Worthington bht Worthington v Hallissy - [2022] NSWSC 753

Supreme Court

New South Wales

Medium Neutral Citation: Worthington bht Worthington v Hallissy [2022] NSWSC 753
Hearing dates: 6 – 7 June 2022
Date of orders: 8 June 2022
Decision date: 08 June 2022
Jurisdiction: Common Law
Before: Schmidt AJ
Decision:
1. Declare that the Second and Third Defendants held 50% of the proceeds of sale of xxxxx, being $1,041,122.24, on trust for the Second Plaintiff.
2. Declare that the Second and Third Defendants are in breach of the trust declared in order 1.
3. Order that the Second and Third Defendants pay $1,041,122.24 as equitable compensation to the Second Plaintiff within 14 days.
4. Give liberty to apply by email to my Associate on 3 days' notice.
5. Stand the proceedings stood over to 6 September 2022 at 9.30 am for directions.
6. Direct the parties to confer and file proposed costs orders within 14 days, together with short written submissions, in the event of any disagreement.

Catchwords:
EQUITY — Trusts and trustees — whether daughter and son-in-law held proceeds of property sale on trust for father/father-in-law — whether daughter and son-in-law were in breach of trustee obligations and duties — breaches of trust established — equitable compensation ordered
CIVIL PROCEDURE — where settlement of proceedings is commenced on behalf of a person under legal incapacity — s 76 Civil Procedure Act 2005 (NSW) — where agreement requires the approval of the court — approval granted
CIVIL PROCEDURE — Appearance — where leave to withdraw a submitting appearance is belatedly sought — Uniform Civil Procedure Rules 2005 (NSW) — trial by ambush or surprise may result — leave refused

Legislation Cited:
Civil Procedure Act 2005 (NSW) ss 56, 58, 76
Real Property Act 1900 (NSW)
Uniform Civil Procedure Rules 2005 (NSW) rr 6.11, 12.5, 42.1

Cases Cited:
Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liq) (2000) 202 CLR 588; [2000] HCA 25
Evergreen Tours Pty Ltd v McLaren [2010] NSWSC 1362
Garsec v His Majesty The Sultan of Brunei [2007] NSWSC 882
Somportex Limited v Philadelphia Chewing Gum Corporation [1968] 3 All ER 26

Category: Principal judgment
Parties: Patricia Mary Worthington bht Stuart Worthington (First Plaintiff)
Leslie Bruce Worthington (Second Plaintiff)
Carolyn Anne Hallissy (First Defendant)
Jennifer-Kym Jenner (Second Defendant)
Karl Jenner (Third Defendant)
Rams Financial Group Pty Ltd (Fourth Defendant)
Representation:
Counsel:
J Young (Plaintiffs)
A Lim (Plaintiffs)

Mr S Anderton (First Defendant)
Mr O Small (First Defendant)

Mrs J-K Jenner (Second Defendant)
Solicitors:
De Silva Hebron (Plaintiff)
Deutsch Miller (First Defendant)

File Number(s): 2021/296987

Judgment

Mr and Mrs Worthington, who are both now aged in their 90’s, brought these proceedings, in Mrs Worthington’s case by her tutor, her son Stuart Worthington. They sought orders against their other children, Ms Hallissy and Mrs Jenner, and their son-in-law Mr Jenner. Mr and Mrs Jenner had filed a submitting appearance, except as to costs, but the orders sought were opposed by Ms Hallissy, who also brought a cross claim against Mrs Worthington and Mr…

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: [2022] NSWSC 753
Decision Date: 08 June 2022

CaseChat Overview and Summary

The case of Worthington v Hallissy involves a dispute over the proceeds of a property sale and whether the daughter and her son-in-law held these proceeds on trust for the father and father-in-law. The dispute was heard in the Supreme Court of New South Wales. The plaintiffs, Worthington and Hallissy, alleged that the defendants, the daughter and her son-in-law, were in breach of their fiduciary duties as trustees and sought equitable compensation. The legal issues before the court were whether the daughter and son-in-law held the proceeds on trust for the plaintiffs and, if so, whether they breached their trustee obligations and duties.

The court found that the daughter and her son-in-law did hold the proceeds on trust for the plaintiffs. They were held to have breached their fiduciary duties by failing to properly account for the sale proceeds and by using some of the funds for their personal benefit. The court detailed the breaches, including the failure to provide detailed accounts and the unauthorized use of trust funds for personal expenses. The court concluded that the daughter and son-in-law were in breach of their trustee obligations and duties, leading to an order for equitable compensation. Additionally, the court addressed procedural matters, including the settlement of proceedings on behalf of a person under legal incapacity and the granting of approval for such settlements. The court also dealt with a belated application for leave to withdraw a submitting appearance, ruling that the trial by ambush or surprise resulting from such a withdrawal could not be condoned, and thus refused the leave.

In summary, the court found the daughter and her son-in-law liable for breaches of trust and ordered equitable compensation. The court also granted approval for the settlement of proceedings on behalf of a person under legal incapacity and refused leave to withdraw a submitting appearance.

Orders