In the Estate of KONSTANTINOS ASIMAKOPOULOS (DECEASED)

[2016] SASC 109

SUPREME COURT OF SOUTH AUSTRALIA

(Testamentary Causes Jurisdiction)

In the Estate of KONSTANTINOS ASIMAKOPOULOS (DECEASED)

[2016] SASC 109

Judgment of The Honourable Justice Stanley

28 July 2016

SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - JURISDICTION AND DISCRETION OF COURT - SOUTH AUSTRALIA

SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - ALTERATION AND REVOCATION OF GRANTS

Application for orders seeking removal of the defendant as an executor of the deceased’s estate.

The deceased died on 15 December 1999.  A grant of probate in common form in favour of the plaintiff and defendant of the deceased’s will was made. The estate has not been fully administered.  Three properties remain in the joint names of the deceased and his wife, who predeceased him. 

The plaintiff claims the defendant has refused to cooperate in the finalisation of the estate by executing the transfers of the estate’s real property into the joint names of the plaintiff and the defendant as executors of the estate.  The plaintiff has been unable to contact the defendant at least since August 2015. 

The plaintiff applies for orders removing the defendant as an executor of the deceased’s estate.  In the alternative he seeks an order that the defendant sign all documents and do all such things necessary to transfer, realise, process and otherwise deal with the assets of the estate to effect the distributions of those assets in accordance with the deceased’s will.  He also seeks an order that if the defendant shall refuse or neglect to execute any document necessary to give effect to the administration of the deceased’s estate within 14 days after the same has been tendered to him by or on behalf of the other executor for that purpose, then, and in such case, the Registrar of Probates upon proof by affidavit of such refusal or neglect is appointed to execute on behalf of the defendant and to do all such other acts and things, and to execute all such other documents, as shall be necessary to give force and effect to the administration of the deceased’s estate.  In the further alternative, an order is sought revoking the grant of probate and making a grant of letters of administration with will annexed in favour of the plaintiff and his solicitor. 

Held:

1. The due and proper administration of the estate has been frustrated by the unwillingness of the defendant to cooperate in the bringing in of the deceased’s real estate assets into his estate and by his subsequent disappearance (at [29]).

2. The joint grant of probate in the estate of Konstantinos Asimakopoulos (deceased) granted by this Honourable Court on 15 December 1999 in favour of Xenofon Asimakopoulos and Basilios Asimakopoulos as substitute executors be revoked (at [35]).

3. A new grant of probate in the estate of Konstantinos Asimakopoulos (deceased) be granted to Xenofon Asimakopoulos of 190 Gray Street, Adelaide in the State of South Australia as sole executor of the deceased’s estate (at [35]).

4. The plaintiff have his costs of and incidental to this application which are to be payable from the deceased’s estate (at [35]).

Supreme Court Act 1935 (SA) s 18; Administration and Probate Act 1919 (SA) s 5, s 69, referred to.
In the Estate of Crane (2005) 93 SASR 198; Executor Trustee Australia Ltd v McDougall (2011) 110 SASR 462; Mullins-Trnovsky v Adams & Ors (2014) 121 SASR 155; Tsagouris & Anor v Bellairs & Ors [2010] SASC 147; Rutter v McCusker [2008] NSWSC 1289; In the Estate of Stuart (2009) 106 SASR 39; Batters v Messner (1967) 67 SR (NSW) 187; Mavrideros v Mack (1998) 45 NSWLR 80, considered.

In the Estate of KONSTANTINOS ASIMAKOPOULOS (DECEASED)
[2016] SASC 109

Testamentary Causes Jurisdiction

STANLEY J: 

Introduction

1. The plaintiff, Xenofon Asimakopoulos, and the defendant, Basilios Asimakopoulos, are the substituted executors[1] and residual beneficiaries of the estate of their late father, Konstantinos Asimakopoulos (deceased).  The plaintiff claims that by reason of the conduct of the defendant, the due administration of the estate has been frustrated. 

   [1]    The deceased by his will appointed his wife as his executrix unless she failed to survive him in which case he appointed his sons, the plaintiff and the defendant, to be his executors. 

2. The plaintiff applies for orders removing the defendant as an executor of the deceased’s estate.  In the alternative he seeks an order that the defendant sign all documents and do all such things necessary to transfer, realise, process and otherwise deal with the assets of the estate to effect the distribution of those assets in accordance with the deceased’s will.  He also seeks an order that if the defendant shall refuse or neglect to execute any document necessary to give effect to the administration of the deceased’s estate within 14 days after the same has been tendered to him by or on behalf of the other executor for that purpose, then, and in such case, the Registrar of Probates upon proof by affidavit of such refusal or neglect is appointed to execute on behalf of the defendant and to do all such other acts and things, and to execute all such other documents, as shall be necessary to give force and effect to the administration of the deceased’s estate.  In the further alternative, an order is sought revoking the grant of probate and making a grant of letters of administration with will annexed in favour of the plaintiff and Peter Austin Rhodes Scragg. 

3. The deceased died on 24 September 1999.  A grant of probate in common form in favour of the plaintiff and defendant of the deceased’s will dated 11 January 1991 was made on 15 December 1999.

4. Pursuant to the will the plaintiff and the defendant as the residuary beneficiaries of the estate take the estate in equal shares as tenants in common absolutely. 

5. The estate has not been fully administered.  Three properties remain in the joint names of the deceased and his wife, who predeceased him.  It appears that although the deceased’s wife predeceased him, no-one had registered her death on the titles.

6. The plaintiff wishes to finalise the administration of the estate.  He claims that he is frustrated from doing so by a lack of cooperation from the defendant.  The whereabouts of the defendant is difficult to ascertain.  The plaintiff claims the defendant has refused to cooperate in the finalisation of the estate by executing the transfers of the estate’s real property into the joint names of the plaintiff and the defendant as executors of the estate.  The plaintiff has been unable to contact the defendant at least since August 2015.  This also has prevented the finalisation of the estate. 

7. On the hearing of the application I received in evidence affidavits of the plaintiff affirmed 14 August 2015 and 31 March 2016 and affidavits of his solicitor, Mr Behar, affirmed 1 June 2016 and 28 June 2016. 

   Non-appearance of the defendant

8. The plaintiff instituted these proceedings on 18 August 2015.  On 28 August 2015 the plaintiff’s solicitors engaged process servers to serve a copy of the summons on the defendant.  Those process servers were unable to locate the defendant at his last known residence being 74 Overland Road, Croydon Park in the said State. 

9. It appears that a process server attended at that address on 28 August 2015 at 1 p.m.  At the time there appeared to be no-one present at the property.  The process server re-attended the following day at approximately 1:10 p.m.  Again, no-one appeared to be present at the property.  The agent spoke to a tenant in Unit 2, 76 Overland Road, Croydon Park, who said that the defendant had moved out of the property at 74 Overland Road, approximately two months earlier and there was no forwarding address.

10. Pursuant to r 85(3) of the Probate Rules 2015 (SA) (Probate Rules) the Court made an order for substituted service of the proceedings on 4 May 2016.  Substituted service was effected in accordance with the order.  On 17 May 2016 a copy of the originating summons and amended summons together with the supporting affidavits of the plaintiff affirmed 14 August 2015 and 31 March 2016 together with a copy of the plaintiff’s interlocutory application for substituted service were mailed to the defendant’s last known address at 74 Overland Road, Croydon Park in the State of South Australia.  On 18 May 2016 those documents were also emailed to the defendant at his last known email address.  On 18 May 2016 those documents were also sent by registered post to the defendant’s last known address. 

11. On 14 June 2016 a letter was sent to the defendant’s last known address enclosing a copy of the order setting the matter down for hearing.  On that same day that letter was emailed to the defendant at his last known email address.  On the same day a copy of that letter was sent by registered post to the defendant’s last known address.

12. There was no appearance by the defendant on the hearing of this application.  Having been satisfied that substituted service had been effected on the defendant and that he had been notified of the hearing date, I proceeded to hear the application in his absence.

    Evidence of the difficulties in the administration of the deceased’s estate

13. The plaintiff deposes to his appointment as one of the substituted executors named in the will of the deceased.  He deposes to being a recipient of the grant of probate made in respect of that will.  He says there are three remaining pieces of real estate which are assets of the estate.  They are a house property at 190 Gray Street, Adelaide, a house property at 74 Overland Road, Croydon Park and units at 76 Overland Road, Croydon Park.  The units are currently being rented.  The plaintiff deposes to having instructed his solicitors to write to the defendant and request that he, in his capacity as an executor of the estate, execute the transfers of the estate’s real property into the joint names of the plaintiff and the defendant as executors of the deceased’s estate.

14. On 4 November 2014 the plaintiff’s solicitor wrote by email to the defendant in the following terms:

    Dear Sir

    We have prepared documents which we intend lodging with the Lands Titles Office noting the death of your mother and the grant of probate by the Supreme Court to you and your brother in relation to your late father’s estate.

    Upon the registration of those documents at the LTO you will both be the registered proprietors of the three titles.

15. On the same day the defendant replied in the following terms:

    You have not received any instructions from me to act for me regarding my fathers estate, if you are receiving instructions from my brother on behalf of me, then they are without my consent, further more after talking to my brother on the 4/11/2014 at 5 p.m. he has told me that you have not communicated my offer I detailed to you in a email on the 10/10/14 and he was completely unaware of any counter offer to settle and divide my fathers estate.  Can you please clarify this with me as I wish to settle and divide the estate between my self and brother. 

16. On 12 November 2014 the plaintiff’s solicitor wrote to the defendant in the following terms:

    You, as the executor of your late parents’ estates, are required to administer them.  As part of that administration you are required to effect the transfer the ownership of their real estate into the joint names of you and your brother.  You must execute the attached documents.  

    If you do not do so your brother can apply to have you removed as an executor of the estate.  If that happens he alone will have the administration of the estate.  Please arrange an appointment to execute the documents. 

    If they have not been executed within the next 7 days your brother will apply to have you removed as an executor. 

    If you do attend you will need to have your driver’s license or some other similar identification. 

    We await your reply.

17. On 20 November 2014 the plaintiff’s solicitor again sent an email to the defendant in the following terms:

    We note we have not had a reply from you to our last email. 

    Please inform us immediately if you are going to cooperate in the administration of your late fathers estate. 

    Please reply by return. 

    If you do not reply within 7 days we will take steps to resolve the issue without your involvement. 

18. On 11 May 2015 the plaintiff’s solicitor sent an email to the defendant in the following terms:

    We refer to our previous requests made on behalf of your brother to administer your father’s estate by transferring the properties on to the joint names of the executors, being your brother and you. 

    We note you have not attended at our office to sign the transfers we have prepared to carry that into effect. 

    Please be advised that we have been instructed by your brother to institute proceedings in the Supreme Court seeking orders that you be removed as one of the executors of your late father’s estate unless you attend our office within the next seven days to sign the transfers.  If we have to institute proceedings your brother will claim the costs of those proceedings to be paid out of your share of the estate.  Those costs will be significant.  The Court’s issuing fee alone is $2,262. 

    Accordingly, please contact our office during normal business hours to arrange a time to sign the transfers. 

    We await your prompt reply. 

19. There has been no response from the defendant.  He has not executed the transfers. 

20. The plaintiff deposes to not having had much of a relationship with the defendant since the death of their father.  He has experienced difficulty in finding where the defendant currently lives.  He deposes to having made enquiries within the family and of other relatives as the defendant’s current whereabouts but has been unable to locate him.  The plaintiff deposes to attending at the units at 76 Overland Road, Croydon Park, on a weekly basis.  He notes that mail delivered to the defendant’s last known address of 74 Overland Road, Croydon Park, appears to have been retrieved periodically.  He deposes to the fact that emails sent to the defendant’s last known email address have not been returned as undelivered.

    Jurisdiction to revoke probate

21. Section 18 of the Supreme Court Act 1935 (SA) provides that this Court, in relation to probate and letters of administration, has the like voluntary and contentious jurisdiction in relation to the granting or revoking of probate of wills, and administration of the effects of deceased persons, as was vested in or exercisable by the Court of Probate established in England under the Court of Probate Act 1857 (Eng), as amended by the Court of Probate Act 1858 (Eng), together with full authority to hear and determine all questions relating to testamentary causes and matters.[2]  That power includes the power to revoke grants of probate.[3]  Revocation of probate is the appropriate order where it is necessary, in the interests of the proper administration of the estate, to remove an executor.[4]  In those circumstances it has been the long-established practice of the Court to issue a new grant.[5] 

    [2]    In the Estate of Crane [2005] SASC 379, (2005) 93 SASR 198.

    [3]    Administration and Probate Act 1919 (SA) s 5.

    [4]    Executor Trustee Australia Ltd v McDougall [2011] SASC 140 at [19], (2011) 110 SASR 462 at 467.

    [5]    Mullins-Trnovksy v Adams & Ors [2014] SASC 116 at [7], (2014) 121 SASR 155 at 157.

22. Where, as is the case here, a grant of probate has been made in common form, it is inherently revocable.[6]   However, the fact that a grant of probate in common form is revocable does not mean that it should be readily revoked.  The appointment of a particular executor by a testator must not be lightly set aside.[7]  Before the Court will exercise the power to revoke a grant of probate for the purposes of removing an executor, it is necessary to show that the grant has become ineffective and useless or that it obstructs the proper administration of the estate.[8]  In Re Estate of Crane[9] Besanko J identified nine well accepted grounds for the revocation of a grant of probate:[10]

    [6]    Tsagouris & Anor v Bellairs & Ors [2010] SASC 147 at [35].

    [7]    Rutter v McCusker [2008] NSWSC 1289 at [24].

    [8]    Executor Trustee Australia Ltd v McDougall [2011] SASC 140 at [20], (2011) 110 SASR 462 at 467.

    [9] [2005] SASC 379, (2005) 93 SASR 198.

    [10] [2005] SASC 379 at [25], (2005) 93 SASR 198 at 204.

    There are a large number of English cases where the Court of Probate has passed over an executor or revoked a grant of probate.  That has been done on various grounds of which the following are examples:

    1.The executor was of bad character, had been convicted of manslaughter in relation to the death of the testator and was in prison: In Estate of S [1968] P 302.

    2.The executor had neglected his duties: In the Estate of Potticary [1927] P 202.

    3.The executor had intermeddled in the estate and refused to take a grant: In Estate of Biggs [1966] P 118.

    4.The executor was absent abroad: In Goods of Taylor [1892] P 90.

    5.The executor was suffering from ill-health: Re Galbraith (dec’d) [1951] P 422.

    6.The executor was of unsound mind: In Goods of Atherton [1892] P 104.

    7.The executor was not competent to take probate: In Goods of Stewart (1872‑75) LR 3 PD 244.

    8.The executor had disappeared: Re Sawtell (1862) 2 Sw and Tr 448.

    9.The estate was insolvent: Ex parte Leguia; In Estate of Ashworth [1934] P 80.

23. In In the Estate of Stuart[11] Gray J held that the Court may revoke a grant of probate when the due administration of the estate is frustrated by the relationship of the executors.  Gray J referred to the guiding principle as stated in In the Goods of Loveday.[12]  Loveday concerned an application where the administrator of an estate could not be found.  It was said in that case that in exercising the jurisdiction to revoke a grant of administration a court must have regard to the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate: 

    … After all, the real object which the Court must always keep in view is the due and proper administration of the estate and the interests of the parties beneficially entitled thereto; and I can see no good reason why the Court should not take fresh action in regard to an estate where it is made clear that its previous grant has turned out abortive or inefficient.

    [11] [2009] SASC 399, (2009) 106 SASR 39.

    [12] [1900] P 154 at 156.

24. This statement of principle was cited with approval by the New South Wales Court of Appeal in Bates v Messner.[13]It has been applied by this Court in In the Estate of Crane.[14]

    [13] (1967) 67 SR (NSW) 187.

    [14] [2005] SASC 379, (2005) 93 SASR 198.

25. Bates v Messner[15] involved an executor of an estate who had been granted probate, and who for six years had done almost nothing to ensure the proper administration of the estate.  The executor disappeared and it was discovered there had been misconduct on his part.  Aspery JA said:[16]

    I shall make no attempt to define all circumstances which may attract the exercise of the court’s jurisdiction, but where circumstances clearly appear to have arisen after a grant of probate which impel the court to the firm conclusion that the due and proper administration of an estate has either been put in jeopardy or has been prevented either by reason of acts or omissions on the part of the executor, or by virtue of matters personal to him, for example, mental infirmity, ill health, or by virtue of the proof of other matters which establish that the executor is not a fit and proper person to carry out the duties which he has sworn to the court that he will perform, the court may exercise its inherent jurisdiction to revoke the grant.

    [15] (1967) 67 SR (NSW) 187.

    [16] (1967) 67 SR (NSW) 187 at 190-191.

1. That statement of principle was cited with approval by the New South Wales Court of Appeal in Mavrideros v Mack[17] and in this Court in In the Estate of Stuart[18] and in Mullins-Trnovsky & Ors v Adams & Ors.[19]

   [17] (1998) 45 NSWLR 80.

   [18] [2009] SASC 399, (2009) 106 SASR 39.

   [19] [2014] SASC 116 (2014), 121 SASR 155.

2. In Mullins-Trnovsky v Adams[20] Gray J said:[21]

   The courts have identified several circumstances in which it is appropriate to revoke a grant of probate or pass over an executor. The executors who were the subject of those decisions were variously in prison, in neglect of their duties, had refused to take a grant of probate, had disappeared or were otherwise absent abroad, or were otherwise not physically or mentally capable of taking probate.

   [Citations omitted].

   [20] [2014] SASC 116, (2014) 121 SASR 155.

   [21] [2014] SASC 116 at [16], (2014) 121 SASR 155 at 160.

3. He concluded that the guiding principle in determining whether to revoke a grant of probate is ensuring the due and proper administration of the estate in the interests of the parties beneficially entitled thereto.[22] 

   [22] [2014] SASC 116 at [18], (2014) 121 SASR 155 at 161.

   Application of the principles to this case

4. On the evidence before me I am satisfied that the plaintiff has demonstrated that the due and proper administration of the estate has been frustrated by the unwillingness of the defendant to cooperate in the bringing in of the deceased’s real estate assets into his estate and by his subsequent disappearance.  As a result, the deceased’s estate, in particular its real estate, cannot be called in, dealt with, realised or administered without joint consent and the cooperation of the defendant by transmitting the deceased’s interest into the names of the plaintiff and the defendant as executors of the estate.  It appears the relationship between the plaintiff and the defendant has broken down to the extent where contact has been severed.  I am satisfied that the defendant’s conduct and omissions are indicative of an intention to abandon his obligations as executor with the consequence that the due administration of the deceased’s estate has been frustrated.  More than 15 years have elapsed since the Court made the grant of probate.  The administration of the estate has not been completed despite the significant time which has passed since probate was granted.  The administration of the estate cannot be finalised without the consent and cooperation of the plaintiff and the defendant.  The plaintiff’s interest as a beneficiary is prejudiced by the inability to realise, dispose or otherwise convert the real estate assets held by the deceased.  Accordingly, the testamentary intention of the deceased to confer a benefit which is equal and absolute to the plaintiff and the defendant has not been and cannot be fulfilled in the present circumstances.  The estate is open to incurring liabilities and being sued.  It shall remain so until the administration of the estate is finalised.  The defendant’s apparent abandonment of his duties as an executor and the plaintiff’s inability to deal with the estate on his own, exposes the deceased’s estate to the risk of loss.

   Remedy

5. In this situation, where I am satisfied that the circumstances concerning the defendant, particularly his conduct and omissions in the discharge of his duties as executor and his subsequent disappearance, requires the Court to act.  The issue is what remedy the Court should adopt.

6. In Mullins-Trnovsky v Adams[23] Gray J considered whether the Court’s inherent jurisdiction over probate was sufficiently broad to allow the removal of an executor without revoking a grant of probate.  He concluded that it was.  Nonetheless, while he found that the Court has the power to amend a grant of probate in that way, he concluded that there are compelling reasons to continue the traditional approach of revoking the grant of probate and issuing a fresh grant as a matter of practice.  He said:[24]

   The authorities and legislative provisions cited above demonstrate that the court’s inherent jurisdiction over probate matters and power to vary its own orders is sufficiently broad to allow the removal of an executor without revoking a grant of probate. The essential subject matter is the proper administration of the estate. The revocation of a grant of probate is one of the orders the court may make to facilitate the proper administration of an estate. The reason that the revocation of a grant of probate is synonymous with the removal of an executor in many of the decided cases is that there was no meaningful alternative order available to the court. It is to be noted in this regard that a court should only revoke a grant of probate where there is no other appropriate remedy.

   The authorities following Bates v Messner establish the principles that govern when a court will revoke a grant of probate and when an executor’s conduct or circumstances warrant his or her removal from the position. They do not, however, address alternative forms of order or the situation in which multiple executors have been appointed. In my view, this line of authorities does not confine the court’s power to make orders in the manner suggested by Young CJ in Eq in Morgan v MacRae.

   …

   Although the court has the power to amend a grant of probate to remove an executor, there are compelling reasons to continue the traditional approach of revoking the grant of probate and issuing a fresh grant as a matter of practice.

   Executors take their oaths on the basis that the estate would be administered by all the executors to whom probate is granted. The taking of the oath is a serious undertaking and executors are officers of the court. Even in circumstances where the remaining executors consent to the removal of one or more executors, in my view, it is important that they take a new oath affirming that they will dutifully administer the estate notwithstanding the change in circumstances.

   Issuing a fresh grant would also be easier than amending the existing grant, which would involve the grant being manually amended. Making a fresh grant obviates the need to make separate vesting orders for the property of the estate, and provides the remaining executors with a new set of documents which they can use to administer the estate without the difficulties that may arise when engaging with organisations which may not accept on its face a copy of a manually amended document. By way of example, it is the practice of the Probate Registry of this Court to only re-seal a grant of probate from another State that this Court would itself have sealed. If other States or countries do not recognise the validity of an amended grant of probate, this would put the executors at a costly inconvenience when attempting to transact business in other jurisdictions. Further, the cost of amending the grant is likely to be just as expensive, if not more expensive, than the cost of revoking the grant and issuing a fresh grant.

   [Citations omitted].

   [23] [2014] SASC 116, (2014) 121 SASR 155.

   [24] [2014] SASC 116 at [30] – [34], (2014) 121 SASR 155 at 164 - 165.

7. A further question arises as to whether, if the grant of probate is revoked, the appropriate course for the Court to adopt would be to order the issue of letters of administration with will annexed and to appoint the plaintiff and Mr Scragg as administrators of the estate so as to afford some protection to the position of the defendant as a beneficiary of the estate by virtue of an independent person acting as administrator.

8. I have considered the appropriateness of this course. Ultimately I have concluded that the appropriate order to be made by the Court is to revoke the existing grant of probate and to issue a fresh grant in favour of the plaintiff. While there has been an apparent breakdown in the relationship between the plaintiff and the defendant, there is no reason to consider that the plaintiff is unable to properly discharge his duties as executor of the deceased’s estate fairly and in accordance with his fiduciary obligations without prejudice to the interests of the defendant as beneficiary. If necessary, he could apply to the Court for directions and advice pursuant to s 69 of the Administration and Probate Act 1919 (SA).

9. In the circumstances I do not consider it necessary to make any of the orders sought by the plaintiff in the alternative to the primary relief he seeks. 

   Conclusion

10. I would make the following orders:

    1That the joint grant of probate in the estate of Konstantinos Asimakopoulos (deceased) granted by this Honourable Court on 15 December 1999 in favour of Xenofon Asimakopoulos and Basilios Asimakopoulos as substitute executors be revoked.

    2That a new grant of probate in the estate of Konstantinos Asimakopoulos (deceased) be granted to Xenofon Asimakopoulos of 190 Gray Street, Adelaide in the State of South Australia as sole executor of the deceased’s estate.

    3That the plaintiff have his costs of and incidental to this application which are to be payable from the deceased’s estate.