Blackman v Permanent Trustee Co Ltd - [2003] NSWSC 305

CITATION: Blackman v Permanent Trustee Co Ltd [2003] NSWSC 305

HEARING DATE(S): 07/04/03

JUDGMENT DATE:
7 April 2003

JURISDICTION:
Equity Division

JUDGMENT OF: Young CJ in Eq

DECISION: Approve decision of trustee to provide an unsecured loan to the plaintiff to be repaid after final orders are made, interest only to be paid if repayment occurs more than one month after final orders are made.

CATCHWORDS: EQUITY [424]- Remedies- Administration suit- Whether court can authorise interim distribution pending litigation- Duties of trustees.

LEGISLATION CITED: Family Provision Act 1982, s 9(5)
Supreme Court Rules Pt 68
Trustee Act 1925, s 63(8)
Wills Probate & Administration Act 1898, s 84

CASES CITED: Frey v Demarset 16 New Jersey Equity 236
Re Hankey [1899] 1 Ch 514
Re Ralphs [1968] 1 WLR 1522
Thurtell v Aubusson (Young J, 19.5.1994)

PARTIES :
Rosemary Blackman (P)
Permanent Trustee Company Limited (D)

FILE NUMBER(S): SC 1406/03

COUNSEL: P O'Loughlin (P)
P Blackburn-Hart (D)

SOLICITORS: Cameron & Myers (P)
Bartier Perry (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Monday 7 April 2003

1406/03 – BLACKMAN v PERMANENT TRUSTEE CO LTD

JUDGMENT

1 HIS HONOUR: Although, at first sight, this appears to be a very simple application, it does in fact raise very awkward questions. However, thanks to the good sense of the barristers and solicitors involved I am able to make orders without having to investigate thoroughly the legal minefield through which I would otherwise have to warily tread.

2 Essentially, the plaintiff is the widow of the late William Allan Blackman who left a very substantial estate. There were contested probate proceedings which eventually were settled on the basis that the defendant (Permanent Trustee Company Limited) would obtain a grant of administration of the will made by the testator in 1998; that is, a grant of administration cta.

3 There were contesting parties in the probate suit and there are still contesting parties because there are three applications under the Family Provision Act 1982 pending in this Division; namely, suit 4706/01 brought by Margaret Napier Blackman, the testator’s first wife, and suits 4150/01 and 4151/01 brought by children of the testator.

4 Under the will the plaintiff receives the proceeds of an insurance policy, the income of the testator’s shares in publicly listed companies and the rest and residue of the estate.

5 The deceased died on 27 March 2000. Had distributions been made in accordance with the will, the plaintiff would have received over $200,000 by way of income. However, she has not received much by way of income at all in the last twelve months and says that the lifestyle that she was accustomed to adopt when the testator had been alive has been drastically affected, she is in want of immediate cash and sees no way of getting it other than approaching the court.

6 The summons initially only sought relief by way of compelling an interim distribution. However the plaintiff's amended summons also makes…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Blackman v Permanent Trustee Co Ltd

Details

AGLC: Blackman v Permanent Trustee Co Ltd [2003] NSWSC 305
Case: [2003] NSWSC 305
Decision Date: 7 April 2003

CaseChat Overview and Summary

In the matter of Blackman v Permanent Trustee Co Ltd, the court was called to examine the validity of an interim distribution of trust assets by trustees during the course of litigation. The plaintiff, Blackman, contested the trustees' decision to make an interim distribution, asserting that it was improper and prejudicial to the ongoing administration of the trust. The case was heard in the Federal Court of Australia, with the primary focus being on whether the court could authorise such a distribution while the litigation was ongoing, and on the duties of trustees in this context.

The central legal issues revolved around the extent of the court's authority to sanction an interim distribution and the obligations of trustees in managing trust assets. Specifically, the court had to determine whether it could direct that trust assets be distributed to beneficiaries during litigation, and if so, under what conditions. Furthermore, the court was required to consider the trustees' fiduciary duties and whether their actions in making an interim distribution complied with these obligations.

The court examined the relevant provisions of equity and trust law to assess the propriety of the interim distribution. It held that while the court has the authority to order interim distributions in certain circumstances, such an order should be made cautiously to ensure that the beneficiaries' interests are protected and that the administration of the trust remains fair and transparent. The court emphasised that trustees must act within their powers and in the best interests of the beneficiaries, and any distribution must not prejudice the outcome of the litigation. The trustees' decision to distribute the assets was found to be improper as it did not comply with these principles. The court concluded that the trustees had breached their fiduciary duties by making the interim distribution without adequate justification.

The final orders of the court were that the interim distribution made by the trustees was invalid, and the assets distributed were to be returned to the trust. The court further directed that the trustees were to refrain from making any further distributions without the court's approval. The litigation was to proceed to determine the final distribution of the trust assets, ensuring that all beneficiaries' interests were fully considered.

Orders