Downie v Langham - [2017] NSWSC 113

Supreme Court

New South Wales

Medium Neutral Citation: Downie v Langham [2017] NSWSC 113
Hearing dates: 13 February 2017
Decision date: 13 February 2017
Jurisdiction: Equity
Before: White J
Decision:
Refer to para [13] of judgment.

Catchwords: EQUITY - equitable remedies - accounts and inquiries – whether defendant in capacity as attorney of deceased should be ordered to account to deceased’s estate – whether attorney acting under power of attorney after the principal has become incapable has obligation to account – inability of attorney to account for expenditure will not necessarily require attorney to pay moneys to estate – defendant concedes that estate moneys were spent for defendant’s own benefit – account of expenditure ordered
Legislation Cited: Powers of Attorney Act 2003 (NSW)
Cases Cited: Taheri v Vitek (2014) 87 NSWLR 403; [2014] NSWCA 209
C v W (No 2) [2016] NSWSC 945
Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417; [1932] HCA 22
Brown v Smith (1878) 10 Ch D 377
Woodward v Woodward [2015] NSWSC 1793
Category: Procedural and other rulings
Parties: Rodney Downie (Plaintiff)
Dianne Langham (Defendant)
Representation:
Counsel:
A Hill (Plaintiff)
In person (Defendant)
Solicitors:
Armstrongs Solicitors (Plaintiff)
n/a (Defendant)

File Number(s): 2016/250318

Judgment

HIS HONOUR: This is an application for an order that the defendant provide an account. It relates to the affairs of the late Mrs Gwen Downie who died on 27 February 2014. The plaintiff is a son of the late Mrs Downie and is the administrator of her estate. The defendant is Mrs Downie's niece.
On 5 January 2010, Mrs Downie appointed the defendant as her attorney pursuant to a general (enduring) power of attorney executed in accordance with the Powers of Attorney Act 2003 (NSW). One of the conditions of the power was that the power was subject to no conditions or limitations save that the attorney must at all times act for the principal's benefit. The power of attorney was thus in quite different terms from that considered by the Court of Appeal in Taheri v Vitek (2014) 87 NSWLR 403; [2014] NSWCA 209.
After the plaintiff obtained the grant of letters of administration with the will annexed, his solicitor called on the defendant to explain various withdrawals from bank accounts of the late Mrs Downie, including some that were made after her death.
In response, on 1 December 2015, the defendant wrote a letter in which, amongst other things, she stated that she had not received a benefit from her aunt's accounts and had taken out-of-pocket expenses from the accounts as they came to hand. She said she did not have copies of the accounts, nor receipts, and explained in some detail her care for and attendances on her aunt, particularly during the last years of her aunt's life. She provided some explanation as to purchases made for Mrs Downie's benefit and also explained in general terms the kinds of expenses that she incurred in visiting Mrs Downie when Mrs Downie…

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 Downie v Langham

Details

AGLC: Downie v Langham [2017] NSWSC 113
Case: [2017] NSWSC 113
Decision Date: 13 February 2017

CaseChat Overview and Summary

In the matter of Downie v Langham, the dispute was between the plaintiff, who sought to have the defendant, Langham, account for expenditure made while acting as an attorney for the deceased. The case was heard in the Supreme Court of South Australia. The plaintiff argued that Langham, in his capacity as the attorney of the deceased, should be ordered to account to the deceased’s estate for the funds spent. The legal issues before the court were whether an attorney acting under a power of attorney after the principal has become incapable has an obligation to account and whether the inability of the attorney to account for expenditure necessarily requires the attorney to pay the moneys to the estate.

The court found that an attorney acting under a power of attorney after the principal has become incapable does indeed have an obligation to account. The court reasoned that the nature of the power of attorney imposes a fiduciary duty upon the attorney to act in the best interests of the principal. However, the court noted that the inability of the attorney to account for the expenditure does not necessarily require the attorney to pay moneys to the estate. Instead, the court ordered an account of the expenditure to be taken, which would provide clarity on the specific uses of the funds and potentially lead to a determination of what, if any, amounts should be paid to the estate. The defendant conceded that the estate’s moneys were spent for his own benefit, which underscored the necessity for the court to order an account of the expenditure. This was seen as a critical step towards ensuring that any misappropriated funds could be identified and potentially reclaimed by the estate.

Orders