In The Estate Of Diane Carol Collison v Collison
[2023] WASC 32
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: IN THE ESTATE OF DIANE CAROL COLLISON -v- COLLISON [2023] WASC 32
CORAM: LUNDBERG J
HEARD: 3 FEBRUARY 2023
DELIVERED : 10 FEBRUARY 2023
FILE NO/S: PRO 3146 of 2019
MATTER: The Estate of DIANE CAROL COLLISON late of 3/15 Thompson Street, Port Hedland, Western Australia (deceased)
BETWEEN: DAVID ALAN COLLISON
Objector
AND
MICHAEL JAMES COLLISON
Administrator
Catchwords:
Probate - Failure to pass accounts - Neglect or refusal to carry out due administration - Revocation of grant of letters of administration - Orders for fresh appointment of letters of administration
Legislation:
Administration Act 1903 (WA), s 43
Non-Contentious Probate Rules 1967 (WA), r 37
Supreme Court Act 1935 (WA), s 18
Result:
Revocation of grant of letters of administration
Appointment of Objector as administrator
Ancillary orders made
Representation:
Counsel:
| Objector | : | Mr M S Macdonald |
| Administrator | : | No appearance |
Solicitors:
| Objector | : | Macdonald Rudder |
| Administrator | : | In Person |
Case(s) referred to in decision(s):
Bates v Messner [1967] 1 NSWR 638
Davis v Davis [2014] WASC 395
Dear v Rich (As Administratrix of the Estate of J H Myslis, dec) (1920) 22 WALR 69
Hons v Hons [2010] NSWSC 247
In re Ellis v Ellis [2015] WASC 77
In the estate of Mack [1962] NSWR 1029
In the estate of Robinson (1902) 19 WN (NSW) 158
In the estate of Shaw [1905] P 92
Mavridos v Mack (1998) 45 NWSLR 80
Phelan v Booth (1941) 43 WALR 60
Porteous v Rinehart (1998) 19 WAR 495
Re Campbell (dec) [1961] QWN 45
Smith v Partridge [2018] WASC 128
The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358
TK, PB & LS v Australian Red Cross Society (1989) 1 WAR 335
LUNDBERG J:
A. Overview
On 21 March 2019, Diane Carol Collison passed away in Port Hedland. Mrs Collison died intestate. Mrs Collison was survived by her two adult sons. Those sons were the only persons entitled in distribution to Mrs Collison's estate pursuant to s 14(1) of the Administration Act 1903 (WA) (the Administration Act).[1]
[1] Affidavit of Michael Collison sworn on 28 May 2019, [2] – [9].
On 12 June 2019, letters of administration were granted to one of Mrs Collison's sons, being Michael James Collison (Michael Collison or the Administrator). Mrs Collison's other son, David Alan Collison, has assumed the role of objector to the accounts of the estate (David Collison or the Objector).
The estate itself is not particularly complex. However, most unfortunately, and as explained in these reasons, Michael Collison has neglected or refused to properly carry out his duties as administrator. Over the last 3½ or more years, Michael Collison has failed to undertake the necessary tasks to allow the accounts pertaining to Mrs Collison's estate to be passed by this court, notwithstanding the several hearings and numerous orders made by Registrars of this court.
Michael Collison's conduct as the administrator over this period has led to numerous objections being agitated by his brother, David Collison, and resulted in several notices of failure to comply being issued to Michael Collison by this court. This conduct has culminated in the matter being referred by a Registrar to a Judge for review pursuant to rules 4(3) and 4(4) of the Non-Contentious Probate Rules 1967 (WA) (the NCP Rules).
At the hearing before me on 3 February 2023, David Collison's counsel, Mr M S Macdonald, moved for orders that the grant of letters of administration to Michael Collison be revoked and that David Collison be appointed as administrator of his mother's estate. Various ancillary orders were also sought. Michael Collison did not appear at the hearing, either in person or through counsel.
In support of the relief sought by David Collison, a chronology of events was filed on his behalf, together with an indication that his counsel intended to rely on the decision of E M Heenan J in The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358.
At the conclusion of the hearing, I indicated I was satisfied that the relief sought by David Collison should be granted and, together with the assistance of counsel, a set of orders was drafted and formally made on the day. These reasons now explain why I was satisfied those orders should be made.
B. Procedural History
Overview
As already noted, on 12 June 2019, letters of administration were granted to Michael Collison. David Collison consented in writing to the grant to his brother. The course of the administration has been marked by repeated delays, with serious concerns being raised by David Collison as to certain aspects of the handling of the administration by Michael Collison.
I am not in a position on the material available, and without hearing from Michael Collison, to make any substantive findings in regard to the concerns which have been raised by David Collison. Accordingly, within these reasons I will only refer to the matters raised by David Collison as allegations and issues without intending to suggest that findings of fact have been made in relation thereto.
I have set out below a comprehensive narrative of the course of events over the past 3½ or more years to explain some of the particular aspects of this matter which I regard as important.
March 2020 - Notice to Pass Accounts
In March 2020, a Notice to Pass Accounts was issued by the court to Michael Collison. The notice is dated 3 March 2020 but was emailed by the court to Michael Collison on 9 March 2020. The notice was in relatively standard terms and provided a fulsome explanation to the recipient of the process to be followed.
It explained that the court had received a request to have a Registrar pass the accounts of the estate of Mrs Collison in accordance with r 37 of the NCP Rules.[2] The notice was issued at the request of Macdonald Rudder, in their capacity as the solicitors for David Collison.[3] The notice further explained that an appointment to have the accounts passed would be listed for hearing if there were any objections to those accounts.[4] The notice required that Michael Collison file the accounts in accordance with Form 4 by 16 April 2020 and that by the same date he file a verified affidavit, all of the original supporting vouchers, and a copy of the estate accounts (with entries in the account being cross-referenced with the numbers given to each of the individual invoices on the file).[5]
[2] Notice to Pass Accounts issued by Registrar S Boyle dated 3 March 2020, [1].
[3] Letter from Macdonald Rudder to the Supreme Court dated 27 February 2020.
[4] Notice to Pass Accounts issued by Registrar S Boyle dated 3 March 2020, [2].
[5] Notice to Pass Accounts issued by Registrar S Boyle dated 3 March 2020, [3].
The initial solicitors engaged by Michael Collison indicated to the court at this juncture they did not act in the administration of the estate. As a result, communications were directed by the court to Michael Collison himself.
May 2020 - Notice of Failure to Comply
On 2 May 2020, a Notice of Failure to Comply was issued by the court to Michael Collison. The notice was emailed to him on 6 May 2020 and a further copy of the notice was posted to the PO Box address which had been provided to the court. The notice explained to him that filing the accounts of the estate was mandatory and that he was currently in breach of the order.[6] The notice further explained that Michael Collison was also now liable to an action to be removed as administrator, at a personal cost to him.[7]
[6] Notice of Failure to Comply issued by Registrar S Boyle dated 2 May 2020, [1].
[7] Notice of Failure to Comply issued by Registrar S Boyle dated 2 May 2020, [2].
By email dated 7 May 2020, Michael Collison confirmed receipt of the notice.
By email dated 21 May 2020, Michael Collison indicated to the court that he and his brother, David Collison, had come to an agreement in relation to the distribution of the estate. Even so, the obligation to file the accounts remained and had not been discharged. Michael Collison then emailed the court stating he had retained solicitors to assist him with the matter (by way of a further email dated 21 May 2020).
On 9 June 2020, new solicitors emerged as representatives for Michael Collison,[8] but the requirement to file accounts remained unsatisfied.
[8] Letter from Butlers, Lawyers & Notaries to the Supreme Court dated 9 June 2020.
On 11 June 2020, a Registrar of this court informed the parties that the obligation remained extant, and that even if David Collison had struck an agreement with him, that did not absolve him of that obligation.[9] The Registrar granted an extension for filing through to 30 June 2020. This letter was forwarded by the court to Michael Collison's solicitors by email on 15 June 2020.
[9] Letter from Supreme Court (Registrar S Boyle) to Michael Collison dated 11 June 2020.
Michael Collison's solicitors filed accounts and supporting documents with the court on 30 June 2020.[10] This material revealed a material new asset in the estate, being Mrs Collison's GESB superannuation account in the sum of $673,322.65. This meant the estate value comprised assets of $1,722,528.42 less liabilities of $926,356.67, with a net value stated to be $796,171.75. The initial assets, as disclosed in June 2019 had been $990,203.80.[11]
[10] Letter from Butlers, Lawyers & Notaries to the Supreme Court dated 30 June 2020.
[11] Affidavit of Michael Collison sworn 28 May 2019, Attachment B.
On 2 July 2020, the Registrar sent two letters out by email to the solicitors for Michael Collison and David Collison. In each instance the letter was copied to the other solicitors. The first letter was addressed to Michael Collison's solicitors and acknowledged the lodgement of the accounts in the estate. The Registrar stated that she had concerns regarding some of the items but would await any additional objections from the Objector and his solicitors.[12] The second letter was addressed to David Collison's solicitors and asked them to study the account carefully and identify what issues, if any, remained as objections to the account.[13]
[12] Letter from Supreme Court (Registrar S Boyle) to Butlers, Lawyers & Notaries dated 1 July 2020.
[13] Letter from Supreme Court (Registrar S Boyle) to Macdonald Rudder Lawyers dated 1 July 2020.
On 15 July 2020, objections were filed by Macdonald Rudder on behalf of David Collison.[14] One fundamental issue raised was whether the superannuation funds were being utilised to discharge estate liabilities, which is statutorily prohibited. Concerns were also raised as to the lack of supporting documents.
[14] Letter from Macdonald Rudder to Supreme Court (Registrar S Boyle) dated 15 July 2020.
On 17 July 2020, Michael Collison's lawyers were sent a letter from the court informing them that objections to the passing of the account had been received. They were asked to consider the objections and, wherever possible, deal with them. The Registrar provided them until 7 August 2020 to do this.[15] Upon the request of the Administrator, this time period was extended to 21 August 2020.[16]
October 2020 – Directions Hearing
[15] Letter from Supreme Court (Registrar S Boyle) to Butlers, Lawyers & Notaries dated 17 July 2020.
[16] Letter from Butlers, Lawyers & Notaries to the Supreme Court dated 6 August 2020; and letter from the Supreme Court (Registrar S Boyle) to the Parties dated 19 August 2020.
On 15 October 2020, a directions hearing was listed for the passing of the accounts. Both parties were informed by email of the hearing on 2 October 2020.[17] Both parties appeared through counsel and in person at that hearing. Michael Collison's counsel had been engaged only the day before the hearing, despite the advance notice given to the parties.
[17] Email from the Supreme Court (Registrar S Boyle) dated 2 October 2020.
At this hearing, the following material issues were canvassed:
1.that amended accounts needed to be filed;
2.that distributions of around $17,000 had allegedly been made by Michael Collison in cash, although David Collison disagreed with this assertion;
3.that there was a paucity of vouchers and receipt to support the accounts;
4. that there were issues as to why the two estate properties had not been sold and distributions made, given the mortgages were in default, and David Collison queried whether the earlier mortgage repayments had been made using money from the superannuation fund;
5. that David Collison considered there was a lack of information being provided by Michael Collison and lack of progress in relation to the management of the estate; and
6. that Michael Collison had allegedly used over $500,000 of estate funds to invest in shares, with David Collison insisting that these funds be restored.
At the hearing on 15 October 2020, the Registrar made orders relisting the passing of accounts for a further hearing on 14 December 2020, with a revised timetable for the filing of amended accounts by 12 November 2020, with objections to be filed by 26 November 2020, and any response by 10 December 2020. The costs of the hearing on 15 October 2020 and the costs flowing from the amendments to the accounts and the objections were reserved through to the passing of accounts.[18]
November 2020 – Further documents filed
[18] Orders of Registrar Fatharly made on 15 October 2020.
On 18 November 2020, the amended accounts and vouchers were filed by Michael Collison, with substantially more documents provided in support of the accounts. Objections were then filed in relation to the Amended Form 4 accounts. The objections included allegations as to:[19]
1.a lack of supporting documents;
2.the possible insolvency of the estate other than for the superannuation fund;[20]
3. expenditure on a family holiday in the amount of $15,000;[21]
4.a distribution in specie of $550,000 to the DCH Trust being an apparent investment in various securities which the Objector asserted the Administrator had no authority to make;[22] and
5.the establishment of two securities accounts for share trading with a total sum of $390,831.64.[23]
December 2020 – Directions Hearing
[19] Notice of Objections to Amended Form 4 lodged by David Allan Collison on 26 November 2020, in response to the account lodged by Michael James Collison.
[20] Notice of Objections to Amended Form 4 lodged by David Allan Collison on 26 November 2020, in response to the account lodged by Michael James Collison, Objection 1.
[21] Notice of Objections to Amended Form 4 lodged by David Allan Collison on 26 November 2020, in response to the account lodged by Michael James Collison, Objection 68, 96.
[22] Notice of Objections to Amended Form 4 lodged by David Allan Collison on 26 November 2020, in response to the account lodged by Michael James Collison, Objection 157.
[23] Notice of Objections to Amended Form 4 lodged by David Allan Collison on 26 November 2020, in response to the account lodged by Michael James Collison, Objections 165 – 167.
At the hearing on 14 December 2020, some progress was apparently made, but the passing of the accounts was adjourned to a further date so that further amended accounts could be filed. In particular, an Amended Form 4 was required from the Administrator. At the hearing, the issues discussed included the sale of the property in Midland and accounting for it, the sale of shares and cash into the account, mortgage insurance issues, and the broader question as to the solvency of the estate.
The Administrator informed the court on 22 January 2021 that his solicitors had ceased acting for him and that he would endeavour to find new solicitors in order to discharge his obligations under the orders.[24]
[24] Letter from Michael Collison to the Supreme Court dated 22 January 2021.
In January and February 2021, the Administrator provided ongoing updates to the court as to the steps he was taking (although those updates were not always copied to the Objector's solicitor).
May 2021 – Directions Hearing
On 3 May 2021, a lengthy hearing before Registrar Fatharly was held. The Administrator appeared in person. The Objector also appeared and was represented by counsel. Prior to that hearing, the most recent Amended Form 4 accounts filed were those dated 18 November 2020 (referred to at [26] above).
At the conclusion of the hearing, the outstanding issues included the sale of the property in Midland and accounting for it, the sale of shares and cash into the account, mortgage insurance issues, and the solvency of the estate. An amended Form 4 was also still required to be filed by the Administrator.
July 2021 – Directions Hearing
The next hearing took place on 8 July 2021. The Administrator appeared in person and the Objector was represented by counsel. It appears the outstanding issues from the previous hearing were discussed and the parties prepared a heads of agreement in order to resolve those issues as between themselves (although of itself this would not relieve the Administrator of the obligation to account as a matter of law).
The basis of the heads of agreement was that the Administrator pay the Objector the sum of $275,000 in satisfaction of his interest in the estate. Apparently, the Administrator was not willing to sign that instrument without obtaining legal advice.
As there remained a number of outstanding issues and the need for an Amended Form 4 to be filed, the passing of accounts was adjourned sine die and costs were reserved.
April 2022 - Directions Hearing
The matter was relisted by the court for a hearing on 14 April 2022. On 13 April 2022, the Administrator emailed the court advising that he could not attend due to COVID-19 issues. At the hearing, it appears three attempts were made by the court to call the Administrator on his mobile phone, with no answer. There was thus no appearance for the Administrator. The Objector was again represented by counsel.
At the hearing, the Registrar raised with the Objector's counsel three possible ways to move the matter forward. One option was to adjourn the hearing to allow the Administrator a final opportunity to file an Amended Form 4, together with a settlement statement for the property which had been sold and as to the assets of the trust which had not satisfactorily been done to that point. Another option was for the Registrar to decline to pass the amended accounts on the basis of what had been filed. A further option was for the matter to be referred to a Judge.
As matters transpired, the court considered it appropriate to follow the first of these options and issued the Administrator with a Notice of Failure to Comply setting out the breaches of orders made on 3 March 2022. This notice was issued on 14 April 2022. The Registrar also ordered the Administrator to file and serve amended and consolidated accounts with all original vouchers including current details of the trust and details of proposed distributions, to be done by 12 May 2022.[25] The passing of accounts hearing was ordered to be relisted for a directions hearing on 17 May 2022, to be attended by the Administrator and the Objector's counsel by telephone. That hearing was intended to consider certain matters set out in the orders including the Administrator's failures to comply with the orders made on 3 March 2022 (and any reasons for those failures).
[25] Order for Passing of Accounts made by Registrar Fatharly on 14 April 2022.
The Administrator was informed of the above by email sent by the court on 14 April 2022. An email response was received from the Administrator through his partner almost a month later, on 13 May 2022. That response confirms the Administrator received the orders issued on 14 April 2022. The email stated in part:
Sorry for the delay in sending the paperwork, it will hopefully be all sent today. My computer died and I lost 90% of my external hard drive that I have been using for estate matters…
May 2022 – Directions Hearing
There was no appearance by the Administrator at the hearing on 17 May 2022 and no answer by telephone. Counsel once again appeared for the Objector.
Following the hearing, the Administrator was issued with a Notice of Failure to Comply setting out the breaches of the orders made on 3 March 2022 and on 14 April 2022. The Administrator was also ordered to file and serve amended consolidated accounts by 27 May 2022 and was ordered to attend at the hearing scheduled for 3 June 2022 in person.
The Administrator was personally ordered to pay the Objector's costs of 14 April 2022 and 17 May 2022 fixed and payable, without an indemnity from the estate (to be paid by 27 May 2022).[26]
June 2022 – Directions Hearing
[26] Order for Passing of Accounts made by Registrar Fatharly on 17 May 2022.
For the purposes of the hearing on 3 June 2022, the Objector filed a Schedule of Items Agreed in Amended Form 4 which sought to clarify the issues that remained. There was no appearance by the Administrator. Further orders were then made by which this matter was referred to a Judge, either for determination or for referral back to the Registrar with directions if thought fit. The Administrator was again ordered to personally pay the Objector's costs.[27]
February 2023 – Directions Hearing
[27] Notice to Pass Accounts issued by Registrar Fatharly on 3 June 2022.
The Administrator was given notice by the court of the hearing before me, which was scheduled for 3 February 2023. This was undertaken using the email address he had supplied and which he had used to communicate with the court previously.
No communications were received from the Administrator prior to the hearing. There was also no appearance from the Administrator at the hearing.
As there was no appearance for the Administrator on 3 February 2023, I instructed that a call be made in the public area outside the courtroom by one of my associates. This was done at the outset of the hearing and once again before final orders were made.
I was satisfied that Michael Collison had received notice of the hearing and that no communications had been received by the court from him. As matters stand, the last communication received from Michael Collison is the email received from him on 13 May 2022 (through his partner), which I have extracted above at [38] of these reasons.
C. Relevant Legislative Provisions
This court has ample powers to exercise probate jurisdiction, through the grant contained in s 18 of the Supreme Court Act 1935 (WA).
More specifically for present purposes, the duty to pass accounts (and the jurisdiction of the court to conduct such an account), is provided for in s 43(1)(b) of the Administration Act.
Section 43 provides as follows:
43.Inventory and accounts
(1)Every person to whom probate or administration is granted shall be under a duty to –
(a)collect and get in the real and personal estate of the deceased and administer it according to law;
(b)file an inventory of the estate of the deceased, and pass his accounts relating thereto within such time, and from time to time, and in such manner as may be prescribed by the rules or as the Court may order;
(c)when required to do so by the Court, deliver up the grant of probate or administration to the Court.
(2)The order of the Court allowing any account shall be prima facie evidence of the correctness of the same, and shall, after the expiration of 3 years from the date of such order, operate as a release to the person filing the same, except so far as it is shown by some person interested therein that a wilful or fraudulent error, omission, or entry has been made in such account.
The manner in which that jurisdiction is to be exercised is specified in r 37 of the NCP Rules.[28] Rule 37 provides as follows:
[28] TK, PB & LS v Australian Red Cross Society(1989) 1 WAR 335, 340.
37.Executors and administrators to pass accounts
(1)Every executor and administrator (other than the Public Trustee) shall file in the Registry his accounts relating to the estate of the deceased in accordance with Form 4, and shall attend before the Registrar at such time as the Registrar may appoint to have the accounts passed and allowed.
(2)Where there is any balance available for distribution, the executor or administrator shall file a plan of distribution with his accounts.
(3)The accounts and plan of distribution mentioned in this rule shall be filed within 12 months after the grant, or within such further time as a Judge or the Registrar may allow, and shall be verified by the affidavit of the executor or administrator.
(4)Notice in accordance with Form 5 of filing of the accounts of an executor or administrator shall be advertised once, 14 days at least before the day fixed for passing the accounts, in a daily newspaper published in Perth.
(5)In the case of an administrator, notice of the filing and of the appointment to pass his accounts shall also be served on the sureties of the administration bond.
(6)A person wishing to object to the passing of the accounts of an executor or administrator, shall file in the Registry, before the day fixed for the passing of the accounts, a notice of his intention to object, and also an affidavit stating his interest and the nature and grounds of his objection.
(7)Upon the taking of the accounts, the Registrar may make such order as to service upon any of the parties or persons interested as he may think fit.
(8)Any person interested may attend before the Registrar upon the taking of the accounts.
(9)The costs of the accounting party and of any person who has filed a notice of objection under this rule shall be in the discretion of the Registrar.
(10)The Registrar's allowance of an account shall be recorded by a certificate.
As to the power of the court to revoke grants of letters of administration, the position is well settled. The court has inherent jurisdiction, pursuant to s 18 of the Supreme Court Act 1935 (WA) to which I have already referred, in relation to the granting or revoking of letters of administration. There is also an express power to revoke grants of letters of administration, found in s 29(1) of the Administration Act.
I have explained below the principles which guide the exercise of the above provisions and powers.
D. Relevant Principles
As can be seen from r 37(3) itself, the NCP Rules provide that the accounts should be filed by the personal representative within 12 months after the grant is made, or in such further time as a Judge or Registrar allows. It has been recognised that this period is very flexible and is usually extended.[29]
[29] In re Ellis v Ellis [2015] WASC 77 [99] (E M Heenan J).
Indeed, it has been observed that the obligation of a personal representative to file accounts in accordance with the Administration Act is not always insisted upon.[30] When it occurs, it is often done upon the demand of an aggrieved party or at the request of the personal representative.[31] Further, the court retains a discretion whether to order that a personal representative file accounts.[32]
[30] In re Ellis v Ellis [2015] WASC 77 [100] (E M Heenan J).
[31] In re Ellis v Ellis [2015] WASC 77 [100] (E M Heenan J).
[32] Davis v Davis [2014] WASC 395 [47] (Jenkins J), citing Hons v Hons [2010] NSWSC 247 [88] - [89] (Ward J).
As explained by E M Heenan J in In re Ellis v Ellis [2015] WASC 77 [101] – [104], the court's power to require a personal representative to file and pass accounts is 'an important part of the court's armoury to enforce the due administration of estates which may be exercised whenever and as often as the requirements of due administration dictate'.
His Honour noted that it was far more typical in this State that the accounts of an estate are dealt with as between the personal representative and the beneficiaries in a private manner, without formally engaging the process in r 37 of the NCP Rules. The process of passing accounts, even when undertaken through a private process, remains a 'potent power for the supervision of estate administration which, in the preponderance of cases, ensures that due administration and accounting is provided by personal representatives and provided to the satisfaction of beneficiaries without the need for formal passing of accounts'.[33]
[33] In re Ellis v Ellis [2015] WASC 77 [105] (E M Heenan J).
The authorities recognise that failures to comply with a formal order which require an Administrator to account for the estate, may lead to the removal of the representative and the appointment of a replacement.[34]
[34] The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 [23] - [31] (E M Heenan J), and the authorities cited therein. Rogers was followed in, amongst other cases, Smith v Partridge [2018] WASC 128 (Pritchard J). See also Porteous v Rinehart (1998) 19 WAR 495, 504 - 506 (White J) in relation to the removal of an executor.
E M Heenan J traversed the applicable principles in this regard in the authority relied upon by the Objector, The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 [23] - [33]. His Honour noted there are a wide variety of circumstances in which revocation of the grant of letters of administration (or a grant of probate) may be ordered.[35] The procedure can also be initiated by the court on its own motion if required.[36]
[35] The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 [23] (E M Heenan J).
[36] The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 [23] (E M Heenan J).
One broad category in which revocation has been ordered, as described by his Honour, is where revocation is necessary or desirable to ensure the due administration of the estate.[37] For example, where the personal representative is too unwell or has disappeared. In these examples, the 'ultimate purpose of the court is to ensure the due and proper administration of the estate and of the interests of the parties beneficially entitled to it'.[38]
[37] The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 [31] (E M Heenan J).
[38] The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 [23] (E M Heenan J).
The following passages from E M Heenan J's decision in The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 provide further explanation of the principles:
[24]Examples of where a grant of probate or administration will be revoked in order to enhance the due and proper administration of the estate are to be found in the cases. One, already mentioned, is where the grantee becomes incapable of administering the estate - see In the estate of Shaw [1905] P 92; In the estate of Mack [1962] NSWR 1029; In the estate of Robinson (1902) 19 WN (NSW) 158 and Re Campbell (dec) [1961] QWN 45.
[25]Another example is where the grantee has persistently neglected or refused to carry out due administration: In the estate of Mack (supra); Bates v Messner [1967] 1 NSWR 638; Phelan v Booth (1941) 43 WALR 60; Dear v Rich (As Administratrix of the Estate of J H Myslis, dec) (1920) 22 WALR 69 and Mavridos v Mack (1998) 45 NWSLR 80. A third is where the grantee is guilty of gross misconduct: Bates v Messner (supra) and Phelan v Booth. For these and other examples of grounds for revocation see Halsbury's Laws of Australia, vol 24 [395 ‑ 3425].
[26]Dear v Rich (As Administratrix of the Estate of J H Myslis, dec) is of particular relevance because it is a case of revocation on the ground of the failure by the administrator to pass accounts as required by the Administration Act. That was an application made pursuant to the former s 27 of the Administration Act (see now s 29). At 71 McMillan CJ said:
Then comes the question of whether sufficient grounds are shown for revoking the letters of administration. Various complaints are made by the administratrix, but I think it is sufficient to say that she ought to be removed because she has omitted, without any excuse being suggested, to pass the accounts which it is her duty to pass under the Act. Although much time has elapsed she has not up to the present carried out that duty which is imposed on her. I think, therefore, on looking at all the facts in this case, that it is one in which the court ought to revoke the letters of administration which have been granted, but at present I am not in a position to say that administration should be granted to any particular person… I think we ought to do no more at present than revoke the administration, and give liberty for a fresh application to be made on behalf of some person who is ready to be appointed.
[27]Rooth and Northmore JJ agreed.
His Honour then made reference to the decision of Phelan v Booth (1941) 43 WALR 60. In Phelan, the executor had neglected and refused to administer the estate. The court made an order requiring the executor to perform the trusts of the will and bring in an account of her administration. The executor refused to comply, and was attached for contempt and brought into custody. Upon a claim for revocation of the grant of probate, Northmore CJ was in no doubt as to the court's power to revoke or suspend a grant of probate or administration. His Honour held as follows (at 61):
It is not in doubt that a Court which makes a grant of probate or administration has inherent power to revoke or suspend such a grant for just cause, and although, so far as I am aware, there is no recorded case in which that power has been exercised in circumstances exactly similar to the circumstances of this case, I can see no material difference, in principle, between the case of a grant becoming inoperative by reason of the physical or mental incapacity of the executor to administer the estate, and the case of one, who, like the defendant, contumaciously refuses to do so.[39]
[39] The reasoning of Northmore CJ in Phelan v Booth was followed in Porteous v Rinehart (1998) 19 WAR 495 (White J).
E M Heenan J recognised in The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 that the removal of a grantee of representation is a 'very major step' ([32]). The significance of that step is more pronounced, according to his Honour, where the removal is of a representative chosen by the testator as the person considered suitable to perform the task of administration and the person most desired by the testator to perform that role. That is not the situation which faces the court in the present proceedings, of course. Mrs Collison died intestate.
Nonetheless, I respectfully agree with his Honour that the removal of a personal representative, whether chosen by the testator or not, is a matter which the court should approach with caution and the court should be sparing in the exercise of the power.[40]
[40] The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 [32] (E M Heenan J).
To further clarify the point, E M Heenan J described there being a reluctance in the cases to remove a personal representative too readily, without allowing the incumbent an opportunity to repair or remedy any defects and to progress promptly with due administration.[41]
[41] The Estate of Erminia Agnes Rogers v Rogers [2009] WASC 358 [32] (E M Heenan J).
E. Disposition
Whether the grant of letters of administration should be revoked?
This court undoubtedly has jurisdiction to make orders to revoke the grant of the letters of administration to Michael Collison, and to make orders appointing a replacement administrator. As I have indicated above, that jurisdiction must be exercised with caution, and sparingly. The focus of the exercise must be on whether such orders are necessary or desirable to ensure the due administration of the estate and of the interests of the parties beneficially entitled thereto.
Should this jurisdiction be exercised in the present circumstances? As matters stand, it is clear to me that Michael Collison should be relieved of the task of administering the estate and so I accordingly took the view at the conclusion of the hearing that I should exercise the jurisdiction to revoke the grant of letters of administration to Michael Collison. I did so for the following primary reasons:
1.After a period of over 3 ½ years since letters of administration were granted, there remain significant outstanding issues with the handling of the estate, the accounts remain subject to what appear to be substantial objections from David Collison, and the accounts have not been passed.
2.More specifically, no substantive progress appears to have been made in the administration of the estate since October 2021, which is about 15 months ago. The Administrator did not appear at the last three directions hearing before the Registrar, which were held on 14 April 2022, 17 May 2022 and 3 June 2022. Nor did he appear at the hearing before me on 3 February 2023. The last written communication from Michael Collison, received by the court on 13 May 2022, was somewhat dismissive of the processes which he, in his capacity as an administrator, is obliged to follow.
3.The court has not received cogent explanations from the Administrator to justify the continuing delays in administering the estate, nor to quell any concerns regarding the management of the estate. I cannot discount the possibility that the Administrator has been prepared to delay the overall process of this matter in his own interests, rather than having regard to the additional interests of his fellow beneficiary to the estate, his brother, David Collison.
4.There remains a risk, although it is difficult to quantify with any precision, that the value of any distribution from the estate will suffer if further delays are experienced. It may well be that there has been a diminution in this regard already. Indications to date have been that the estate may be insolvent, unless the sizeable superannuation fund is taken into account.
5.The potential financial impact of these delays is one consideration. Another allied concern is the personal stress which such delays can have on the family, including in this case the impact on David Collison. Ordinary human experience tells us that dealing with the aftermath of the death of a family member is difficult enough. Having the added burden of extensive delays in the administration of a family member's estate compounds the stress and anxiety.
6.Finally, I am troubled that Michael Collison has not had the benefit of independent, professional assistance to discharge his duties as the administrator. Early in the proceedings, lawyers had been engaged by Michael. However, he has been unrepresented for some time now. That is not to say that professional assistance is always required. Estates which are not complex can be administered without engaging legal or accounting representatives, depending on the sophistication of the executor or administrator. However, where the administration of the estate gives rise to substantial concerns from the Objector, where significant delays ensue, and where the administrator fails to heed court notices, the absence of professional representation heightens the risk that the executor or administrator may misunderstand their obligations and the duties they must discharge.
For all of these reasons, I was satisfied that orders should be made to revoke the grant of the letters of administration to Michael Collison.[42] Fundamentally, I consider Michael Collison has had more than sufficient time to repair or remedy defects in the preparation of the accounts. Put simply, I do not have confidence that he will complete his duties as the administrator of Mrs Collison's estate in a timely way from this point going forward, regardless of the number of further notices this court may issue to him, or the number of additional exhortations he may be given by Registrars of this court.
[42] Order 1.
It is not necessary that I be satisfied there has been actual misconduct on the part of the incumbent before exercising the power of removal.[43] Indeed, as I have said at the outset, in the absence of Michael Collison appearing before me, I propose to treat the matters raised by David Collison as allegations without making final findings of fact adverse to Michael. The weight of the available material nonetheless indicates that the welfare of the beneficiaries and the estate as a whole would be served by a change in the appointed administrator of this estate.
[43] Smith v Partridge [2018] WASC 128 [27] (Pritchard J).
What is important is that prompt steps now be taken to ascertain the status and value of the assets and liabilities of the estate, to address any areas of uncertainty (such as the manner in which sale proceeds have been accounted for, the status and value of the funds invested, and the status of the superannuation fund) and for a final Form 4 to be prepared for review by a Registrar.
Should a fresh appointment now be made?
As I have already noted, Mrs Collison's two sons are the only persons entitled to any distribution from Mrs Collison's estate pursuant to s 14(1) of the Administration Act. As I have found that Michael Collison should, in effect, be removed as the current administrator of the estate, the question arose whether I should make a fresh appointment order or simply give leave to another party to apply.
As there are only two persons entitled to the distribution of the estate, the view I took was that it was unnecessary for notice to be given to any other person before a fresh appointment was made.
Accordingly, I considered the most efficacious route to be that I should order that David Collison be appointed as a replacement administrator.[44] David Collison has taken an active role in this matter over the past 3½ years and, together with his solicitors, he has a high degree of familiarity with the estate which will hopefully assist in the orderly and efficient finalising of the accounts.
Ancillary orders
[44] Order 2.
I was also satisfied that additional and ancillary orders should be made in support of the above orders. I was satisfied that four main ancillary orders should be made, as explained below.
First, that Michael Collison be required to deliver up to the Probate Registry the original of the grant of the letters of administration for cancellation.[45] This is necessary to ensure Michael Collison cannot deal with the estate hereafter.
[45] Order 3.
Second, that Michael Collison file an affidavit describing his administration of the estate and identifying estate assets which remain unadministered or under his control and all papers, documents, accounts, receipts or other documents relating to estate assets.[46] This will assist to enhance the proper administration of the unadministered estate and to enable a proper accounting to be undertaken. Allied to this and thirdly, that Michael Collison shall appear before a Registrar of this court, on a date to be fixed, for examination by or at the instance of any newly appointed administrator to answer questions on oath or affirmation about the nature and extent of his partial administration and the location of any unadministered estate assets as well as to give an account of the period of his incomplete administration.[47]
[46] Order 4.
[47] Order 5.
Finally, I made a series of costs orders in favour of David Collison and adverse to Michael Collison.[48]
[48] Orders 6 to 8.
F. Conclusion
In the circumstances, I considered it appropriate to make the following orders on 3 February 2023:
1.The grant of the letters of administration of the estate of Diane Carol Collison dated 12 June 2019 to Michael James Collison be and is hereby revoked.
2. David Allan Collison, as the only other person entitled to distribution, be appointed as administrator of the estate of Diane Carol Collison, and the fee payable on application to the probate Registry be waived.
3.By 4.00pm on 10 February 2023, Michael James Collison deliver to the probate Registry of this court the original grant of letters of administration.
4.By 4.00pm on 24 February 2023, Michael James Collison file and serve an affidavit describing his administration of the estate and identifying estate assets and all papers, documents, accounts, receipts, or other documents related to estate assets and liabilities.
5.Michael James Collison shall appear before a Registrar of this court on a date to be fixed for examination on oath or affirmation by or at the instance of the administrator to answer questions about the nature and extent of his administration and the location of assets and liabilities of the estate, and documents relating to them.
6.The costs of David Allan Collison (the Objector) of and incidental to the passing of accounts proceedings, including the costs of today and all costs reserved, be paid by the estate on a trustee basis.
7.Michael James Collison do personally pay the Objector's costs of and incidental to the passing of accounts proceedings, including the Objector's costs of today and all costs reserved, on a party-party basis to be paid to the estate.
8.Michael James Collison do bear his own costs of the passing of accounts proceedings and the costs of today and not be entitled to an indemnity from the estate for such costs.
9.There be liberty to apply.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SAO
Associate to the Honourable Justice Lundberg
10 FEBRUARY 2023
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