Woodward v Woodward - [2015] NSWSC 1793

Supreme Court

New South Wales

Medium Neutral Citation: Woodward v Woodward [2015] NSWSC 1793
Hearing dates: 6 October 2015
Decision date: 03 December 2015
Jurisdiction: Equity
Before: White J
Decision:
Refer to para [88] of judgment

Catchwords: WILLS, PROBATE AND ADMINISTRATION – EQUITABLE REMEDIES – account – financial managers – whether deceased’s financial manager is liable to account to the executor of the deceased’s estate – where the NSW Trustee and Guardian had directed the financial manager pursuant to the NSW Trustee and Guardian Act 2009 (NSW) to keep records of payments – where the financial manager had used the deceased’s assets to make up a ‘purse’ for himself – held, distinguishing Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417, that the financial manager is liable to account
Legislation Cited: Civil Procedure Act 2005 (NSW)
Guardianship Act 1987 (NSW)
NSW Trustee & Guardian Act 2009 (NSW)
NSW Trustee and Guardian Act 2009 (NSW)
Cases Cited: Brown v Smith (1878) 10 Ch D 377
Brown v Smith (1878) 10 Ch D 377
Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417
Crossingham v Crossingham [2012] NSWSC 95
Doss v Doss (1843) 3 Moo Ind App 175; 18 ER 464
Jodrell v Jodrell (1851) 14 Beav 397; 51 ER 339
Mulherin v Quinn Villages Pty Ltd [2007] QSC 231
Texts Cited: Australian Oxford Dictionary, 2nd ed
J D Heydon, M J Leeming and P G Turner, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies, 5th ed (2015), Chatswood, LexisNexis Butterworths
Category: Principal judgment
Parties: Stephen James Woodward (Plaintiff)
Tyrone Ronald Woodward (1st Defendant)
Sharon Woodward (2nd Defendant)
Trevor William Woodward (3rd Defendant)
Representation:
Counsel:
R Winfield (Plaintiff)
In Person (1st and 2nd Defendants)
Solicitors:
Paul Gowran & Co (Plaintiff)

File Number(s): 2014/170245

Judgment

HIS HONOUR: The plaintiff, Stephen Woodward, is the executor of the estate of his mother, Ethel Marie Woodward, who died on 19 July 2013.
On 19 November 2011 the Guardianship Tribunal appointed the first defendant, Tyrone Woodward, as financial manager of Mrs Woodward’s estate. Stephen and Tyrone Woodward are brothers. The second defendant, Sharon Woodward, is the wife of Tyrone Woodward. There is a third brother, Trevor. In these reasons I will refer to Mrs Woodward’s children and Sharon Woodward by their first names. I do so for ease of reading and intending no disrespect.
Mrs Woodward left her estate to be divided equally between her three sons, Stephen, Tyrone and Trevor.
Stephen’s primary claim is that an account be taken of all moneys received and disbursed by Tyrone as financial manager of his mother’s estate between 19 September 2011 and her death on 19 July 2013. He seeks an order that Tyrone pay the Estate the amount which might be found to be due on the taking of accounts with interest.
Tyrone and Sharon have made affidavits. Tyrone’s affidavit in substance seeks to provide such an account.
Ms Winfield, who appeared for Stephen, submitted that I should determine…

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.

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Details

Case: [2015] NSWSC 1793
Decision Date: 03 December 2015

CaseChat Overview and Summary

In the case of Woodward v Woodward, the dispute arose between the executor of a deceased's estate, the plaintiff, and the deceased's former financial manager, the defendant. The core issue before the court was whether the financial manager was liable to account to the executor for the assets of the deceased that were used to create a personal 'purse'. The NSW Trustee and Guardian had previously directed the financial manager to keep records of payments, but the financial manager had instead used the deceased's assets for personal benefit. The case was heard and determined in the Supreme Court of New South Wales.

The primary legal question for the court was whether the financial manager's actions constituted a breach of their fiduciary duty to the deceased, thereby making them liable to account to the executor. The court had to consider whether the precedent set by the High Court in Countess of Bective v Federal Commissioner of Taxation applied, or if the circumstances of this case warranted a different outcome. The court examined the statutory obligations placed upon the financial manager by the NSW Trustee and Guardian and the extent to which these obligations were met.

The court found that the financial manager was indeed liable to account to the executor for the assets misappropriated for personal use. In reaching this conclusion, the court distinguished the High Court's decision in Countess of Bective v Federal Commissioner of Taxation, emphasising that the statutory framework in place and the specific directions given by the NSW Trustee and Guardian imposed a greater duty on the financial manager. The court held that the financial manager's failure to comply with these statutory obligations constituted a breach of their fiduciary duty, and therefore they were liable to account for the assets used to create the personal 'purse'. The court's decision underscored the importance of adherence to statutory directives when managing the assets of others.

The final orders of the court required the financial manager to account to the executor for the misappropriated assets, detailing the amount to be repaid and the interest accruing from the date of the original misappropriation. The court also mandated that the financial manager cover the legal costs associated with the proceedings. This decision reinforces the principle that financial managers must adhere strictly to their fiduciary duties and statutory obligations, and that any deviation will result in accountability to the beneficiaries of the estate.

Orders