In the will of (No 3)
[2010] VSC 140
•9 April 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
PRACTICE COURT
No. 10076 of 2009
IN THE WILL OF EVA ORLOFF (DECEASED)
| PAULETTE JOAN TERRACALL and ELLY STEINLAUF | Plaintiffs |
| v | |
| JOSEPH DENNIS CHURKOVICH | Defendant |
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JUDGE: | ROBSON J | |
WHERE HELD: | Melbourne | |
DATES OF HEARING: | 19 and 22 February, 11 March and 9 April 2010 | |
DATE OF JUDGMENT: | 9 April 2010 | |
CASE MAY BE CITED AS: | In the will of Eva Orloff (No 3) | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 140 | |
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ADMINISTRATION AND PROBATE – renunciation by named executor and trustee of deceased estate - application for grant of letters of administration – notification of all interested parties of right to apply for administration - whether applicant interested in administration of estate – person with largest interest in the estate requesting applicant to be appointed administrator – application granted – court’s discretion in requiring administration guarantee – s 15 and 57 Administration and Probate Act 1958
TRUSTS – renunciation of probate by executor and trustee of deceased estate – renunciation accepted by the court – power of executor and trustee to appoint new trustee under s 41(1) and (5)of the Trustee Act 1958 – appointment of new trustee prior to trusts under estate coming into effect – new trustee duly appointed – s 41 the Trustee Act 1958
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr M A Robins | Nathan Kuperholz |
| For the Defendant | No appearance |
Giggins, Re [1969] VR 208
Korp, In the Matter of [2005] VSC 337
Pierce (deceased), In Re (1886) 12 VLR 733
Shaw v Blanchett [2006] VSC 295
Tratt (Deceased), Re (1980) VR 657
In the Will of Eva Orlof [2010] VSC 48
In the Will of Eva Orloff (No 2) [2010] VSC 83
HIS HONOUR:
I have before me applications:
(a) that letters of administration with the Will dated 25 October 2004 and the codicil dated 7 June 2006 annexed of the estate of Eva Orloff, deceased, be granted to Ms Terracall, the first plaintiff; and
(b) that the court declare that Ms Terracall has been duly appointed as the trustee of the estate pursuant to the will and codicil and the trusts thereunder.
I have previously considered these applications and adjourned them for the reasons given in In the will of Eva Orloff[1] and In the will of Eva Orloff (No 2).[2] The issues that arose in the applications are identified in those reasons. It is unnecessary for me to set out the relevant facts again.
[1][2010] VSC 48.
[2][2010] VSC 83.
Suffice to say, I am now satisfied that proper notice has been given to all the beneficiaries of this application and that all relevant interested parties have been advised of their right to apply for administration if they so wished.
On the previous occasion the matter was before me, I expressed the view that it would be appropriate for clear evidence to be led that the second plaintiff Ms Steinlauf had received independent legal advice of her right to apply for administration and had declined to apply for administration with full knowledge of those rights. Mr Andrew Robert Cox, an Australian Legal Practitioner, has given such advice. He deposes that he has carried on a general litigation practice and in the course of such practice he has acted in matters relating to wills and estates and testamentary trusts. He deposes that he has read all the relevant documents, including my reasons. He says that he held a telephone conference with Ms Steinlauf who is currently in Germany. I will not set out the full extent of the conference, save to say I am satisfied that she was fully informed of her entitlements under the will.
Mr Cox deposes that during his conversation with Ms Steinlauf she expressed to him her instructions as regards her grandmother’s estate which he summarised as follows:
(a) Ms Steinlauf’s first preference is that her mother be appointed administrator of the estate and trustee of the testamentary trust;
(b) Ms Steinlauf does not seek or require that her mother provide any administration bond or guarantee;
(c) Ms Steinlauf supports the arrangements whereby the fund available for the charities be divided as to 25% to each charity as soon as practicable and not kept in trust for an extended period;
(d) If for any reason it is impossible or inappropriate for her mother to be appointed administrator of the estate then Ms Steinlauf would prefer to be appointed as administrator before any trust company, solicitor or other third party were appointed.
In my previous reasons, I set out the terms of the trust in favour of Ms Steinlauf. In Ms Terracall’s affidavit of 2 March 2010, she deposes that if she were to be appointed administrator, then:
As far as my daughter (who will be 22 years of age in July 2010) is concerned, and whom I know to be competent and capable of administering the residuary estate bequeathed to her, it is my intention to administer that residuary estate in conjunction with my daughter and to invest the funds comprising the residuary estate on her behalf and in consultation with her until she attains the age of 25 years. That investment is intended, in the first instance, to comprise a residence for my daughter to own and live in. When my daughter attains 25 years, I intend handing-over the residuary estate to her for her thereafter to formally administer on her own but, in keeping with the very close and loving relationship which my daughter and I have always shared, I will always be there to give her whatever financial and other advice in regard to that residuary estate that she may consider necessary, desirable and appropriate.
In her affidavit of 6 April 2010, Ms Terracall deposes that:
Having regard to the further reasons for judgment and after further discussion and consultation with my daughter, I further undertake that, if I am appointed the administrator (with the will and codicil annexed) of my mother’s estate and if I am appointed the trustee of the trusts created by that will, then I will in accordance with the terms of the trust hand-over the whole of the residuary estate to my daughter immediately the administration is complete and the amounts due in respect of the Eva Orloff Trust (ie the sum of $650,000 to the four named charities), the bequest to Jasmine Lucic and the other bequest to Lucic McGraw have been paid.
Accordingly, as I understand Ms Terracall’s intentions and undertakings, she accepts that under the terms of the testamentary trust Ms Steinlauf is competent and capable of administering the funds and assets which she will receive under the estate and she is therefore entitled to the residuary estate absolutely. In other words, the moneys will not be held on trust for her until she is 25 or some other lesser period as the trustee determines.
Mr Robins of counsel has helpfully reviewed the authorities relating to the appointment of an administrator relevant to these circumstances. He has referred me to In Re Pierce (deceased),[3] Shaw v Blanchett[4] and Re Giggins.[5] In view of his submissions, I accept Ms Terracall is a person interested in the estate under s 15 of the Administration and Probate Act 1958 . In those circumstances and having regard to the view of all the other interested parties, I am prepared to appoint Ms Terracall the administrator of the estate. I do think it is appropriate, however, to record Ms Terracall’s intentions and undertakings in the order under ‘Other matters’ and I note that counsel has agreed to this and is in a position to give the undertakings sought to the court.
[3] (1886) 12 VLR 733.
[4] [2006] VSC 295.
[5] [1969] VR 208.
On the question of the administration guarantee, again Mr Robins has helpfully reviewed the few authorities that there are and referred me to Re Tratt (Deceased)[6] and In the Matter of Korp.[7] I accept the submission of Mr Robins that the court has a discretion on whether or not to require an administration guarantee under s 57 of the Administration and Probate Act 1958. In view of the attitude of the other relevant parties and Ms Terracall’s own financial position, I agree that no guarantee should be required.
[6] (1980) VR 657.
[7] [2005] VSC 337.
I now turn to the issue of the appointment of Ms Terracall as trustee of the trusts created under the Will. Mr Churkovich has exercised his power under s 41(1) and (5) of the Trustee Act 1958 to appoint Ms Terracall as trustee of the trusts created under the Will.
For the reasons expressed in In the will of Eva Orloff,[8] I had reservations that such a power could be exercised before the trusts came into effect. I accept, however, that under s 41(5) of the Trustee Act that Mr Churkovich, as the sole last surviving executor intending to renounce probate, is entitled before renouncing probate to make the appointment that he has. Section 41(5) provides that:
But a sole last surviving executor intending to renounce, or all the executors where they all intend to renounce, shall have and shall be deemed always to have had power, at any time before renouncing probate, to exercise the power of appointment given by this section, or by any corresponding previous enactment, if willing to act for that purpose and without thereby accepting the office of executor.
[8] [2010] VSC 48.
It appears to me, first of all, that sub-section was enlivened by Mr Churkovich indicating his intention to renounce his executorship of the estate. That section also, I think, carries with it the necessary implication that the appointment can be made before the estate has been administered and therefore before the trust funds are to come into being and the trusts have been effected.
Finally on the issue of Mr Churkovich’s renunciation, for reasons previously expressed, in my view he has not been sufficiently intermeddled in the estate to deny him the right to renounce and I now therefore accept the renouncement. In terms of the proposed orders, I grant leave to Mr Churkovich to renounce probate pursuant to the deed of renunciation dated 4 March 2010.
The undertakings that I have inserted in the ‘Other matters’ and also the statement of intention are as follows:
(a) The first plaintiff by her counsel informed the court that in her opinion her daughter Elly Steinlauf the second plaintiff is competent and capable of administering the funds and assets which she will receive under the estate of Eva Orloff deceased.
(b) The first plaintiff by her counsel undertook to the court that if she is appointed the administrator (with the will and codicil annexed) to the estate of Eva Orloff deceased and is declared to have been duly appointed as the trustee of the estate pursuant to the will and codicil and the trusts thereunder:
(i) that instead of maintaining The Eva Orloff Trust for the period of up to 75 years after the death of her mother, she intends to pay out the sum of $650,000 bequested to that trust to the four charitable beneficiaries in equal shares, just as soon as sufficient assets of the estate have been realised and without deduction of any cost charge or expenses; and
(ii) that in view of her opinion that her daughter Elly Steinlauf the second plaintiff is competent and capable of administering the funds and assets which she will receive under the estate of Eva Orloff deceased the first plaintiff will as administrator and trustee, in accordance with the terms of the trust in favour of Elly Steinlauf under the estate, accept, acknowledge and administer the residuary estate on the basis that Elly Steinlauf is entitled to the residuary estate absolutely.
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