Hitchins, S.M. v Roksandic, Z
[1989] FCA 411
•31 JULY 1989
Re: SANDRA MIA HITCHINS
And: ZARKO ROKSANDIC and PUBLIC TRUSTEE FOR THE AUSTRALIAN CAPITAL
TERRITORY
No. ACT G41 of 1988
FED No. 411
Probate and Administration
COURT
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Jenkinson(1), Neaves(1) and von Doussa(1) JJ.
CATCHWORDS
Probate and Administration - intestacy - Cross-applications by beneficiaries entitled to estate - Disputation between the applicants as to who should be granted administration and as to property comprising the estate - Exercise of discretion by primary judge to appoint as administrator Public Trustee for the Australian Capital Territory - Appeal by one beneficiary - Whether beneficiary entitled to grant in priority to Public Trustee - Whether Public Trustee properly joined as a respondent to the appeal.
Administration and Probate Act 1929 (A.C.T.), ss 10A, 12, 24
Federal Court Rules, Order 52, sub-rule 14(1).
HEARING
CANBERRA
#DATE 31:7:1989
The appellant appeared in person.
Counsel for the first respondent : Mr T.M. Johnstone
Solicitors for the first respondent : Gallens Crowley & Chamberlain
Counsel for the second respondent : Mr R.L. Crowe
Solicitor for the second respondent : Australian Government Solicitor
ORDER
The Public Trustee for the Australian Capital Territory cease to be a party to the appeal.
The appellant pay the costs of the Public Trustee for the Australian Capital Territory of the motion notice of which was given on 4 July 1989.
The appeal be dismissed.
The appellant pay the first respondent's costs of the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an appeal from a judgment of the Supreme Court of the Australian Capital Territory (Gallop J.) given on 15 August 1988 whereby the Court ordered that the Public Trustee for the Australian Capital Territory be appointed to administer the estate of Ivan Roksandic (also known as Rok Sandy) late of Wollongong in the State of New South Wales, deceased, and that the costs of both parties to the proceedings in that Court be paid out of the assets of the estate of the deceased.
Before the Supreme Court were cross-applications for the grant of Letters of Administration of the estate of the deceased who died on 27 February 1980. The deceased, who was, at the date of his death, domiciled in New South Wales, left assets both in that State and in the Australian Capital Territory. The applications were respectively made by the only known issue of the deceased, namely Sandra Mia Hitchins ("the appellant") and her brother Zarko Roksandic ("the first respondent"). At the date of his death the deceased was unmarried. He died without leaving a valid will. So far as has appeared, the appellant and the first respondent are the only beneficiaries entitled to share in the estate.
Before the Supreme Court, the appellant and the first respondent relied on extensive affidavit evidence to the detail of which it is unnecessary to refer. Suffice it to say that the evidence establishes beyond any doubt that there are substantial matters in dispute between the appellant and the first respondent as to the assets of which the deceased was possessed at the date of his death. The evidence also reflects the inability over many years of the appellant and the first respondent to reach agreement concerning the administration of the estate.
Following the deceased's death, the first respondent took immediate steps to preserve the assets of the estate. From the outset there was disagreement between the appellant and the first respondent. Various proposals put forward in relation to the administration of the estate were rejected by one or other of them. In June 1984, the first respondent made application to the Registrar of Probates in the Australian Capital Territory for the grant of letters of administration. There were lengthy delays in obtaining the necessary material to support that application and in the result, having regard particularly to the disputation between the appellant and the first respondent, the registrar declined to deal with the application without an order of the Supreme Court. By application dated 16 October 1986 the first respondent applied to the Supreme Court for an order that the administration of the estate of the deceased be granted to him and for such further and other orders as to the court might seem fit. The appellant also applied to the Supreme Court for the grant of administration of the estate and for such further and other orders as to the Court might seem proper, her application being dated 30 October 1986. On 31 October 1986, the Supreme Court (Kelly J.) ordered, by consent, that the two applications be consolidated. His Honour further ordered that the first respondent have the carriage of the consolidated matter and gave directions as to the filing of affidavits by the parties.
On 12 February 1988, again by consent, Kelly J., upon an application made by the first respondent, ordered that the public trustee for the Australian Capital Territory be appointed under s.23 of the Administration and Probate Ordinance 1929 (A.C.T.) as administrator of the personal estate and receiver of the real estate in the Australian Capital Territory of the deceased with power to get in such personal and real estate pending resolution of the contested right of administration and, with the concurrence of the parties to the suit, to pay such of the Australian Capital Territory debts as were payable.
Shortly prior to that order being made, namely on 18 January 1988, the appellant obtained, in the Supreme Court of New South Wales, a grant of Letters of Administration of the estate of the deceased. Gallop J. accepted that this grant had been obtained without notice of the application for such grant having been given to the first respondent.
When the matter came on for hearing before Gallop J., counsel for the first respondent informed his Honour that his client was prepared to withdraw his application for a grant in favour of a grant being made to the Public Trustee (who had consented to administer the estate), provided the appellant was also prepared to withdraw her application. The position taken by the appellant, however, was that she opposed the grant of Letters of Administration to the first respondent on a number of grounds. She also opposed the appointment of the Public Trustee to administer the estate. It was submitted by counsel on her behalf that, as she was the administrator of the estate in New South Wales, it would be convenient for her to administer the whole estate. The appointment of the Public Trustee as administrator was opposed on the ground that a commission would be charged by the Public Trustee and this would have the effect of depleting the assets of the estate available for distribution to the beneficiaries.
In his reasons for judgment Gallop J. said:
"I certainly agree with what has been put to me by both counsel that a joint grant of Letters of Administration is just not feasible. I am of the view that the best way in which to resolve the differences between the parties and the best way in which to administer the estate is to appoint the Public Trustee. I am satisfied that that is certainly in the best interests of the estate. What happens to the grant of Administration in New South Wales would be a matter for litigation in that place but the issues between these parties are so substantial that there is just no way in which the estate could be satisfactorily administered otherwise. Being of the view that it is necessary and convenient to appoint some person to be the administrator of the estate, I appoint the Public Trustee to administer the estate of the deceased."
The notice of appeal, which is dated 2 September 1988 and which is signed by the appellant in person, names the Public Trustee for the Australian Capital Territory as the second respondent to the appeal. This appears to have been done in the belief that it was required by Order 52, sub-rule 14(1) of the Federal Court Rules. That sub-rule provides:
"14.(1) Each party to the proceeding in the court appealed from who is affected by the relief sought by a notice of appeal or is interested in maintaining the judgment under appeal shall be joined as a party appellant or respondent to the appeal."
The Public Trustee took the view that he was not properly joined as a respondent to the appeal as he was not a party to the proceeding in the Supreme Court and he wished to stand neutral as between the contesting parties. The matter was raised with the appellant and the first respondent and agreement was reached that the Court be asked to make an order that "proceedings against the Second Respondent be dismissed". Some time after that agreement had been reached, the appellant filed in the Registry of this Court an affidavit sworn by her on 7 June 1989 and intituled in the appeal referring, inter alia, to administration proceedings which had been commenced by her on 22 May 1989 in the Supreme Court of the Australian Capital Territory against the Public Trustee complaining of certain conduct on his part in the administration of the estate. Counsel for the Public Trustee informed the Court that, in consequence of the receipt by the Public Trustee of a copy of that affidavit, the view was taken that the appellant's consent to the Public Trustee ceasing to be a party to the appeal had been withdrawn and that, in order to answer the allegations made in the affidavit, the Public Trustee should be legally represented on the hearing of the appeal. In later correspondence, however, the appellant informed the solicitor for the Public Trustee that, on the hearing of the appeal, she would not be pursuing the allegations of improper conduct on the part of the Public Trustee but would be doing so in the separate proceedings pending in the Supreme Court. In the light of those developments, the Public Trustee, by motion, notice of which was given on 4 July 1989, sought an order that he cease to be a party to the appeal and an order providing for his costs.
Upon the appellant confirming to the Court that, on the hearing of the appeal, she would not seek to rely on the affidavit sworn by her on 7 June 1989 and would not raise in the appeal any question concerning the Public Trustee's administration of the estate, the Court ordered that the Public Trustee cease to be a party to the appeal and that the appellant pay the Public Trustee's costs of the motion. The Court indicated that those costs should properly be taken to include the costs incurred in perusing the appellant's affidavit sworn on 7 June 1989 and in considering and determining the course that should be taken in relation thereto.
The appellant, who appeared in person, relied upon a number of grounds to support the appeal. Principal among those grounds was a submission that, as one of the two persons entitled to the property of the deceased, she had, as against the Public Trustee, a prior right to a grant of administration, that that right could properly be denied only upon just cause being shown and that the material before the Supreme Court fell far short of constituting such just cause. In particular, it was submitted that the circumstance that the two beneficiaries of the estate had been unable to agree as to who should administer the estate or as to the assets which it comprised provided no foundation for denying the appellant's right to a grant. As between herself and the first respondent, the appellant submitted that her claim was to be preferred as she could be expected to pursue more vigorously than the first respondent the recovery for the benefit of the estate of the property which was in dispute and of which the first respondent claimed to be the owner in his own right.
By virtue of s.12 of the Administration and Probate Act 1929 (A.C.T.), that being since 11 May 1989 by virtue of s.5 of the Self-Government (Citation of Laws) Act 1989 (A.C.T.) the correct short title for present purposes of what was formerly the Administration and Probate Ordinance 1929 (A.C.T.), the Supreme Court has a discretionary power to grant administration of the estate of a person dying intestate. That section provides:
"12. The Court may grant administration of the estate of an intestate person to any of the following persons, being of the full age of eighteen years:
(a) the husband or wife of the deceased; or
(b) one or more of the next of kin; or
(c) the husband or wife conjointly with one or more of the next of kin, or if there is no such person, or no such person within the jurisdiction -
(i) who is, in the opinion of the Court, fit to be trusted; or
(ii) who, when duly cited, appears and prays for administration,
(d) such person, whether a creditor or not of the deceased, as the Court thinks fit."
It is well established, however, that the discretion so conferred on the Court is to be exercised in accordance with the general principle of law which recognises that, in the case of a person dying intestate, certain persons are entitled, in priority to others, to administer the estate. Clearly, in accordance with that principle, those entitled to the property of the deceased would, in the absence of any grounds warranting the Court exercising its discretion adversely to them, be entitled to a grant.
Section 12, however, is not the only source of power in the Supreme Court to grant administration in relation to a person dying intestate. A further power, a power expressed in very general terms, is conferred by s.24 which provides:
"24. The Court may, in any case where a person dies -
(a) intestate; or
(b) ....
(c) ....
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 his giving such security (if any) as the Court directs, and every such administration may be limited as the Court thinks fit."
As to the width of the discretion so conferred it is sufficient to refer to what was said by Helsham J. in respect of the corresponding section, section 74, of the Wills, Probate and Administration Act, 1898-1965 (NSW) in Bath v. British and Malayan Trustees Ltd (1969) 2 NSWR 114 at p 118:
"As to the first step in the argument, it seems to me that where circumstances arise in which the Court is empowered to appoint an administrator under s. 74, then having regard to matters of necessity or convenience as to whether any appointment should be made, the Court is given a discretion regarding an appointee, and the choice of competing appointees, which discretion is wider if anything than the discretion to choose 'such person as the Court shall think fit', under the English ancestor of this section (s. 73 of the Court of Probate Act 1857). In exercising this discretion the Court is entitled to follow the approach adopted by Sir Francis Jeune, P. (enunciated in relation to revocation of a grant and substitution of an administrator) in In the Goods of Loveday, (1900) p 154, at p 156: 'After all the real object which the Court must keep in view is the due and proper administration of the estate and the interests of the parties beneficially entitled thereto.' If, in the present case, the appointment of one applicant - the second defendant - would immediately result in successful curial proceedings to stultify the administration of the estate proposed by that appointee in order to protect the beneficiaries, then convenience would dictate that such an appointment should not be made if there is a more convenient alternative. There is some authority to be found for the proposition that the Court will in an application under s.74 (actually its English ancestor) take heed of the desirability of avoiding the necessity for a beneficiary to institute an administration suit for the protection of his interest in the estate: see In the Goods of Grundy (1868), LR 1 P & D 459. I have no doubt that all the factors to which I have referred are proper to be considered in this suit in the exercise of a discretion under the section."
It is apparent from a consideration of the reasons for judgment of Gallop J. that, although s.24 is not expressly referred to, his Honour made the order the subject of this appeal in exercise of the wide discretion which that section confers.
The principles which regulate the circumstances in which an appellate court may review the exercise of a general discretion of the kind embodied in s.24 of the Administration and Probate Act are well settled: House v. The King (1936) 55 CLR 499 at pp 504-5, and see Minister for Aboriginal Affairs v. Peko-Wallsend Ltd (1986) 162 CLR 24 at p 47.
In the present case, not only are we satisfied that no sufficient ground has been shown to warrant this Court interfering with the exercise by the Supreme Court of the discretion undoubtedly vested in it, but we are satisfied that the order appointing the Public Trustee as administrator of the deceased estate was the most appropriate order to make in the circumstances. We should add that we cannot find in the evidence any support for the assertion made by the appellant that the appointment was not an appropriate one because the Public Trustee was to be regarded as the appointee of the first respondent, the implication being that the Public Trustee would not actively pursue a claim on behalf of the estate to the property asserted by the appellant to form part thereof but claimed by the first respondent to be beneficially owned by him. We should add that, while the circumstance that, prior to the matter being determined by the Supreme Court, the appellant had obtained a grant of Letters of Administration in the State of New South Wales - a grant which is the subject of an application for revocation at the suit of the first respondent - was a factor relevant to be taken into account by the Supreme Court, it could not, in the circumstances, be decisive of the question who should obtain a grant in the Australian Capital Territory. The appellant disclaimed reliance upon the grant to her of administration by the Court of the deceased's domicile as entitling her to preference in competition with her brother or with the Public Trustee for administration in the Australian Capital Territory. A claim to a grant on that ground was considered by Helsham J. in Bath v. British and Malayan Trustees Ltd (1969) 2 NSWR 114 at pp 119-120:
"The first of these arguments asserts a right in the second defendant to a grant which the Courts recognize and will give effect to. The right is said to be found in the reasons for judgment given In the Goods of Earl (1867), LR 1 P & D
450. In that case the attorney of an executrix who had obtained a grant of probate in New South Wales (from the court of the domicile) sought a grant of administration c.t.a. in England under the equivalent of s.74 (s.73 of the Court of Probate Act). Sir J.P. Wilde, at p 453, said: 'This Court, however, is armed with a special power by the 73rd section of 20 & 21 Vict. c.77. I think the Court ought to act upon that section, and to make a grant in all such cases as the present to the person who has been clothed by the Court of the country of domicile with the power and duty of administering the estate, no matter who he is or on what ground he has been clothed with that power.' The authorities were reviewed by Lord Merriman, P., in In the Estate of Kaufman, (1952) 2 All ER 261; (1952) p 325, where his Lordship affirmed the proposition enunciated by Wilde, P., as a general rule to be followed at least in relation to moveables, but recognized the existence of the clear discretion under the section to depart from the rule in a proper case. Starke, J., refers to the case of In the Goods of Earl, supra, in the following passage from his reasons for judgment in Lewis v. Balshaw (1935), 54 CLR 188, at p 197, where his Honour was dealing with the application for administration in New South Wales by an attorney of an executor of a deceased who died domiciled in England and to which executor probate of the deceased's will had been granted in England; that application was contested upon grounds different from the present, but that fact does not affect the applicability of what his Honour said about the so-called right of the representative of the executor to a grant in New South Wales; he said: ' Undoubtedly the rule or practice of English law in the case of movable property is that a Court of probate should follow the grant made by the competent Court of the domicil. The rule is a rule of convenience and expediency, and not an absolute right .... The rule is based upon the doctrine of English law that the beneficial succession to a deceased person's movables is governed by the law of his domicil and that consequently the representative recognized by the Court of the domicil should be placed elsewhere in a position to represent the deceased.' I do not think it really matters whether one regards this right of the executor appointed by the Court of the domicile as merely a qualification to apply in New South Wales or as a prima facie entitlement to appointment in New South Wales; because the position is clearly left open on the authorities for a displacement of such person if the necessity or convenience of administration of the estate requires it. So that I do not think that the first proposition put by Mr Reddy on behalf of the defendants really takes the matter any further. And it has been pointed out that the researches of counsel have discovered no case in which this right has been discussed in connexion with any competing claim by some other person. Therefore I do not think it is necessary for me to categorize the right of the executor by himself or his attorney to apply for administration in respect of the assets in New South Wales; the precise nature of such a right can be determined if and when it is necessary to do so."
The principal ground of appeal, therefore, fails.
The appellant also submitted that the Supreme Court lacked jurisdiction to make a grant to the Public Trustee because, it was said, there had been a failure to comply with the provisions of par. (b) of s.10A of the Administration and Probate Act. That section provides:
10A. The seal of the Court shall not be affixed to any probate or letters of administration -
(a) until all probate, stamp and other duties (if any), but not including estate duty, payable under any law in force in the Territory have been paid; and
(b) except upon an affidavit that notice of the intention to apply in that behalf has been published once in a newspaper published and circulating in the Territory fourteen days before the making of the affidavit and that no caveat has been lodged."
The evidence does not establish whether the requirements of par.10A(b) were satisfied but, in any event, we are unable to accept that a failure to comply with the provision, even if such failure be shown to have occurred, would result in a denial of the Supreme Court's jurisdiction to make the order the subject of this appeal. Section 10A is directed to another matter, namely the steps to be taken by the Registrar of Probates consequent upon a grant being made either by the Court or by the Registrar.
This ground, therefore also fails.
A further submission that the Supreme Court lacked jurisdiction because the order appointing the Public Trustee was made by the Court of its own motion and was not within the scope of the orders sought in the applications made by the appellant and the first respondent must also be rejected. Each application sought a grant of administration to the applicant but also sought such further or other orders as to the Court should seem fit. If it be thought that a formal application for the appointment of the Public Trustee were necessary, we would regard as sufficient what was said in that behalf by counsel for the first respondent when opening the matter before Gallop J., albeit that what was said was expressed to be conditional upon the appellant withdrawing her application for a grant.
The appellant also sought to rely on the principle of res judicata or issue estoppel, contending that prior to the making of the order the subject of the appeal, namely on 5 February 1988, the Supreme Court had dismissed an application by the first respondent to have the Public Trustee appointed to administer the estate. It is sufficient to dispose of this submission that no factual foundation has been established to support it. So far as appears, all that relevantly occurred on 5 February 1988 was that a motion by the first respondent to have the Public Trustee appointed under s.23 of the Administration and Probate Ordinance as administrator of the personal estate and receiver of the real estate in the Australian Capital Territory of the deceased pending the resolution of the contested claim for administration was adjourned until 12 February 1988 when the order previously referred to in these reasons was made by consent.
It was also submitted that the Supreme Court had denied procedural fairness to the appellant in that she was not given the opportunity to argue that the Public Trustee should not be appointed. A perusal of the transcript of the proceedings before the Supreme Court shows that this submission is not soundly based. The question whether the Public Trustee should be appointed was debated and counsel for the appellant then informed the Court that his instructions were to oppose such an appointment. There was clearly ample opportunity for the appellant to put forward any reasons against the appointment.
Finally, it was submitted that it was improper for Gallop J. to take into account that substantial administration of the estate had taken place under the order made by consent on 12 February 1988. The material on which his Honour relied was contained in an affidavit sworn by Aiden Blair Anderson, the Deputy Public Trustee, on 18 May 1988. That affidavit was filed in proceedings in the Supreme Court between the present appellant and the Public Trustee as administrator of the estate of the late Ivan Roksandic and numbered SC 539 of 1988. Counsel for the appellant and the first respondent expressly agreed before Gallop J. that his Honour was to have regard to the contents of that affidavit in determining the issue before him. We are of opinion that there is no substance in the appellant's submission.
For the reasons set out above, the appeal is dismissed. The appellant must pay the first respondent's costs of the appeal.
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