A trustee may seek an opinion, advice or direction from the Court if it is in doubt concerning a particular course of action it proposes to take. 

Section 63(1) of the Trustee Act 1925 (ACT) (Act) provides:

A trustee may apply to the Court for an opinion, advice or direction on any question respecting the management or administration of the trust property, or respecting the interpretation of the trust instrument.

The principal purpose of section 63(1) of the Act is the protection of the trust (and its beneficiaries). In circumstances where a trustee may be personally liable for a breach of trust, obtaining judicial advice may also assist a trustee in managing its financial and reputational risk. 

Under section 63(2) of the Act, if a trustee acts following the opinion, advice or direction it has obtained from the Court, provided it has not been guilty of any fraud, willful concealment or misrepresentation in obtaining that opinion, advice or direction, then the trustee will be taken to have discharged its duty as trustee concerning the subject matter of the application. This is significant because a trustee who is taken to have discharged their duty concerning a particular matter will not have engaged in a breach of trust.

In the decision of Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) [2008] HCA 42, the High Court made several general observations concerning section 63 of the Act.

The Executor may distribute the assets of the estate, or part of the assets, among the people entitled only if the executor or administrator:

• gave public notice for creditors or anyone else to give the executor or administrator their claims against the estate within the time stated in the notice

• had regard to each claim the executor or administrator received within the time stated in the notice; and

• applied under the Births, Deaths and Marriages Registration Act 1997 for a search of the register for information about the parents or any children—
• (i) of the deceased person; or

• (ii) of any other person known by the executor or administrator to be relevant to the distribution of the assets; and
• had taken into account any relevant information or documents obtained from the registrar-general as a result of the search ss 64(1)(a)-(d) of the Administration and Probate Act 1929 (ACT)

Background

John Gray ( “JG” ) was an American citizen employed by the U.S. government. He married his wife, Nan in May 1967. They never had any children together. Following his retirement, the testator and his wife elected to stay in Canberra.

In April 2008, JG executed a valid will (the Will), divided his estate amongst several beneficiaries with a portion also going to the Immanuel Lutheran Church in Woden, ACT.

The Will appointed Nan as executor of the estate. In the event Nan predeceased him, the Will appointed JG’s friend Gavin Matthew as executor. In 2013, JG suffered a severe stroke. His speech and cognition were severely affected. He suffered a further stroke in 2018, after which he moved into a shared aged-care facility. In April 2019, Nan died.

In August 2019, JG was contacted by Christine Gagnon who claimed to be his biological daughter. Christine said she had found out that JG was her biological father through ancestry tracing and DNA testing. Christine lived in the United States, had been put up for adoption in Massachusetts and had only recently been able to find out information about her biological father.

The executor submitted that there was no acknowledgment by JG that Christine was his child; probably due to JG’s affected cognition and speech. Christine did not provide JG with a birth certificate, the results of the DNA testing or any other independent corroborative material substantiating that she was his daughter.

JG died on 27 September 2022. On that day the executor sent an email to Christine informing her of the testator’s death. The executor and Christine corresponded over the following months.

The matter

In the Estate of Gray [2023] ACTSC 241 the executor brought an application seeking judicial advice under s 63 of the Trustee Act 1925 (ACT) on the following questions:

(1) Has the executor complied with the requirements of s 64(1) of the Administration and Probate Act 1929 (ACT)?

(2) Is the executor justified in distributing proceeds contained in a Westpac bank account of $1,800,00.00, those distributions to be made pro rata under the terms of the Will to the beneficiaries named therein at the expiration of 6 months from the grant of probate?

On 10 February 2023, the executor was granted probate of the Will. Christine was not mentioned in the Will. On 17 February 2023, the executor published a Notice of intended distribution in the Canberra Times Newspaper (the Canberra Times notice).

On 23 February 2023, the executor sent an email to Christine forwarding a copy of the Canberra Times and attaching the following letter

Hi Christine,

I hope that you are well.

Please note that probate was granted by the Supreme Court of the Australian Capital Territory in Canberra on 10 February 2023 to me to act as executor of the will of the late Mr John Payne Gray.

As you may know, the executor’s role is responsible for administering the deceased estate, including broadly and publicly notifying the granting of probate. Executors do not provide advice about any parties’ potential actions.

The attached formal notice of probate was published on 17 February 2023 as per the relevant legislation of the Australian Capital Territory.

Kind Regards

Gavin Matthew

On 24 February 2023, Christine responded, sending an email to the executor in which she said “Yes I expected that. I’m glad he found you”.

On 28 June 2023, the executor’s solicitor applied for a search of the ACT Register under the Births, Deaths and Marriages Registration Act 1997 (ACT) for information about the parents or any children of the deceased; no children were found. Christine continues to live in the United States.

The Supreme Court may make orders under the Family Provision Act 1969 (ACT) for provision out of an estate for the benefit of an eligible person, which includes a child of the deceased. An application must be brought within six months following the grant of probate Christine has not made an application nor indicated she will make an application, for a distribution from the estate under the Family Provision Act.

As of the date of the application, the majority of JG’s estate is held in cash in Australian bank accounts with the Australian portion of the estate crystallised into cash following the sale of JG’s property.

A substantial minority of the estate comprises savings and investments that are held in a United States bank account. The portion of the estate in the United States is not yet finalised, being potentially subject to taxation and health care costs under United States law. The executor seeks to make an interim distribution of most of the Australian portion of the estate.

The decision

The Court ordered that the executor had complied with the requirements of s 64(1)(a)-(d) of the Administration and Probate Act 1929 (ACT) concerning the proposed distribution of the Australian assets of the estate. The executor is justified in distributing $1,800,000 from the term deposit account under the terms of the Will after the expiration of 6 months from the date of the grant of probate with costs to be paid out of the estate on the solicitor and client basis.