Saffron v Cowley - [2012] NSWSC 1108

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Saffron v Cowley & Anor; Estate of Saffron [2012] NSWSC 1108
Hearing dates: 10 September 2012
Decision date: 10 September 2012
Jurisdiction: Equity Division - Probate List
Before: White J
Decision:
Refer to paras [49] and [50] of judgment.

Catchwords:
WILLS, PROBATE AND ADMINISTRATION - executor - obligations of executors - where executors are directors of trustee of trust to which balance of estate is paid - no order had been made for payment of commission - executors paid themselves purported advances on commission - one executor paid himself remuneration for professional work done for the estate as an accountant although no clause in will authorising such remuneration - executors as directors of residuary beneficiary purported to authorise payments of advances on commission - where conflict between personal interests of executors in receiving remuneration and duty to residuary beneficiary - where acting on legal advice - prompt steps taken to rectify defaults after taking further legal advice - undertaking to court for repayment of funds received

TRUSTS - beneficiaries - question as to who are beneficiaries of trust - where trustees power to appoint all or parts of the trust fund or income thereof to be held in trust for one or more persons to the exclusion of others - consideration of definition of "appointed class" - whether definition of "appointed class" so hopelessly wide so that trust is administratively unworkable - possibly that trust assets held for benefit of charities - referral of papers to Attorney-General
COSTS - indemnity costs - resistance to plaintiff's claim not reasonable
Legislation Cited: Probate and Administration Act 1898
Civil Procedure Act 2005
Trustee Act 1925
Cases Cited: Re Craig (1952) 52 SR (NSW) 265
Re Baden's Trust Deeds; McPhail v Doulton [1971] AC 424
Texts Cited: Maclean, Trusts and Powers, Law Book Company, 1989
Category: Principal judgment
Parties: Alan Saffron (Plaintiff)
Edwin Maxwell Cowley (1st Defendant)
Victor Bogan (2nd Defendant)
Representation: Counsel:
M S White with B D Kaplan (Plaintiff)
B Coles QC with A C Harding (Defendants)
Solicitors:
M + K Lawyers (Plaintiff)
Tresscox Lawyers (Defendants)

File Number(s): 2011/305017

Judgment

HIS HONOUR: The defendants are the executors of the will of Abraham Gilbert Saffron who died on 15 September 2006. The plaintiff is the son of the deceased. He has instituted separate proceedings for further provision out of the deceased's estate. Under the deceased's will he was entitled to a legacy of $500,000, which has been paid.

In these proceedings the plaintiff complained about payments that the defendants made to themselves out of the estate for what was described as advances against commission. These advances were said to have been approved by the residuary beneficiary of the estate.

On 21 December 2011 the defendants filed a notice of motion seeking an order that the plaintiff provide security for costs. He is resident outside the jurisdiction. The Registrar made an order for the provision of security. I was told that in the hearing…

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 Saffron v Cowley

Details

AGLC: Saffron v Cowley [2012] NSWSC 1108
Case: [2012] NSWSC 1108
Decision Date: 10 September 2012

CaseChat Overview and Summary

The case of Saffron v Cowley involved a dispute concerning the administration of an estate by executors who were also directors of a trust to which the estate's balance was paid. The deceased's will did not include a clause authorizing the executors to receive remuneration for their professional work done for the estate. One executor paid himself for his services as an accountant, and the executors made payments to themselves as advances on commission, despite no order having been made for commission payment. The executors, acting on legal advice, purported to authorize the payments of advances on commission as directors of the residuary beneficiary. The court needed to determine the legal obligations of the executors and whether the payments made by them were justified.

The court examined the conflict between the personal interests of the executors in receiving remuneration and their duty to the residuary beneficiary. It was noted that the executors had acted on legal advice and took prompt steps to rectify the defaults after receiving further legal advice. The court also considered whether the definition of "appointed class" in the trust was so wide that it rendered the trust administratively unworkable, potentially leading to the trust assets being held for the benefit of charities. The court found that the executors' resistance to the plaintiff's claim was not reasonable and ordered the executors to repay the funds received.

The court granted indemnity costs to the plaintiff, ruling that the executors' resistance to the claim was not reasonable. The court ordered the executors to repay the funds received, which included the unauthorized remuneration and advances on commission. The court also referred the papers to the Attorney-General for consideration regarding the definition of "appointed class" and the potential holding of trust assets for the benefit of charities. The court's decision underscored the importance of executors adhering to their fiduciary duties and acting in the best interests of the estate and its beneficiaries.

Orders