Kovacs v Public Trustee - [2006] SASC 1

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction)
In the Estate of HELENE LABADY
KOVACS v PUBLIC TRUSTEE
Ruling of The Honourable Justice Debelle
9 January 2006
WILLS, PROBATE AND LETTERS OF ADMINISTRATION - PROBATE AND LETTERS OF ADMINISTRATION - GRANTS OF PROBATE AND LETTERS OF ADMINISTRATION
Probate action - contest as to which of deceased's wills was the true will - proceedings compromised by plaintiff and defendant - terms of compromise - orders pronouncing for the 1995 will made by consent.
Public Trustee Act 1995 s 5(3), referred to.
Bull v Fulton (1942) 66 CLR 295; In re King [1917] 2 Ch 420; In re Kuhl [1933] SASR 394; In re McCaffrey [1938] SASR 403; In re Munn [1943] SASR 304; Oakes v Uzzell [1932] P 19; Palin v Ponting [1930] P 185; Timbury v Coffee (1941) 66 CLR 277, considered.

In the Estate of HELENE LABADY
KOVACS v PUBLIC TRUSTEE
[2006] SASC 1
Civil:

DEBELLE J. In this action there is a contest as to which of two wills executed by the deceased Helene Labady, who died on 27 February 1999, should be admitted to probate.
The plaintiff claims a grant of probate in solemn form of a will of the deceased made on 23 March 1995 (“the 1995 will”).
The defendant Public Trustee has filed a defence and counterclaim. In the counterclaim Public Trustee seeks a grant of probate in solemn form in respect of a will made by the deceased on 6 December 1994 (“the 1994 will”). In the defence Public Trustee pleads that the deceased was not of sound mind, memory or understanding at the time that she gave instructions for the preparation of the 1995 will nor at the time of the execution of that will. Public Trustee also alleges that the execution of the 1995 will was obtained by the fraud of the plaintiff. In the counterclaim Public Trustee pleads the due execution of the 1994 will and contends that a grant of probate in solemn form should be made in respect of that will.
The deceased died a widow. Her husband had pre‑deceased her, dying on 11 June 1975. She did not re‑marry.
The deceased and her husband did not have any natural born children. They adopted three children, two sons and a daughter. The daughter is Elizabeth Elaine Labady (“Betty Labady”). On 6 October 1998 Public Trustee was appointed administrator of the affairs of Betty Labady by the Guardianship Board pursuant to the Guardianship and Administration Act 1993. Public Trustee continues to hold that position.
On 6 December 1994 Public Trustee was appointed by the deceased to administer her affairs by virtue of an enduring power of attorney and continued to act pursuant to that power until the deceased died on 27 February 1999.
Public Trustee was also appointed sole executor and trustee of the 1994 will of the deceased, which was executed on 6 December 1994. By that will the deceased made a bequest of $2,000 to a woman Marjorie Lytwyn and gave the rest of her estate to Betty Labady.
The plaintiff claims to have befriended the deceased. On 23 February 1995 the deceased executed the 1995 will. In that will the deceased appointed the plaintiff the sole executor and trustee of the will. The plaintiff is also the only beneficiary named in the will, save for a gift over in favour of the Royal Society for the Blind of South Australia Inc in the event that the plaintiff did not survive the deceased for more than one calendar month. The plaintiff did survive the deceased for more than one calendar month. Betty Labady did not receive any bequest under the 1995 will.
The two sons of the deceased did not receive any bequest under either will. They have given notice of an intention to make a claim under the Inheritance (Family Provision) Act 1972.
In order to obtain a grant of probate in solemn form, the plaintiff as the party propounding the will must call at least one of the attesting witnesses to prove due execution: In re Munn [1943] SASR 304; Oakes v Uzzell [1932] P 19. The evidence of the attesting witness may be given by affidavit: Palin v Ponting [1930] P 185. One of the attesting witnesses has sworn an affidavit proving due execution of the 1995 will. Proof of due execution gives rise to a presumption that the testator had testamentary capacity and knew and approved of the contents of the will: Timbury v Coffee (1941) 66 CLR 277 at 283; Bull v Fulton (1942) 66 CLR 295 at 343; In re McCaffrey [1938] SASR 403 at 407.
The parties to this action have agreed to compromise the action subject to the approval of the Court. They have agreed
1.that a grant of probate in solemn form be made in respect to the 1995 will;
2.(a) that the costs of the parties as between solicitor and client be paid out of the estate of the said deceased as if they were testamentary expenses;
(b)the sum of $2,000 be paid to Marjorie Lytwyn; and
(c)the balance of said estate then remaining be divided and paid equally between the plaintiff and Betty Labady subject to their bearing in equal shares the burden of any claim brought against the said estate by the two adopted sons of the deceased or either of them, pursuant to the provisions of the Inheritance (Family Provision) Act 1972.
The parties have agreed that the compromise be made a rule of Court. Public Trustee consents to this order on behalf of Betty Labady. In this respect Public Trustee relies on and accepts the advice of counsel as to the risks of litigation inherent in prosecuting the defence and counterclaim. The opinion has been proved. It is unnecessary to set out the terms of the opinion or summarise the reasons why the advice has been given to Public Trustee to compromise the claim. Having read the opinion, I am satisfied that Public Trustee has sound reasons for accepting the advice.
The estate of the deceased is small. It consists of the sum of $121,000 held by Public Trustee. That sum represents the proceeds of the sale of the plaintiff’s house after expenditure of certain of the proceeds for the benefit of the deceased during her lifetime. The fact that the estate is small is a compelling reason to encourage the parties not to waste it by incurring costs in litigation. There is a real likelihood that such costs would erode the whole or a substantial part of the estate. Those who are named as beneficiaries in each will have consented to the compromise.
Not all of the potential beneficiaries under both the 1994 will and the 1995 will have consented to the compromise. A compromise does not bind those who have not assented to it: In re Kuhl [1933] SASR 394 at 402. The grant of probate made as part of that compromise can be set aside at the suit of persons not party to the compromise, even if they have notice of the proceedings: In re King [1917] 2 Ch 420 at 430. Thus, the two brothers are not bound by the compromise.
Given the consent of all of the beneficiaries named in each will, it is appropriate to approve the compromise and to make orders to give effect to it.
Public Trustee is both the administrator of the estate of Betty Labady and was named as sole executor of the 1994 will. I am satisfied that Public Trustee has not had a conflict of interest while acting in both of those capacities. The only financial interest of Public Trustee is to receive a commission for acting as executor and that interest can only be realised if the 1994 will is the will admitted to probate as the true will of the deceased. There is no other conflict between Public Trustee acting in each capacity. The interest as potential executor did not conflict with the interest of Betty Labady as a beneficiary under the will of the deceased. It is appropriate, therefore, to make orders pursuant to s 5(3) of Public Trustee Act 1995 approving the manner in which Public Trustee has acted in both capacities.
For these reasons there will be orders as follows:
1.Pronouncing for the force and validity of the last will and testament of Helene Labady late of 106 Trimmer Parade Seaton in the State of South Australia deceased being the script bearing date the 23rd day of March 1995 referred to in the affidavit of scripts of the plaintiff filed in this action and propounded on behalf of the plaintiff.
2.That the conduct of Public Trustee in acting in this action
(i) in Public Trustee’s capacity as the executor appointed by the will dated 6th December 1994 of Helene Labady (named in the said will as Helena Labady) late of 106 Trimmer Parade Seaton in the State of South Australia deceased and
(ii) in Public Trustee’s capacity as the administrator of the affairs of Elizabeth Helene Labady the adopted daughter of the said Helene Labady and the principal devisee and legatee of the said will and a person under disability and whose affairs are (and have been since 5th August 1998) administered by Public Trustee pursuant to an order of the Guardianship Board made on that day and a further order of the said board made on 25th October 2004
be approved.
3.The terms of compromise annexed hereto and marked “A” are approved and made a rule of court.
4.That the plaintiff’s and the defendant’s costs of action be taxed or agreed as between solicitor and client and paid out of the estate of the deceased.