’t do so and see it as, well, let’s work on the will and remove the executor as an easier alternative than having to make that argument. But the argument is going to be faced by the incoming administrator, and so it’s unavoidable. And so then the question must go back to the basic principle, which is - - -

HIS HONOUR: Sorry. What - sorry. What’s unavoidable? An incoming executor might take some advice and then might sue the trust to set it all aside?

MR PARATORE: Exactly. It’s an unavoidable - - -

HIS HONOUR: That’s not going to happen if your client is executor, though, is it?

MR PARATORE: It’s this balancing, your Honour, between - to remove the executor now who’s actually performing his obligations under the will as executor and the potential beneficiary raises - - -

HIS HONOUR: But - - -

MR PARATORE: - - - the transactions in that - - -

HIS HONOUR: But why do you say he’s conducting his obligations under the will whereas, as executor, it’s at least arguable he should be considering setting aside the $3 million transaction? And he’s not. He’s not considering that.

MR PARATORE: Well, we don’t know that, your Honour, because this is an interlocutory application.

HIS HONOUR: Right.

MR PARATORE: And it’s privileged, in any event.

HIS HONOUR: I see. All right. So your client doesn’t swear that he’s seeking advice about that or anything like that, that he’s considering setting aside the - making application to effectively sue himself and set aside the transaction?

MR PARATORE: Your Honour - - -

HIS HONOUR: He doesn’t swear that, does he?

MR PARATORE: No, he doesn’t. No. There’s no evidence - we’re not at a final hearing where this evidence can be tested - - -” (emphasis added)

And later:

“HIS HONOUR: And - and - and if for a moment we - just for a moment humour me. We call that - if we can just call that right against the trustee an asset. And perhaps it’s not. Perhaps it’s a chose of action, but let’s - let’s - or perhaps it’s not. Let’s just call it an asset for the purposes of it. Your client is just not pursuing that and has absolutely no intention of pursuing that, does he? He - - -

MR PARATORE: I would have to ask him, your Honour.

HIS HONOUR: Right. You didn’t think to ask him before you came here?

MR PARATORE: Your Honour - - -

HIS HONOUR: This is just ridiculous, isn’t it? It’s obvious what’s happened. It’s absolutely obvious what’s happened and it’s also, I would have thought, obvious on the material that your client has no intention to sue himself, which is basically what he would have to do. You agree with that?

MR PARATORE: Yes.

HIS HONOUR: Right. You’ve not come along in response to the application and said - with an affidavit saying, ‘I’m intending to seek advice as to suing the trust and I’ve - I’m taking advice,’ blah, blah, blah, blah, blah, blah, blah. All you do is you come here and you say there’s no evidence of what he’s intending to do. Well, you’re his solicitor. He could swear it, and he hasn’t. So why would I not draw the inference that he has absolutely no intention of doing that, and therefore he’s in a hopeless position of conflict? Why wouldn’t I draw that inference?

MR PARATORE: It’s open to your Honour.” (emphasis added)

Consideration

46. [46]
    The application is brought pursuant to s 6 of the Succession Act 1981 which is in these terms:

“6 Jurisdiction

3. (1)
   Subject to this Act, the court has jurisdiction in every respect as may be convenient to grant and revoke probate of the will or letters of administration of the estate of any deceased person, to hear and determine all testamentary matters and to hear and determine all matters relating to the estate and the administration of the estate of any deceased person; and has jurisdiction to make all such declarations and to make and enforce all such orders as may be necessary or convenient in every such respect.

3. (2)
   The court may in its discretion grant probate of the will or letters of administration of the estate of a deceased person notwithstanding that the deceased person left no estate in Queensland or elsewhere or that the person to whom the grant is made is not resident or domiciled in Queensland.

3. (3)
   A grant may be made to such person and subject to such provisions, including conditions or limitations, as the court may think fit.

3. (4)
   Without restricting the generality of subsections (1) to (3) the court has jurisdiction to make, for the more convenient administration of any property comprised in the estate of a deceased person, any order which it has jurisdiction to make in relation to the administration of trust property under the provisions of the Trusts Act 1973.

3. (5)
   This section applies whether the death has occurred before or after the commencement of this Act.”

47. [47]
    The starting point is that the choice of an executor is that of the testator and that choice ought to be honoured unless there is some good reason why the chosen executor ought not continue to administer the estate.^[7]  Often misconduct by an executor will justify removal but misconduct is not a necessary prerequisite to the exercise of discretion to remove an executor.^[8]  A conflict of interest between the executor and other interested parties is a relevant consideration but the existence of a conflict in itself may not be determinative.^[9]  The question is as to the extent of the conflict and its likely effect upon the administration.^[10]
48. [48]
    In the end, the discretion under s 6 ought to be exercised in the interests of the due administration of the estate.
49. [49]
    Here, the applicant has made out an overwhelming case for the removal of the executor.
50. [50]
    There appear to be two substantial issues in the administration of the estate.  The first question is whether the extraordinary inter vivos transactions of 2018 are binding upon the estate.  Secondly, there are the family provision claims by Donna and Marla.
51. [51]
    It is obvious, as was conceded in argument on Scott’s behalf, that the inter vivos transactions were designed by Prudence and her lawyers (who now represent Scott) to defeat any family provision application by Donna and Marla.  Scott has a clear interest in defending the inter vivos transactions.  Therefore, a central question is whether that circumstance is likely to lead Scott to prefer his own interests to the due administration of the estate.  It was conceded by Mr Paratore (after some evasion) that an inference is open that Scott has no intention to consider, let alone act on, any issue as to the enforceability (or otherwise) of the inter vivos transactions.  I draw that inference.  It is the only sensible one open.
52. [52]
    The recorded conversation shows a deep-seated animosity of Scott towards Donna.  In my view, in the recorded conversation, Scott reveals his intention to access the estate’s funds to fight any claim knowing that Donna will have to fund any legal fees herself.  There is a plan stated by him to run her out of money.
53. [53]
    The submissions made on Scott’s behalf should all be rejected.  True it is that the conversation with Marla occurred now two years ago.  Little has changed given that Mr Paratore, in argument, conceded that an inference is open that Scott has no intention of considering whether the inter vivos transactions ought to be set aside and I have drawn that inference. 
54. [54]
    Scott’s approach to the present issues, presumably upon the advice of his solicitors, is to litigate the validity of the inter vivos transactions in the family provision proceedings.  It is completely inappropriate to put the estate to the expense of defending family provision applications until the issue of the validity of the inter vivos transactions are determined.  The determination of the validity of the inter vivos transactions will determine whether there is any real fund upon which family provision could be made.
55. [55]
    Donna and Marla should not be put to the expense of prosecuting the family provision applications only to find that the inter vivos transactions are valid and so their family provision applications cannot succeed.  It is unnecessary to draw any final conclusion as to whether Scott’s intention that the defence of the inter vivos transactions be heard in the family provision application is part of his overall expressed plan to inconvenience Donna and run her out of money.
56. [56]
    The proper administration of the estate will be frustrated by Scott continuing as executor.  An executor should be appointed who will objectively consider the issues facing the estate.
57. [57]
    Scott has not suggested that Mr Murphy is not a suitable trustee and executor should the court remove him.  I find that Mr Murphy is an appropriate replacement by virtue of his legal training and experience.  No objection has, or could be, reasonably taken to Mr Murphy being paid fees as assessed on the Supreme Court scale of fees.
58. [58]
    It is appropriate to remove Scott as executor and trustee, revoke probate granted to Scott, grant letters of administration to Mr Murphy and make associated orders.
59. [59]
    It is appropriate to reserve the costs of the application as discretionary considerations relevant to the question of costs may emerge in the pending future litigation concerning the estate.
60. [60]
    It is ordered:

1. Pursuant to s 6 of the Succession Act 1981, John Scott Permewan is removed from the office of executor of the estate of Prudence Veronica Permewan.
2. Pursuant to s 6 of the Succession Act 1981 the Grant of Probate issued to John Scott Permewan is revoked.
3. Myles Gerard Murphy is appointed as Administrator of the estate of Prudence Veronica Permewan in place of John Scott Permewan.
4. Letters of Administration with the Will dated 29 November 2017 be granted to Myles Gerard Murphy, subject to the formal requirements of the Registrar.
5. Any requirements for advertising the intention of Myles Gerard Murphy to obtain a grant of Letters of Administration with the Will be dispensed with.
6. Acting in his capacity as Administrator of the Estate, Myles Gerard Murphy is entitled to engage his firm from time to time as his solicitors and that their fees be assessed by an independent cost assessor pursuant to the Supreme Court scale, as varied from time to time, on an indemnity basis and those fees are to be so assessed at the completion of the Administration.
7. Pursuant to ss 82 and 90 of the Trusts Act 1973 (Qld) John Scott Permewan will do all things reasonably necessary to transfer any property of the Estate presently in his name into the name of Myles Gerard Murphy as Administrator of the Estate.
8. Myles Gerard Murphy as Administrator of the Estate is entitled to be registered as the proprietor of any real property of the deceased in Queensland pursuant to s 114 of the Land Title Act 1994 (Qld).
9. Myles Gerard Murphy as Administrator of the Estate has liberty to apply to the Court for further orders or directions upon five clear days notice.
10. Costs of this Application are reserved.