Chick v Grosfeld - [2012] NSWSC 1166

Supreme Court

New South Wales

Medium Neutral Citation: Chick v Grosfeld [2012] NSWSC 1166
Hearing dates: 6, 7, 8 and 16 February 2012
Decision date: 25 September 2012
Jurisdiction: Equity Division
Before: White J
Decision:
Refer to paras [102] and [104] of judgment.

Catchwords:
WILLS, PROBATE AND ADMINISTRATION - executors - application for removal of executor - allegations that executor mismanaged affairs of estate - where funds were paid into working account of company owned by executor - no authorisation for executor to mix estate moneys with his own - executor concealed movement of money by wrongly describing payments made - where accountant and financial advisor appointed as executor and trustee of will - clause in will authorising right to charge professional hourly rate "in connection with the trusts in this Will" payable from the estate - executor withdrew moneys on account of such remuneration in advance of the doing of work for which invoices were later rendered - time sheets provided were not contemporaneous - amounts charged were excessive - whether estate as been put into jeopardy by reason of breaches of duty
WILLS, PROBATE AND ADMINISTRATION - letters of administration with the will annexed - appointment of administrator - proposed trustee company declined to act - where plaintiffs sought order that chartered accountant be appointed as administrator - where no evidence of fitness to be appointed as executor nor of experience as trustee or executor of will - no evidence of knowledge of ongoing dispute between beneficiaries - no evidence of willingness to be appointed if not entitled to charge - appointment of the NSW Trustee and Guardian pursuant to NSW Trustee and Guardian Act 2009, s 22
Legislation Cited: Probate and Administration Act 1898
Family Provision Act 1982
Taxation Administration Act 1953 (Cth)
NSW Trustee and Guardian Act 2009
Cases Cited: Brown v Grosfeld; Fitzpatrick v Grosfeld [2011] NSWSC 796
Brown & Anor v Grosfeld [2011] NSWSC 1429
Fitzpatrick v Grosfeld [2011] NSWSC 1428
Bates v Messner (1967) 67 SR (NSW) 187
Mavrideros v Mack [1998] NSWCA 286; (1998) 45 NSWLR 80
Commissioner of Stamp Duties (Qld) v Livingstone [1965] AC 694
Sacks v Gridiger (1990) 22 NSWLR 502
Estate of Instone (Supreme Court of New South Wales, Powell J, 23 August 1993, unreported)
Texts Cited: R Geddes, C Rowland & P Studdert, Wills, Probate and Administration Law in New South Wales (1996) LBC Information Services 1996
Category: Principal judgment
Parties: Murray Chick (Plaintiff)
Johannes Theodorus Grosfeld (Defendant)
Representation: M McAuley (Plaintiff)
A Lakeman (Defendant)
McAuley Hawach (Plaintiff)
Angela Anthony & Associates (Defendant)

File Number(s): 2010/258874

Judgment

HIS HONOUR: This is an application for the removal of an executor.

The proceedings concern the estate of the late Barry Ian Chick who died on 9 December 2007. He was survived by four children (Ian, Jennifer, Murray and Kimberley) and ten grandchildren. He appointed the defendant, Johannes Grosfeld as the executor and trustee of his will. Mr Grosfeld is an accountant and had been Mr Chick's financial adviser.…

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 Chick v Grosfeld

Details

AGLC: Chick v Grosfeld [2012] NSWSC 1166
Case: [2012] NSWSC 1166
Decision Date: 25 September 2012

CaseChat Overview and Summary

In the Supreme Court of New South Wales, the case of Chick v Grosfeld involved a dispute regarding the management of an estate by the appointed executor, Grosfeld. The plaintiffs, the beneficiaries of the estate, sought the removal of Grosfeld as executor due to allegations of mismanagement. The plaintiffs claimed that Grosfeld had misappropriated estate funds by depositing them into his company's account without authorisation and concealing the movement of money through incorrect payment descriptions. Additionally, Grosfeld had charged professional fees for services rendered but had failed to provide contemporaneous time sheets and had overcharged for his services. The plaintiffs argued that these actions had jeopardised the estate.

The court had to determine whether Grosfeld's actions constituted a breach of his duties as executor and if his conduct warranted his removal from the position. Specifically, the court needed to assess whether Grosfeld had properly managed the estate's funds, whether his fees were justified, and if his actions had put the estate at risk. The court also needed to decide on the appropriate appointment of an administrator if Grosfeld was to be removed.

The court found that Grosfeld had indeed breached his fiduciary duties by misappropriating estate funds and overcharging for his services. The court held that his actions had put the estate in jeopardy, and therefore, he should be removed as executor. In relation to the appointment of a new administrator, the court dismissed the plaintiffs' proposed candidate, a chartered accountant, due to a lack of evidence of their fitness to hold the position. Instead, the court appointed the NSW Trustee and Guardian as the new administrator under the NSW Trustee and Guardian Act 2009, s 22.

Orders