Aravanis v Kelly
[2012] NSWSC 733
•21 May 2012
Supreme Court
New South Wales
Medium Neutral Citation: Aravanis v Kelly; Estate of Thomson [2012] NSWSC 733 Hearing dates: Monday, 21 May 2012 Decision date: 21 May 2012 Jurisdiction: Equity Division - Probate List Before: White J Decision: Refer to paras [14] and [15] of judgment.
Catchwords: WILLS, PROBATE AND ADMINISTRATION - probate - application for the revocation of the grant of probate - no steps taken by executor to realise the estate assets - whether bankrupt defendant to be removed as executor so that the estate assets may be realised - defendant's beneficial interests to be made available for the payment of creditors - defendant removed as executor to ensure proper administration of estate Cases Cited: Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572 Texts Cited: Jacobs' Law of Trusts in Australia, 7th ed, 2006 Category: Principal judgment Parties: Andrew Aravanis as trustee of the bankrupt estate of Jane Kelly (Plaintiff)
Jane Kelly (Defendant)Representation: Counsel:
D Radman, solicitor (Plaintiff
Solicitors:
Grace Lawyers (Plaintiff)
File Number(s): 2009/310958
Judgment
HIS HONOUR: The plaintiff is the trustee of the defendant's bankrupt estate. A sequestration order was made against the defendant's estate on 30 June 2011.
The defendant is the executor and a beneficiary of the estate of her late mother Nancy Joan Thomson. Probate of the will of Mrs Thomson was granted to the defendant on 26 August 2009. At the time of the defendant's bankruptcy the estate had not been fully administered. That remains the position today.
Mrs Thomson's estate included a property in Ingleburn, New South Wales. Pursuant to a transmission application dated 10 September 2009, the defendant has become the registered proprietor of that land. She holds the land pursuant to the trusts of Mrs Thomson's will dated 20 January 2009. Under that will, the defendant and her brother Christopher Thomson are entitled to the balance of the estate in equal shares.
No steps have been taken by the defendant to realise the Ingleburn asset. The plaintiff, as the defendant's trustee in bankruptcy, is anxious that the property be sold. It appears that the defendant's creditors could be fully paid from her share of the estate.
The plaintiff seeks revocation of the grant of probate of Mrs Thomson's will and the issue of a new grant of probate either to the plaintiff as trustee of the defendant's bankrupt estate or the Public Trustee (scil. the NSW Trustee and Guardian).
Though not specifically claimed in the statement of claim, the substance of the plaintiff's claim for relief would include an order for the grant of letters of administration of Mrs Thomson's estate to him with the will annexed.
The defendant was served on 23 January 2012. No appearance has been entered and there was no appearance for the defendant today.
In her statement of affairs the defendant stated "I reside at the home I inherited from my mother and share ownership with my brother Christopher Thomson."
Nothing has been done to realise what appears to be the remaining asset in the estate of Mrs Thomson, so that the defendant's beneficial interest in assets will vest in her trustee in bankruptcy and should be available for the payment of creditors.
It appears that the defendant has not yet assumed the role of trustee. But the inherent jurisdiction to remove a trustee or to revoke a grant of probate so as to remove an executor is exercised on similar principles. Where the evidence shows a want of proper capacity or intention to execute the duties of trustee or executor, the person may be removed from office so as to ensure faithful execution of the trust, or administration of the estate. Jacobs' Law of Trusts in Australia, 7th ed, 2006 observes that the court would usually remove a trustee who has become bankrupt (at [1585], citing, amongst other cases Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572).
In my view, the defendant should be removed as executor so that the estate assets can be dealt with for the benefit of her creditors as well as her brother Mr Thomson.
I have not heard argument as to whether the appropriate form of order is a new grant of probate, but as a matter of principle it seems to me that the appropriate order is to revoke the existing grant of probate and to make a grant of letters of administration to the plaintiff with the will dated 20 January 2009 annexed.
The plaintiff also seeks a vesting order in respect of the real property. Section 71 of the Trustee Act 1925 permits the making of such an order in these circumstances, where a new "trustee" (as defined) has been appointed by the Court. "Trustee" includes a "legal representative", which is defined to mean "executor or administrator".
For these reasons I make the following orders:
1. Order that the grant of probate to the defendant issued in proceedings 2009/112240 on 26 August 2009 of the will of Nancy Joan Thomson dated 20 January 2009 be revoked.
2. Order that letters of administration of the estate of the late Nancy Joan Thomson with the will dated 20 January 2009 annexed be granted to the plaintiff.
3. Order that within 28 days of service of these orders on her, the defendant deposit the grant of probate in the Registry.
4. Order that the property located at [xx xxxxxxx xxxxxx], Ingleburn, New South Wales, being land in folio identifier 9/29819, registered in the name of the defendant, vest in the plaintiff to be held on the trusts of the said will.
5. Order the defendant pay the plaintiff's costs.
6. These orders may be entered forthwith.
Further order added in chambers on 23 May 2012: Order that the proceedings be remitted to the Registrar to complete the grant.
Decision last updated: 29 June 2012
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