Clark v Inglis

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Citation: Clark v Inglis[2010] NSWCA 144.

This information can be found in the Textbook: Evans, Equity and Trusts, 3rd edition, Lexis Nexis, 2012, pp. 584-5 [31.32].

Contents

Background Facts

  • The late Dr. Inglis set up a trust. After he died, he was survived by the Defendant [Helen Inglis], a son by that marriage and four children from his first marriage.
  • In his will in 2005, he appointed the Defendant and Pam Wood, his eldest daughter from his first marriage, as executors.
  • During the time Dr. Inglis was still alive, the accounting practices were changed, whereby the property/moneys were treated as ‘income’, rather than ‘capital’. After Dr. Inglis’s death, the children of the first marriage thought the changed practices were incorrect and should be reversed. While initially agreeing, the Defendant refused to cooperate with the children, in particular, Pam Wood.

Legal issues

Judgment

  • In examining such questions, the first step is always to look at the trust instrument. :*:*Here, the trust instrument specifically gave the trustee discretion to determine whether any property was capital or income.
  • The second step is to look at the law – usually statute – giving deference to the principles, practice and approach of the relevant industry.
    • The accounting industry deems these terms as interchangeable, and the court should give heed to those principles.
  • The Plaintiff loses, no breach of duty to keep proper accounts.

References

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