Application of Gordon Albert Salier

[2017] NSWSC 473

Supreme Court

New South Wales

Medium Neutral Citation:	Application of Gordon Albert Salier [2017] NSWSC 473
Hearing dates:	06/04/2017
Date of orders:	06 April 2017
Decision date:	06 April 2017
Jurisdiction:	Equity
Before:	McDougall J
Decision:	Order that the applicant bring in short minutes of order in accordance with reasons.
Catchwords:	TRUSTS AND TRUSTEES – administrator pendente lite – application for judicial advice – where proceedings commenced without getting advice because of a concern that a limitation period might expire – whether administrator would be justified in continuing proceedings – Trustee Act 1925 (NSW), s 63
Legislation Cited:	Limitation Act 1969 (NSW) Trustee Act 1925 (NSW)
Category:	Principal judgment
Parties:	Gordon Albert Salier (Plaintiff)
Representation:	Counsel: G George (Plaintiff)   Solicitors: O’Connor & Co Legal (Plaintiff)
File Number(s):	2016/382867

Judgment   (ex tempore – revised 6 april 2017)

1. HIS HONOUR: The applicant, Mr Salier, is the administrator pendente lite of the estate of Michael Joseph Hogan, deceased. The deceased died on 15 April 2016. He left behind him at least three wills: one made on 28 May 2012; one made on 10 February 2015; and one made on 15 March 2015. The provisions of those wills are very different, and there is a contest between the beneficiaries (principally, his sons) as to which will should be admitted to probate.

2. Mr Salier seeks the opinion, advice or direction of the court under s 63 of the Trustee Act1925 (NSW). The advice sought is in substance that he would be justified in carrying on proceedings commenced by him already to recover loans said to have been made by the deceased to his son Paul Martin Hogan. Mr Salier commenced those proceedings without getting advice under s 63 because of a concern that a limitation period might expire in respect of either or both of the loans. He has not served the statement of claim.

3. The Statement of Facts recites two agreements made between the deceased and his son Paul. One related to an advance of money to assist Paul to purchase, as tenant in common with his brother Brendan James Hogan, a property at Avoca Street, Randwick. The other related to an agreement made between the deceased and Paul to assist Paul to purchase a property at Eurimbla Avenue, Randwick, again as tenant in common with his brother Brendan.

4. When made, the loans were or may have been unsecured. However, in 1997, Paul executed a mortgage in favour of his father to secure each loan, each mortgage of course being over Paul's interest in the relevant property. There are particular reasons why the arrangement was structured and documented in the way it was, but it is not necessary to go into those reasons.

5. Each mortgage has been discharged. However, it is thought, neither loan has been repaid. I should say that there would appear to be a serious issue of fact here. The deceased was apparently strongly of the view that the loans had not been repaid, if a statement made in his will of 15 March 2015 is to be given any weight. Paul appears to contend that the loans have been repaid or partly repaid.

6. The amounts of the loans were, respectively, $160,000 and $255,000. At least according to the mortgages, each bore interest: at 10.5 per cent per annum and 5.9 per cent per annum respectively. It appears (and in any event it is Mr Salier's understanding) that no interest has been paid. On the face of things, therefore, there is or may be a principal debt in total of $415,000 which is an asset of the estate. Further, on Mr Salier's calculations, there is a very substantial amount of interest accrued but unpaid: of the order of $1.5 million or more.

7. Although the deceased's estate was not insubstantial, the possible assets comprising the debts (if unpaid) and interest are not to be disregarded. It is Mr Salier’s duty, among other things, to seek to get in the assets of the estate. It is apparent that the debts cannot be recovered unless there is litigation.

8. I am satisfied, on the basis of the Statement of Facts and the material supporting it contained in the court book, that it is at least fairly arguable that the loans were advanced and that they have not been repaid. I am therefore satisfied that there is something of value to be recovered (if that should prove to be the case on a final hearing of any claim). It is of course trite, but nonetheless important, to bear in mind the saying attributed to Sir Owen Dixon that one story is good only until another is told; but the advice is sought on the basis of the story known to Mr Salier, not on the basis of whatever it is that Paul may say.

9. There is an exception to that last observation, because Paul has been cross-examined at length in various proceedings, and it would appear to be the case that some of what he has said supports the proposition that he remains indebted to the estate.

10. I referred earlier to a potential limitation problem. If the loans in question were secured by mortgages then there would not appear to be a real limitation issue, because of s 42 of the Limitation Act1969 (NSW). If however they were not secured by the mortgages (for reasons that I cannot presently understand), the case would appear to be that they are repayable on demand. On either analysis, it would appear, there may be an answer to any limitation defence that may be raised.

11. In all the circumstances, bearing in mind both the purposes for which Mr Salier was appointed as administrator and his powers and duties as administrator, I am satisfied that it is appropriate to give him advice to the substance or effect of that which he seeks. I cannot advise him that he would be justified in commencing proceedings, because he has already done so (alternatively, if I were to give that advice, it would not protect him in any event, having regard to the terms of s 63). I am however prepared to advise him that he would be justified in serving the originating process, being a statement of claim apparently filed in this court on 29 November 2016, bearing number 2016/357246. I am also satisfied that it would be appropriate to advise him that he would be justified in carrying on those proceedings.

12. I have no doubt that if some problem arises which at present cannot be foreseen, Mr Salier, if he does not feel confident in exercising his own discretion to deal with the problem, will seek the advice of the court at that time.

13. It is also appropriate to make the costs order sought.

14. For those reasons, I order that the applicant bring in short minutes of order to give effect to what I have just said.

15. I stand the matter over to 10am tomorrow, 7 April 2017, for the making of orders. If appropriate orders are submitted to me in chambers I will make them in chambers and excuse any further attendance.

Decision last updated: 27 April 2017