Brown v Brown [1999] NSWSC 604

New South Wales Supreme Court CITATION : Brown v Brown [1999] NSWSC 604 CURRENT JURISDICTION : EQUITY FILE NUMBER(S) : 2107/90 HEARING DATE(S) : 11/06/99 JUDGMENT DATE : 21 June 1999

PARTIES : Mary Patricia NELSON and Jean FARRELL as Executrices of the Estate of Alice Veronica BROWN v Raymond BROWN & Anor JUDGMENT OF : Bryson J

COUNSEL : M.S. Willmott for the Plaintiff Ms J. Sanford for the Defendant SOLICITORS : Lees & Givney for the Plaintiff Ronald S. Czinner & Co for the Defendant CATCHWORDS : TRUSTS and TRUSTEES - variations under Slip Rule of errors in judgment dated 29 April 1999. DECISION : See Paragraph 18.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BRYSON J.

MONDAY 21 JUNE 1999

2107/9 MARY PATRICIA NELSON and JEAN FARRELL as Executrices of the Estate of ALICE VERONICA BROWN v RAYMOND BROWN & ANOR.

JUDGMENT 1 HIS HONOUR: Two Notices of Motion seek further consideration of matters in my judgment of 29 April 1999. It was my view that the defendants should account as if they had made a fair charge in the nature of rent for occupation of No. 118 Morrison Road by Mr Jack Brown and his family. The plaintiffs' Notice of Motion of 27 May 1999 Claim 3(a) asked me to re-open my consideration of findings relating to the charge in the nature of rent (para. 59), and to interest thereon (para. 65), and of the orders based on those findings. 2 In para. 59 I adopted $300 per week as the fair market rental value of the property from 28 October 1990 until 19 April 1999; so I applied $300 per week to the period from 1 January 1997 to 28 April 1999. It appeared to me that $300 per week was supported by Mr Phippen's affidavit evidence. After hearing submissions on the Notice of Motion I am satisfied that reconsideration is appropriate, because I did not have regard to Exhibit P (tendered at transcript p.242), which was an agreed Schedule Market Rental Values. Exhibit P was based on Mr Phippen's evidence but there were agreed handwritten modifications, and it was not appropriate to base findings on Mr Phippen's affidavits, or on anything other than the agreed Schedule. As para.59 was affected by a slip or accidental omission to give attention to Exhibit P I withdraw the paragraph. 3 Exhibit P does not produce an agreed outcome. Column (a) sets out rental values for the whole property and Column (b) sets out rental values on a notional basis in which the property is treated as if the defendants had not added an upper storey and the property had a ground floor only. In my view I should adopt the rental value for the whole property, because the defendants were trustees of the whole property throughout the whole period to which the accounting for rent relates. The late Mrs A.V. Brown was and her estate is beneficial owner of a share in the property in whatever state of improvement it has been from time to time, and the defendants are accountable for its rental value as it actually was, irrespective of the earlier history of the improvements. This is no less so because, while Mrs A.V. Brown was still alive, the defendants, for their own purposes, improved the property by adding the upper storey. 4 The findings which I substitute for para.59 are as follows. The fair market rental value of the property is established at $114,159.25 for the period 29 October 1990 to 4 August 1998 by addition from Exhibit P of the agreed Schedule of Market Rental Values. I adopt $340 per week for the period from 5 August 1998 until 28 April 1999; 38 weeks at $340 produces $12,920. The total is $127,079.25. Exhibit O shows that the agreed outgoings incurred by the defendants total $12,935.00. The defendants are accountable to the trust for the balance of $114,144.25 and to the estate for 2125 parts in 4800 parts of that balance; that is for $50532.60. My judgment will include that sum of $50532.60. 5 This requires me to reconsider interest on the charge in the nature of rent, which I earlier dealt with in para.65. In calculating interest I treat the notional rent as having increased to $340 per week on 1 January 1997. Overall the adoption of notional balances at annual intervals produces a conservative calculation which is more favourable to the defendants than calculation based on the total rental value as it increased week by week throughout the whole period from 29 October 1990. 6 Defendants' counsel pointed out errors in the rates of interest which I earlier used. I used interest rates for the first five interest calculations up to 28 October 1993 which were higher than those actually found in Schedule J. In my re-calculation I have adhered, as I earlier intended, to the rates actually found in Schedule J. 7 The Notional Balances on which the last three interest calculations in para 65 were based should be increased to allow for the higher rental value from 1 January 1997. The notional balance on which the interest calculation for the period from 29 October 1997 to 28 October 1998 is based should be increased by $761 from $34,300 to $35,061 to allow for the increase in rental value to $340 per week from 1 January 1997. The calculations are: