Terry Goldberg, a partner in our Sydney office is currently representing the former wife of a partner of EY Australia for failing to comply with the terms of a trust deed of which she was nominated as the beneficiary by her ex husband. Read full article below.
EY sued in marital trust case
By MARIANNA PAPADAKIS – Australian Financial Review – dated 07/03/14
The former wife of an EY Australia employee is suing the accounting and advisory company for failing to comply with the terms of a trust deed of which she was a beneficiary.
Dana Segelov, the former wife of EY partner Asher Joseph, is seeking almost $439,419 in compensation, alleging that EY Services breached a fiduciary duty by failing to notify her she was a beneficiary of a trust deed and giving payments under the deed to her husband.
Ms Segelov married Mr Joseph in December 1994, and alleges when her husband became a partner of the firm in June 2006, he nominated her as a beneficiary of the EY Service Trust without her knowledge.
Mr Joseph, however, was allegedly using the trust payments purportedly made to Ms Segelov between August 2006 and April 2012 to fund his gambling habit.
The trust made payments to two bank accounts, the first a joint account Ms Segelov believed had been closed.
Up to $51,625 was paid into the joint St George Bank account between August 2006 and June 2007, and further payments of $439,419.68 were paid into a Westpac account from July 2007 to April 2012, after Mr Joseph completed and submitted forms altering the details of where the payments were to be made to EY.
Ms Segelov’s barrister, Terry Goldberg, argued in the NSW Supreme Court trial last Thursday that she was never informed she was a beneficiary and receiving income from the trust, and EY was instead taking instructions concerning the payments from her then husband.
Mr Goldberg told the court separate family court proceedings were on foot, and Ms Segelov had discovered the trust only after enquiries were made by her accountant concerning her tax returns.
Ms Segelov had never been provided with a statement of income from the trust or information concerning the payments for tax purposes, Mr Goldberg said.
And the firm, as trustee, breached its fiduciary duty to act in good faith and for Ms Segelov’s benefit, and went beyond the scope of its power when it took instructions from Mr Joseph without her knowledge.
EY Services director McGregor Dixon, who was in charge of managing the trust since July 2010, said in evidence he accepted there was no procedure at EY for checking or verifying information in a nomination form filled out by Mr Joseph concerning payments from trust.
Mr Dixon said the company was indifferent as to where the trust’s income was paid and once a beneficiary was nominated, there was no procedure for corresponding with them.
“We provide the relevant details and income to the beneficiaries from the trust; our procedure is to make that available to the partner for them to provide to the beneficiary as appropriate,” Mr Dixon said.
“Our expectation was that the partner would pass on the information as appropriate to the beneficiary.”
He accepted there was a risk Mr Joseph had no authority to act on the nominated account and had not told the plaintiff of changes.