Court of Appeal
Supreme Court
New South Wales
Medium Neutral Citation: Bird v Bird [2013] NSWCA 262 Hearing dates: 17 and 18 July 2013 Decision date: 16 August 2013 Before: Beazley P at [1]
Macfarlan JA at [2]
Ward JA at [92]Decision: (1) Allow the appeal in part.
(2) Set aside orders (1), (3) and (4) made on 5 June 2012 and orders (1) to (4) made on 27 June 2012.
(3) Judgment for Deborah Bird against Warrick Bird, Rodney Bird and Herbert Cannington in the sum of $188,920.25 plus interest to be calculated.
(4) Order Warrick Bird, Rodney Bird and Herbert Cannington to pay Deborah Bird's costs of the proceedings at first instance.
(5) Order Herbert Cannington to pay Deborah Bird's costs of the appeal and order Warrick Bird and Rodney Bird to pay 50 per cent of those costs.
(6) Remit the second and third cross-claims to the Equity Division for determination.
(7) Direct that, if the parties are able to agree on the order to be made, they submit to the Court a form of consent order identifying the amount of the judgment inclusive of interest to which Deborah Bird is entitled in accordance with these reasons for judgment.
(8) If the parties are unable to so agree, direct that they lodge draft orders and submissions in accordance with the following timetable:
(a) Deborah Bird to lodge draft orders and submissions within seven days of the date of this judgment.
(b) Warrick Bird, Rodney Bird and Herbert Cannington to lodge draft orders and submissions within a further seven days.
(c) Deborah Bird to lodge any reply within a further seven days.
(9) Direct that the terms of the judgment to be entered in favour of Deborah Bird be determined by the Court on the basis of the draft orders and submissions of the parties without the necessity for a further oral hearing.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords: SUCCESSION - executors and administrators - liability of executors in devastavit for failing to call in and collect the assets of the deceased - prior to his death the deceased's properties were sold by his wife acting under powers of attorney - attorney paid proceeds into her own bank account - executors should have enquired as to what became of the properties and proceeds of sale - manner of determining loss suffered by estate
EQUITY - trusts and trustees - third party liability for breach of trust - knowing receipt under first limb of Barnes v Addy - property sold under powers of attorney and proceeds paid into attorney's own bank account - actual knowledge…
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- AGLC
- Bird v Bird [2013] NSWCA 262
- Case
- [2013] NSWCA 262
- Decision Date
CaseChat Overview and Summary
The court was required to determine whether the executors were liable for devastavit for failing to call in and collect the assets of the deceased, and if so, how the loss to the estate should be calculated. Additionally, the court had to consider whether third parties had received trust property with knowledge of a breach of trust, specifically whether they knew the attorney lacked the power to deposit the proceeds into her own account and that payments to them were from those proceeds. The limitation period for the devastavit claim was also a key issue, with the court needing to ascertain whether time ran from the executors' initial failure to recover the loss or from the expiry of the limitation period for the estate's claim against the attorney.
The Court of Appeal allowed the appeal in part, setting aside certain earlier orders. It found the executors liable for devastavit, ordering judgment against them for a specific sum plus interest. The court reasoned that the executors ought to have enquired about the properties and the proceeds of sale, and their failure to do so constituted a breach of their duty. The court also remitted cross-claims against third parties for determination, indicating that the principles of knowing receipt under the first limb of *Barnes v Addy* were relevant, requiring actual knowledge of the breach of trust. The court also addressed the limitation period, implying that the claim against the executors was not statute-barred.
The court made detailed orders regarding the calculation of the judgment sum, including interest, and the allocation of costs. It also directed the parties to submit draft orders and submissions for the final determination of the judgment amount, or to agree on the terms themselves, to avoid further oral hearings.
Orders
Orders of the court
(1) Allow the appeal in part.
(2) Set aside orders (1), (3) and (4) made on 5 June 2012 and orders (1) to (4) made on 27 June 2012.
(3) Judgment for Deborah Bird against Warrick Bird, Rodney Bird and Herbert Cannington in the sum of $188,920.25 plus interest to be calculated.
(4) Order Warrick Bird, Rodney Bird and Herbert Cannington to pay Deborah Bird's costs of the proceedings at first instance.
(5) Order Herbert Cannington to pay Deborah Bird's costs of the appeal and order Warrick Bird and Rodney Bird to pay 50 per cent of those costs.
(6) Remit the second and third cross-claims to the Equity Division for determination.
(7) Direct that, if the parties are able to agree on the order to be made, they submit to the Court a form of consent order identifying the amount of the judgment inclusive of interest to which Deborah Bird is entitled in accordance with these reasons for judgment.
(8) If the parties are unable to so agree, direct that they lodge draft orders and submissions in accordance with the following timetable:
(a) Deborah Bird to lodge draft orders and submissions within seven days of the date of this judgment.
(b) Warrick Bird, Rodney Bird and Herbert Cannington to lodge draft orders and submissions within a further seven days.
(c) Deborah Bird to lodge any reply within a further seven days.
(9) Direct that the terms of the judgment to be entered in favour of Deborah Bird be determined by the Court on the basis of the draft orders and submissions of the parties without the necessity for a further oral hearing.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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