Adam Stewart prevails as court blocks executors' audit bid in Butch Stewart estate fight

Adam Stewart has notched another courtroom win in the protracted wrangle over his late father's business empire after the Supreme Court tossed out an application by the executors of Gordon 'Butch' Stewart's estate to commission a red-flag audit of several family-controlled companies.

Delivered orally on March 26 by Justice Cresencia Brown Beckford and issued in written form on Wednesday, the ruling halts the executors' push to scrutinise the books of Gorstew Limited, Appliance Traders Limited and their subsidiaries.

The executors — Trevor Patterson, Cheryl Hamersmith-Stewart, Elizabeth 'Betty Joe' Desnoes, and Martin Veira — had gone to court in 2024 asking for authorisation to urgently examine the companies, raising what they described as serious worries about how the businesses had been managed following Butch Stewart's death on January 4, 2021. Hamersmith-Stewart is Butch's common-law widow.

Adam Stewart, who succeeded his father at the helm of the Sandals hotel chain, asked the court to strike out the matter. His legal team argued the action was an abuse of process and that the executors had no authority under the Trusts Act to bring the claim.

In a 24-page judgment, Justice Brown Beckford agreed, concluding that the executors were attempting to perform executorial functions rather than trustee duties — and that the Trusts Act does not regulate the work of executors.

'In view of this finding, the executors in seeking to carry out this red flag audit are acting [as] executors and not trustees of the will of the Founder,' the judge wrote. 'In that event, they do not have standing under the Trusts Act to bring this claim.'

She added: 'The executors' duties, though they may overlap with trustee duties and possibly in instances be the same activity, are not, in law, synonymous.'

The judge went on to say that even if her reading were wrong on whether the executors qualify as trustees of the estate as a matter of law, 'the duties which they are seeking to carry out by this claim are clearly executorial and not trustee functions.'

'This is confirmed by the Fixed Date Claim Form, which defines the claimants as executors and not trustees, clearly denoting the capacity in which the claim was being brought,' she explained.

Justice Brown Beckford also rejected the notion that being named as 'Executors and Trustees' in a will automatically converts executors into trustees. 'It is noted that the executors are referred to as trustees throughout the will. This nomenclature, as shown in the preamble, was for convenience only,' she said.

Reviewing Butch Stewart's will, the court found that the clause covering the ATL Group — which encompasses Gorstew Limited and Appliance Traders Limited — did not place those shares into a trust.

The judgment also touched on the executors' plan to engage US-based accounting firm Alvarez and Marsal to handle the audit. Adam Stewart's lawyers argued the engagement would run afoul of the Public Accountancy Act. While the judge described that submission as 'not without merit' in principle, she said it could not succeed in this instance because the application before her sought authorisation for the audit itself, not the appointment of a particular firm.

The executors, ordered to cover Adam Stewart's legal costs, were granted leave to appeal.

The outcome marks another notable win for Adam Stewart and his siblings, Brian Jardim and Jaime Stewart, in the drawn-out family dispute over the running of their father's estate.

Adam Stewart was represented by Walter Scott KC and Ian Wilkinson KC, along with attorneys Conrad George, Anna Gracie, André Sheckleford, and Gabrielle Chin. The executors' team was led by Michael Hylton KC and Kevin Powell KC, with attorney Timera Mason. John Graham KC and attorney Peta-Gaye Manderson represented Gorstew Limited.