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How Does the Court Supervise Trusts and Estates?

Through Order 15. A party need not seek general administration under the direction of the Court to get relief — specific questions can be determined, and executors, administrators and trustees can be ordered to furnish or verify accounts, pay funds into Court, or do or abstain from doing any act.

The National Court practice series, no. 248 · Other jurisdictions of the Court · 5 min read

Order 15 of the National Court Rules 1983 is headed Administration and Trusts.

Rule 1

Interpretation of Order 15

“Administration proceedings” means proceedings for the administration of an estate or the execution of a trust under the direction of the Court.

“Estate” means estate of a deceased person.

The distinction that runs through the Order

Administration proceedings put the whole estate or trust under the Court’s direction. That is a heavy remedy. Rule 2 allows the same relief to be obtained without it.

Rule 2

Four categories of proceeding

(1) Proceedings may be brought for any relief which could be granted in administration proceedings.

(2) Proceedings may be brought for the determination of any question which could be determined in administration proceedings, including a question —

(a) arising in the administration of an estate or in the execution of a trust; or

(b) as to the composition of any class of persons having a claim against an estate or a beneficial interest in an estate or in property subject to a trust; or

(c) as to the rights or interests of a person claiming to bea creditor of an estate; entitled under the will or on the intestacy of a deceased person; or beneficially entitled under a trust.

Sub-rules (3) and (4) — the supervisory orders

(3) Proceedings may be brought for an order directing an executor, administrator or trustee —

(a) to furnish accounts; or (b) to verify accounts; or (c) to pay funds of the estate or trust into Court; or (d) to do or abstain from doing any act.

(4) Proceedings may be brought for an order —

(a) approving any sale, purchase, compromise or other transaction by an executor, administrator or trustee; or

(b) directing any act to be done in the administration of an estate or in the execution of a trust which the Court could order to be done if the estate were being administered, or the trust were being executed, under the direction of the Court.

Sub-rules (5) and (6) are the point of the Rule

(5) None of Sub-rules (1) to (4) limits the operation of any other of them.

(6) In proceedings brought under this Rule a claim need not be made for the administration of the estate, or the execution of the trust, under the direction of the Court.

So a beneficiary who wants accounts, or a trustee who wants a proposed sale approved, need not ask for general administration. The specific relief can be sought on its own.

Rules 4 and 5

Rule 4 — fiduciaries must all be parties

(1) In proceedings relating to an estate, all the executors of the will of the deceased, or all the administrators of the estate, must be parties.

(2) In proceedings relating to a trust, all the trustees must be parties.

(3) Where proceedings are brought by executors, administrators or trustees, any executor, administrator or trustee who does not consent to being joined as a plaintiff shall be made a defendant.

Rule 5 — beneficiaries need not be

(1) and (2)all the persons having a beneficial interest in or claim against the estate need not be parties, and the same for a trust.

(3) The plaintiff may make parties, as he thinks fit, of the persons referred to in Sub-rules (1) and (2).

(4) This Rule has effect notwithstanding Order 5 Rule 3 (parties and causes of action) but does not limit the powers of the Court under that Order.

A practical rule of thumb

Join every fiduciary — that is mandatory. Join such beneficiaries as are necessary for the question to be determined properly — that is a judgement.

Rule 4(3) is the answer where a co-executor will not join in bringing the proceedings: make them a defendant. See adding a party.

Rules 6 and 7

Rule 7 — breach of trust on an originating summons

(1) The Court may make any certificate or order and grant any relief to which the plaintiff is entitled by reason of any breach of trust, wilful default or other misconduct of a defendant notwithstanding that the proceedings were commenced by summons.

(2) That does not affect the Court’s power under Order 4 Rule 35 (continuation on pleadings of proceedings commenced by summons).

Rules 8 and 9

Rule 8 — a remedy of last resort

(1) The Court need not direct the entry of judgement or make an order for the administration of an estate or the execution of a trust under the direction of the Court unless the judgement or order is necessary for the determination of the questions arising between the parties.

(2) Where it appears that such a judgment or order is necessary to prevent proceedings by creditors of the estate or by persons claiming to be entitled under the will or on the intestacy of the deceased or to be beneficially entitled under the trust, the Court may direct the entry of judgement and may further order that no steps shall be taken under any account or inquiry directed, without the leave of the Court.

Rule 9 — conduct of a sale

Where the Court makes an order for the sale of property comprised in an estate, or of trust property, the executors or administrators or the trustees, as the case may require, shall, unless the Court otherwise orders, have the conduct of the sale.

See also sale of property before trial under Order 14, and on grants generally probate and administration under Order 19.

On costs, note Order 22 Rule 33 (the trustee basis) and Rule 64: a person who is or has been a party in the capacity of trustee or mortgagee is, unless the Court otherwise orders, entitled to costs out of the fund or mortgaged property — and the Court may order otherwise only where the trustee or mortgagee has acted unreasonably or, for a trustee, has in substance acted for his own benefit rather than for the benefit of the fund.

Sources

Check the section yourself

Before relying on anything here, read the current text of the National Court Rules 1983 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.

Disclaimer: This article provides general information about Papua New Guinea law and does not constitute legal advice. Laws may change, and their application depends on individual circumstances. You should obtain professional legal advice for your specific situation. Read the full disclaimer.