Brown v Milson
[2012] WASC 36
•6 FEBRUARY 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: BROWN -v- MILSON [2012] WASC 36
CORAM: EM HEENAN J
HEARD: 11 & 12 JANUARY 2012
DELIVERED : 12 JANUARY 2012
PUBLISHED : 6 FEBRUARY 2012
FILE NO/S: CIV 3385 of 2011
BETWEEN: JANE KIRSTY BROWN
Plaintiff
AND
ROBERT ALEXANDER JAMES MILSON
Defendant
Catchwords:
Executors - Trustees - Executor absent from jurisdiction - Unable to make contact - Needed to execute transfer for completion of sale of estate asset - Application for directions under Trustees Act - Distinction between roles of executor and trustee of unadministered estate - Order for removal of executor - Liberty reserved to reapply on return to jurisdiction
Legislation:
Administration Act 1903 (WA), s 141
Transfer of Land Act 1893 (WA), s 187(3)
Trustees Act 1962 (WA), s 6, s 89
Non-Contentious Probate Rules 1967 (WA), r 35
Result:
Order for amendment and partial revocation of grant of probate to remove absent executor
Leave granted for absent former executor to reapply upon return to jurisdiction
Category: A
Representation:
Counsel:
Plaintiff: Mr C H James
Defendant: No appearance
Solicitors:
Plaintiff: Gibson & Gibson
Defendant: No appearance
Case(s) referred to in judgment(s):
In the Estate of Alice Maud Mack [1962] NSWR 1029
In the Goods of William Loveday [1900] P 154
Livingston v Commissioner of Stamp Duties (1960) 107 CLR 411
Livingston v Commissioner of Stamp Duties (1964) 112 CLR 12 (PC)
Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306
Re Baker Deceased; Rouse v Attorney‑General for Victoria [1961] VR 641
Re Estate of Freebairn (dec) [2005] SASC 497
Riddle v Riddle (1952) 85 CLR 202
Tsaknis v Lilburne [2010] WASC 152
EM HEENAN J: On 29 March 2011, this court granted probate in common form of the will of David Brian Milson (dec) late of 22 Tyrell Street, Nedlands, who died on 18 February 2001, to his son, Robert Alexander James Milson, then of Nedlands, and to his daughter, Jane Kirsty Brown of Cambewarra, New South Wales, the executors named in that will.
The will of the deceased was made on 12 February 2003 and, apart from providing for the appointment of those two executors, it provided that they were the only beneficiaries and that the whole of the testator's estate was to be left to them as tenants in common in equal shares.
In the present proceedings, Mrs Brown is the plaintiff and her co‑executor and brother, Mr Robert Alexander James Milson, is the defendant. The proceedings have been commenced because of difficulties experienced in the administration of their father's estate upon which they have both embarked.
The evidence comprises an affidavit of Mrs Brown sworn 15 December 2011 and a supplementary affidavit of Mrs Brown sworn 12 January 2011, which I have received in facsimile form, accompanied by an undertaking to file the original in the court as soon as possible, this affidavit having been sworn overnight in Sydney.
What has happened is that, in the course of the administration of their father's estate, Mrs Brown and Mr Milson decided to sell the family home where their father and their late mother had been living. On 10 March 2011 they entered into an agency agreement with a firm of real estate agents in the Nedlands area, appointing those agents as selling agents for the property. Both executors signed that agency appointment and at that time they were looking for a sale price of $1,650,000 for the property.
Time went by but there were no expressions of interest near that price and the burden of keeping up the house when it became unoccupied was difficult. Eventually, they decided to drop the asking price and they found a buyer for the purchase of the property at $1,250,000 and entered into an executory contract for the sale of the land to that purchaser for that price on or about 27 October 2011.
At the time when that contract of sale was executed by the executors, Mr Milson had left the country and was living in Canada in the course of an extended tour, and arrangements were made for him to sign the acceptance of the offer to purchase in Canada. The ensuing contract called for the completion of the sale by settlement on 16 January 2012; that is, in only four days' time.
From then on, difficulties began to be experienced, essentially because of problems in communicating with Mr Milson. The affidavit of Mrs Brown contains a lengthy selection of email and similar correspondence or attempts to correspond with Mr Milson in Canada. The affidavit also gives some information which may serve to explain the reasons for the difficulties in communication. Mr Milson is aged 40 years. He is unmarried and has no children. He has a history of depressive illness and, according to his sister, he has on a number of occasions in years past gone away on holiday, including holidays overseas, and remained out of touch with the family and impossible to contact for long periods; for six months or 12 months on some occasions.
Obviously, Mrs Brown has been concerned about the need to comply with all the necessary formalities to complete the contract for the sale of the Tyrell Street property which include, of course, executing a transfer of the land to the purchaser in a form which would allow settlement to be achieved at the Land Titles Office after completion of the sale. In that respect, s 187(3) of the Transfer of Land Act1893 (WA) provides that where an executor or administrator of the estate of a deceased person has been appointed and is noted on the register book, all executors or administrators must sign any contract or other application for a dealing to be registered under the Act. Section 187(3) provides:
If in any case probate or administration is granted to more persons than one, all of them for the time being shall join and concur in every dealing relating to the land or to the estate, right, title or interest therein.
That being the case, it is essential that as co‑executor Mr Milson should sign the transfer in order for the dealing to be registered. If that is not done and if settlement is delayed, there will be a potential liability by the vendors to pay interest. If the delay continues, the purchaser could, should the purchaser so desire, rescind the sale, terminate the contract and possibly sue for damages if any were suffered.
Having regard to the history of the delay in effecting a sale of this property, and also having regard to what is generally known to be a depressed real estate market in Perth in recent years, Mrs Brown is naturally anxious to avoid the risk of losing the sale or incurring any penalties in the way of interest. She has initiated these proceedings with a view to overcome the problems presented by the inability to communicate with her brother.
I should say a little about the efforts which have been made to communicate with Mr Milson in Canada. They are set out comprehensively in the affidavits which I have already described and I can therefore deal with them in a general way. The method of communication has been by telephone or by SMS or email. Mr Milson has been travelling around various places in Canada and staying in hostels or other accommodation for short periods. Some of the messages have reached him and he has responded. For example, there is evidence of communications with him during October 2011 about the suitability of the offer, the reduction of the asking price for the sale to the price eventually agreed upon, and other communications dealing with insurance claims for minor damage to the unoccupied house.
However, since mid‑November 2011 it has been very difficult for Mrs Brown to communicate with her brother. There have been very few, if any, communications from him. Messages left for him have not been answered. Concerned at the problems presented for the administration of the estate by this lack of communication, and also out of natural concern for the safety of her brother, Mrs Brown has taken a number of initiatives to try and contact him. She has approached the Australian Government Department of Foreign Affairs and Trade to enlist support through Australian Embassies and High Commissions. She has reported him as missing to the Australian police in New South Wales, and through them to the Federal Police.
Communications have been made by some of those authorities with the police in Canada. Advice has been received that there is very little that the authorities in Canada can do unless Mr Milson presents himself at a port or a border crossing where he would need to present a passport. The situation has reached an impasse and Mrs Brown has become naturally increasingly concerned.
The settlement for the completion of the sale is, as I have said, now imminent. In these circumstances, Mrs Brown, through her solicitors, issued an originating summons on 15 December 2011, which was brought on for hearing as an urgent matter in the holiday period. She sought relief initially under s 141 of the Administration Act1903 (WA) for a third person, a trusted and experienced friend, to be appointed as attorney for Mr Milson for the purpose of executing the transfer consequent to the contract of sale to allow completion on the due date for settlement.
That application was brought under s 141 of the Administration Act which has been amended and truncated in 1942, 1962 and 1984. It has its origins in s 164 of the Judicature Act of the United Kingdom in 1925, but in its amended form appears to apply only to missing executors or administrators who are members of Her Majesty's naval, military or air forces and, for that reason, does not apply in the present circumstances. I am satisfied that I cannot make an order under that section in the present circumstances.
By the originating summons, Mrs Brown also sought, in the alternative, orders under s 89 of the Trustees Act 1963 (WA) that the plaintiff's execution of the transfer for 22 Tyrell Street be deemed sufficient to bind the estate. Written submissions have been put in, citing authorities, to advance the submission that the powers of the court under s 89 of the Trustees Act are sufficiently ample to allow an order of that kind to be made. The authorities include Re Estate of Freebairn (dec) [2005] SASC 497; Re Baker Deceased; Rouse v Attorney‑General for Victoria [1961] VR 641; and Riddle v Riddle (1952) 85 CLR 202.
I accept that those authorities establish that the powers conferred on this court under s 89 of the Trustees Act and equivalent legislation in other states and jurisdictions do confer ample power for the court to intervene and assist in the completion of transactions involving trustees but, at least at first glance, the section appears to be confined to circumstances in which there are problems in the way of lack of power to effect the completion of a disposition or transaction because of doubts or uncertainties or absence of express powers under any relevant trust instrument. I do not wish to be taken as concluding that the section is necessarily confined in that way, but I certainly have reservations about its extension to the circumstances which exist here.
Another problem about dealing with the matter under s 89 of the Trustees Act is that, at least at this point, it is questionable whether Mrs Brown and Mr Milson in effecting the sale of the Tyrell Street property are, in the strict sense, acting as trustees in contrast to acting as executors of their father's estate notwithstanding s 6 of the Trustees Act. The reason for that is that the Tyrell Street property comprises the major asset of their father's estate. Its realisation by sale and the conversion of the proceeds to cash is part of the duties of the executors in gathering in the estate property and that is very much an activity which occurs in the initial phase of acting as executors rather than trustees - see Jacob's Law of Trusts in Australia (7th ed, (2006)) par 240; also Livingston v Commissioner of Stamp Duties (1960) 107 CLR 411 and on appeal Livingston v Commissioner of Stamp Duties (1964) 112 CLR 12 (PC) and Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306. That also raises some concerns over whether or not any order could or should be made under s 89.
When I raised these matters with counsel for Mrs Brown at the hearing of this motion yesterday, attention then was directed in turn to some alternative means of dealing with the situation. I referred counsel to a decision of Myers J in the Supreme Court of New South Wales In the Estate of Alice Maud Mack [1962] NSWR 1029. In that case there had been a grant of probate to several executors of a deceased estate. One later became of unsound mind, the second left the jurisdiction without embarking on administration. In these circumstances, a person who would have been entitled to a grant of letters of administration with the will annexed because of being a beneficiary under the will applied to the Supreme Court of New South Wales for the revocation of the grant of probate to the executor of unsound mind and the executor outside the jurisdiction and in its place sought a grant of letters of administration of the unadministered estate to him. His Honour said:
Where one of several executors becomes incapable, the proper course is to revoke the grant and make a fresh grant to the others, reserving leave to the incapable executor to join in the grant on recovering his capacity. I cannot take that course, however, because of the absence from the jurisdiction of the other executor. Nevertheless, the grant to the incapable executor must be revoked.
His Honour then said:
The conduct of the other executor also requires revocation of the grant to him and since he cannot be served, it would be useless to advertise for him. The revocation may be made without notice to him; In the Goods of Bradshaw (1887) 13 Probate Division 18 and In the Goods of Covell (1889) 15 Probate Division 8.
After referring to some other matters, his Honour went on to revoke the grant of probate and instead granted letters of administration with the will annexed, limited until the incapable executor should become of sound mind. In his Honour's view, the conduct of the executor out of the jurisdiction meant that he should not automatically be entitled to a renewal of the grant on his return but should be left to apply should he decide to do so.
His Honour's decision in that respect is entirely consistent with authority. In the case of In the Goods of Loveday [1900] P 154 the result was described, correctly, by the headnote as follows:
The practice by which a grant of administration may be revoked and a fresh grant made in the absence of the holder of the outstanding grant is not confined to cases where the administration has been taken by creditors. Where an intestate died leaving a widow and six children by a former marriage, and the widow, who obtained administration could not be found, the Court, upon the application of the children, revoked the grant and directed administration de bonis non in favour of one of their number.
In these circumstances counsel sought and obtained an adjournment overnight to consider whether or not the originating summons should be amended to apply for a revocation or amendment of the existing grant of probate so as to remove David Milson as executor and to make a new grant or extend the present grant to Mrs Brown. Having communicated with Mrs Brown overnight and a supplementary affidavit having been filed as I have already mentioned, the application this morning to revoke the existing grant has been advanced.
I am satisfied that in the particular circumstances of this case, because Mr Milson cannot be found and is apparently unresponsive to all reasonable attempts to communicate with him, some of which must have come to his notice, he has, whether wittingly or unwittingly, demonstrated an inability or a neglect to comply with obligations resting upon him to participate in the administration of his father's estate by participating in the important task of facilitating the completion of the sale of the family home.
It is provided by r 35 of the Non-Contentious Probate Rules 1967 (WA) that a Registrar may amend or revoke a grant if satisfied that that should be done. Rule 35(2) says that except in special circumstances, a grant shall not be amended or revoked under that rule other than on the application or with the consent of the person to whom the grant was made. The power of a Judge is more ample than the power of a Registrar under these rules, a Judge having all the inherent powers of the Court and the implicit powers available under the Administration Act.
Nevertheless, it is important that, if possible or practicable, the person who has received a grant or is one of a number of co‑grantees should receive notice of any application to revoke or amend the grant concerning him. In this case, I am satisfied that that would not be practicable. Time would not allow it. The history of attempts to contact Mr Milson strongly suggests that it may be futile and the urgency is such that attempts to do so would frustrate the accomplishment of the purpose which this proceeding is designed to achieve. I am satisfied, therefore, that the revocation can be made without notice to Mr Milson.
I hasten to add, however, that there is no reason to suppose that this revocation would be likely to cause Mr Milson any substantial prejudice. I say that because the evidence is that he has joined in with his sister and co‑executor in appointing agents for the sale of the Tyrell Street property and that he has also executed this particular contract of sale for the sale of the property at this price with completion on 16 January 2012. There is no reason, therefore, to suppose that he would be opposed to this sale or that he would have grounds to refuse to complete the contract even if he were.
A further consideration which is relevant to the protection of Mr Milson's interests is that should he ultimately re‑establish communication with Mrs Brown or, more importantly, return to this jurisdiction, it would be open for him to reapply and be re‑established as a co‑executor of this estate.
I have given some consideration to the potential consequences that an order for revocation might have in the event that it were made. The fact that a grant is revoked will not affect transactions, actions or obligations incurred or entered into by the grantee prior to the revocation, so such a revocation would not in any way destroy or diminish or affect the enforcement of the contract of sale of the Tyrell Street property which had been executed by both executors back in October 2011.
As for the implementation of the proposed orders, steps can be taken to have a new grant of probate as amended issued by the Court by one of the senior probate Registrars later in the course of the day. I have mentioned to counsel for the plaintiff how this could be accomplished and if he desires to liaise with my associate at the completion of this hearing, every assistance will be provided to accomplish that. The original grant of probate of 29 March 2011 has been produced to the Court and will be retained in view of the amendments which are to be made.
In the circumstances, therefore, I consider that I should order that the grant of probate dated 29 March 2011 be amended by revoking the grant to the first-named executor, Robert Alexander James Milson of 22 Tyrell Street, Nedlands, but otherwise the grant should be confirmed so that it takes effect from today as a grant solely to Jane Kirsty Brown. The order will also be that leave will be reserved to Robert Alexander James Milson to reapply for a double grant (see Tsaknis v Lilburne [2010] WASC 152) to be made to him with his sister in the event that he returns to Western Australia and applies in the proper form to do so.
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