Application of Penhall and Dutton; Estate of the late Kylie Anne Dutton
[2021] NSWSC 79
•12 February 2021
Supreme Court
New South Wales
Medium Neutral Citation: Application of Penhall and Dutton; Estate of the late Kylie Anne Dutton [2021] NSWSC 79 Hearing dates: 9 February 2021 Date of orders: 12 February 2021 Decision date: 12 February 2021 Jurisdiction: Equity - Duty List Before: Parker J Decision: See [17]
Catchwords: CIVIL PROCEDURE – probate and administration of estates – application for special administration ad colligenda bona defuncti – property unoccupied since the death of the deceased – property unable to be insured – appointment necessary to preserve the value of the estate – limited grant of administration
Legislation Cited: Probate and Administration Act 1898, s 74
Cases Cited: Application of Teresa De Leon; Estate of the Late Kim David Frumar [2016] NSWSC 1116
Re Estate of the late Assim; Application of Assim (2015) 106 ACSR 544
Texts Cited: Mason and Handler Succession Law and Practice NSW
Category: Procedural rulings Parties: Garry Neville Penhall (First Plaintiff)
Julie Dutton (Second Plaintiff)Representation: Counsel:
Solicitors:
DKL Raphael (Plaintiffs)
Penhall & Co (Plaintiffs)
File Number(s): 2020/327044 Publication restriction: Nil
Judgment
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Before the Court is an application for a grant of special administration ad colligenda bona defuncti. The application concerns the estate of the late Kylie Anne Dutton, who died in August 2020 at the age of 47. The plaintiffs in the proceedings are Julie Anne Dutton and Garry Neville Penhall. Ms Dutton is the sister of the deceased and Mr Penhall is Ms Dutton’s solicitor.
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The deceased died intestate. Her estate passes to her three children, Jacob Aquilina, Lachlan Aquilina and Isaac Dutton. For convenience and without disrespect I will refer to the deceased’s children by their first names.
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The deceased’s main asset was land and premises at Albury Street, Tumbarumba NSW (“the Tumbarumba property”). It is estimated to have a value of $185,000. The remainder of the estate consists of funds held in an account with the National Australia Bank (“NAB”), a superannuation plan with Colonial First State and a motor car. The estate is estimated to have a total value of $200,000.
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The plaintiffs seek appointment as administrators of the deceased’s estate under s 74 of the Probate and Administration Act 1898, which provides:
74 Power as to appointment of administrator
The Court may, in any case where a person dies—
(a) intestate, or
(b) leaving a will, but without having appointed an executor thereof, or
(c) leaving a will and having appointed an executor thereof, where such executor—
(i) is not willing and competent to take probate, or
(ii) is resident out of New South Wales,
if it thinks it necessary or convenient, appoint some person to be the administrator of the estate of the deceased or of any part thereof, upon the appointed person giving such security (if any) as the Court directs, and every such administration may be limited as the Court thinks fit.
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Two administrators are proposed. Ms Dutton is currently receiving medical treatment and, on the advice of counsel, decided that her solicitor, Mr Penhall, should also be a plaintiff and co-applicant for administration. Jacob, who is the only child of the deceased who is sui juris, does not wish to make an application for administration. He has consented to Letters of Administration being granted to the plaintiffs.
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The application is made as a matter of urgency for the following reasons. The Tumbarumba property has remained unoccupied since the death of the deceased, a period of around six months. As a result, insurance for the property cannot be obtained. Tumbarumba is a small village community in southern NSW, approximately two hours from the Snowy Mountains. Counsel for the plaintiffs submitted that there is a real risk of damage to the property, either from bushfires or vandalism, whilst it remains unoccupied. To protect and preserve the estate, the plaintiffs seek orders that would allow for the property’s sale as soon as possible.
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The plaintiffs also seek an order dispensing with publication of the notice of intention to make the application, an order dispensing with any administration bond or sureties, and an order dispensing with further compliance with the probate rules in relation to this application. In urgent cases, the court may dispense with such requirements: see Re Estate of the late Assim; Application of Assim (2015) 106 ACSR 544 at 550.
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As noted in Mason and Handler Succession Law and Practice NSW at [5249]:
A grant [of administration ad colligenda bona defuncti] may be made for the purpose of protecting the estate or particular estate assets, where the delay in obtaining a normal grant will endanger them and an immediate grant can protect them.
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The objectives of such grants were discussed by Slattery J in Assim at 547-548:
The exercise of the s 74 power is grounded in convenience or necessity. The appointment should be crafted to meet that convenience or necessity. For example, the appointment of a creditor will usually be limited to collecting the estate in order to pay the debt due to the creditor: Re Stewart (1869) LR 1 P & D 727. A common objective of such appointments is to preserve the estate by collecting, securing and prevent the wasting of estate assets, as the old Latin title of this form of appointment suggests – the administration is ad colligenda bona defuncti. Such limited grants do not normally encompass the investment, sale or distribution of estate assets.
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In Application of Teresa De Leon; Estate of the Late Kim David Frumar [2016] NSWSC 1116, McDougall J considered an application in similar terms to the present. In that case, the deceased was an ophthalmic surgeon who conducted practices in NSW and the ACT. The practices were the principal assets of the estate and the plaintiff gave evidence that it was necessary for them to be sold as quickly as possible, to preserve their value to an incoming ophthalmic surgeon.
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McDougall J accepted the plaintiff’s submissions, noting at [6] that “if there is a significant delay in selling the practices, their patients will no doubt go elsewhere”. His Honour concluded at [14]:
It seems to me that the plaintiff has made good her case for the relief claimed. The substantial assets are the practices and the company. If they are not realised for something like their estimated value, the estate will be highly insolvent. Even if they are realised as something like their estimated value, the estate will be insolvent unless the superannuation fund or the life policy came good (if I may use a colloquial expression). Regardless, it is in the interests of the beneficiaries and, equally importantly, creditors of the estate that someone be appointed to get in and protect the estate’s assets.
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This case does not have the same urgency as Frumar. In hindsight, given the Tumbarumba property has remained unoccupied for six months, there appears to be no reason why an application for an ordinary grant of administration could not have been made earlier. Had that happened, a grant might have been made by now.
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Despite this, I consider that the application for the urgent appointment of the plaintiffs as administrators is made out. The Court should deal with the situation as it now is. Where the Tumbarumba property remains unoccupied and uninsured, there is an ongoing risk that the value of the estate may be diminished. It is clearly in the interests of the beneficiaries that the plaintiffs be appointed to get in and sell the property in order to protect the estate.
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The plaintiffs also seek orders covering the other assets of the deceased’s estate. They wish to collect and invest, at interest, the proceeds of the funds held in the deceased’s bank accounts and superannuation fund. As I will be making an urgent grant, I think that it is convenient to make those orders as well. It is in the interests of the beneficiaries that the proceeds of such funds be invested.
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In their summons, the plaintiffs proposed that their administration of the estate should, so far as the Tumbarumba property is concerned, be limited to taking control of the property, doing all things necessary to sell it and, if it is sold, lodging and maintaining the net sale proceeds in an interest bearing account pending a full grant of administration. It was also proposed that the grant should not include the power to distribute assets.
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I accept the plaintiffs’ proposed limitations. A grant of special administration ad colligenda bona defuncti is only ever made as a form of interim relief. As Slattery J noted in Assim at 547, after the usual advertising and procedural steps have been taken, an application for a full grant of administration should be made.
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The orders of the Court are:
Order that a grant of special administration ad colligenda bona defuncti be granted to Garry Neville Penhall and Julie Dutton in the estate of the late Kylie Anne Dutton which, in August 2020, limited to the assets described in paragraph [1] of the summons.
Order that the grant not include the power to distribute assets.
Order that publication of the notice of intention to make the application be dispensed with, for the purposes of the application for this grant only.
Order that the administration bond and sureties be dispensed with, for the purposes of the application for this grant only.
Order that further compliance with the probate rules be dispensed with, for the purposes of the application for this grant only.
Order that there be liberty to apply.
Order that the plaintiffs’ administration of the estate be otherwise limited to:
getting in the said assets of the estate described in order 1 and, if thought fit, to execute a transfer of the land known as [XX] Albury Street, Tumbarumba NSW 2653, and, in the meantime taking all necessary steps (to the extent reasonably possible) to insure and keep safe the property and pay all rates and taxes pending sale with power to defer the sale and, if to the administrators it is in the best interests of the estate, to lease the property at the best rent available;
executing all such other instruments and doing all things as may be necessary to complete any sale of the property;
if the property be sold, to lodge and maintain the net sale price of the property in an interest bearing account in the name of the administrators pending a further grant of administration;
collecting and investing, at interest, the proceeds of any bank account or credit account monies in the name of the deceased with any of NAB or Colonial First State Bank;
collecting and investing, at interest, the proceeds of any superannuation fund in the name of the deceased with Colonial First State – Wynstan Superannuation Plan;
until a grant of further administration is made or until further orders of the Court.
Order that the summons be referred to the Registrar in Probate to be dealt with in accordance with the Rules of Court.
Order that the costs of these proceedings be paid out of the estate on an indemnity basis.
Direct that the applicants make an application for an ordinary grant of administration of the deceased’s estate as soon as reasonably practicable after having obtained control of the assets the subject of this grant.
These orders are to be entered forthwith.
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Decision last updated: 12 February 2021
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