Zizzo v Faulks - [2017] NSWSC 114

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Zizzo v Faulks & Ors [2017] NSWSC 114
Hearing dates: 14 February 2017
Decision date: 14 February 2017
Jurisdiction: Equity
Before: White J
Decision:
Counsel to bring in short minutes of order in accordance with reasons.

Catchwords: EQUITY - trusts and trustees – testamentary trusts – where trustee has lost capacity – trustee a life tenant – attorneys of life tenant under enduring power of attorney seek appointment as new trustees – attorneys also contingent remaindermen – conflict of duty and duty – whether court should appoint a beneficiary as trustee – whether court should appoint a relative as trustee – whether court should appoint a sole trustee – conflict of duty and duty – appointment of NSW Trustee and Guardian as trustee and administrator
Legislation Cited: NSW Trustee and Guardian Act 2009 (NSW)
Trustee Act 1925 (NSW)
Wills, Probate and Administration Act 1898 (NSW)
Cases Cited: Hancock v Rinehart [2014] NSWSC 658
Hancock v Rinehart [2015] NSWSC 646 at [124]; (2015) 106 ACSR 207
In re Tempest (1866) LR 1 Ch App 485
Johnstone v Johnstone (1902) 2 SR(NSW) Eq 90; [1902] NSW St Rp 83
Moore v McKelvey (1906) 23 WN (NSW) 100
Texts Cited: Jacobs’ Law of Trusts in Australia (8th ed 2016, Butterworths)
Category: Procedural and other rulings
Parties: Rosemary Zizzo (1st Plaintiff)
Nicholas Arena (2nd Plaintiff)
John Sarich (3rd Plaintiff)
Josephine Faulks (1st Defendant)
Charlotte Susanne Arena (2nd Defendant)
Roseanne Michelle Murray (3rd Defendant)
Peter Arena (4th Defendant)
Paul Arena (5th Defendant)
Michael Arena (6th Defendant)
Norman Sarich (7th Defendant)
Joanne Doust (8th Defendant)
Henry Charles Ford (9th Defendant)
Nicholene White (10th Defendant)
Representation:
Counsel:
T Bors (Plaintiff)
G Waugh (2nd-6th; 8th and 9th Defendants)
Solicitors:
Patrick Hargraves & Co (Plaintiffs)
Bilbie Dan (Defendants)

File Number(s): 2016/282743

Judgment

HIS HONOUR: The principal question on these applications is who should be appointed as the trustee or trustees of the trust or trusts arising under a will and codicil of the Late Nicola Arena who died on 10 July 1963.
Probate of Nicola Arena’s will and codicil was granted to his daughter, Connie Arena, on 14 January 1964.
By his will dated 10 November 1953, Nicola Arena appointed his daughter Connie as the executrix and trustee of the will and gave her his residence in Storey Street, Maroubra (“the Maroubra property”), together with the furniture and contents, on trust to permit his daughters Connie, Angelina and Josephine to reside there and to have the use and benefit of the residence for their joint lives, or the life of the last survivor and, on the death of the last of those three daughters, for their children.
Connie died in October 1971, Angelina died in May 2008 and neither had any children.
Josephine is now 88 and was admitted to a nursing home in December 2015. She suffers from advanced dementia as well as physical ailments. She has no children. It is likely that the initial gift of 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 Zizzo v Faulks

Details

AGLC: Zizzo v Faulks [2017] NSWSC 114
Case: [2017] NSWSC 114
Decision Date: 14 February 2017

CaseChat Overview and Summary

The case of Zizzo v Faulks involved the appointment of trustees for a testamentary trust, following the incapacity of the original trustee, who was also the life tenant. The applicants, who were both attorneys of the life tenant under an enduring power of attorney and contingent remaindermen, sought to be appointed as new trustees. The court had to determine whether it should appoint one of the beneficiaries, a relative of the beneficiaries, or a sole trustee, given the potential conflicts of interest. Ultimately, the court decided to appoint the NSW Trustee and Guardian as the trustee and administrator of the trust, in light of the conflict of duty and the need for impartial management.

The legal issues at the centre of this case involved the appointment of trustees for a testamentary trust where the original trustee had lost capacity. The applicants sought to be appointed as new trustees, but their dual roles as attorneys and contingent remaindermen created potential conflicts of interest. The court had to balance the competing interests of the beneficiaries, the life tenant, and the contingent remaindermen, while also considering the potential for conflicts of duty. The court was required to determine whether it should appoint one of the beneficiaries, a relative of the beneficiaries, or a sole trustee, to ensure the proper management of the trust.

In delivering the judgment, the court considered the various options for appointing new trustees and weighed the potential conflicts of interest associated with each option. The court acknowledged the applicants' concerns about the potential for conflicts of interest, but ultimately determined that appointing one of the beneficiaries, a relative of the beneficiaries, or a sole trustee would not adequately address these concerns. The court found that appointing the NSW Trustee and Guardian as trustee and administrator was the best option, as it would ensure impartial management of the trust and mitigate the potential for conflicts of duty.

The final orders of the court were to appoint the NSW Trustee and Guardian as the trustee and administrator of the testamentary trust, in place of the original trustee who had lost capacity. The court also ordered that the applicants, as attorneys of the life tenant, continue to exercise their powers under the enduring power of attorney in relation to the life tenant's personal affairs. These orders ensured that the trust was properly managed and that the interests of all parties were protected.

Orders