Aoukar v Nemer

[2019] SASC 218

Supreme Court of South Australia

(Civil)

AOUKAR & ANOR v NEMER & ORS

[2019] SASC 218

Judgment of The Honourable Justice Stanley

24 December 2019

SUCCESSION - MAKING OF A WILL - EXECUTION

This is an application pursuant to Rule 235 of the Supreme Court Civil Rules 2006 for judgment by admissions to admit a will to probate in circumstances where the validity of a codicil is disputed.

Held:

1.  The evidence establishes the due execution by the deceased of her will. 

2.  The plaintiffs are to bring into Court minutes of order reflecting these reasons.

Supreme Court Civil Rules 2006 (SA) r 235, r 205(2), r 83(4); Administration and Probate Act 1919 (SA) s 69, referred to.

Tschirn v Australian Executor Trustees Ltd [2016] SASC 149; In Re Plant [1926] P 139; Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66, discussed.

Moon v Mun [2013] NSWCA 217; Trenbath v Trenbath [2014] SASC 50; Re The Trademarks Act 1955-1958 and the Registered Trademarks “Certina” and “Certina DS” (1970) 44 ALJR 191; In the Estate of Martin [1958] SASR 365; In the Goods of Loveday [1900] P 154; Estate of Kouvakas [2014] NSWSC 786, considered.

AOUKAR & ANOR v NEMER & ORS

[2019] SASC 218

STANLEY J:

Introduction

1. This is an application for judgment by admissions to admit a will to probate in circumstances where the validity of a codicil is disputed. 

2. The application is made pursuant to SCR 235. 

3. Linda Nemer (the deceased) died on 10 October 2017.  The deceased made a will on 23 July 2015 (the will).  The will appointed the plaintiffs as the executors of the deceased’s estate. 

4. There is a codicil to the will dated 24 May 2017 (the codicil).  The codicil does not affect the appointment of the plaintiffs as the executors of the deceased’s estate.  It makes changes to sub-clauses 3.4, 3.6, 3.8 and clause 6. 

5. The plaintiffs commenced an action seeking an order that the will and the codicil be admitted to probate in solemn form. 

6. Pursuant to SCR 205(2) the defendants to the action are Paul Nemer (Paul), George Nemer (George), Leslie Nemer (Leslie), Donia Yammine (Donia), Pauline Khoury (Pauline) and Marie Andonopoulos (Marie). 

7. Paul, George and Leslie have filed a defence in the action.  By their defence they admit the validity of the will and that it should be admitted to probate.  They dispute the validity of the codicil. 

8. Donia, Pauline and Marie have been served but have not filed a notice of address for service or a defence. 

9. There is another brother, Joseph Richard Nemer, who except in respect of a statute, is not a beneficiary of the deceased’s estate.  He was disjoined as a defendant to the action. 

Power to grant judgment

1. SCR 235 provides:

   235—Judgment on admissions

   (1) The Court may, on application by a party, give judgment on the basis of admissions.

   (2) The Court may give judgment under this rule even though the judgment does not resolve all issues between the parties.

2. Pursuant to SCR 235 the Court must be satisfied, on evidence, of the formal validity of the will. 

3. I am satisfied that the evidence establishes the due execution by the deceased of her will. 

4. The Court has a discretion as to whether to grant judgment.  The power to award judgment on admissions on the pleadings is properly exercisable where the Court can see that a clear and unanswerable case is advanced on the pleadings, with the position so decisively depicted and the correct outcome so unambiguously obvious that there is simply no need for any issue to go to trial.  The evaluative question relevant to exercise of the discretion is whether it is just to award judgment without regard to the merits of the parties’ contentions.

The evidence

1. I received evidence by way of affidavits from Marie Antoniette Nemer sworn 26 April 2018, Jessica Marie Connell sworn 26 April 2018 both filed in the probate action 1604 of 2018, affidavits of the first plaintiff Sonia Marie Aoukar (Sonia) sworn 7 November 2018, 21 June 2019 and 22 August 2019, Norma Therese Nemer sworn 1 May 2019, three affidavits of Sarah Kathleen Annicchiarico affirmed 21 June 2019, 23 July 2019 and 22 August 2019, an affidavit of the second plaintiff, Brian Aoukar (Brian), filed 22 August 2019 and an affidavit of Andrew Donald Lovelock Woods sworn 14 June 2019 in action 724 of 2019. 

The factual circumstances

1. Paul, George and Leslie are three of the eight children of the deceased.  They are the residuary beneficiaries of the deceased’s estate under her will. 

2. The first plaintiff Sonia is a daughter of the deceased.  The other three daughters are Donia, Pauline and Marie.  The second plaintiff, Brian, is Sonia’s husband.

3. The deceased was married to Antoine George Nemer (Antoine).  Antoine predeceased his wife.  He left a will dated 23 July 2015.  Letters of administration of that will were issued on 4 November 2016.  His estate is substantial.  Although Antoine’s will is complex, the deceased was the residuary beneficiary of his estate. 

4. Pursuant to the deceased’s will, the residue of her estate is distributed 25 per cent to George, 37.5 per cent to Paul and 37.5 per cent to Leslie.  A specific bequest is made in favour of Sonia, Donia, Pauline and Marie in equal shares of any money standing to the deceased’s credit at the date of her death in any bank account or investment account situated in Australia held in her personal name.  The evidence is that is an amount of approximately $972,000.00.   

5. The effect of the codicil is to redirect away from the residuary estate, assets of the deceased, including moneys held in foreign bank accounts and assets to which she is entitled under her late husband’s will, to Sonia, Donia, Pauline and Marie. The codicil effects a fundamentally important change in the distribution of the deceased’s estate given the likely magnitude of her interest in the estate of Antoine. That has not yet been determined because of difficulties and uncertainties which have been encountered by the administrators of Antoine’s estate which are the subject of an application for advice and direction pursuant to s 69 of the Administration and Probate Act 1919 (SA) (the Act).

6. It can be seen that Sonia has a personal interest in propounding the codicil. 

7. There is evidence which might permit the drawing of an inference that the plaintiffs seek a grant of probate of the will at this time because they wish to use the standing the grant would give them to pursue other claims against the administrators of Antoine’s estate. This is a factor which has led to the administrators seeking advice and direction pursuant to s 69.

8. To the extent that the plaintiffs seek to litigate against the administrators of Antoine’s estate and to seek to be indemnified out of the assets of the deceased’s estate, the burden of the foreshadowed claims will fall on Paul, George and Leslie.

9. For example, the plaintiffs, as executors of the deceased’s estate, appear to want to claim that a property at Springfield forms part of Antoine’s estate and as a result, part of the deceased’s estate.  This issue in part turns on whether a 2014 deed of family settlement is binding or not, and whether the parties treated the deed as being on foot or abandoned.  The plaintiffs deny that the deed was abandoned.  It was executed by Sonia purportedly under a power of attorney which Paul, George and Leslie assert did not authorise her to do so.  The validity of the 2014 deed is an issue raised by the administrators of Antoine’s estate.

10. Further, the plaintiffs, as executors of the deceased’s estate, seek to agitate claims in relation to the quantum of the interest which is to flow to the estate under Antoine’s will relating to a company, Hilltop Shopping Centre Pty Ltd.  Whether the benefit of that interest passes to Sonia, Donia, Pauline and Marie, or Paul, George and Leslie, will depend on the validity of the codicil. 

11. Paul, George and Leslie contend that a grant of probate of the will to the plaintiffs at this stage of the probate action, without the Court requiring appropriate undertakings from them, is likely to lead to them, in their capacity as executors, spending considerable sums of money to pursue claims which are designed to further Sonia’s personal interest. 

The issues

1. The plaintiffs seek an order that the will be admitted to probate.  They proffer an undertaking that they will not dispose of or distribute that part of the estate affected by the codicil until the question of the validity of the codicil has been determined, either inter partes or by order of the Court. 

2. Paul, George and Leslie do not oppose a grant of probate of the will to the plaintiffs per se, but oppose a grant of probate prior to the Court pronouncing on the validity of the codicil.  Paul, George and Leslie propose either the appointment of the plaintiffs pursuant to SCR 83(4) to represent the deceased’s estate, or the appointment of an administrator pendente lite.  They submit that if the Court is to make a grant of probate of the will to the plaintiffs at this stage it should be conditional upon the plaintiffs proffering not only the undertaking they have proffered, but two further undertakings in the following terms:

   1 (a) they will not commence any proceedings in their capacity as the executors of the estate of the deceased without first having obtained the advice and direction of the Court, in an application made under s 69 of the Act, that they would be justified in taking the proposed proceedings;

   (b)      they will, unless otherwise directed by the Court, give notice to and serve upon the defendants (and the other beneficiaries of the estate of the deceased if requested by the other beneficiaries) any application for advice and direction and supporting affidavits if that application is capable of affecting the position of Paul, George and Leslie as beneficiaries of the estate of the deceased;  and

   (c) they will take no steps as the first and second defendants in action SCCIV-724 of 2019 if they seek indemnity from the residuary estate of the deceased for costs incurred by them as defendants in action SCCIV-724 of 2019 without first taking the advice and direction of the Court under s 69 of the Act in relation to the steps they would be justified in taking in action SCCIV-724 of 2019.

   2   If Sonia and Brian choose to continue the probate action the further costs of the probate action are to be funded out of the share of the estate of the deceased which goes only to Sonia, Donia, Pauline and Marie unless and until such time as the Court otherwise orders, and they should be required to undertake that they will not indemnify themselves or exonerate themselves out of the residuary estate of the deceased for the further costs incurred in relation to the probate action unless the Court so orders.

3. The plaintiffs are not prepared to proffer these further undertakings. 

Should the will be admitted to probate now?

1. The central object of the exercise of the Court’s probate jurisdiction is the due and proper administration of the deceased’s estate, having regard to the testamentary intentions of the deceased and the interests of the beneficiaries of the estate.

2. The position in relation to non-contentious applications for probate is that, as a general rule, any codicils must be proved with the will. 

3. There is an exception to this rule.  It is explained in Tristram & Coote’s Probate Practice:

   There is an exception to this rule where a codicil, which in no way alters the appointment of executors, is in dispute, and it is necessary for the estate to be administered without delay.  In such a case probate of the will only is granted to the executors therein named, the question of the validity of the codicil thereto being reserved.  A will and codicil may similarly be admitted to probate limited until the litigation with reference to the other codicil is decided. 

   Where exceptionally a will is admitted to proof notwithstanding a dispute as to the validity of a known existing codicil, it is now the usual practice for an undertaking to be given to the court by the proving executor that he will not dispose of or distribute that part of the estate affected by the codicil until the question as to the validity of the codicil has been determined either inter partes or by order of the court. 

4. Paul, George and Leslie contend that the Court should not depart from the general rule.  They submit that the rule in relation to non-contentious applications should apply with even greater force to contested applications for probate.  They submit the Court, in the exercise of discretion, should not admit the will to probate at this time.  Instead, they propose the Court should appoint an administrator pendente lite. 

5. There is authority for the proposition that the Court will apply the exception to the general rule even in contentious applications for a grant of probate in solemn form.  In In Re Day Merriman P made an order in a contested application for an order in solemn form granting probate in respect of a will and a codicil where a later codicil was disputed.   The Court left the question of the second disputed codicil to be decided by action. 

6. The exercise of the discretion is conditioned on the Court’s satisfaction that a clear and unanswerable case is established on the pleadings that the plaintiffs are entitled to a grant of probate and that such a grant is necessary for the estate to be administered without delay.

7. As to the first, I am satisfied on the material that it is not in dispute that a grant of probate should issue to the will.  A clear and unanswerable case is established on the pleadings and affidavit evidence from the other defendants.  The defence pleads that the will is valid and should be admitted to probate.  Subsequent to the hearing, by permission, the plaintiffs filed and served affidavits from Donia, Pauline and Marie admitting the validity of the will and that it should be admitted to probate. 

8. Due execution having been proved, the rule is that in the absence of evidence to the contrary, the will is presumed to have been made by the testatrix with sound mind, a proper understanding of the nature of the act of making a will and its effects, the extent of the property constituting her estate and the claims to which she ought to give effect.

9. As to the second matter, I consider that it is necessary for the estate to be administered without delay. It is apparent that the admission to probate of the codicil is vigorously contested. That contest could take a significant period of time. The plaintiffs, as executors of the deceased’s estate, should be permitted to proceed with the administration of the estate pending a decision in relation to the validity of the codicil. I am satisfied that there will be cost savings and, more importantly, expedition in the administration of the estate in a grant of probate of the will being made now. It is clear that there are issues in relation to the getting in of the assets of the estate. That would involve consideration of litigation in relation to a number of matters. One such matter is the pending action No 724 of 2019 between the administrators of Antoine’s estate and the plaintiffs and others seeking advice and direction pursuant to s 69 of the Act and orders pursuant to SCR 206. As I have said, Antoine’s estate is substantial and complex. The extent to which the deceased’s estate is a beneficiary of Antoine’s estate is a question of significant interest. It is notable that in the civil action No 724 of 2019 the administrators seek advice and direction in relation to a number of aspects of Antoine’s estate, particularly affecting the deceased’s estate, including as to whether they are justified in treating and communicating with the plaintiffs as executors of the deceased’s estate as a beneficiary of Antoine’s estate. It is necessary that the deceased’s estate be represented in those proceedings. For reasons I will come to I am satisfied that representation should be by the plaintiffs in their capacity as executors of the estate. That satisfies the requirement for necessity. Whether a grant of probate to the will at this stage would obviate delay and save unnecessary expense requires a consideration of the alternative remedies proposed by Paul, George and Leslie namely the appointment of the plaintiffs pursuant to SCR 83(4) to represent the deceased’s estate or the appointment of an administrator pendente lite. 

10. I do not accept the submission that the appointment of the plaintiffs to represent the deceased’s estate pursuant to SCR 83(4) is an adequate alternative to the order sought by the plaintiffs.  SCR 83(4) confers power on the Court to appoint a person or persons to represent the estate when there is no one entitled to do so.  That is not the current position.  Further, such an appointment would oblige the plaintiffs to meet the costs of representation from their own resources rather than being indemnified from the estate in circumstances where they would have to exercise fiduciary duties detached from their own interests.  Finally, such an appointment would only permit the plaintiffs to act in these proceedings.  It would give them no other rights in respect of the administration of the deceased’s estate.  It would not entitle them to get in the assets of the estate. 

11. I do not accept the submission that the appointment of an administrator pendente lite will save costs to the estate because the administrator would be less likely to engage in the litigation which the plaintiffs have foreshadowed.  An administrator pendente lite will in all likelihood need to be remunerated and, potentially, charge fees for professional services.  In addition, there would be the cost of the grant and the taking of possession of the estate, both which will be paid again when the final grant to the plaintiffs is made.  There is further prospect of litigation by the administrator pendente lite which would incur additional costs.  There is no basis to think that there would be any saving from the appointment of an administrator tasked with getting in the assets of the estate than from the plaintiffs undertaking that duty. 

12. The opposition of Paul, George and Leslie is predicated upon an assumption or apprehension that the plaintiffs, if granted probate, will act in breach of their duties as executors.  This in turn is founded upon the proposition that the plaintiffs if granted probate, will embark upon unnecessary litigation.  I do not accept this submission.  Executors are under a duty to get in the assets of the estate, to pay the debts, the pay the legacies given by the will and to distribute the assets in accordance with the testatrix’s intentions.  As was observed by Doyle J in Tschirn v Australian Executor Trustees Ltd, as an aspect of this first duty, an executor may be required to enforce, by legal proceedings if necessary, any right, title or interest of the testatrix in particular assets.  The prospect that the plaintiffs will conduct litigation for that purpose does not evidence any breach of executorial duty.  I do not consider that a proper basis has been established to refuse the application.  The evidence in the third affidavit of Sarah Annicchiarico, affirmed 22 August 2019, which identifies the steps the plaintiffs intend to undertake in performance of their executorial duties, does not prove that if the grant sought is made they will act in breach of their duties as executors. 

13. Not only does the evidence not establish that submission, in any event, I would proceed on the assumption, in the absence of evidence to the contrary, that the plaintiffs will act in conformity with their duties as executors and act impartially in the interest of all beneficiaries.  If that does not occur, then the plaintiffs run the risk of having to bear personally the cost of such litigation rather than being entitled to an indemnity from the estate.  That, together with undertakings I will require from the plaintiffs as a condition of the grant of probate, will provide adequate protection to the interests of Paul, George and Leslie in the deceased’s estate. 

1. The proper exercise of the power conferred by SCR 235 will obviate the delay involved and will save unnecessary expense.  However, the exercise of that power should be conditioned on the plaintiffs proffering appropriate undertakings.

Undertakings 

1. I am satisfied the undertaking proffered by the plaintiffs is appropriate.  Such an undertaking was required by the Court in In Re Day.  However, I do not consider it is sufficient. 

2. Paul, George and Leslie are concerned that their interests in the due administration of the estate require the additional undertakings they seek. 

3. I am satisfied in the circumstances of this case that, where there is potential for their interests in the residue of the estate to be used to fund proceedings contrary to their interests, it is appropriate the plaintiffs provide undertakings that they will not commence any proceedings or defend action No 724 of 2019 without having obtained advice and direction from the Court that they would be justified in instituting or defending those proceedings. 

4. I do not accept the submissions of the plaintiffs that such undertakings are unnecessary because presently there is no residue and the undertakings sought are unnecessary and contrary to the usual approach to Beddoe orders.  As to the first submission, the getting in of assets may yet create a residue.  As to the second submission, while the usual practice of executors might be to bring or defend proceedings at their own risk without seeking a Beddoe order where they consider that there is no controversy about the proceedings, in the circumstances of this case I consider that the undertakings sought from the plaintiffs are reasonable and appropriate. 

5. As the High Court said in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of the Macedonian Orthodox Diocese of Australia and New Zealand:

   … provision is made for a trustee to obtain judicial advice about the prosecution or defence of litigation in recognition of both the fact that the office of trustee is ordinarily a gratuitous office and the fact that a trustee is entitled to an indemnity for all costs and expenses properly incurred in performance of the trustee’s duties.  Obtaining judicial advice resolves doubt about whether it is proper for a trustee to incur the costs and expenses of prosecuting or defending litigation.

6. The condition that the grant sought only be made by the proffering of these undertakings will provide some assurance to Paul, George and Leslie that their interests in the deceased’s estate are properly protected and thereby reduce the risk of unnecessary litigation. 

7. On the other hand, I would not condition the making of the grant on the provision by the plaintiffs of the remaining undertakings sought. 

8. An undertaking that, unless otherwise directed by the Court, the plaintiffs will give notice and serve upon the defendants and other beneficiaries any application pursuant to s 69 of the Act and supporting affidavits if the application is capable of affecting the interests of Paul, George and Leslie is unnecessary and reverses the proper order of things. It would be contrary to the provisions of s 69(2) and (5) of the Act. If an application is brought by the plaintiffs the Court can make such an order if it thinks necessary.

9. Likewise, an undertaking that the plaintiffs will fund the probate action out of the share of the deceased’s estate which goes only to Sonia, Donia, Pauline and Marie and will not indemnify themselves out of the residuary estate unless the Court orders otherwise, is inappropriate and reverses the proper order of things.  There is no reason why these questions should not be decided in the usual way under a Beddoe application. 

10. In a Beddoe application the Court may weigh up whether it is proper to incur testamentary expenses from the residuary estate (if one comes into existence) for its benefit in litigation against some of the beneficiaries.  This was considered in Tschirn where the issue of whether funds that were the subject of a specific legacy should be used in proceedings for the benefit of the residue. However, that is a different thing from saying that there should be some sort of blanket undertaking that it can never occur, pre-empting the exercise of the Court’s power pursuant to s 69.

Conclusion

1. I would direct the plaintiffs to bring into Court minutes of order reflecting these reasons.