Elizabeth Catherine Sanderson v The Public Trustee; Heather Sanderson v The Public Trustee

The New South Wales Court of Appeal considered the dispute between Elizabeth Catherine Sanderson and Heather Sanderson (the beneficiaries) and the Public Trustee, concerning the administration of a deceased estate. The core of the disagreement revolved around the Public Trustee's management of certain assets, specifically shares, and the beneficiaries' claims for compensation arising from alleged mismanagement.

The Court was required to determine whether the Public Trustee had breached its duty of care in managing the estate's investments, particularly in relation to the sale of shares. It also had to consider whether the beneficiaries had suffered loss as a result of any such breach and, if so, the appropriate measure of damages. The question of whether the Public Trustee had acted with reasonable prudence and diligence in its role as executor and trustee was central to the proceedings.

The Court applied the principles of trustee law, emphasizing the duty of a trustee to act with the care, diligence, and prudence that a reasonable person would exercise in managing the affairs of another. It examined the evidence regarding the market conditions at the time of the share sales and the steps taken by the Public Trustee to obtain advice and to act in the best interests of the beneficiaries. The Court considered whether the Public Trustee had adequately diversified the estate's investments and whether the timing of the sales was commercially justifiable.

Ultimately, the Court found that the Public Trustee had not breached its duty of care in its management of the shares. The beneficiaries' claims were dismissed, and the Public Trustee was not found liable for any loss to the estate.