Burke v Australian Executor Trustees Limited [2026] VSC 178
Summary
In Burke v Australian Executor Trustees Limited [2026] VSC 178, the Supreme Court of Victoria ordered the removal of a professional trustee company as executor, administrator and trustee of three interconnected deceased estates that had been under administration, in various forms, since 1938.
The plaintiff, represented by Prior Law, successfully argued that the trustee company had become unfit to continue acting due to extensive delay, failures in communication and accountability, perceived preferential treatment of one beneficiary, and the existence of irreconcilable conflicts of interest arising from the administration of estate assets.
Justice Gray ultimately concluded that the defendant’s conduct had created a reasonable perception of partiality toward one beneficiary and exposed the estates to potential claims for devastavit (wastage) and breach of its duty to all beneficiaries. The Court ordered the removal of the trustee company and foreshadowed the appointment of an independent administrator to complete the administration of the estates.
The case is a significant Victorian authority concerning the removal of executors and trustees, particularly where prolonged estate administration raising claims of devastavit, family conflict, and questions of fiduciary neutrality intersect.
Facts of the Case
The proceeding concerned the administration of three Burke family estates associated with substantial farming land in the Bendigo and Axedale regions of Victoria. The estates had historically been administered by Sandhurst Trustees Ltd and its successors, eventually Australian Executor Trustees Limited (“AET”).
The plaintiff, one of several beneficiaries, commenced proceedings in 2019 seeking judicial advice, accounting orders, and ultimately the removal of AET as executor and trustee. The dispute centred on several key issues:
- significant delays in the finalisation of the estates;
- alleged failures by the executor to respond adequately to beneficiary requests for information;
- concerns regarding the management of farming operations and estate assets;
- allegations that one beneficiary received preferential treatment;
- disputes surrounding the proposed sale of the principal farming property; and
- concerns regarding executor commissions, remuneration, agistment arrangements, and possible devastavit of estate assets.
The plaintiff contended that the defendant repeatedly extended opportunities for one beneficiary to acquire estate land outside previously agreed arrangements and in a manner inconsistent with the interests of the remaining beneficiaries.
The Court also considered allegations concerning excessive remuneration paid to the same beneficiary for property management activities and failures to ensure estate properties generated appropriate agistment income.
Prior Law appeared for the plaintiff throughout the entire proceeding.
Decision of the Court
Justice Gray ordered that the defendant be removed as executor, administrator and trustee of the estates pursuant to s 34 of the Administration and Probate Act 1958 (Vic) and s 48 of the Trustee Act 1958 (Vic), both of which stipulate tests for the removal of an executor (or administrator) and the removal of a trustee, which the Court viewed as one and the same.
Justice Gray held that:
- the defendant was exposed to strong prima facie claims for devastavit of estate assets;
- the administration had given rise to conflicts of interest that were “irreconcilable”;
- the conduct of the administration created a reasonable perception that the defendant had become partial to the interests of one beneficiary over others; and
- confidence in the defendant’s ability to complete the administration impartially had been undermined.
Justice Gray emphasised that the paramount consideration in applications for removal of executors and trustees is the welfare of beneficiaries and the proper administration of the estate.
Importantly, the Court observed that actual misconduct need not be conclusively proven; the existence of serious and reasonably arguable conflicts or claims against the executor may itself justify removal where confidence in the administration has been compromised.
Commentary
This decision is an important reminder that professional executors and trustee companies are not immune from judicial scrutiny simply because they are institutional fiduciaries. The case demonstrates several significant principles relevant to estate practitioners and trustee companies.
i) Delay alone can become critical
The estates in question had remained under administration for many years, with substantial delays occurring even after litigation commenced. The Court treated prolonged delay, combined with inadequate communication and lack of transparency, as highly relevant to determining unfitness.
Executors and trustees must ensure that estates are administered efficiently, beneficiaries are kept properly informed, and requests for information are addressed promptly and substantively.
ii) Perceived partiality can be sufficient
One of the most significant aspects of the judgment is the Court’s focus on the “reasonable perception” of partiality. Justice Gray found that the defendant’s dealings with one beneficiary concerning estate land transactions created an appearance that the executor favoured that beneficiary’s interests.
The case reinforces that fiduciaries must not only act impartially, but must also be seen to act impartially.
iii) Conflicts of interest must be managed early
The Court placed considerable emphasis on whether the executor ought to have sought judicial advice at an earlier stage.
Where estate administration becomes contentious, particularly in intergenerational asset disputes, professional executors should carefully consider whether independent directions from the Court are necessary before taking substantive steps.
iv) Institutional executors remain subject to fiduciary standards
The judgment confirms that trustee companies are held to the same fiduciary standards as private executors. The Court closely examined the executor’s management of estate assets, commissions, remuneration arrangements, and overall administration conduct.
Causing devastavit amounts to a breach of a trustee company’s duty to the beneficiaries. The Court found that the duties of trustee companies are not to cause waste and, instead, to the preservation of the estate which would require them to take active steps, such as prudent investment or other reasonable efforts to obtain a return on assets, for example generating income from the use of land.
Conclusion
Burke v Australian Executor Trustees Limited is a leading Victorian authority on the removal of executors and trustees in complex estate administrations.
The proceeding demonstrates the Supreme Court’s willingness to intervene where the administration of an estate has become compromised by delay, conflict, or perceived partiality, even where the executor is a professional trustee company.
The case is particularly relevant for rural estates involving:
- long-standing family farming operations;
- agistment and livestock arrangements;
- informal historical business structures; and
- competing beneficiary interests concerning retention or sale of farming land.
These disputes often involve overlapping issues of partnership accounting, occupation of land, family expectations, and executor neutrality.
The successful outcome achieved by Prior Law on behalf of plaintiff highlights the importance of rigorous fiduciary accountability and reinforces the Court’s supervisory role in protecting beneficiaries and ensuring proper estate administration.