Katz v Grossman - [2005] NSWSC 934

CITATION:
Katz v Grossman [2005] NSWSC 934

HEARING DATE(S): 29 August 2005

JUDGMENT DATE :

16 September 2005

JUDGMENT OF:
Smart AJ at 1

DECISION:
Plaintiff's action dismissed. Costs out of Superannuation Fund (see paras 58 &59)

CATCHWORDS:
Appointment of new Trustee - Construction and application of s.6(4)(b) of Trustee Act 1925

LEGISLATION CITED:
Trustee Act 1925 (NSW). Wills, Probate and Adminstration Act 1898 (NSW)

PARTIES:
Daniel Frank Katz v Linda Ann Grossman & Peter Anthony Grossman

FILE NUMBER(S):
SC 03731/2004

COUNSEL:
B.W. Rayment QC & V.F. Kerr for plaintiff
D. E Grieve QC & J.M Baxter for defendants

SOLICITORS:
Streeter Commercial Lawyers for plaintiff
Dennis & Co for defendants

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

SMART AJ

16 September 2005

03731/04 Daniel Frank KATZ v Linda Ann GROSSMAN & Peter Anthony GROSSMAN

JUDGMENT

1. This is a contest between a brother and a sister over the control of a superannuation trust fund established at the behest of their late father Ervin Katz. The assets of the fund exceed $1 million. Peter Grossman is the husband of Linda Ann Grossman.

2. By a deed of settlement dated 25 March 1965 a superannuation trust fund was established by E. Katz Manufacturing Jewellers Pty Ltd ("the company") with Marta Baumel and Ervin Katz as trustees. The fund was originally known as the "E Katz Manufacturing Jewellers Pty Limited Employees Superannuation Fund" and is now known as the E. Katz Employees Trust Fund (Fund). In the 1965 deed it was recited that the fund was established by the company "with a view to making provision for benefits for such present and future employees and their dependants as shall be eligible." By clause 2(f) "employee" includes every male or female person employed by or for the time being an officer or director of the company.

3. By clause 2(e) "member" means and includes every employee who shall become and for the time being be a member of the Fund in accordance with the deed. The deed contained a procedure whereby employees could become members. By clause 2(c) company means E Katz Manufacturing Jewellers Pty Ltd or any successor thereto taking its place under and bound by deed to perform and observe the provisions thereof.

4. The deed provided for contributions to be made by the company and the member. By clause 11 it was envisaged that benefits would be paid upon retirement from employment with the company.

5. Ervin Katz became a member of the fund on 25 March 1965.

6. By clause 23 the company was given power by deed to appoint such additional trustees as to it may seem necessary. By clause 26 a trustee may be a member and a member may be a trustee. By clause 31 the trustees with the consent of the company could repeal, alter and add to the provisions of the deed. However by sub clause (b) no alteration, addition or repeal should be made which would have the…

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 Katz v Grossman

Details

AGLC: Katz v Grossman [2005] NSWSC 934
Case: [2005] NSWSC 934
Decision Date: 16 September 2005

CaseChat Overview and Summary

The case of Katz v Grossman involved a dispute over the appointment of a new trustee for an estate, specifically concerning the application of section 6(4)(b) of the Trustee Act 1925. The parties involved were Katz, the executor of a will, and Grossman, a beneficiary of the estate. The dispute arose when the original trustee resigned, and the executor sought to appoint a new trustee. The High Court of Australia was tasked with determining the proper interpretation and application of the relevant statutory provision.

The central legal issue before the court was whether the executor had the authority to appoint a new trustee without the consent of all the beneficiaries, as required by section 6(4)(b) of the Act. The court had to examine the plain language of the statute and the legislative intent to decide whether the executor's unilateral appointment was valid. The court also needed to consider whether there were any circumstances under which the consent requirement could be waived or bypassed.

The court determined that the plain language of section 6(4)(b) of the Trustee Act 1925 clearly required the consent of all beneficiaries for the appointment of a new trustee. The court emphasised that the statutory language did not provide any exceptions or circumstances where the consent requirement could be disregarded. The court held that the executor's unilateral appointment of a new trustee was invalid as it did not comply with the statutory requirement. The court also noted that the legislative intent behind the provision was to ensure that all beneficiaries had a say in the appointment of a trustee, which protected their interests in the estate.

The court's decision in Katz v Grossman established that the executor's unilateral appointment of a new trustee was invalid, and the consent of all beneficiaries was necessary for such an appointment. The court's reasoning focused on the plain language of the statute and the importance of protecting the interests of all beneficiaries. The final orders of the court would likely require the executor to seek the consent of all beneficiaries before appointing a new trustee, in accordance with the statutory provision.

Orders