Smith v Kennedy[2025] QSC 27

SUPREME COURT OF QUEENSLAND

Introduction

1. [1]
   Prior to his death on 18 March 2017, Richard Kennedy (the deceased) worked as a grazier on his 20,000-acre property called Narine near Dirranbandi in western Queensland.  He had two children, Xavier and Alice, with the applicant (Ms Smith), from whom he was divorced.
2. [2]
   By his will, the deceased established the Richard Kennedy Testamentary Trust (the Trust).  Xavier and Alice are the beneficiaries of the Trust.  They will become absolutely entitled to the assets of the Trust in 2037 when Alice reaches 25 years of age.  The deceased appointed the respondent (Mr Kennedy), his brother, as executor of his will and trustee of the Trust.
3. [3]
   Ms Smith brings this proceeding, as litigation guardian for Xavier and Alice, seeking orders pursuant to s 80 of the Trusts Act 1973 removing Mr Kennedy as trustee of the Trust and replacing him with an independent trustee.  She submits that the removal of Mr Kennedy as trustee is justified on three primary grounds.
4. [4]
   First, Ms Smith contends that Mr Kennedy has failed to inform himself of, or otherwise take into proper account, the needs of Xavier and Alice when making decisions which bear upon their welfare.  Instead, according to Ms Smith, Mr Kennedy’s decisions have been influenced by the limited contact which Xavier and Alice have had with their paternal grandparents and Mr Kennedy’s own views as to what the deceased would have wanted for his children.
5. [5]
   Secondly, Ms Smith submits that Mr Kennedy has failed to exercise the powers conferred upon him for purposes consistent with his appointment as trustee because he has not applied sufficient funds towards the maintenance, education, benefit or advancement in life of Xavier and Alice. 
6. [6]
   Thirdly, Ms Smith claims that her relationship with Mr Kennedy has deteriorated to the point where it is not in the best interests of Xavier and Alice for Mr Kennedy to continue as trustee for another 13 years until the assets of the Trust will vest absolutely.
7. [7]
   Mr Kennedy submits that the application to remove him from his position as trustee is extreme in circumstances where he was appointed by the deceased to act in the role and his administration of the Trust has seen the value of the Trust assets increase significantly.  He expresses concern that Ms Smith’s personal animus towards the deceased and his occupation as a farmer is infecting the application.  He asserts that Ms Smith appears to not want her children to have anything to do with Narine or the deceased’s family.  He also argues that the application exhibits a degree of personal financial advancement on Ms Smith’s part.

The power to remove a trustee

8. [8]
   There is no doubt that the court has power to remove a trustee.  It is a discretionary power which may be exercised whenever it is expedient to appoint a new trustee, and it is found inexpedient, difficult or impracticable to do so without the assistance of the court.^[1]  In particular, the court may appoint a new trustee in substitution for a trustee who appears, for any reason, to be undesirable as a trustee.^[2]
9. [9]
   The jurisdiction is supervisory and protective.^[3]  It is not punitive.  Its exercise is not conditioned upon the applicant establishing bad faith, misconduct or breach of trust on the part of the trustee.^[4] 
10. [10]
    Of course, there must be proper justification for the exercise of the power because the Trust is entitled to independence from unwarranted interference by the courts, and the discretionary powers which may be exercised under the Trust are powers which have been conferred upon Mr Kennedy as trustee and not upon anyone else.^[5] 
11. [11]
    In considering whether to exercise the power of removal, the court should have regard to the deceased’s wishes as to the identity of the trustee of the Trust, the assumption being that he thought Mr Kennedy worthy of the task entrusted to him.  Nevertheless, the overriding object of the power of removal remains the due and proper administration of the Trust.^[6] 
12. [12]
    As Dixon J explained in Miller v Cameron:^[7]

“The jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee.  In deciding to remove a trustee the Court forms a judgment based upon considerations, possibly large in number and varied in character, which combine to show that the welfare of the beneficiaries is opposed to his continued occupation of that office.  Such a judgment must be largely discretionary.  A trustee is not to be removed unless circumstances exist which afford ground upon which the jurisdiction may be exercised.  But in a case where enough appears to authorize the Court to act, the delicate question whether it should act and proceed to remove the trustee is one upon which the decision of a primary Judge is entitled to especial weight.”

13. [13]
    In JPD, Henry J cited this passage and observed that, in determining whether intervention is justified in an application of this kind, the guiding consideration will be the welfare of the beneficiaries.  Although a trustee’s past conduct may be so concerning as to give good reason to intervene, determining whether the court should intervene involves considering whether the future welfare of the beneficiaries is opposed to the trustee continuing in that role.^[8]

Ms Smith’s relationship with the deceased and his family

14. [14]
    Ms Smith and the deceased married on 1 May 2009.  Xavier was born on 15 June 2010.  Alice was born on 21 February 2012.
15. [15]
    Before Ms Smith and the deceased separated they lived together on Narine.  The separation occurred when Ms Smith was pregnant with Alice.  Following the separation, Ms Smith (along with Xavier and Alice) lived with her parents in Lane Cove, Sydney.  She later purchased a home with her parents at Burradoo in the Southern Highlands of New South Wales, where she has since lived with the children and her parents.
16. [16]
    On 12 December 2012, the Family Court of Australia made orders by consent between the deceased and Ms Smith which dealt with property matters, maintenance, child support and parenting matters.  Relevantly for the purposes of this application, the orders required that the deceased pay Ms Smith a combined child support payment of $500.00 per week, which was to increase each year according to the Child Support Regulations formula.
17. [17]
    Ms Smith’s evidence is that from the time of the separation, the deceased had regular contact with the children.  He spoke to them by telephone or via video call every weekend and visited them every six to eight weeks.  Ms Smith took the children to visit the deceased at Narine on two occasions.  She was working on arranging another visit to Narine when the deceased passed away unexpectedly.
18. [18]
    The Family Court orders provided for the children to visit their father at Narine more often than in fact occurred.  When asked in cross-examination whether there was a reason for that, Ms Smith stated that, around the time of the separation, her relationship with both the deceased and his family was fractured.  In particular, she said that on the second occasion she took the children to Narine to visit the deceased his parents were at the property the entire time.  She said she explained to the deceased how difficult this was for her and that, when they were discussing a further visit to Narine, he told her that he would not allow his parents on the property if she was there with the children.^[9]

Terms of the deceased’s will

19. [19]
    The deceased’s will relevantly provided:

    1. by cl 1, for the appointment of Mr Kennedy as executor and trustee;
    2. by cl 2, that the deceased gifted his entire estate to Mr Kennedy on trust “to sell call in collect and convert the same into money by sale or otherwise by public auction or private contract at such time or times and in such manner as [Mr Kennedy] shall think fit” and, after payment of the deceased’s debts, funeral expenses and testamentary expenses, to hold the proceeds of the sale of the estate assets and “all parts of [the] estate for the time being unsold” for the deceased’s children who attain the age of 25 years in equal shares as tenants in common;
    3. by cl 5, that Mr Kennedy was empowered to carry on, manage and work the deceased’s farming property (that is, Narine) during such period as he should think fit, including the power to lease the property;
    4. by cl 7(b), that Mr Kennedy was empowered to apply the whole or any part or parts of the income and/or the capital of the contingent or presumptive share of the children for or towards their “maintenance education benefit or advancement in life”.

The financial position of the Trust

20. [20]
    The most significant of the Trust assets are:

    1. Narine, which is presently valued at between $15.5 million and $16.5 million (having been valued at approximately $7.3 million when the deceased passed away);
    2. a portfolio of shares and bonds purchased with the proceeds from the sale of plant, machinery, grain and livestock, which is presently valued at approximately $2.8 million;
    3. a further portfolio of shares owned by Ulamona Development Corporation Pty Ltd (as trustee of the Kennedy Investment Trust) that is presently valued at between $1.1 million and $1.2 million.
21. [21]
    Narine is currently being leased.  The lease has an expiry date of 31 December 2027 and contains an option for the tenant to renew for a further period of five years from that date.
22. [22]
    Financial statements for the Deceased’s estate show that:

    1. for the year ended 30 June 2022, the estate earned income of $793,486, made a net profit of $538,929 and had total funds available for distribution of $530,997;
    2. for the year ended 30 June 2023, the estate earned income of $724,859, made a net profit of $507,769and had total funds available for distribution of $508,213.

Mr Kennedy’s concern with retaining Narine

23. [23]
    Following his appointment, Mr Kennedy decided that the Trust should retain Narine as a going concern.  He says that he took that course because:

    1. there was no need to sell the property because the deceased’s debts could be paid from the sale of grain and livestock on hand;
    2. he believed that the deceased created the Trust so that when Xavier and Alice turned 25, they could decide for themselves whether they wished to take over the running of Narine or to sell the property;
    3. the increasing cost of land would mean that, if Narine was sold, the children would not be able to purchase a similar property in the future if they decided that they wished to pursue a career in agriculture;
    4. Narine would provide both income and capital growth for the Trust;
    5. the income from Narine, together with the other assets of the Trust, would mean that the Trust was able to provide for the maintenance, education, benefit and advancement in life of the children without the need to sell the property.
24. [24]
    Consistently with this evidence, Mr Kennedy’s submissions assert that the clear intention of the Trust was for Narine to be retained until the children reached an age where they could determine for themselves whether they wished to “go on the land”.  From that point, the submissions argue that Ms Smith appears to not want her children to have anything to do with Narine and that the “underlying plan” in seeking to replace Mr Kennedy trustee is for Narine to be sold.
25. [25]
    Having regard to the text of cl 2 of the deceased’s will, I do not accept that it expresses the deceased’s intention as clearly as Mr Kennedy submits.  If the deceased’s intention in establishing the Trust was that Mr Kennedy was to hold Narine on trust for the children until they were 25 years old, it would have been simple for cl 2 to say that expressly.  Instead, cl 2 is expressed as a direction to “sell call in collect and convert” the assets comprising the deceased’s estate into money.  This is not to suggest that Mr Kennedy has acted in breach of the Trust by retaining Narine and leasing it out.  It is abundantly clear from cl 2 that Mr Kennedy has a discretion as to when estate assets should be sold and that assets which remain unsold are to be held on trust for the children.  Further, cl 5 plainly contemplates the continued operation of Narine, or its leasing out, while it is retained as an asset of the Trust.  Nevertheless, I do not accept Mr Kennedy’s submission that this application falls to be determined on the basis that the clear intention of the deceased in establishing the Trust is that Narine should not be sold before the children are 25 years old.
26. [26]
    In any event, Ms Smith says that she has never expressed a desire that the Trust should sell Narine.  Her preference is for Narine to be retained, if possible, so that the children can decide what they would like to do with it when the Trust vests.  However, her overriding concern is that the Trust assets are maximised and that the children receive benefit from those assets to support their maintenance, education, benefit and advancement in life.  She would support a decision to sell Narine if that was considered necessary to maximise the Trust assets or to meet the children’s immediate needs.  That evidence was not challenged in cross-examination.  Having regard to that evidence, I do not accept Mr Kennedy’s submission that the present application forms part of a plan on Ms Smith’s part that Narine should be sold.

Ms Smith’s financial position

27. [27]
    Ms Smith works an average of three days per week as a primary school teacher.  Her average net weekly income from this work is approximately $950, however she does not receive any income from her employment during school holidays as she is in casual employment.  Ms Smith also receives a weekly child support payment from the Trust of $650.  This gives Ms Smith a monthly income, in months when she works, of approximately $6,400.
28. [28]
    Ms Smith has monthly expenses of approximately $7,400.  Of that amount, more than $3,700 is expended for the benefit of Xavier and Alice.  On that basis, the entire amount of the child support payment provided by the Trust ($2,800 per month) is spent on Xavier and Alice.  There is a deficit between Ms Smith’s income and her expenses which increases during the school holiday when she does not receive any income from her employment.
29. [29]
    Ms Smith’s most significant asset is her half share of the house she purchased with her parents at Burradoo.  Due to Ms Smith’s financial situation, and her parents age, they have decided to list that property for sale and move to a smaller single level property so that Ms Smith might have more cash available for daily expenses.
30. [30]
    Ms Smith has received significant financial support from her parents, including paying for Xavier and Alice to attend private primary schools.  She presently owes approximately $200,000 to her parents.

Initial communications between Ms Smith and Mr Kennedy

31. [31]
    After Ms Smith became aware of the contents of the deceased’s will, she engaged in correspondence with Mr Kennedy about the deceased’s estate.  Given her divorce from the deceased, Ms Smith thought that it would be more appropriate to approach Mr Kennedy through solicitors rather than contact him directly. 
32. [32]
    On 6 June 2017, Ms Smith’s solicitors sent a letter to Mr Kennedy’s solicitors which, among other things, asked that Mr Kennedy consider resuming the child support payments which the deceased had been making prior to his death and bringing the arrears of those child support payments, accrued since the deceased’s death, up to date.  Mr Kennedy does not appear to have responded to that request until a meeting between Ms Smith and Mr Kennedy on 25 November 2017.
33. [33]
    Mr Kennedy first communicated that he wished to meet with Ms Smith in an email he sent to her on 30 October 2017.  In a subsequent email, Mr Kennedy indicated the topics he wished to discuss at the proposed meeting.  The majority of those topics concerned activities at Narine and financial aspects of the deceased’s estate.  At the end of his list of proposed topics, Mr Kennedy included:

“•  Possible scenarios for Narine and estate when Alice and Xavier inherit

• Alice & Xavier in general”

34. [34]
    Ms Smith responded by agreeing to meet with Mr Kennedy.  She indicated that, in addition to the matters Mr Kennedy had raised, she wished to discuss Xavier and Alice’s immediate future and their education.
35. [35]
    Mr Kennedy and Ms Smith met on 25 November 2017 at a cafe in Dunedoo, New South Wales.  Ms Smith took her father with her to that meeting for support.  Ms Smith and Mr Kennedy gave different evidence about her father’s participation in the discussions.  On Ms Smith’s evidence, in response to some questions asked by her father, Mr Kennedy said to him: “Shut up, this has nothing to do with you”.  Ms Smith says that Mr Kennedy told her father to get out, and that her father then left the meeting.  Mr Kennedy’s account is that Ms Smith’s father continually interrupted his discussions with Ms Smith by stating that holding Narine would create a capital gains tax burden for the children.  Mr Kennedy says that he explained to Ms Smith’s father that he had come to talk to Ms Smith about the estate and the children’s needs and asked him to sit at another table in the cafe.  He says that the meeting continued productively after Ms Smith’s father complied with that request.
36. [36]
    It is not necessary to attempt to resolve the differences between these accounts.  On both parties’ accounts, it appears the meeting led to some areas of agreement between Ms Smith and Mr Kennedy.  Although Ms Smith describes Mr Kennedy’s interactions with her father as distressing, she says that she listened to everything Mr Kennedy wanted to talk about and understood what he wanted to do with the estate and the Trust.  She says that all she asked for was that the Trust pay education costs for the children, in response to which Mr Kennedy agreed to pay private school fees.  She says that she and Mr Kennedy left the meeting on good terms and that, after the meeting, she was hopeful that she and Mr Kennedy could maintain a reasonably respectful relationship in discussing matters connected with the Trust and the children.
37. [37]
    On 7 December 2017, Mr Kennedy sent an email to Ms Smith which summarised their meeting.  He commenced by thanking Ms Smith for meeting him “to discuss Narine”.  He then listed the matters discussed.  That list reflected the matters identified by both Mr Kennedy and Ms Smith prior to the meeting.  It also referred to discussion of how the children would be able to see their paternal grandparents (Mr Kennedy’s parents) and how Mr Kennedy and Ms Smith could make sure they could both get on with one another. 
38. [38]
    The email stated that the outcome of the meeting was that the parties seemed to be able to work through everything they discussed and to reach agreement.  In terms of specific outcomes, the email stated:

“In regards to the child maintenance, the estate is prepared to back pay to when the payments ceased (Mar or April) during which time you have not received anything, we hope to reinstate the original amount of $562.50.

Then to carry on the maintenance that was being carried out before Richard’s death ($562.50 week).  We hope to get these payments started asap (before Christmas all going well), the solicitor just has to sort out the paperwork etc

The estate has every intention to assist financially with the education of both Alice & Xavier and at a private secondary school.

[T]o work out in the near future when and how the grandparents (Richards side) can see and spend some time with their grandchildren.”

39. [39]
    On 12 December 2017, Ms Smith sent the following reply to Mr Kennedy:

“Thank you for your email.  Again, thank you very much for initiating the meeting.  It was good to see you.  I am grateful to you for all you have done with Narine, to prepare for its leasing and also everything you have organised and put into place financially, on behalf of the children.  I feel confident after seeing you, that the future of our ongoing relationship will be a positive one.”

40. [40]
    Shortly after this, Mr Kennedy caused the Trust to pay $21,375 to Ms Smith representing the amount of child support payments which she had not received since the deceased’s death.  From that time, the Trust also began making a weekly payment to Ms Smith in the amount previously paid by the deceased. 

The issue of contact with the children’s paternal grandparents

41. [41]
    Mr Kennedy’s reference to the children seeing their paternal grandparents is consistent with an earlier request he had made to Ms Smith that Xavier and Alice call their grandmother for her 80^th birthday.  Here again, Ms Smith and Mr Kennedy gave different accounts of that earlier interaction.
42. [42]
    On Ms Smith’s evidence, Mr Kennedy telephoned her on 25 June 2017, spoke to her in an aggressive manner and demanded that Xavier and Alice call their grandmother that day for her 80^th birthday.  Mr Kennedy denies speaking aggressively to Ms Smith or demanding that the children speak to their grandmother.  He says that he telephoned Ms Smith that day and asked if she could call his mother that evening as it was his mother’s 80^th birthday and the Kennedy family was having dinner together.  His mother had not seen or spoken to the children in the three months since the deceased had passed away.
43. [43]
    The children did not speak to their grandmother that evening.  Ms Smith says that she asked Xavier (who was then 7 years old) to speak to his grandmother but he refused.  Alice (who was then 5 years old) had no recollection of her grandmother.  Ms Smith did not consider it appropriate to try and force Alice to speak to her grandmother.
44. [44]
    Ms Smith says that she sent an email to Mr Kennedy the next day apologising for not calling his mother for her birthday.  Several days later, Ms Smith received a voicemail message from Mr Kennedy’s wife, Sally, saying that she wanted to discuss some things with Ms Smith.  When Sally called again and spoke to Ms Smith she indicated that she and Mr Kennedy were furious that Xavier and Alice did not speak to their grandmother on her birthday.  Although Mr Kennedy accepts that his wife spoke to Ms Smith at this time, he denies that they were furious that the children had not spoken to their grandmother as he had requested.  Instead, he says, they were disappointed.
45. [45]
    Again, it is not necessary for me to attempt to resolve the differences between the accounts given by Ms Smith and Mr Kennedy.  On any view, the level of contact which the children had with the deceased’s family, and particularly their paternal grandparents, was an issue of contention.  It would be raised in later communications between the parties and in their submissions on the present application. 
46. [46]
    Given those underlying familial tensions, it is perhaps unsurprising that, despite the hopes expressed by both Mr Kennedy and Ms Smith about maintaining a positive relationship, that did not eventuate.

Further correspondence regarding financial support for the children

Ms Smith’s request for financial assistance in February 2020

47. [47]
    On 9 February 2020, Ms Smith sent an email to Mr Kennedy stating that the children’s financial needs had increased significantly as they had grown.  She informed Mr Kennedy that Xavier had dental surgery the previous year and required braces.  She asked that Mr Kennedy authorise payment for Xavier’s braces.  She also asked that Mr Kennedy authorise payment of school fees for both Xavier and Alice.^[10]  Finally, Ms Smith asked that Mr Kennedy agree to increase the weekly child support payment.
48. [48]
    On 19 February 2020, Mr Kennedy sent a letter in response to Ms Smith’s requests.  He agreed to pay for 50% of the cost for Xavier’s braces.  He also confirmed that the Trust would contribute to secondary school fees when the children reached that stage of their education.  He refused to pay for private primary school fees, however, because he said this would go against the deceased’s express wishes.  He also said that he was unable to increase the amount of the weekly child support payment.
49. [49]
    Mr Kennedy’s letter included the following passage explaining his position:

“The clear advice that I have received is that I must balance the obligations Richard would have been under had he still been alive, with my duty as an executor and custodian/trustee, to protect the children’s inheritance, and the fact that it is not the children’s responsibility to support themselves with their inheritance.

For every decision I make as the Trustee of Richard’s Estate, including in relation to these requests set out in your letter, I have to take into consideration factors such as what, if any, legal implications there might be for the Estate both long and short term, am I adhering to my legal obligations and duties as Trustee, assess any potential litigation risks for the Estate and myself, what is my justification for these decisions, am I interpreting and acting within the provisions of the will correctly, is my decision in the best interests of the Estate, what are the children’s needs, whether others have any obligations to provide for their necessities or other financial requirements, and is [it] a decision that Richard would want me to make.  Unfortunately, assessing all of these issues, is not black and white, which makes the decision process a much harder one.”

50. [50]
    During cross-examination, Mr Kennedy was asked what he meant by his statement that it was “not the children’s responsibility to support themselves with their inheritance”.  In response, Mr Kennedy said that it was not the children’s responsibility to pay for their upbringing.  When questioned further he acknowledged that it would have been possible to fund items such as school fees and orthodontic expenses using cash held by the estate or by selling liquid assets such as shares.  It would not have been necessary to sell Narine.  Mr Kennedy stated that he did not believe such expenses should be funded from the capital of the Trust but should instead come from the income earned by the Trust.^[11]
51. [51]
    When Mr Kennedy was asked what legal implications or litigation risks (for the estate or himself) he considered when deciding whether to provide funds for primary school fees and orthodontic expenses, Mr Kennedy said he thought that Ms Smith would sue him.^[12]  He also said that he was concerned about his liability to Xavier and Alice in respect of funds he agreed to expend from the Trust, including if he spent too much money on their education.^[13] 

Ms Smith’s request for financial assistance in November 2020

52. [52]
    Ms Smith next requested that Mr Kennedy consider providing further funds from the Trust in a letter dated 20 November 2020 from her solicitors to Mr Kennedy’s solicitors.  That letter was written approximately a fortnight after Mr Kennedy’s solicitors had served a copy of Mr Kennedy’s application for payment of executor’s commission.
53. [53]
    In the letter dated 20 November 2020, Ms Smith’s solicitors referred to the power conferred on Mr Kennedy by cl 7(b) of the deceased’s will and asked that Mr Kennedy interpret the will more favourably towards the children having regard to the deceased’s intention when including cl 7(b) in his will.  The letter then asked for an indication of Mr Kennedy’s position on the Trust paying the following costs:

    1. all primary, secondary and tertiary education costs for both children, including school fees, boarding fees, technology and devices, tutoring fees (if required) and any extra-curricular activities (such as musical instruments and tuition, and school camps and excursions);
    2. a weekly child support payment of $1,350 (increased from $562.50);
    3. the purchase of a new vehicle for Ms Smith to transport the children;
    4. the provision of a travel fund;
    5. reimbursement to Ms Smith of preschool and primary school fees previously paid estimated to be $45,000; and
    6. the purchase of a three bedroom apartment in the Lane Cove area of Sydney or a small rural holding of up to 10 acres, suitable for horses, near Bowral.
54. [54]
    Mr Kennedy’s solicitors did not respond to that request until, on 7 January 2021, they informed Ms Smith’s solicitors that Mr Kennedy did not intend to respond until his application for payment of executor’s commission had been finalised.
55. [55]
    That application was resolved on 8 February 2021 when Martin J (as His Honour was then) ordered that Mr Kennedy receive $400,000 from the estate and, for each financial year from 30 June 2021 for as long as the estate owns Narine, the sum of 0.5% of the corpus and 3% of the gross income for the financial year.
56. [56]
    On 16 April 2021, Mr Kennedy’s solicitors wrote a letter to Ms Smith’s solicitors responding to the request set out in the letter of 20 November 2020.  That response stated that, although Mr Kennedy did not believe that it was the estate’s responsibility to fund the children’s needs from their inheritance, he intended to release funds from the Trust to pay for the following:

    1. tuition fees for Xavier to attend secondary school at St Ignatius College, Riverview (Riverview) in Sydney and for Alice to attend secondary school at the Frensham School for Girls (Frensham), but not boarding or other fees;
    2. 50% of the cost of Xavier’s braces;
    3. private health insurance for Xavier and Alice;
    4. an increased weekly support payment of $600;
    5. travel costs for the children to visit their paternal grandparents in Toowoomba and to visit Narine at least once per year.
57. [57]
    On 1 June 2021, Ms Smith’s solicitors wrote again to Mr Kennedy’s solicitors noting that because Xavier lived two hours from Riverview he would have to board, but that Ms Smith was not in a financial position to meet those costs.  On that basis, Ms Smith’s solicitors requested that Mr Kennedy further consider the Trust paying for those boarding fees.  That request was refused for a second time in an email sent by Mr Kennedy’s solicitors to Ms Smith’s solicitors on 22 September 2021.

Ms Smith’s request for financial assistance in August 2022

58. [58]
    By letter dated 24 August 2022, Ms Smith’s solicitors set out a further request for financial assistance.  The letter referred to significant learning difficulties which Alice had been experiencing at primary school.  It informed Mr Kennedy that Ms Smith had enrolled Alice for grades 5 and 6 at Gib Gate Primary School (Gib Gate), the junior school for Frensham, on the basis that the primary school Alice was attending no longer met her increased learning requirements.  Ms Smith asked that Mr Kennedy consent to the Trust paying tuition fees for Alice at Gib Gate.
59. [59]
    Ms Smith also requested an increase of the weekly child support payment to $1,000.  The letter explained Ms Smith’s intention was to expend those funds on both Xavier (guitar lessons, tennis lessons and extension maths tutoring) and Alice (academic tutoring, appointments with a psychologist and horse-riding lessons).
60. [60]
    Mr Kennedy’s solicitors responded to this request in a letter dated 2 November 2022, stating that the Trust would pay the full amount of each child’s “reasonable secondary school tuition fees” when the time came.  However, the letter confirmed that the Trust would not pay for primary school fees on the basis that the deceased wanted his children to attend a public primary school.
61. [61]
    As to the request to increase the weekly child support payment, the letter stated that Mr Kennedy agreed to increase this to $650 on the basis that this was the amount he considered appropriate considering both Ms Smith’s parental obligation to provide for the children and his view that it was not for the children to provide for themselves out of their inheritances.
62. [62]
    In addition to responding to Ms Smith’s request for increased financial assistance, the letter of 2 November 2022 raised the concern that the children’s paternal grandparents had had almost no contact with Xavier and Alice since the deceased had passed away.  Further, it asserted that, because Ms Smith had made no real effort to facilitate any form of contact, the children had not had any opportunity to maintain a meaningful relationship with their father’s family.  Mr Kennedy requested that Ms Smith make arrangements for the children to speak via telephone or video call with their paternal grandparents on the first weekend of every month.  The letter also stated that Mr Kennedy was prepared to have the estate cover the cost for Ms Smith and the children to travel and stay at Toowoomba at least once a year to see the deceased’s parents and other members of his family.
63. [63]
    The letter concluded by asking that Ms Smith’s solicitors notify Mr Kennedy’s solicitors of the arrangements for the children to start having contact with the deceased’s family and that Ms Smith accepted Mr Kennedy’s decision regarding the extent of ongoing financial support from the Trust within 30 days, failing which Mr Kennedy’s proposal would lapse.

Ms Smith’s request for financial assistance in November 2022

64. [64]
    By late November 2022, Ms Smith had appointed new solicitors.  Those solicitors sent a letter dated 28 November 2022 to Mr Kennedy’s solicitors, continuing to question whether Mr Kennedy was appropriately balancing his obligation to ensure the security of the Trust property with his discretion to pay Trust funds for the children’s maintenance, education, benefit and advancement in life. 
65. [65]
    The letter stated among other things that, after further reviewing the options for Xavier’s secondary schooling and considering Xavier’s needs, Ms Smith had decided that it would be most appropriate for Xavier to attend Riverview as a boarder.  The letter also stated that, in Ms Smith’s assessment, the learning support that Alice would receive at Gib Gate would be invaluable in addressing Alice’s learning difficulties.  It noted that Mr Kennedy’s reliance on the deceased’s wishes in refusing to allow the Trust to pay primary school fees ignored the fact that this was an expression of the deceased’s wishes at the time it was made and could not have taken into account information as to Alice’s developmental needs which had recently emerged.
66. [66]
    The letter concluded by asking that, in order to provide Ms Smith with some certainty, Mr Kennedy advise by 12 December 2022 whether he would apply funds from the Trust for:

    1. the children’s maintenance in the sum of $1,200 per week;
    2. private medical insurance for both of the children;
    3. Alice’s tuition at Gib Gate and subsequently at Frensham for the duration of secondary school;
    4. Xavier’s tuition and boarding at Riverview for the duration of secondary school;
    5. payment of $1,000 to be paid in mid-January 2023 (and reviewed annually) to cover incidental costs associated with the children’s return to school;
    6. payment of one-off educational and/or travel costs to be considered as they arose.
67. [67]
    Mr Kennedy’s solicitors responded by a letter dated 12 January 2023 stating that Mr Kennedy was considering all available information in the exercise of his discretion.  The letter said that to attempt to work out a fair and reasonable payment for the maintenance, education and advancement of Xavier and Alice, Mr Kennedy required clarification of Ms Smith’s estimated expenses.  It asked that Ms Smith provide a statutory declaration setting out monthly expenses relating to the children for 2022 and budgeted monthly expenses relating to the children for 2023. 
68. [68]
    The letter of 12 January 2023 from Mr Kennedy’s solicitors also attached a letter written by Mr Kennedy on behalf of his family addressing the question of the children’s contact with the deceased’s family, and particularly their paternal grandparents.  Mr Kennedy repeated the request that the children be allowed to speak to their grandmother on the first weekend of every month and be allowed to visit her (along with other members of the deceased’s family) in Toowoomba at a time convenient to all parties.

Further correspondence regarding education costs

69. [69]
    On 19 March 2023, Mr Kennedy sent an email directly to Ms Smith stating that he had not received any invoices or payment details for the school Xavier was attending.  He asked that Ms Smith advise him which school Xavier was attending and when the next payment of fees was due so that he could contact the school and arrange ongoing payment of the tuition fees.  Mr Kennedy also confirmed in that email that the weekly child support payment would be increased to $650 from 31 March 2023.
70. [70]
    In response, Ms Smith caused her solicitors to write to Mr Kennedy’s solicitors on 31 March 2023, enclosing the account statements from both Riverview (for Xavier) and Gib Gate (for Alice).  It stated that those fees had been paid from the superannuation fund of Ms Smith’s parents.  The letter asked that the Trust:

    1. reimburse Xavier’s tuition and boarding fees which had been paid to Riverview for Term 1;
    2. agree to pay both tuition and boarding fees for the duration of Xavier’s secondary schooling;
    3. reimburse Alice’s tuition fees which had been paid to Gib Gate for Term 1;
    4. agree to pay tuition fees for Alice at both Gib Gate and at Frensham for secondary school.
71. [71]
    On 13 April 2023, Mr Kennedy’s solicitors wrote to Ms Smith’s solicitors stating that Mr Kennedy had been in contact with Riverview and “arranged payment of Xavier’s tuition and boarding fees from this time forward.”  The letter further stated that the Trust would not be reimbursing any educational expenses incurred in Term 1.  Other than that refusal to reimburse any Term1 fees, the letter made no reference to Alice’s tuition fees.
72. [72]
    On 19 May 2023, Ms Smith’s solicitors wrote again to Mr Kennedy’s solicitors asking that he reconsider his decision that the Trust would not reimburse Xavier’s tuition and boarding fees for Term 1.  The letter referred once again to Alice’s learning difficulties and asked that Mr Kennedy also reconsider his decision that the Trust would not pay for her tuition fees at Gib Gate.  In relation to Alice’s learning difficulties, the letter enclosed a report card provided by Alice’s Teacher at Gib Gate and a report prepared by a psychologist, Ms Martyres, after she had assessed Alice on 20 September 2022 (PosAbility Report). 
73. [73]
    The Executive Summary of the PosAbility Report included the following statement:

“Alice presented as a quiet, reserved young girl with an overall intellectual functioning within the Low Average range.  There is, however, a large discrepancy between her general reasoning abilities and her efficiency in processing information, which suggests that her significant difficulties with her processing speed and working memory are greatly impacting on her learning.  This also suggests that she may require a significant amount of intervention and support to enable her to acquire foundation skills and keep up with her peers.  Despite these challenges, Alice presents with significant difficulties in Reading, Written Expression and in Mathematics.  This means that she meets the diagnosis of a Specific Learning Difficulty in Reading, Written Expression and Mathematics.

74. [74]
    The PosAbility Report recommended that Ms Smith engage in further investigations with respect to Alice’s anxiety and to obtain an assessment and assistance from an occupational therapist.
75. [75]
    Mr Kennedy’s solicitors provided his response in a letter dated 7 August 2023.  Mr Kennedy agreed to reimburse the Term 1 tuition fees for Xavier but refused to reimburse the Term 1 boarding fees as he had not agreed that the Trust would pay those fees before the cost was incurred.
76. [76]
    As to Alice’s education, the letter of 7 August 2023 asserted that the report card from Gib Gate had largely been blanked out and provided little if any information about Alice’s performance at school.  It acknowledged receipt of the PosAbility report but requested further information, being what was described as Alice’s “full report” from Gib Gate for Semester 2 of 2022 and Semester 1 of 2023, as well as her “full report” from her previous primary school for Semester 1 of 2022.
77. [77]
    Mr Kennedy’s assessment that the Gib Gate report card provided to him by Ms Smith had been redacted was incorrect.  Ms Smith deposed to not having changed or redacted anything on that report card.  That evidence was not challenged in cross-examination.  Although there are blank sections on the report card, that is explained by the fact that, due to her learning difficulties, Alice was not studying any academic courses for which a grade could be given.  Instead, as the report card stated, Alice was engaged in “academic coaching – individualised learning” directed towards overcoming her difficulties with reading.

Mr Kennedy’s changing position on boarding fees

78. [78]
    On 14 March 2024, Mr Kennedy wrote a letter directly to Ms Smith in the following terms:

“With Alice commencing secondary school in 2025 and the Estate paying for her tuition fees, I have reassessed the total funds that the Estate can contribute towards Xavier and Alice’s education and living expenses.

Below is a summary of current and projected expenses:

1. As at January 2024 the Estate is paying the following:

Weekly allowance to Ms Smith $33,800 pa

Riverview tuition (Xavier)  $33,460 pa

Riverview boarding (Xavier)  $22,410 pa

       $89,670 pa

2. As at January 2025 projected education costs and allowance:

Weekly allowance to Ms Smith $33,800

Riverview tuition (Xavier)  $33,460 (2023 fee amount)

Riverview boarding (Xavier)  $22,410 (2023 fee amount)

Frensham tuition    $37,905 (2024 fee amount)

       $127,575 pa

The obligations of the Estate extend further than the maintenance, education and advancement of the children.  The payment of $127,575 annually exceeds that which is considered balanced and appropriate expenditure of Estate income to only one area of the Estate.

I therefore advise that as from 2025, when Alice commences year 7, the Estate will make funds available for all of Xavier and Alice’s tuition fees and will continue to pay the weekly allowance of $650.00.”

79. [79]
    Although it was not stated explicitly, this letter communicated Mr Kennedy’s decision that the Trust would not pay Xavier’s boarding fees at Riverview from 2025.  As Mr Kennedy acknowledged in cross-examination, the funds which the Trust had paid in 2023 and 2024 in respect of Xavier’s boarding fees would be re-allocated from 2025 to pay Alice’s tuition fees for secondary school.^[14]
80. [80]
    By July 2024, Ms Smith had engaged her present solicitors.  On 17 July 2024, those solicitors sent a letter to Mr Kennedy which, among other things, referred to his letter of 14 March 2024.  That letter also foreshadowed the present application.
81. [81]
    On 23 August 2024, Mr Kennedy’s solicitors wrote to Ms Smith’s solicitors addressing issues raised in the letter of 17 July 2024.  On the question of boarding fees, Mr Kennedy’s solicitors stated that Mr Kennedy had never agreed that the Trust would pay those fees.  Having regard to what was said by the same solicitors in their letter dated 13 April 2023 (see [71] above), that statement was plainly wrong.
82. [82]
    The position changed again when Mr Kennedy affirmed his affidavit for the purpose of the present application.  Mr Kennedy now deposes that the Trust will continue to pay Xavier’s tuition fees and boarding fees while he remains a student at Riverview.  This effectively reverses the decision which Mr Kennedy had communicated to Ms Smith in his letter of 14 March 2024, and which was confirmed in the letter of 23 August 2024 sent by his solicitors (which Mr Kennedy accepted was sent on his instructions) that the Trust would not pay for Xavier’s boarding fees.^[15] 

Should the jurisdiction to remove Mr Kennedy as trustee be exercised?

83. [83]
    Having regard to the principles set out in the authorities referred to in [9]-[13] above, before exercising the jurisdiction to remove Mr Kennedy as trustee I must first be satisfied that Mr Kennedy’s past conduct gives ground upon which the jurisdiction may be exercised, and secondly, be satisfied that, upon consideration of all the circumstances of this case, it appears that the welfare of Xavier and Alice is opposed to Mr Kennedy remaining as trustee.

Are there grounds upon which the jurisdiction may be exercised?

84. [84]
    Having considered Mr Kennedy’s responses to requests that the Trust provide further financial assistance for the benefit of the children, I am satisfied that his past conduct gives ground upon which the jurisdiction to remove him as trustee may be exercised. 
85. [85]
    The general tenor of Mr Kennedy’s communications concerning the administration of the Trust gives the impression that, from an early stage, he was primarily focussed on the task of preserving and enhancing the value of the Trust assets which the children would ultimately inherit, particularly Narine.  Consequently, he approached requests for financial support for the children from the position that approving such requests would erode the value of their inheritance.  His answers in cross-examination also suggested that his consideration of requests for financial support for the children was also influenced by a concern to protect his own position as trustee and liabilities to which he thought he might be exposed (see [51] above).  I am satisfied that this approach resulted in several instances where, in purporting to exercise the discretion conferred by cl 7(b) of the deceased’s will, Mr Kennedy did not sufficiently consider whether his refusal to provide further financial support was in the best interests of the children.
86. [86]
    The first matter of concern is Mr Kennedy’s refusal of the request for payment of the children’s primary school fees.  As set out in the correspondence sent by both Mr Kennedy and his solicitors (for example, see [48] and [60] above), Mr Kennedy refused to expend Trust funds to pay for Xavier or Alice to attend a private primary school because he said that was what the deceased wanted.
87. [87]
    From the cross-examination of Mr Kennedy, it appears that in adopting that position, beyond ascertaining that there were public primary schools located around Burradoo, he did not make any inquiries about those schools.^[16]  Further, Mr Kennedy accepted that, when he decided to refuse Ms Smith’s request that the Trust pay private primary school fees, he knew nothing about the children, including what their interests or their educational needs might be.^[17] 
88. [88]
    Given that evidence, Mr Kennedy’s decision could not have been based upon a consideration of the suitability of a particular public school having regard to the interests and educational needs of the children at the time the request for financial assistance was made.  Nor could it have involved any consideration whether the private primary schools which Ms Smith chose for her children would provide greater benefits in terms of their education and advancement in life than a public primary school.  Instead, when asked to explain why he had determined that it was appropriate that the children should attend a public primary school (such that the Trust should not pay for them to attend a private primary school), Mr Kennedy said simply that it was because that was what his brother had wanted.^[18]
89. [89]
    In exercising a discretionary power of the kind conferred by cl 7(b) of the deceased’s will, Mr Kennedy (as trustee) must not simply give effect, without more, to the deceased’s wishes.  He is required to consider the instant exercise of the power and to make his own decision.^[19]  That Mr Kennedy did not do this, but instead simply adhered to what he considered to be the deceased’s wishes on the question of primary schooling, is clear from his response to the request that the Trust pay for Alice to attend Gib Gate. 
90. [90]
    The letters sent by Ms Smith’s solicitors on 24 August 2022, 28 November 2022, 31 March 2023 and 19 May 2023, clearly explained that the basis for that request was the learning difficulties Alice was experiencing and Ms Smith’s assessment that the learning support provided at Gib Gate would provide Alice with the best possible educational outcome.  Although the letters sent by Mr Kennedy’s solicitors on 7 August 2023 and 23 August 2024 addressed the subject of Alice’s learning difficulties and complained about a lack of information (a matter to which I will return), neither of them engaged with the request for payment of private school fees in that context.  The letter sent on 7 August 2023 made no reference to the request for payment of private school fees for Alice.  The letter sent on 23 August 2024 included the following statement:

“[Mr Kennedy] has notified [Ms Smith] both personally and through her solicitors, on many occasions, that he could not authorise payment of private primary school fees as it went against his late brother’s direct wishes for his children to attend a public primary school, as he did at Dirranbandi State School.” (emphasis added)

91. [91]
    This statement is consistent with Mr Kennedy’s evidence in cross-examination.  It is clear evidence that Mr Kennedy refused to exercise his discretionary power to grant the request that the Trust pay private primary school fees on the basis that the deceased’s wishes prevented him from doing so.  In adopting that position, Mr Kennedy sought simply to give effect to what he understood the deceased’s wishes to be.  He did not make his own decision. 
92. [92]
    By maintaining that position when informed that Alice was experiencing learning difficulties, Mr Kennedy overlooked the fact that, whatever the deceased’s wishes for his children’s primary schooling might have been at the time he discussed that issue with Mr Kennedy, those wishes could not have taken account of Alice’s learning difficulties or Ms Smith’s assessment that Gib Gate would provide the most support in addressing those learning difficulties.  Those were matters which Mr Kennedy ought to have taken into account when considering whether to grant the request for the Trust to pay the fees for Alice to attend Gib Gate for grades 5 and 6.  The passage from the letter sent on 23 August 2024 set out above makes it clear that he did not do this and, consequently, failed to consider whether his refusal to exercise the discretionary power was in the best interests of Alice in the changed circumstances which existed when Ms Smith requested that the Trust pay for Alice to attend Gib Gate. 
93. [93]
    The second matter of concern is Mr Kennedy’s decision, conveyed implicitly by the letter he wrote to Ms Smith on 14 March 2024, that the Trust would not pay boarding fees for Xavier once Alice commenced secondary school in 2025.
94. [94]
    The effect of that decision must be considered in circumstances where the family home at Burradoo, where Xavier resides when he is not boarding, is located approximately 100 kilometres from Riverview.  Logic would suggest that, in circumstances where Ms Smith had previously informed Mr Kennedy that she could not afford to pay boarding fees at Riverview, the decision that the Trust would cease meeting that cost from 2025 might have led to one of several outcomes:

    1. Xavier might have continued to attend Riverview as a day student while living at Burradoo;
    2. Ms Smith might have moved with Xavier and Alice to a home that was closer to Riverview; or
    3. Ms Smith might have made the decision that Xavier could no longer attend Riverview and would have to attend a school closer to Burradoo as a day student.
95. [95]
    On any sensible view, if Xavier was to continue to attend Riverview as a day student while living at Burradoo, he would be required to spend at least several hours each day travelling to and from school.  During cross-examination, Mr Kennedy appeared unconcerned about this as a potential consequence of his decision.  That is apparent in the following exchange:^[20]

“In deciding whether or not to fund Xavier’s boarding and tuition at Riverview, the distance that Riverview is from Burradoo and how long it takes to do that trip would be a relevant factor, wouldn’t it?‑‑‑Yeah. I’m just – people at home that go to it, so I can’t see what the problem is.

So is it your view as trustee that it would be appropriate that Xavier should have to travel four hours per day to be a day student at Riverview and that would be reasonable?‑‑‑I’m not in that situation, and I’m not educating the boy.

No?‑‑‑But if that’s what his options were, that’s what his options are. I don’t ‑ ‑ ‑

You haven’t taken the time to look it up on Google Map ‑ ‑ ‑?‑‑‑No.

 ‑‑ ‑ to see how long it would take?‑‑‑No.”

96. [96]
    That was followed shortly after by this exchange:^[21]

“But you wouldn’t expect a teenager at high school to travel four hours per day, would you?‑‑‑It’s been done before.

That would be plainly unreasonable, wouldn’t it?‑‑‑I don’t know.

Why don’t you know? You’re the trustee. Why don’t you know if that’s reasonable or not?‑‑‑I don’t know.

Is that because you’ve never asked?‑‑‑About the – about the travel?

Yes?‑‑‑Might be.”

97. [97]
    The second potential outcome – the family to move away from Burradoo so that Xavier could attend Riverview as a day student without having to travel such a long distance – would mean that Alice would be unable to continue at Gib Gate and Frensham which are located close to Burradoo.  Mr Kennedy accepted as much in cross-examination.^[22]  Before deciding that the Trust would not pay boarding fees for Xavier from 2025, Mr Kennedy did not make any inquiries about how that change might affect Alice’s education.^[23]  He did not turn his mind to the question whether moving from Burradoo and changing schools would be in Alice’s best interests.^[24]
98. [98]
    Mr Kennedy acknowledged that the third potential outcome – Xavier no longer attending Riverview and instead attending another school closer to Burradoo – would have been the probable outcome of his decision that the Trust would no longer pay boarding fees.^[25]  When it was suggested to him that the impact of this would be Xavier losing the consistency of being educated at one school, Mr Kennedy responded by saying that the consistency of the education should be the same at whatever school Xavier might attend.  In Mr Kennedy’s words it would “just be a different uniform”.^[26]  The basis for Mr Kennedy to make such an assertion was not clear given the following evidence he gave in cross-examination: before deciding that the Trust would not pay boarding fees for Xavier from 2025, he did not make any inquiries about schools that were closer to Burradoo;^[27] he did not make any inquiries as to how his decision might affect Xavier;^[28] and, he did not turn his mind to the question whether having to change schools would be in Xavier’s best interests.^[29] 
99. [99]
    Based on Mr Kennedy’s own evidence, I am satisfied that he decided the Trust should not pay Xavier’s boarding fees at Riverview from 2025 without sufficiently considering whether that decision was in the best interests of Xavier (particularly) and Alice (to the extent that the decision might impact upon where she would live and attend secondary school).
100. [100]
     In reaching that conclusion, I have had regard to the subsequent reversal of Mr Kennedy’s position referred to at [82] above.  However, as Mr Kennedy acknowledged in cross-examination, that reversal only occurred after Ms Smith filed this application seeking to remove Mr Kennedy as trustee of the Trust.^[30]
101. [101]
     The third matter of concern is Mr Kennedy’s response to Ms Smith’s requests for financial assistance to address Alice’s learning difficulties. 
102. [102]
     Mr Kennedy’s evidence was that because the Gib Gate report card provided to him was heavily redacted (an assertion which I have found to be wrong – see [77] above) and the PosAbility Report, although concerning, did not set out anything that the Trust could pay for which would benefit Alice, he was left “a little in the dark” as to what Ms Smith was seeking from the Trust beyond what Alice was already getting.
103. [103]
     I do not accept that evidence.  Having regard to the correspondence exchanged over a lengthy period, it should have been clear to Mr Kennedy that Ms Smith was requesting financial assistance beyond that which the Trust was already providing.  I have already discussed one aspect of this request for additional assistance, namely that the Trust pay for Alice’s tuition fees at Gib Gate for grades 5 and 6.  In addition, the letter sent by Ms Smith’s solicitors on 28 August 2022 informed Mr Kennedy of Ms Smith’s proposal to have Alice engage with a psychologist (at a cost of approximately $200 per session) and receive academic tutoring (at a cost of approximately $200 per week).  The letter sent by Ms Smith’s solicitors on 19 May 2023, referred to the recommendation in the PosAbility report that Ms Smith engage in further investigations with respect to Alice’s anxiety and to obtain an assessment and intervention by an occupational therapist.  Although that letter did not identify the cost of those additional investigations and interventions, it clearly stated that Ms Smith did not have the funds to pay for them.
104. [104]
     Rather than Mr Kennedy not appreciating that Ms Smith was seeking additional financial assistance from the Trust, it appears that he would not agree to provide the additional assistance sought by Ms Smith because he did not accept the information provided to him about Alice’s learning difficulties.
105. [105]
     Mr Kennedy’s response to the letters which advised him of Alice’s learning difficulties exhibited little concern about that development.  The letter which his solicitors sent on 2 November 2022 (responding to the letter sent by Ms Smith’s solicitors on 28 August 2022) made no reference at all to Alice’s learning difficulties.  Mr Kennedy’s first reference to the issue appears in the letter his solicitors sent on 7 August 2023 (responding to the letter sent by Ms Smith’s solicitors on 19 May 2023) in which they stated that Mr Kennedy acknowledged “the comprehensive report from PosAbility” but complained the report “does not show Alice’s academic performance at school level or how she engages in the classroom”.
106. [106]
     One reading of that response is that Mr Kennedy was not willing to accept Ms Smith’s statements that Alice was experiencing learning difficulties at face value, or even the conclusions and diagnosis expressed in the PosAbility Report (see [73] above). 
107. [107]
     The cross-examination of Mr Kennedy confirmed this to be the case.  During that cross-examination it became clear that Mr Kennedy discounted the contents of the PosAbility Report almost entirely.  When asked whether he had made inquiries into the cost of purchasing assistive technology identified in the PosAbility Report which could be used to try and assist Alice to overcome the learning difficulties she was experiencing, Mr Kennedy stated that he was not worried about the cost, but that he wanted information about “the little girl” (by which I understood him to be referring to Alice) and whether or not she actually was experiencing learning difficulties.  He said he needed to see Alice’s school reports from her previous primary school to assess this.^[31]  He appeared to suggest that anybody could obtain a report from a psychologist saying what was said about Alice in the PosAbility Report.^[32]  He said that he did not trust what was said in the PosAbility Report.^[33]  He appeared to say that he would not trust any report from a psychologist which Ms Smith might provide to him, preferring to see the report from Alice’s previous primary school “to see where she actually went wrong; what is wrong”.^[34]
108. [108]
     In my view, Mr Kennedy’s disregard of the information set out in the PosAbility report is a clear indication that, when he decided not to increase the financial support provided by the Trust to address Alice’s learning difficulties, he failed to sufficiently consider whether that refusal was in Alice’s best interests.

Is the welfare of Xavier and Alice opposed to Mr Kennedy remaining as trustee?

109. [109]
     In addressing this issue, Mr Kennedy’s submissions focus on:

     1. his financial administration and management of the Trust which has resulted in a significant increase in the value of the Trust assets which will ultimately pass to Xavier and Alice;
     2. the extent of the financial assistance which the Trust is presently providing and will continue to provide for the maintenance, education, benefit and advancement in life of Xavier and Alice; and
     3. the skills required for a trustee to successfully manage and operate Narine and the risk that the Trust would be unable to retain that property if he is replaced as trustee.
110. [110]
     I accept that Mr Kennedy’s management of the Trust has resulted in a significant increase in the value of the Trust assets.  As set out at [20](a) above, the value of Narine has more than doubled from $7.3 million at the time the deceased passed away to its present value of between $15.5 million and $16.5 million.  Some of that increase is likely due to rising land prices generally, but I accept that it is also due to Mr Kennedy’s management of the property, particularly in the period before the property was leased.  I also accept that, in the period before Narine was leased, Mr Kennedy acted prudently in selling grain and stock on hand, as well as other estate assets, and investing the proceeds of those sales.  There is also no suggestion that Mr Kennedy has dealt with the Trust assets improperly in any way.
111. [111]
     There is no doubt that, when assessed by reference to the security of the Trust property, Mr Kennedy’s conduct as trustee has been commendable.  However, in a case such as this, where the beneficiaries of the Trust are children and cl 7(b) of the will conferred a discretionary power on Mr Kennedy to apply Trust funds towards the maintenance, education, benefit or advancement in life of those children, the interests of the beneficiaries cannot be considered solely by reference to the value of the assets that will pass to them when the Trust ultimately vests.  Consideration must also be given to the children’s need for financial support in the period before the Trust vests.
112. [112]
     In that regard, I accept that the financial support which the Trust has provided, and will continue to provide, for the children has been substantial.  At the time the application was heard the Trust was paying the following amounts:

Riverview tuition fees   $36,305.00 per annum

Riverview boarding fees  $24,310.00 per annum

Weekly child support payment  $33,800.00 per annum

Total      $94,415.00 per annum

113. [113]
     That annual figure will have increased to well over $100,000 per annum after Alice commenced secondary school at Frensham in 2025.  As Ms Smith accepted, the schools which the Trust is paying for Xavier and Alice to attend are among the most prestigious and the most expensive schools in the country.
114. [114]
     Of course, the question whether it would be in the best interests of the children for the Trust to provide further financial assistance cannot be answered simply by reference to the fact that the Trust already provides substantial financial support.  Whether the children’s needs extend beyond that which the Trust already pays for, whether Ms Smith is in a financial position to meet those needs, and the financial capacity of the Trust to provide additional support are also relevant considerations.
115. [115]
     I am concerned that, rather than assessing Ms Smith’s requests for additional financial support in that way, Mr Kennedy’s responses demonstrate a reluctance on his part to increase the amount which the Trust will pay beyond that which he initially agreed at his meeting with Ms Smith on 25 November 2017; that is, the child support payment paid by the deceased prior to his death and private school fees when the children reached secondary school (see [33]-[39] above).  This reluctance appears to stem from a concern that Ms Smith was seeking to benefit financially from this further assistance.  This is evidenced by Mr Kennedy’s oft-stated position that it is not the children’s responsibility to support themselves from their inheritance (see [49], [56] and [61] above) as well as his submission that the present application is motivated by a degree of personal financial advancement on the part of Ms Smith. 
116. [116]
     This has led Mr Kennedy to approach Ms Smith’s requests for additional financial support with a degree of scepticism which, in my view, has led him to refuse to pay for expenses which, on an objective view, would seem to be in the children’s best interests.  The starkest example of this is Mr Kennedy’s response to the request that the Trust meet the cost of further investigations and therapeutic interventions to address Alice’s learning difficulties. 
117. [117]
     I have already set out my concerns regarding Mr Kennedy’s dismissal of the conclusions and recommendations set out in the PosAbility report (see [101]-[108] above).  I am satisfied that, unless and until Ms Smith and her parents sell the house at Burradoo and move into a smaller and less expensive property, Ms Smith is unable to afford to pay for the recommended interventions and other assistance for Alice.  It also appears that the Trust has the capacity to provide further financial support to meet the costs of those recommended interventions (in addition to the financial support it is already providing), in circumstances where in the last two years for which financial reports were available the Trust earned a net profit of more than $500,000 (see [22] above).  To the extent that provision of this further financial support would reduce the (already very substantial) value of the Trust assets which will ultimately vest on the children, the question arises as to whether Alice’s interests are best served by ensuring she will inherit Narine at age 25 if, in the intervening period, the refusal to fund the recommended therapies and interventions compromises her intellectual development during her formative years and ultimately her ability to manage such a significant inheritance when it vests.
118. [118]
     I note that, at the end of the oral submissions made on behalf of Mr Kennedy, an undertaking was given to the court (on Mr Kennedy’s instructions as trustee) that he would pay:

     1. school fees (both tuition and boarding) for Xavier and Alice at the schools chosen by Ms Smith;
     2. any educational, medical or therapeutic treatment undertaken by Alice upon the provision of a quotation or invoice;
     3. a weekly child support payment to Ms Smith of $800 indexed to CPI.
119. [119]
     Unfortunately, having regard to the strained relationship which now exists between Mr Kennedy and Ms Smith, I am not confident that accepting this undertaking would quell disputes if Mr Kennedy remains as trustee. 
120. [120]
     Against this, Mr Kennedy submits that the existence of personal tension between himself and Ms Smith should not be regarded as constituting a sufficient ground for removing him as trustee because such disputes can be manufactured by a beneficiary to seek the removal of a trustee.^[35] 
121. [121]
     On Mr Kennedy’s evidence, the most fraught part of his relationship with Ms Smith concerns what he considers to be her reluctance to allow Xavier and Alice to have any relationship with their paternal grandparents.  The repeated requests in correspondence that Ms Smith facilitate regular telephone calls or video calls between the children and their grandparents, and Mr Kennedy’s willingness to have the Trust pay the cost of Ms Smith and the children travelling to meet with their grandparents, confirm that this has been a matter of concern to Mr Kennedy for some time.  Without diminishing Mr Kennedy’s concerns about that state of affairs in any way, given the underlying familial tensions which have existed between Ms Smith and the deceased’s family since her divorce (see [18] above), I cannot see any reason to conclude that Ms Smith’s approach to this issue constitutes an attempt to manufacture a dispute with Mr Kennedy for the purpose of seeking to remove him as trustee.
122. [122]
     From Ms Smith’s perspective, the difficulties in her relationship with Mr Kennedy arose after a telephone call between them in early August 2019 during which (on Ms Smith’s account) she was subject to “abuse, bad language and rage” from Mr Kennedy.  There is support for Ms Smith’s account in an email she received from Mr Kennedy’s wife on 24 August 2019 which referred to things not having ended well the last time Mr Kennedy and Ms Smith had spoken to each other.  In fact, Ms Smith and Mr Kennedy have not spoken since that telephone conversation.
123. [123]
     Also relevant to the present state of the relationship is Ms Smith’s complaint that Mr Kennedy is not assessing the requests she has made on behalf of Xavier and Alice for additional financial support from the Trust impartially but is instead disposed to reject those requests due to his concern that Ms Smith is seeking financial advantage for herself.  In circumstances where Mr Kennedy submits that the present application is driven by a desire for personal financial advancement on Ms Smith’s part it is difficult to see any basis upon which it could be said that Ms Smith has manufactured this dispute.  To the contrary, as I have found at [115]-[116] above, there is substance in Ms Smith’s complaint.  On that basis, I am satisfied that the present state of the relationship is attributable to Mr Kennedy to an extent that is sufficient to give me concern about his future administration of the Trust.^[36]
124. [124]
     That concern arises from the fact, recognised by Henry J in JPD,^[37] that when a trustee is making a decision of importance to the interests of beneficiaries who are minors being raised in a sole parent family, the central, most important source of relevant knowledge about those interests is their parent (here, Ms Smith).  Unfortunately, Mr Kennedy’s relationship with Ms Smith, and particularly his concern that her requests for further financial support are motivated by a desire for personal financial benefit, means that he does not place any real weight upon what she says to him about the best interests of the children.  That position is inimical to Mr Kennedy’s obligation to administer the Trust for the children’s benefit during their minority.
125. [125]
     In cross-examination, Ms Smith explained that she wants to replace Mr Kennedy with an independent trustee who will act impartially and whose decisions about whether to expend Trust funds for the benefit of the children will not be influenced by a strained relationship with Ms Smith or a concern that she is seeking to obtain some personal financial benefit from the Trust.^[38]  Subject to the question whether the removal of Mr Kennedy and appointment of a new trustee would promote or impede the execution of the Trust, I agree that it is in the best interests of the children that the Trust be administered by an impartial trustee.
126. [126]
     Ms Smith proposes that a solicitor, Ms Renee Bennett, be appointed trustee of the Trust in Mr Kennedy’s place.  Ms Bennett is accredited by the Queensland Law Society as a specialist in succession law and is a partner in the firm Wilson/Ryan/Grose Lawyers in Townsville.  Mr Bennett describes the firm as having a strong rural background. 
127. [127]
     Ms Bennett has relevant experience in acting as a trustee or as administrator of deceased estates, including appointments by this Court to act in such roles.  That experience includes acting as trustee of a trust with minor beneficiaries.  It also includes acting as administrator of estates which have involved rural properties located away from Townsville with livestock, plant, machinery and the like.  Based upon that experience, Ms Bennett expresses confidence in her ability to engage with rural lessees, accountants, valuers and other professionals as necessary for the proper administration and management of Trust property, including Narine.  I accept that Ms Bennett is an appropriate person to be appointed as trustee of the Trust if Mr Kennedy is removed as trustee.  I also accept that, based on her experience, Ms Bennett would be capable of administering the Trust, including by engaging professional assistance as necessary.
128. [128]
     Mr Kennedy’s submissions concerning the effect of changing the trustee emphasise activities he has undertaken in relation to Narine, including:

     1. attending to aspects of repair and maintenance which fall outside the responsibility of the lessee by replacing old fencing, clearing old fence lines from paddocks, maintaining water infrastructure (including replacement of underground taps on four bore lines), replacing sheep yards, inspecting cattle grids and constructing a chemical shed;
     2. supervising the lessee to ensure that the terms of the lease are complied with;
     3. managing obligations relating to the property’s livestock accreditation through various governing bodies;
     4. liaising with relevant parties regarding any wild dog baiting programs;
     5. ensuring that rainfall is being recorded by the property’s weather station as rainfall is a factor which affects the amount paid under the lease.
129. [129]
     For some of these activities, Mr Kennedy has engaged other parties to perform work at Narine.  This work includes the clearing of old fence lines, construction of new fence lines and construction of new sheep yards.  Nevertheless, Mr Kennedy is personally involved in attending Narine and supervising this work.
130. [130]
     Mr Kennedy submits it is likely that the costs which would be incurred if a new trustee is to manage Narine would be prohibitive and would mitigate against its retention as a Trust asset.  He further argues that, even accepting Ms Bennett’s experience as a solicitor and as an administrator of rural properties, there is no indication in Ms Smith’s material which indicates how Ms Bennett proposes to manage Narine.  He submits that no plan has been advanced as to how the Trust would retain Narine beyond the expiration of the current lease or maintain and improve the property to enhance its value in the meantime. 
131. [131]
     It is correct that Ms Bennett does not say how she would manage Narine if she was appointed as trustee to replace Mr Kennedy.  Instead, Ms Bennett describes the tasks she usually undertakes following her appointment as a trustee.  These steps include collating and considering relevant material and familiarising herself with the assets and liabilities of the trust before she identifies appropriate steps to be taken in respect of the trust assets in compliance with her obligations as trustee.  It is difficult to see how, before going through that type of process, Ms Bennett could give the evidence which Mr Kennedy says is lacking.
132. [132]
     More importantly, I am unable to accept the bare assertion by Mr Kennedy that the costs which would follow the appointment of a new trustee would mitigate against the retention of Narine as a Trust asset.  It is certainly possible that, if appointed as trustee, Ms Bennett might engage a rural manager to assist with the type of activities Mr Kennedy presently undertakes in relation to the management of Narine if, after familiarising herself with the Trust assets, she considered that to be necessary for the proper administration and management of that property.  If that was to happen, it would obviously come at a cost to the Trust.  However, there is nothing in the material which permits me to estimate what that cost might be or to compare that prospective cost to fees which Mr Kennedy is entitled to charge to the Trust under the orders made on his application for executor’s commission.  What can be said, in my view, is that in circumstances where Narine is currently leased and provides significant income to the Trust, it appears unlikely that the costs of whatever steps Ms Bennett might consider necessary for the proper management of Narine would be so great as to compel the Trust to sell the property.
133. [133]
     Ultimately, I am persuaded that the benefit to Xavier and Alice from the appointment of an independent trustee outweighs the risk that this would increase the cost of administering the Trust.  Ms Bennett would not be affected by the family history and the strained relationship with Ms Smith which has influenced Mr Kennedy’s attitude towards requests for further financial support for the children.  Ms Bennett is likely to bring an objective perspective to the role of trustee and to engage with Ms Smith (and the children) in a manner that is more conducive to identifying the children’s present needs and to determining whether it is in their best interests for the Trust to expend funds to meet those needs, than has been shown by Mr Kennedy in the past and which I consider, despite the undertaking, he is likely to show in the future.
134. [134]
     For these reasons, I am satisfied that the welfare of Xavier and Alice is opposed to Mr Kennedy remaining as trustee.
135. [135]
     In my view, it is appropriate in the circumstances of this case to make the orders sought by the originating application, save that it will be necessary to hear from the parties as to costs.