Catherine Marie Smith as administrator of the estate of the late Keith Raymond Seaman v Seaman - [2015] WASC 420

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: CATHERINE MARIE SMITH as administrator of the estate of the late KEITH RAYMOND SEAMAN -v- SEAMAN [2015] WASC 420

CORAM: ACTING MASTER GETHING

HEARD: 30 OCTOBER 2015

DELIVERED : 6 NOVEMBER 2015

FILE NO/S: CIV 1204 of 2013

BETWEEN: CATHERINE MARIE SMITH as administrator of the estate of the late KEITH RAYMOND SEAMAN
Plaintiff
AND
TREVOR RAYMOND SEAMAN
First Defendant
CATHERINE MARIE SMITH
Second Defendant
PHILLIP ARTHUR GREGORY STEWART
Third Defendant
GEOFFREY KEITH SEAMAN
Fourth Defendant

Catchwords:

Intestacy - Administrators - Whether administrator can set off an amount owed to the estate by a person entitled in distribution against amount due to that person from the distribution of the estate

Legislation:

Nil

Result:

Orders given allowing administrator to set off amount owing by person entitled in distribution

Category: B

Representation:

Counsel:

Plaintiff:     Ms C F Holyoak-Roberts
First Defendant             :     In person
Second Defendant         :     N/A
Third Defendant           :     N/A
Fourth Defendant          :     N/A

Solicitors:

Plaintiff:     Leonard Cohen Legal
First Defendant             :     In person
Second Defendant         :     N/A
Third Defendant           :     N/A
Fourth Defendant          :     N/A

Case(s) referred to in judgment(s):

Catherine Marie Smith as administrator of the estate of the late Keith Raymond Seaman v Seaman [2015] WADC 67
Hawkins v Barkley-Brown [No 2] [2010] NSWSC 395
Public Trustee v Gittoes aka Caldar [2005] NSWSC 373
State of Western Australia v Seaman [2014] WASCSR 11

ACTING MASTER GETHING: Catherine Marie Smith is the administrator of the estate of the late Keith Raymond Seaman.[1] The Deceased died on 25 September 2008 without leaving a valid will. Letters of Administration were granted to Ms Smith on 8 May 2012.
[1] Whom I will refer to as 'the Deceased'.
The Deceased was survived by four children namely Ms Smith, Trevor Raymond Seaman, Phillip Arthur Gregory Stewart and Geoffrey Keith Seaman.[2] Their mother, the Deceased's wife, predeceased the Deceased. Under the Administration Act 1903 (WA) s 14 the four children are the only persons entitled to the proceeds of the estate. They are each entitled to an equal share of the Deceased's estate.
[2] I will refer to Trevor Raymond Seaman as 'Mr Seaman' and to Geoffrey Keith Seaman as 'Mr G K Seaman'.
One of the assets of the estate of the Deceased was a property at 1460 Park Road, Hovea in Western Australia ('Property').
By Originating Summons filed 11 February 2013, Ms Smith sought an order for vacant possession of the Property. At the time of making the application, Mr Seaman was in occupation, possession and control of the Property. He refused to vacate possession and cooperate with the sale process. Mr Seaman entered an appearance in this application on 28 March 2013.
The application was heard by the master on 11 June 2013. Ms Smith was represented by her lawyer. Mr Seaman appeared in person. The master made orders that:
(a)within 28 days Mr Seaman was to give vacant possession of the property to Ms Smith in her capacity as administrator of the Deceased's estate;
(b)the costs of the application be paid by Mr Seaman; and
(c)there be liberty to apply.
On 29 July 2013, the court made a property (seizure and delivery) order in relation to the Property pursuant to the Civil Judgements Enforcement Act 2004 (WA) (CJEA).
On 2 September 2013, Mr Seaman lodged an application for a suspension order pursuant to CJEA s 16. He filed an affidavit in support of the application sworn the same day. As set out in this affidavit, his grounds for seeking the order were primarily as follows:
From the indications that my father Keith Raymond Seaman gave me while he was alive, an eviction from 146 Park Road would be in conflict with his dying wishes, that of protecting his granddaughter Isabella Seaman, and my wife Yuki Seaman who live with me at 1460 Park Road.
Mr Seaman then went on to describe the hardship that the eviction of he and his family from the Property would cause.
The application for a suspension order was heard before the master on 10 September 2013. The master dismissed the application. The master also ordered Mr Seaman to pay Ms Smith's costs of the application.
On 10 September 2015, Ms Smith invoked the liberty to apply in the orders of the master made 11 June 2013. The circumstances in which she did so are set out in her affidavit sworn 2 September 2015 and are as follows.
On 11 September 2013, Mr Seaman set fire to the house on the Property. He was charged for this offence and on 20 January 2014 entered a plea of guilty to a charge of wilfully destroying property by fire. He was sentenced in the Supreme Court on 24 January 2014 to 2 years, six months in prison with eligibility for parole.[3]
[3] The sentencing remarks of Jenkins J are annexed to the Smith Affidavit (CS2, pages 32 ‑ 41), and reported as the State of Western Australia v Seaman [2014] WASCSR 11.
On 27 October 2013, Ms Smith sold the Property, having first arranged for the demolition of the house destroyed by fire.
On 13 September 2014, Ms Smith commenced an action in the District Court for recovery of the loss suffered by the Deceased's estate as a result of destruction of the house on the Property by Mr Seaman. She obtained default judgment for damages to be assessed. After a protracted interlocutory course, Principal Registrar Melville assessed damages at $103,188.[4] Mr Seaman appeared in person on the hearing of that application. The order of the Principal Registrar is also annexed to Ms Smith's affidavit.[5] On 5 August 2015, District Court taxed the costs with respect to that action at $23,917.23.[6]
[4] The decision of the Principal Registrar is also annexed to Smith Affidavit (CS3, pages 42 ‑ 58), and is reported as Catherine Marie Smith as administrator of the estate of the late Keith Raymond Seaman v Seaman [2015] WADC 67.
[5] Smith Affidavit, Annexure CS4 pages 59 ‑ 60.
[6] Smith Affidavit, annexure CS5, pages 61 ‑ 63. The Certificate of Taxation is dated 18 August 2015.
Mr Seaman has refused to consent to the judgment sum plus interest and costs being deducted from his share of the Deceased's estate.
Mr Seaman has commenced an appeal from the decision of Principal Registrar Melville, by application dated 29 June 2015. He has not taken any action seeking a stay of the decision of Principal Registrar Melville.
In the application before me, the orders sought by the Administrator are as follows:
1.The judgment sum of $103,118.00, plus interest thereon at 6% per annum calculated from 13 January 2014, plus costs of $23,917.23 awarded against Trevor Raymond Seaman, the First Defendant in District Court action number 3007 of 2013 be paid from the share of the First Defendant in the estate of the deceased.
2.The Plaintiff be entitled to pay the estate the sums referred to in order 1 from the funds held on trust on behalf of the First Defendant.
3.The First Defendant pay the parties' costs, such costs to be paid from his share of the estate of the deceased.
Ms Smith, in her capacity as a beneficiary, Mr Stewart and Mr G K Seaman, each filed notices consenting to the application by Ms Smith in her capacity as administrator.
Ms Smith's application pursuant to the liberty to apply came on before the master on 29 September 2015. The master ordered Mr Seaman to file and serve any affidavit material by 20 October 2015, and adjourned the application to master's chambers on 27 October 2015. The master made an order that Mr Seaman have leave to make any oral submissions if need be on 27 October 2015.
The matter came on before me on 27 October 2015. Mr Seaman appeared via video link from prison. By that time, he had not filed any affidavit in opposition to the application.
I adjourned the application for hearing on 30 October 2015, and ordered that Mr Seaman be brought up to appear in court in person. I advised Mr Seaman that the court would be in a position to receive any evidence he wished to bring orally, and would give him the opportunity to make submissions.
At the hearing on 30 October 2015, Mr Seaman gave evidence on oath. Mr Seaman's evidence was that he had a conversation with his father, the Deceased, before his death to the effect that his father wanted him to have the Property, and for his three siblings to get nothing from his estate. Mr Seaman said his father intended to make a will, but said that he did not have the money to pay a lawyer. His father told him that he went to see a friend of his who had been a lawyer, and had helped him from time to time with legal matters. After the death of his father, Mr Seaman went and saw his father's friend to see if he could find out whether his father had made a will. The friend confirmed that he had met with his father and that they had had a vague and general discussion about his father wanting a will. Mr Seaman has not been able to find any will made by his father. Mr Seaman also said that he had seen a lawyer after his father's death to discuss his father's estate. He thought that he had instructed a lawyer to place a caveat over his father's estate. I interpose the narrative to observe that caveat number CAV 53 of 2010 was lodged on behalf of Mr Seaman against the estate of the Deceased on 25 June 2010 and approved for entry on 29 June 2010. However, it expired on 29 December 2010.[7]
[7] Pursuant to Non‑contentious Probate Rules 1967 (WA) r 34(3).
Mr Seaman's evidence is that the Property had been in the hands of his family for over 100 years, his great, great, grandfather having cleared the Property in 1895. One reason his father wanted him to have the Property is that he knew that Mr Seaman would not sell the Property, but keep it in the family. Mr Seaman also said that he had spent a large amount of time and money on the Property, in particular to help build the house. He had never been paid for this work. He also spent money on the Property maintaining it after the death of his father, including paying rates and insurance.
Later in the hearing, Mr Seaman made submissions in opposition to the orders sought. His submissions were to the effect that, in all the circumstances as he had outlined them, it was unfair and unjust that he did not receive his share of the estate.
Counsel for Ms Smith made a general objection to Mr Seaman's evidence on the basis that it was largely hearsay and mostly irrelevant. With this reservation, counsel declined the opportunity to cross‑examine Mr Seaman.
In addition to the liberty to apply, the Court has the power to make the orders sought pursuant to Administration Act 1903 (WA) s 45, which provides that the:
Court may make such order with reference to any question arising in respect of any will or administration, or with reference to the distribution or application of any real and personal estate which an … administrator … may have in hand, or as to the residue of the estate, as the circumstances of the case may require.
It is well established law that an administrator of a deceased estate has the power to set off moneys owed to the estate by a person entitled in distribution against moneys owed to that person from the estate. The position is summarised in the following passage from the judgment of Slattery J in Hawkins v Barkley-Brown & Anor [No 2]:[8]
The rights of set off between an estate and beneficiary in these circumstances are clear. If a beneficiary owes money to the trustees, as such, the trustees have a right to retain trust property, whether capital or income coming to such beneficiary…The rationale for this right of retainer is that a person who owes an estate money and is thereby bound to increase the general mass of the estate by a contribution of his own cannot claim an aliquot share of the estate given to him out of that mass without first making the contribution which completes it…'
[8] Hawkins v Barkley-Brown [No 2] [2010] NSWSC 395 [18] (footnotes omitted). See also: Public Trustee v Gittoes aka Caldar [2005] NSWSC 373 [138] (White J).
There are four operative court orders in the present case:
(a)the order of the Supreme Court granting Letters of Administration to Ms Smith on 8 May 2012;
(b)the order of the Supreme Court on 11 June 2013 giving Ms Smith vacant possession of the Property;
(c)the judgment of the District Court on 18 June 2015 assessing damages at $103,188; and
(d)the certificate of taxation of the District Court dated 18 August 2015, in the amount of $23,917.23, which may be enforced as a judgment.[9]
[9] Rules of the Supreme Court 1971 (WA) O 66 r 57.
The right of set off sought to be exercised by Ms Smith as administrator is just that, a right. The four orders set out in the preceding paragraph establish a proper basis for the exercise of this right. There is no general discretion to refuse to allow the administrator to exercise the right of set off on the basis that to do so would be unjust or unfair. Even if there was such a discretion, I would not have exercised it in favour of Mr Seaman. The order sought is a direct consequence of his actions in setting fire to the house on the Property in the face of court orders that the Deceased's estate be administered on the basis of an intestacy and requiring him to give up possession of the Property.
Further, Mr Seaman does not have any other funds from which to pay the judgment of the District Court. It is thus appropriate for these orders to have immediate effect, without any opportunity for Mr Seaman to otherwise pay the amounts owed.
For these reasons, Ms Smith is entitled to orders in the following terms:
1.the plaintiff is entitled to set off the following amounts from the first defendant's share of the estate of the deceased:
(a)the judgment sum of $103,188 in District Court action CIV 3007 of 2013;
(b)interest on the judgment sum in (a) at the rate of 6% per annum (which should be calculated for insertion into the final order); and
(c)the costs of District Court action CIV 3007 of 2013 in the amount of $23,917.23;
2.the plaintiff is entitled to deduct the amount in 1 from the funds held on trust on behalf of the first defendant.
I am of the preliminary view that Ms Smith is entitled to her costs, though I will hear from her counsel and Mr Seaman on that point. If an order for costs is made, this should also be deducted from Mr Seaman's share of the estate. I am minded to fix the costs, so invite Ms Smith's lawyers to submit a draft bill, with the draft orders.
Mr Seaman expressed some concern as being 'out of the loop' in terms of what was happening with the administration of the estate. This is explained to some extent by the fact that he is in prison. Ms Smith is under an obligation to pass the accounts of the estate.[10] I propose to make a further direction to the effect that within 28 days of the date of this order, Ms Smith serve on Mr Seaman draft accounts (without vouchers), including details of the calculations of the balance of the estate. This will inform Mr Seaman how Ms Smith has given effect to the orders I propose to make.
[10] Administration Act 1903 (WA) s 43.
There should be a further direction that, within 21 days of the date of this order, Mr Seaman provide written notice to Ms Smith's solicitors of the address to which he would like documents sent (in case it is not directly to him in prison) and the bank account number into which the balance of his share of the estate may be paid. I am also open to making other directions to facilitate the efficient conclusion of the administration of this estate.
I will publish these reasons and then convene a hearing a week or so later in order to make final orders. I direct Ms Smith through her solicitor to file and serve a minute of proposed orders (and any draft bill of costs) two business days prior to the hearing. Service on Mr Seaman should be by way of facsimile or email.