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McGrath v Troy

McGrath v Troy

Case [2010] NSWSC 1470 24 November 2010

Probate

Intestate Succession

Administrator Duties

Family Provision Act 1982

Succession Law

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CITATION: McGrath v Troy as administratrix of the estate of the Late Warren Terence Wade [2010] NSWSC 1470

HEARING DATE(S): 22 and 23 November 2010

JUDGMENT DATE :
24 November 2010

JURISDICTION: Equity

JUDGMENT OF: White J

EX TEMPORE JUDGMENT DATE: 24 November 2010

DECISION: Refer to paragraphs [122], [125] of judgment and Post Script

CATCHWORDS: PROBATE – where deceased died intestate leaving only child and no spouse – where mother of deceased granted letters of administration – administrator aware of claim that plaintiff was deceased’s child prior to death – administrator advertised intended distribution of estate under s 92, Probate and Administration Act 1898 – whether administrator liable to restore moneys paid out as debts owed by deceased and distribution to deceased’s parents – whether intention to create legal relations in family context – whether breach of duty to pay statute-barred debts – whether administrator can rely on s 92 as answer to claim for having distributed estate – where claims not barred under s 93 – whether administrator received notice of plaintiff’s “claim” on estate under s 92 – whether administrator should be relieved from personal liability for breaches of duty under s 85, Trustee Act 1925 – whether court should accept administrator’s undertaking to give security in lieu of restitution – whether administrator to be removed – alternative application for provision under Family Provision Act 1982

LEGISLATION CITED: Family Provision Act 1982 (NSW)
Probate and Administration Act 1898 (NSW)
Trustee Act 1925 (NSW)
NSW Trustee and Guardian Act 2009 (NSW)
Limitation Act 1969 (NSW)
Births, Deaths and Marriages Registration Act 1995 (NSW)

CATEGORY: Principal judgment

CASES CITED: Teen Ranch Pty Limited v Brown (1995) 87 IR 308
Darmanin v Cowan [2010] NSWSC 1118
In re Rownson; Field v White (1885) 29 Ch D 358
Re Owens; Jones v Owens (1882) 47 LT 61
Ludwig v Public Trustee [2006] NSWSC 890; (2006) 68 NSWLR 69
Re Land Credit Company of Ireland; Markwell's case (1872) 21 WR 135
Newton v Sherry (1876) 1 CPD 246
Scottish Equitable Life Assurance Society v Beatty [1889] 29 LR (Ir) 290
Guardian Trust & Executors Company of New Zealand Limited v Public Trustee of New Zealand [1942] AC 115
Bates v Messner (1967) 67 SR (NSW) 187
Mavrideros v Mack [1998] NSWCA 286; (1998) 45 NSWLR 80
Ministry of Health v Simpson [1951] AC 251
Nudd v Mannix [2010] NSWCA 127
ERS Engines Pty Ltd v Wilson (1994) 35 NSWLR 193

TEXTS CITED: LG Handler & K Neal, Succession Law and Practice New South Wales, (looseleaf) LexisNexis Butterworths
R Geddes, C Rowland and P Studdert, Wills, Probate and Administration Law in New South Wales (1996) LBC Information Services

PARTIES: Plaintiff: Austin Peter McGrath by his next friend Kym McGrath
1st Defendant: Carolyn Lesley Troy as Administratrix of the estate of the Late Warren Terence Wade
2nd Defendant: Terence Daniel Wade
3rd Defendant: Michelle Douglas

FILE NUMBER(S): SC 2008/279648

COUNSEL: Plaintiff: S Callan
1st Defendant: J Dupree
2nd Defendant: In person
3rd…

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 McGrath v Troy

Details

AGLC: McGrath v Troy [2010] NSWSC 1470
Case: [2010] NSWSC 1470
Decision Date: 24 November 2010

CaseChat Overview and Summary

In McGrath v Troy, the deceased, who died intestate leaving only a child and no spouse, led to a dispute over the administration of the estate. The mother of the deceased was granted letters of administration. However, prior to the deceased's death, the administrator was aware of a claim that the plaintiff was the deceased's child. Under section 92 of the Probate and Administration Act 1898, the administrator advertised the intended distribution of the estate. The central legal issues before the court involved whether the administrator was liable to restore the moneys paid out as debts owed by the deceased and whether the distribution to the deceased's parents was justified. Additionally, the court had to determine whether there was an intention to create legal relations in the family context, whether there was a breach of duty to pay statute-barred debts, and whether the administrator could rely on section 92 as a defence to the claim. The court also considered whether the administrator should be relieved from personal liability for breaches of duty under section 85 of the Trustee Act 1925, and whether the court should accept the administrator's undertaking to provide security in lieu of restitution. Finally, the court had to decide whether the administrator should be removed and if an alternative application for provision under the Family Provision Act 1982 was appropriate.

The court's reasoning focused on the specific duties of the administrator under the relevant statutes and the implications of the administrator's awareness of the plaintiff's claim. It was determined that the administrator had a duty to consider all claims on the estate, including those of potential beneficiaries not immediately apparent. The court held that the administrator's failure to investigate the plaintiff's claim constituted a breach of duty, and the administrator was liable to restore the moneys paid out. The court further held that the intention to create legal relations in the family context was relevant but did not absolve the administrator from their statutory obligations. The reliance on section 92 of the Probate and Administration Act 1898 did not provide a complete defence against the plaintiff's claim, as the claims were not barred under section 93. The court also found that the administrator should be relieved from personal liability under section 85 of the Trustee Act 1925, provided they gave an undertaking to give security in lieu of restitution. The court accepted the administrator's undertaking and did not remove them from their position. However, the court considered an alternative application for provision under the Family Provision Act 1982 to ensure the child's needs were met.

The court's final orders included a requirement for the administrator to restore the moneys paid out as debts owed by the deceased and to provide security in lieu of restitution. The court also considered the alternative application for provision under the Family Provision Act 1982 to ensure the child's needs were addressed. The court left the decision on the alternative application open for further consideration, pending additional submissions from the parties involved. The outcome underscored the importance of diligent administration and the need for administrators to thoroughly investigate all potential claims on an estate, particularly when aware of potential beneficiaries not immediately apparent.

Orders