Appeal Court Quashes Verdict In Big Will Case

Northern Advocate, 15 July 1939, Page 6

Appeal Court Quashes Verdict In Big Will Case

[Per Press Association. Copyright .] WELLINGTON, This Day. A reserved decision was delivered yesterday by the Court of Appeal in the appeal by the Public Trustee against the Guardian Trust and Executors’ Company of New Zealand, Ltd. By a majority of four Judges to one; the court yesterday reversed the de* cision of Mr Justice Northcroft, delivered at Christchurch on July 28, 1938, and entered judgment for the sum of £8450 and costs against the Guardian Trust in respect of legacies paid out of the estate of Elizabeth Smith, of Christchurch, which legacies the Public Trustee alleged had been improperly paid. Conditional leave to appeal ' to the Privy Council was allowed the Guardian Trust. Facts of Cass. The case arose out of the fact that the will made on June 8, 1934, by Miss Smith, who died on July 9, 1935, was, on December 17, 1936, upset on the application of her next-of-kin. The estate, valued at £60,000, then became intestate, the Public Trustee becoming the executor to divide the estate between over 20 nephews and nieces. Prior to the will being upset, the Guardian Trust and Executors’ Company paid out to legatees, who ceased to benelt when probate was withdrawn, the sum of £8450, and the Public Trustee sued for that amount.

At the Supreme Court hearing, Mr Justice Northcroft gave judgment for the defendant, ruling that there was no failure of the duties or breach of the trust with which defendant was charged. The Chief Justice, Sir Michael Myers, held that the case did not depend upon proof of fraud in the Common Law sense, but that it was sufficient if constructive fraud in the equitable sense was proved. After dealing at length with the facts, His Honour came to the conclusion that the Guardian Trust did have notice of such facts as should have led it to a different course. In his opinion, the grant of probate to that company had been improperly and irregularly obtained.

Acted in Good Faith

Mr Justice Ostler came to the conclusion that the Guardian Trust had acted throughout in good faith. Mr Justice Smith held that the general manager of the Guardian Trust had acted recklessly and carelessly, and that that was not consistent with bona fides.

Mr Justice Fair came to the conclusion that the facts did not warrant him differing from the finding of the trial Judge that dishonesty or want of good faith had not been established, but that the failure of the company to stop the payment of cheques after receiving notice that the validity of the will would be challenged rendered it liable for the amount claimed by the Public Trustee.