Executor Trustee Australia Ltd v Henderson - [2006] SASC 82

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
EXECUTOR TRUSTEE AUSTRALIA LTD AND ORS v HENDERSON
Ruling of The Honourable Justice Perry
21 March 2006
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - PROBATE AND LETTERS OF ADMINISTRATION - JURISDICTION AND DISCRETION OF THE COURT
In proceedings in which the plaintiffs challenged a will which had been made the subject of a grant of probate in common form, and sought an order pronouncing for the force and validity of an earlier will in solemn form of law, the Court was asked to make an order by consent, revoking the grant of probate of the later will - consideration of the questions whether such an order could properly be made by consent, without hearing evidence as to alleged want of testamentary capacity or lack of knowledge and approval of the will, whether a grant in solemn form of law of the later will should be made on affidavit evidence, and whether terms of the compromise between the parties varying the terms of the later will could properly be made a rule of court - orders made as sought.
Williams, Mortimer and Sunnucks 18th Edition [39.08] page 441; Re Muirhead [1971] P 263; Re Watts (1837) 1 Curt 594; In the estate of Edwards (deceased) (1981) 28 SASR 380; In the Estate of Szylowicz (1978) 19 SASR 263; Public Trustee v Cawthorne (1993-4) 175 LSJS 90; Wheatley v Edgar (Unreported) Supreme Court of Western Australia BC300303231 [2003] WASC 118; Haines, Succession Law in South Australia LexisNexis (Butterworths) 2003 [20.19] p 271, considered.

PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - CONDUCT OF PARTIES
In applying for a consent order in the Testamentary Causes Jurisdiction of the Supreme Court, the parties' representatives failed to draw the Court's attention to a time constraint permitting parties to opt out of the settlement if the order was not made before a stated date - urgent hearing called on to deal with the matter outside of ordinary sitting times on the last day before the time limit expired - counsel offered no assistance to the Court on possibly contentious issues as to the manner in which the application might be dealt with - where there is no contradictor, it is the duty of counsel to draw to the Court's attention possibly contentious matters and relevant authority - ordered that none of the legal representatives recover costs of their attendance.

EXECUTOR TRUSTEE AUSTRALIA LTD AND ORS v HENDERSON
[2006] SASC 82
Civil

PERRY J. On 10 March 2006, I made orders disposing of these proceedings, at the same time, reserving the right to publish reasons later.
On 14 November 2002, probate in common form of what was put forward as the last will and testament of Phyllis Mary Rondahl (“the deceased”), who died on 5 September 2002, was granted by this Court to the defendant, Mary Phyllis Henderson (“Mrs Henderson”), who was the sole executor named in the will. The will was dated 27 August 1993. I will refer to that will as the 1993 will.
In these proceedings, the validity of the 1993 will is placed under challenge.
When the proceedings were instituted, the sole plaintiff was Executor Trustee Australia Ltd (“Executor Trustee”).
By direction of the Court, a number of persons with a potential interest in the estate of the deceased, were served with citations.
They included four parties who at first intervened and later were joined in the proceedings. They now appear as the second to fifth plaintiffs.
Another group of parties cited who intervened in the action, did not seek otherwise to be joined. Neither did they seek to be separately heard at the trial, but they indicated that they supported the plaintiffs’ claim and the orders sought.
The plaintiffs claim that the 1993 will is invalid for want of testamentary capacity, or further or in the alternative, that it is invalid for lack of knowledge and approval of its contents.
The plaintiffs claim that the deceased executed her true last will in 1992, being a will dated 24 December 1992 (“the 1992 will”), in which Executor Trustee and the Mrs Henderson were appointed as joint executors.
The plaintiffs seek orders revoking the grant of probate of the 1993 will and pronouncing against the force and validity of that will, and that the Court pronounce for the force and validity of the 1992 will in solemn form of law.
Part of the estate of the deceased comprises a parcel of shares in Coopers Brewery Ltd (“Coopers”). On 22 September 2005, I made an order that John Ronald Hart, chartered accountant, be appointed administrator pendente lite of that parcel of shares. The shares were subsequently transferred into his name. The share scrip is currently held by the Court.
Shortly before the matter was due to come on for trial before me, I was informed that all interested parties had reached a settlement of the issues in the proceedings. In light of that intimation, I called the matter on for mention on 1 March 2005.
I was then informed that the terms of settlement were embodied in a document headed “Terms of Compromise”, which the parties asked to be made a rule of court on the footing that it remain confidential.
At the same time, I was handed minutes of an order to be made by consent being an order:
qFor the revocation of the 1993 will.
qPronouncing against the force and validity of the 1993 will.
qPronouncing for the full force and validity of the 1992 will.
qThat probate of the 1992 will be granted to Executor Trustee and the defendant, Mrs Henderson, as the executors named in that will.
qThat the Terms of Compromise as signed by counsel, be made a rule of court and be sealed, to be opened only by order of the Court.
Separate minutes provided for orders:
qThat Mr Hart, the administrator pendent lite, transfer the parcel of Coopers shares to the executors of the estate, following the grant of probate of the 1992 will.
qProviding for the release of the share certificates held by the Court to the executors.
qProviding that Mr Hart account for dividends received on the Coopers shares.
qAs to the costs of the administrator.
I was informed that if the Court made the orders sought, notwithstanding the grant of probate of the 1992 will, the effect of the terms of the compromise would be to vary the distribution of the estate somewhat, from that provided for in that will.
When I indicated that I would be disinclined to make the terms of settlement a rule of court without an assurance that all parties with a potential interest in the estate were party to the settlement, I was informed that everyone affected was party to the compromise, with the exception of two parties who disclaimed any entitlement under the 1992 will.
At my request, the deeds of disclaimer executed by those parties, who are respectively Richard Burnside Cooper and Christine Lynne Staines, were placed on the court file.
No further submissions were made by counsel, whereupon I adjourned to consider the matter.
When I did so, it seemed to me that there were some issues upon which I should hear the parties further. Those issues were:
qWhether it would be proper to revoke the grant of probate of the 1993 will and pronounce against its validity without the calling of any evidence to demonstrate incapacity or lack of due execution or the like.
qWhether it was proper to pronounce for the force and validity of the 1992 will and to order that probate in solemn form of that will be granted, on affidavit evidence.
qWhether in the circumstances it was proper to make the terms of compromise a rule of court.
No reference had been made by counsel of those points when the matter had previously been called on before me for mention.
After hearing further argument from counsel, I resolved those issues in favour of the plaintiffs, and agreed to follow the course which they were proposing.
In the result, I made orders in terms of the minutes of order which had been proffered, the effect of which I have summarised above.
In the circumstances, it is sufficient if I note briefly the reasons why I was prepared to take that course.
Revocation of a grant of probate without hearing evidence
There is long-standing authority for the view that a probate court should not pronounce against what appears to be the last will in date, without hearing evidence. See Williams, Mortimer and Sunnucks:[1]
… Where the court is asked to pronounce against what purports to be the last will of the deceased, evidence must be produced to show lack of due execution, incapacity or whatever ground is alleged for the invalidity of the will. It is the duty of the probate court to give effect if it can to the wishes of the testator as expressed in testamentary documents and it should not, therefore, pronounce against what it knows to be the last will in date without making an inquiry as to its validity.[Citing Re Muirhead][2] Except under section 49 of the Administration of Justice Act 1985 the court cannot pronounce against a will by consent [citing Re Watts][3] …
[1] 18^th Edition [39.08] page 441.
[2] [1971] P 263.
[3] (1837) 1 Curt 594.
However, counsel pointed out to me that, after an analysis of relevant authorities, Sangster J had In the estate of Edwards (deceased)[4] held that it was proper to revoke grant of probate the subject of those proceedings, where all parties concerned were sui juris and consented to the revocation.
[4] (1981) 28 SASR 380.
In the course of his reasons in that case, Sangster J observed:[5]
On the whole I am of the opinion it is at least arguable that no cause need be shown in proceedings seeking revocation of a grant if all parties who could possibly be interested consent to that revocation, but I need not go so far as that and therefore I expressly refrain from deciding that question. It is sufficient for me to say that in my opinion even if a grant of probate may not be revoked without cause then nevertheless a grant may be revoked for cause which is alleged in the proceedings before the court and which allegations, if made out, would support the revocation, and where there is no suggestion that that allegation is other than bona fide; and that the court may do so without hearing any evidence in support of the alleged cause for revocation if all parties possibly interested in the outcome of the proceedings consent to the order.
[5] Ibid 384.
In this case, there is “cause … alleged in the proceedings before the court” in the form of allegations which, if made out, would support the revocation.
Not without some hesitation, I was in the circumstances prepared to follow the approach adopted by Sangster J in that case.
Evidence to support a grant of probate in solemn form
I am satisfied that it is in the discretion of the court as to what evidence it regards as sufficient to justify such a grant. In the circumstances of this case, I was prepared to accept the affidavits of the two attesting witnesses, without seeking further evidence.
Making the terms of compromise a rule of court
When I first gave consideration to this question, it appeared to me that the decision of this court In the Estate of Szylowicz[6] stood in the path of acceding to the request to make the terms of compromise a rule of court.
[6] (1978) 19 SASR 263.
In Szylowicz, the plaintiff asked the court to pronounce for the force and validity of the purported last will and testament of the deceased.
The matter came before Jacobs J by way of a motion for judgment in default of a defence. In addition to the decree of probate sought, the plaintiff sought to have the terms of compromise between her and the defendant embodied in the decree as a rule of court.
In the course of referring to a number of authorities, Jacobs J observed:[7]
I have found no case in which the power to make the terms of compromise a rule of court has been exercised when all outstanding issues have been resolved in the course of proving the “disputed” will in some form.
[7] Ibid 270.
After indicating that he would pronounce in favour of the formal validity of the propounded will and order that probate of it be decreed, Jacobs J said:[8]
… the power of the court to sanction in its decree a variation of the terms of the will by way of compromise, is no longer exercisable. There is no unresolved issue between the parties to support the compromise, and the will so established speaks according to its tenor. What the parties may choose to do by way of family arrangement is a matter for them, but not a matter to which the court can be called upon to lend its aid.[9]
[8] Ibid 271.
[9] See also Public Trustee v Cawthorne (1993-4) 175 LSJS 90; Wheatley v Edgar (unreported) Supreme Court of Western Australia BC200303231 [2003] WASC 118 per Heenan J at [31]; Williams, Mortimer and Sunnucks (supra) at [39-04]; and Haines, Succession Law in South Australia, LexisNexis (Butterworths) 2003, [20.19] p 271.
However, after hearing argument, I was satisfied that insofar as the order of revocation sought in this case is itself an expression of the terms of the compromise, the observations of Jacobs J in Szylowicz did not apply. I indicated that I was prepared to allow the remaining terms of the compromise to be made a rule of court.
No costs
When the matter was called on for mention on 1 March 2006, no reference was made by counsel to the fact that the terms of compromise include a clause which provides that:
If the court shall not by 13 March 2006 make the orders [for probate of the 1992 will in solemn form and making the terms of compromise a rule of court] the second, third and fourth plaintiffs shall be at liberty by notice to the defendant and the first plaintiff to terminate the obligations of the parties under the terms of this compromise.
At the conclusion of the hearing on 1 March 2006, I intimated to counsel that as I was sitting in another jurisdiction, I was uncertain as to when I would be able to attend to the matter, but I expected to be able to call it on again within a week or so.
I then stood the matter over to a date to be fixed.
Notwithstanding the fact that, including juniors, there were at that stage seven counsel before me, no-one troubled to alert me to the terms of the clause to which I have just referred.
On 9 March 2006, my associate received a call from the solicitor for one of the parties drawing attention to the clause and asking whether the matter could be dealt with as a matter of urgency.
In response to that request, I called the matter on again on 10 March 2006, outside of regular sitting times.
In the meantime, I had acquainted myself with the issues which I thought were involved, as to which, as I have said, no reference was made at the earlier hearing.
At the hearing on 10 March, I drew the parties’ attention to the fact that it was not satisfactory in circumstances such as this, to simply have the papers dropped into the lap of the court, leaving it to the judge to sort the matter out and identify any points which might need to be considered.
This was not a situation where the Court was simply being asked to pronounce a straightforward order or judgment by consent.
The estate involves property worth some tens of millions of dollars; the counsel before me on 1 March included two senior counsel; the exercise which I was expected to perform was by no means straightforward, and involved some possibly contentious issues; but the matter was simply left to me to deal with, as best I could, with no help offered by counsel.
Where there is no contradictor, and a matter is proceeding more or less ex parte, it is the duty of counsel to draw the judge’s attention to any possibly contentious matters and to cite any relevant authority.
In view of the failure of counsel to answer to that duty, I ordered that none of the representatives of the parties, that is, counsel and solicitors who were before me on 10 March 2006, were to recover any costs for their attendance before me that day.
On reflection, it might have been more appropriate to make such an order with respect to the attendance before me by counsel on 1 March 2006. But no doubt they will be informed of the view which I have expressed, and I will let the order as to costs stand in the terms pronounced by me on 10 March.