Davis v Davis [2012] NSWSC 523

In May 2012, the New South Wales Supreme Court was asked to intervene between two brothers, one of which was the executor of their deceased father’s will. The will included a general and typical grant to the executor of a power “to invest and change investments freely as if he was beneficially entitled and this power includes the right to invest in property for occupation or use by a beneficiary”.

The executor interpreted the clause as a right to live rent free in the father’s house for many years, which was the substantial asset of the estate, without keeping separate accounts and mixing estate money with his own. The executor’s brother brought court proceedings for him to be appointed executor in his brother’s place and to carry out the terms of the will by distributing the assets to himself and his brother.

Whilst the court found the conduct of the executor to be prejudicial to the beneficiaries, that he was acting in self interest, and therefore not a fit and proper person to administer the estate, the court declined to appoint the applicant brother as the executor in his place. It did so on the basis that it would compound the obvious family tension that existed in any event. The court determined that the executor under the relevant power could not act in their own interest but must act in the interest of all beneficiaries and in all of the circumstances revoked the executor’s grant of probate and appointed the Public Trustee to undertake the administration of the estate.

Comment – There is always an element of risk in appointing a sole executor. In this particular instance, there might have been merit in the deceased appointing both of his sons as executors to ensure some check upon the exercise of the executor’s powers. This may not be possible in all cases, particularly where there is family tension, in which case the appointment of a trusted professional advisor or an independent executor and trustee may be considered.