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McMahon v Aynsley[2022] QSC 140

SUPREME COURT OF QUEENSLAND

CITATION:

McMahon & Ors v Aynsley & Ors [2022] QSC 140

PARTIES:

SEAN PATRICK MCMAHON as trustee for the JOINT

VENTURE TESTAMENTARY TRUST

(First Applicant)

AND

SEAN PATRICK MCMAHON and BRADLEY HELLEN as executors of the ESTATE OF LESLIE WILLIAM

AYNSLEY

(Second Applicant)

AND

SEAN PATRICK MCMAHON and BRADLEY HELLEN

as the trustees for the LESLIE AYNSLEY

TESTAMENTARY TRUST

(Third Applicant)

v

CLEMENT AYNSLEY

(First Respondent)

AND

GREGORY AYNSLEY

(Second Respondent)

AND

JENNIFER DE BOOY

(Third Respondent)

AND

CHRISTOPHER O'CONNOR

(Fourth Respondent)

AND

DEANNA AYNSLEY

(Fifth Respondent)

AND

THE COUNCIL OF THE QUEENSLAND INSTITUTE

OF MEDICAL RESEARCH

(Sixth Respondent)

AND

TOC H AUSTRALIA INCORPORATED

(Seventh Respondent)

AND

GWM PROPERTIES PTY LTD (ACN 102 379 135)

(Eighth Respondent)

FILE NO/S:

BS 6722 of 2022

DIVISION:

Trial

PROCEEDING:

Originating application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

8 July 2022 

DELIVERED AT:

Brisbane

HEARING DATE:

Determined on the papers without an oral hearing

JUDGE:

Bradley J

ORDER:

THE ORDER OF THE COURT IS THAT: 

  1. Pursuant to s 96 of the Trusts Act 1973 (Qld), the first applicant: 
    1. (a)
      has power to sell the real property comprised in Lot 112 on SP 191057 (the “Land”) on the terms contained in the written agreement for the sale of the Land executed by the first applicant on 6 June 2022 (the “Sale Contract”); 
    2. (b)
      is permitted to sell the Land on the terms contained in the Sale Contract; and 
    3. (c)
      is otherwise justified in entering into and performing the Sale Contract.
  2. The second applicants are to pay out of the assets of the Estate of Leslie William Aynsley: 
    1. (a)
      The costs of the first applicant, on the indemnity basis;
    2. (b)
      The costs of the second and third applicants, on the indemnity basis; and 
    3. (c)
      The costs of the eighth respondent up to and including 24 June 2022, on the standard basis. 

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – APPLICATIONS TO COURT FOR ADVICE AND AUTHORITY – where the Sale Contract is conditional upon the first applicant obtaining an order in respect of an application to the Court for directions pursuant to s 96 of the Trusts Act 1973 (Qld) or the Court dismissing the application for directions – whether the first applicant has power to enter into the Sale Contract, to perform the Sale Contract and to complete the transfer of the Land pursuant to the Sale Contract 

Succession Act 1981 (Qld), s 21, s 26, s 45(1)

Trusts Act 1973 (Qld), s 94(1), 96

Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER 198, cited.

COUNSEL:

J D McKenna QC and S L Walpole for the first applicant

J Otto QC and K Kluss for the second and third applicants C Jennings QC for the eighth respondent

SOLICITORS:

Piper Alderman for the first applicant

McInnes Wilson Lawyers for the second and third applicants

Clayton Utz for the eighth respondent

[1]  These reasons concern an application under the Trusts Act 1973 (Qld) for directions pursuant to s 96 or, in the alternative, for an Order authorising and conferring power on a trustee pursuant to s 94.  In exercising the jurisdiction to give directions on a trustee’s application, the Court is determining what ought to be done in the best interests of the trust estate.  The Court is not determining the rights of adversarial parties.[1] 

Background

  1. [2]
    Leslie William Aynsley was a World War II veteran.  He purchased a parcel of land at 502 Hope Island Road, Helensvale on the Gold Coast (the Land), which had been the Oxenford Racetrack.  It comprises approximately 20.87 hectares.  
  2. [3]
    Mr Aynsley lived very frugally.  In his later life, he was a widower with three adult children, Clement, Jennifer and Greg, and grandchildren.  Mr Aynsley had no background or experience in property development.  Nor did any of these family members.
  3. [4]
    The Land is held as a freehold estate in a single title registered under the Land Title Act 1994 (Qld).  It is currently described as Lot 112 on SP 191057.  

Appointment of attorney and entry into the Joint Venture Agreement

  1. [5]
    On 11 May 2007, Mr Aynsley appointed Sean Patrick McMahon as his attorney under an enduring power of attorney.  Mr McMahon is a solicitor.  He has been in practice as such for about 23 years.
  2. [6]
    On 20 June 2007, Mr Aynsley entered into a Joint Venture Agreement (JVA) with GWM Properties Pty Ltd (GWM) in relation to a project for the development of the Land.  By the JVA, Mr Aynsley and GWM agreed that they would keep the contents of the JVA and all documents and information relating to the JVA confidential.  There are a few exceptions to this obligation of confidence, including seeking legal advice.  
  3. [7]
    On 26 June 2007, a mortgage of the Land, granted by Mr Aynsley in favour of GWM was registered over the title.  
  4. [8]
    By the JVA, Mr Aynsley and GWM made provision for their Joint Venture to develop the Land progressively over time.  The Joint Venture parties have designated them as sub-stages 1 to 9.  
  5. [9]
    Between about 17 December 2008 and 27 March 2013 leases granted by Mr Aynsley to various tenants were registered on the title to the Land.   

Mr Aynsley loses capacity

  1. [10]
    In 2013, Mr Aynsley lost capacity.  The Queensland Civil and Administrative Tribunal (QCAT) affirmed Mr McMahon’s appointment as Mr Aynsley’s attorney for matters relating to or connected with the joint venture, the Land and the JVA.  Mr McMahon continued to be the attorney for Mr Aynsley in those respects.  He continued to represent Mr Aynsley’s interests in relation to the JVA and made decisions in relation to the JVA on behalf of Mr Aynsley as a Joint Venture party. 
  2. [11]
    Between 1 July 2013 and 9 August 2017, leases granted by Mr Aynsley, through Mr McMahon as his attorney, to various tenants were registered on the title to the Land.

The Statutory Will of Mr Aynsley

  1. [12]
    On 27 September 2017, the Registrar for and on behalf of Mr Aynsley signed a Will (the Statutory Will).  The Registrar signed pursuant to s 26 of the Succession Act 1981 (Qld) and an Order made by the Court that day authorising the Statutory Will to be made, pursuant to s 21 of that Act.  The Statutory Will was made pursuant to Orders made by Applegarth J on an application brought by Mr Aynsley’s litigation guardian, appointed by QCAT.[2]
  2. [13]
    The Statutory Will provides for the appointment of two executors of the estate of Mr Aynsley.  One is Mr McMahon, a partner with the firm McMahon Clarke.  The other executor was to be Ann Fordyce, then a partner of the firm Pilot Partners.  Amongst other provisions, the Statutory Will provided that if one of the executors is unwilling to act as executor, Mr Aynsley appoints in their place the senior director, principal or partner (as the case may be) for the time being of the firm named in the Statutory Will of which the unwilling person was a partner.  
  3. [14]
    The Statutory Will provides for two testamentary trusts.  The executors were to be the initial trustees of the Les Aynsley Testamentary Trust (LAT Trust) to be established under the Statutory Will.  Mr McMahon was to be the trustee of the Joint Venture Testamentary Trust (JVT Trust) to be established under the Statutory Will.  
  4. [15]
    It is convenient to summarise some other relevant parts of the Statutory Will.
  5. [16]
    Mr Aynsley directed his executors and the trustees of any trusts created by the Statutory Will that: 

“in administering my Estate and the Trusts established by or under my Will, my Executors and Trustees must ensure that any obligations I have pursuant to the [JVA and other agreements] entered into on my behalf arising out of or in connection with my Joint Venture interest are fulfilled or otherwise complied with (as the case may be).”

  1. [17]
    Mr Aynsley made eight gifts as pecuniary legacies conditional upon there being sufficient money or assets in his estate from which the legacies could be paid. 
  2. [18]
    Mr Aynsley gave the trustee of the JVT Trust his interest in the Land, the JVA and associated agreements, bank accounts operated pursuant to those agreements, his obligations under those agreements, and “all matters related to the conduct of the joint  venture pursuant to” those agreements.  The sole capital and income beneficiary of the JVT Trust is the LAT Trust.  
  3. [19]
    Mr Aynsley gave to the trustees of the LAT Trust the balance of his estate remaining after the payment of the pecuniary legacies.  
  4. [20]
    The primary beneficiaries of the LAT Trust are Mr Aynsley’s three children, Clement, Gregory and Jennifer, each if they survive Mr Aynsley, and, if any of his children does not survive him or dies before the LAT Trust vests, the Statutory Will makes provision for certain grandchildren of Mr Aynsley and certain greatgrandchildren of Mr Aynsley to be primary beneficiaries, in place of any nonsurviving child, on a par stirpes basis.  
  5. [21]
    Mr Aynsley provided for the trustees of the LAT Trust to pay amounts from the net income of the LAT Trust to the primary beneficiaries each financial year.  
  6. [22]
    The secondary beneficiaries of the LAT Trust are the spouses, children and descendants of the primary beneficiaries, the entities of which any of the primary beneficiaries are a director or have an absolute contingent or expectant interest, three of the persons gifted a pecuniary legacy, the Council of the Queensland Institute of Medical Research, and Toc H Australia Incorporated.   
  7. [23]
    Mr Aynsley provided that the trustees of the LAT Trust may pay from net income of the trust such amounts as the trustees in their absolute discretion determine for the benefit of the secondary beneficiaries.  
  8. [24]
    The primary beneficiaries and some of the secondary beneficiaries are entitled to a distribution of capital of the LAT Trust at the vesting date.  

Further progress of the development of the Land

  1. [25]
    Between 20 October 2017 and 6 September 2019, further leases granted by Mr Aynsley, through Mr McMahon as his attorney, to various tenants were registered on the title to the Land. 
  2. [26]
    On 9 September 2019, a mortgage granted by Mr Aynsley, through Mr McMahon as his attorney, in favour of Commonwealth Bank of Australia was registered over the title to the Land.  On 23 September 2019, a priority of mortgage instrument was registered over the title, giving priority to the CBA mortgage over the GWM mortgage. 
  3. [27]
    Further leases by Mr Aynsley, through Mr McMahon as his attorney, to various tenants were registered on the title to the Land between 4 March 2020 and 10 November 2021. 
  4. [28]
    At present, the Joint Venture parties have developed Stages 1 to 6.  Stages 1 to 4 contain five single-level, large format retail style buildings.  Stage 5 contains a petrol station.  Stage 6 contains a two-level retail and office mixed use building.  Stages 1 to 6 have been fully constructed.  They are now tenanted, with a few minor vacancies that represent about five percent of the total net lettable area.  Easements have been granted over the Land to the Council of the City of Gold Coast and Energex Limited.
  5. [29]
    The Joint Venture parties have secured preliminary approval for Stages 7 and 9 in the form of a mixed-use development, which can include a variety of uses, including a small format convenience store or supermarket, lifestyle retail premises, a gymnasium, a large format retail premises, and residential, resort and aged accommodation.  
  6. [30]
    In about June 2021, the Joint Venture parties decided to consider a process for achieving a sale of the Land.  Mr McMahon, as attorney for Mr Aynsley, and GWM agreed to a process for appointing agents and marketing the Land for sale to potential buyers.  Five selling agents were approached.  Three were appointed. 

The death of Mr Aynsley and the grant of probate

  1. [31]
    On 3 February 2022, Mr Aynsley passed away.  Since his death, Mr Aynsley’s estate has been governed by the Statutory Will and the two testamentary trusts, the JVT Trust and the LAT Trust have been created.  
  2. [32]
    Following Mr Aynsley’s death, Ms Fordyce was unwilling to act as executor of his estate.  She had retired from the firm Pilot Partners.  Bradley Hellen, the senior partner of Pilot Partners, was willing to act in her place.  
  3. [33]
    On 9 March 2022, the Court granted probate of the Statutory Will to Mr McMahon and Mr Hellen as executors.  On his death, all of Mr Aynsley’s property devolved to and vested in these executors pursuant to s 45(1) of the Succession Act 1981 (Qld).  As the grant of probate was made to Mr McMahon and Mr Hellen as executors, this property remained vested in them.  That property included Mr Aynsley’s freehold estate in the Land and his rights under the JVA.[3]  
  4. [34]
    In accordance with the terms of the Statutory Will, Mr McMahon became the sole trustee of the JVT Trust, and Mr McMahon and Mr Hellen became the trustees of the LAT Trust.  
  5. [35]
    On 31 March 2022, Mr McMahon, as trustee of the JVT Trust, became the registered owner of the freehold estate in the Land, this having been transmitted to him as devisee.  The executors must have assented to the devise of the Land to Mr McMahon as trustee of the JVT Trust.  The executors’ rights in relation to the Land ceased.  Mr McMahon as trustee of the JVT Trust became entitled to deal with the Land in accordance with the JVA Trust.  
  6. [36]
    There has been no novation of the JVA.  The legal rights and obligations of Mr Aynsley to GWM under the JVA are vested in Mr McMahon and Mr Hellen as executors.  
  7. [37]
    As executors, Mr McMahon and Mr Hellen have paid the pecuniary legacies provided for in the Statutory Will.  

The Sale Contract

  1. [38]
    The sales process, which had begun in about July 2021, continued after the death of Mr Aynsley.  The sales process identified a purchaser prepared to acquire the Land on terms that are commercially acceptable to Mr McMahon as trustee of the JVT, to Mr McMahon and Mr Hellen as executors, to Mr McMahon and Mr Hellen as trustees of the LAT Trust, and to GWM. 
  2. [39]
    The Joint Venture parties have agreed that, upon settlement of a sale of the Land, the security interest held by JWM over the Land is to be released on the basis that the security interest will apply to the sale proceeds.  They have also agreed in general terms as to how the sale proceeds are to be dealt with under the JVA.
  3. [40]
    Following the death of Mr Aynsley, Mr McMahon became concerned about the extent of his powers under the JVA and the Statutory Will in relation to a sale of the Land of the kind contemplated under the sale contract.  As trustee of the JVT Trust, Mr McMahon sought confidential and privileged legal advice from Counsel about whether he has the power to enter into and perform the sale contract, having regard to the terms of the JVA and the Statutory Will.
  4. [41]
    Mr McMahon and Mr Hellen, as executors of the estate of Mr Aynsley, have a common interest and concern; as do Mr McMahon and Mr Hellen in their capacity as trustees for the LAT Trust.  The executors and LAT Trust trustees 
  5. [42]
    Mr McMahon as trustee of the JVT Trust, Mr McMahon and Mr Hellen as executors, and GWM agreed that Mr McMahon should execute a contract of sale for the whole of the Land and the developments on it on a conditional basis.
  6. [43]
    On 6 June 2022, pursuant to the agreement between the Joint Venture parties, Mr McMahon, in his capacity as a trustee of the JVT Trust, entered into a contract of sale for the whole of the Land on a conditional basis (the Sale Contract).
  7. [44]
    The Sale Contract is conditional upon Mr McMahon obtaining an order in respect of an application to the Court for directions pursuant to s 96 of the Trusts Act, or the Court dismissing the application for directions on the grounds that Mr McMahon already has the power to sell the Land the subject of the JVT Trust at law and does not require the directions.

The proceeding and the parties

  1. [45]
    By this proceeding, Mr McMahon and Mr Hellen, in their relevant capacities, seek such directions. 
    1. (a)
      In his capacity as sole trustee of the JVT Trust, Mr McMahon is the first applicant in this proceeding. 
    2. (b)
      In their capacity as executors of the Estate of Mr Aynsley, Mr McMahon and Mr Hellen are the second applicants.  
    3. (c)
      In their capacity as trustees of the LAT Trust, Mr McMahon and Mr Hellen are the third applicants.  
  2. [46]
    To the extent that they may have different interests in their different capacities, this has been accommodated by Mr McMahon retaining solicitors and Counsel to advise and act for him as trustee of the JVT Trust and first applicant, and Mr McMahon and Mr Hellen retaining solicitors and Counsel to advise and act for them as executors of Mr Aynsley’s Estate and as trustees of the LAT Trust, and as second and third applicants.

The first applicant, Mr McMahon as trustee of the JVT Trust

  1. [47]
    On 1 July 2022, a statement of facts, and open and confidential submissions and affidavits were filed on behalf of the first applicants.  In the submissions, the first applicant contended that on the proper construction of the JVA and the Statutory Will, the sale contemplated by the Sale Contract is authorised by the JVA and Mr McMahon has power under the Statutory Will to enter into and perform the transaction contemplated by the Sale Contract.  On this basis, the first applicant sought an order, pursuant to s 96 of the Trusts Act, that the first applicant has power to sell the Land on the terms contained in the Sale Contract, is permitted to do so, and is otherwise justified in entering into and performing the Sale Contract.  
  2. [48]
    In the alternative, if the Court considered that entering into and performing the Sale Contract is justified, but that Mr McMahon lacks power to do so, the first applicant sought an order pursuant to s 94(1) of the Trusts Act that on the evidence before the Court the Sale Contract is in the best interests of the beneficiaries of the JVT Trust and that power necessary to do so be conferred on the first applicant and/or the second applicants.  

The second and third applicants: Mr McMahon and Mr Hellen as executors and as trustees of the LAT Trust 

  1. [49]
    On 5 July 2022, written submissions were filed on behalf of the second and third applicants.  In these, the second and third applicants adopt the first applicant’s statement of facts and written submissions and submit that it is in the interests of the LAT Trust and the beneficiaries of that trust for the first applicant to enter into the Sale Contract and perform it.

The first, second and third respondents: LAT Trust primary beneficiaries

  1. [50]
    The first, second and third respondents are the three children of Mr Aynsley.  Each survived Mr Aynsley.  They are the primary beneficiaries of the LAT Trust.  None of them made any submissions in respect of the relief sought by the applicants.

The fourth to seventh respondents: the LAT Trust secondary beneficiaries

  1. [51]
    The fourth, fifth, sixth and seventh respondents are those of the secondary beneficiaries of the LAT Trust who are entitled to a distribution of the capital of the LAT Trust at the vesting date.  None of them made any submissions in respect of the relief sought by the applicants.

The eighth respondent: GWM

  1. [52]
    The eighth respondent is GWM, as counterparty to the JVA.  GWM appeared at the two directions hearings.  GWM, as a party to the JVA, has rights in respect of the confidentiality obligations imposed on Mr Aynsley by the JVA.  GWM made no objection to the orders made in respect of the filing of confidential information in the proceeding.  I understand the legal representatives of the first applicant and GWM communicated about those orders before they were proposed.  
  2. [53]
    In written submissions dated 5 July 2022, GWM submitted that it is appropriate and just for the Court to make orders in the terms sought by the first applicant.  As GWM has no common interest with the first applicant in the subject matter of the application, it has had no access to the confidential and privileged legal advice the first applicant has obtained.  GWM’s submissions were appropriately qualified in that respect.  
  3. [54]
    GWM also sought an order for its costs to be paid from the estate of Mr Aynsley.  I will deal with matters of costs at the conclusion of these reasons.  

Consideration of the application

  1. [55]
    I have considered the statement of facts and the open and confidential affidavits and submissions filed on behalf of the first applicant.  I have also considered the submissions filed on behalf of the second and third applicants and the eighth respondent.  I set out below my conclusions.

Powers of the LAT Trustee

  1. [56]
    I am satisfied that, on a proper construction of the JVA and the Statutory Will, Mr McMahon as trustee of the JVT Trust and Mr McMahon and Mr Hellen as executors of the Estate have power to make decisions under the JVA to effect a sale of the Land in the circumstances set out in the statement of facts and in the open and confidential affidavits filed on behalf of the first applicant.  I am also satisfied that they have power to agree to a variation of the JVA to enable or facilitate a sale of the Land, to the extent it may be necessary or appropriate to do so to effect a sale of the Land.  
  2. [57]
    I am satisfied Mr McMahon as trustee of the JVT Trust has power to enter into the Sale Contract, to perform the Sale Contract, and to complete the transfer of the Land pursuant to the Sale Contract.

Whether this conduct is permitted by the LAT Trust, the Statutory Will and the JVA 

  1. [58]
    A sale of the Land by Mr McMahon on the terms contained in the Sale Contract, in addition to being within his power as trustee of the JVT Trust, would also be permitted by the terms of that trust and the terms of the Statutory Will and the JVA.

Whether entering and performing the Sale Contract is justified

  1. [59]
    Mr McMahon has obtained confidential and privileged legal advice from leading and junior Counsel.  Counsel have satisfied themselves that they hold the information, evidence, and instructions necessary and appropriate to provide such advice.  
  2. [60]
    Mr McMahon has acted on advice from the selling agents that the marketing process was the most appropriate way to market the Land for sale.  On the evidence before the Court the sale process has been measured and guided by appropriate professional advisers to achieve the best price for the Land.  It has achieved that purpose.  
  3. [61]
    Mr McMahon has obtained an opinion as to the value of the Land from an independent valuer.  The independent valuer has also advised that the marketing process was the most appropriate way to market the Land for sale, and that the Sale Contract, including the sale price, represents an appropriate sale at an appropriate time.  It avoids exposing the JV Trust to risks associated with potential changes in interest rates and inflation.  
  4. [62]
    Mr McMahon has also obtained the agreement of GWM as a Joint Venture partner to this course of action.  He has provided non-confidential information about the Sale Contract to the primary beneficiaries of the LAT Trust.  Each has supported Mr McMahon proceeding with the sale.  
  5. [63]
    I am satisfied that Mr McMahon has had proper professional advice on the risks and benefits of the options for continuing to hold and develop the Land in accordance with the JVA and selling the Land on the terms of the Sale Contract.  
  6. [64]
    I accept Mr McMahon’s evidence that he has considered and evaluated the risks and potential benefits of continuing to develop the Land in accordance with the JVA.  
  7. [65]
    The terms of the Sale Contract were the subject of independent advice.  Mr McMahon has taken appropriate and reasonable steps to ensure those terms are appropriate for a sale of this nature.  Mr McMahon has taken appropriate and reasonable steps to satisfy himself that he can obtain a release of the mortgages registered over the title to the Land to complete the transfer contemplated by the Sale Contract.   
  8. [66]
    Mr McMahon and Mr Hellen, as trustees of the LAT Trust and as executors, have taken their own confidential and privileged advice from leading Counsel and junior Counsel.  Their Counsel have been briefed with confidential information.  With the benefit of consideration of that confidential information and legal advice on it, Mr McMahon and Mr Hellen are satisfied that the risks and benefits of the available options have been appropriately considered on the basis of proper professional advice.  They are satisfied that the sale process was an appropriate one and the terms of the Sale Contract are also appropriate.  They are satisfied that it is in the interests of the LAT Trust and its beneficiaries (both primary[4] and secondary) for the Sale Contract to be entered into and performed.  
  9. [67]
    In the circumstances, I am satisfied that Mr McMahon as trustee of the JVT would be justified in entering into and performing the Sale Contract.  
  10. [68]
    I am satisfied that the applicants in their respective capacities are genuine in their concerns about the power and authority of Mr McMahon as trustee of the JVT to enter into and perform the Sale Contract in the exercise of his fiduciary duties.  The reasonable appropriate steps have been taken to inform Ms McMahon of his legal position.  However, in the circumstances, he is entitled to seek the guidance of the Court. An Order should be made pursuant to s 96 of the Trusts Act.  No Order pursuant to s 94 is required.   

Costs

  1. [69]
    This is an instance where the duties of the trustees of the trusts and of the executors of the estate in respect of the most significant asset of the late Mr Aynsley warranted their relevant concerns being the subject of an application for judicial advice.  The applicants sued in the interests of the respective trusts and the estate.  They had no personal interest in the litigation.  The three applicants, in each of their respective capacities, should be entitled to recover their costs of the proceeding from the estate on the indemnity basis.[5]  
  2. [70]
    The first to seventh respondents took no active part in the proceeding.  By extra-curial communications, they advised the first applicant of their support for the relief he sought.  They do not seek any order about their costs, if any.  
  3. [71]
    GWM seeks an order that its costs of the proceeding be paid out of the estate and be assessed on the indemnity basis.  It contends that, as a party to the JVA, it was a necessary party to the proceeding.  It also relies on the decision in Boyd v Talbot (2021) 7 QR 661, 695 [90] as authority that it would be appropriate for its costs of the proceeding to be paid out of the estate on the indemnity basis.  
  4. [72]
    Mr McMahon as trustee of the JVA Trust made no submissions about the costs of GWM.  Mr McMahon and Mr Hellen (as the second and third applicants) do not oppose the court making an order that GWM’s costs of the proceeding be assessed on the indemnity basis and paid out of the estate.  
  5. [73]
    In so far as directions the Court might make could affect GWM’s contractual right to maintain the confidentiality of information under the JVA, it had a legal interest in the proceeding.  Those matters were resolved at the two directions hearings, evidently to GWM’s satisfaction.  GWM is entitled to its costs of those hearings.  Rather than risk overzealous scrutiny, it seems appropriate to allow GWM its costs of the proceeding up to and including the day of the second directions hearing.  
  6. [74]
    As a party to the proceeding, GWM was protecting its own contractual rights as to confidentiality.  It had no claim to any funds held by any of the trustees or executors. GWM was not being sued as a trustee.[6]  Its position is quite unlike that of the nominated trustees and beneficiaries in Boyd v Talbot.   
  7. [75]
    I reject the submission that GWM had any legal interest in whether the Court should provide advice pursuant to s 96 of the Trusts Act or authorise and confer powers pursuant to s 94.  It was not necessary for GWM to make any submissions on those matters.  
  8. [76]
    Of course, GWM had an interest in securing a sale of the Land on the terms of the Sale Contract, because such a transaction would likely give it rights to receive a substantial payment under the JVA.  There was nothing improper about GWM being concerned about its own pecuniary interests.  However, those pecuniary interests were irrelevant to whether the Court should provide advice to or authorise and confer powers on the trustees and executors.  GWM’s interests could play no role in the Court’s consideration of the substance of the final relief sought in the proceeding.  
  9. [77]
    Its pecuniary interests mean that GWM could not act as amicus curiae.  To the extent its written submissions were intended to assist the Court, strictly considered, they were officious.  
  10. [78]
    Once the directions were made that dealt with the confidentiality of information, documents and submissions, GWM ceased to be a person whose was necessary to enable the Court to determine whether and to what extent to grant the relief sought by the applicants.  That GWM voluntarily incurred costs after the second directions hearing is no basis for burdening the estate of a frugal man with an obligation to pay them.  

Final disposition

  1. [79]
    In the circumstances, I propose to make an order that, pursuant to s 96 of the Trusts Act, that Mr McMahon as trustee of the JVT Trust:
    1. (a)
      has power to sell the Land on the terms contained in the Sale Contract;
    2. (b)
      is permitted to sell the Land on the terms contained in the Sale Contract; and
    3. (c)
      is otherwise justified in entering into and performing the Sale Contract.
  2. [80]
    I am also satisfied that I should make an order that Mr McMahon and Mr Hellen as executors of Mr Aynsley’s estate should pay out of the assets of the estate:
    1. (a)
      the costs of Mr McMahon as first applicant on the indemnity basis; 
    2. (b)
      the costs of Mr McMahon and Mr Hellen as the second and third applicants on the indemnity basis; and 
    3. (c)
      the costs of GWM as the eighth respondent up to and including 24 June 2022. 

Footnotes

[1] Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER 198, 201, cited in KordaMentha Pty Ltd atf LM Managed Performance Fund v Members of the LM Managed Performance Fund (No 2) [2021] QSC 55, [56] (Williams J).

[2]  The reasons for this Order were published as Re APB, ex parte Sheehy [2017] QSC 201.

[3]  The Land was the major asset of Mr Aynsley at the date of his death. His other assets included cash derived from distributions from the Joint Venture, and a small parcel of land at Staplyton.

[4]  They have also considered the contingent primary beneficiaries and secondary beneficiaries, and the named individual secondary beneficiaries.

[5]  UCPR, r 703(2)(a), (b).

[6]  UCPR, r 703(2)(b).

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Editorial Notes

  • Published Case Name:

    McMahon & Ors v Aynsley & Ors

  • Shortened Case Name:

    McMahon v Aynsley

  • MNC:

    [2022] QSC 140

  • Court:

    QSC

  • Judge(s):

    Bradley J

  • Date:

    08 Jul 2022

  • White Star Case:

    Yes

Appeal Status

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