Lord v Firns
[2000] NSWSC 1021
•16 October 2000
CITATION: Lord v Firns; Estate of Ronald Douglas Firns [2000] NSWSC 1021 CURRENT JURISDICTION: Equity Division
Probate ListFILE NUMBER(S): SC 109217/98 HEARING DATE(S): 09/10/2000 JUDGMENT DATE: 16 October 2000 PARTIES :
John Frederick Lord and David John Kerr (P)
Kenneth John Firns (D1)
Ronald Douglas Firns (Junior)(D2)JUDGMENT OF: Young J
COUNSEL : C Bevan (Administrators)
G Mackey (Solicitor) (Persons subpoenaed)SOLICITORS: Turner Freeman (Administrators)
Tzovaras Legal (Persons subpoenaed)CATCHWORDS: SUCCESSION [263]- Getting in the estate- Subpoenas usually inappropriate method of discovering assets. LEGISLATION CITED: Conveyancing Act 1919, s 153
Trustee Act 1925, ss 5, 63CASES CITED: Arhill Pty Ltd v General Terminal Co Pty Ltd (1990) 23 NSWLR 545
Elder v Carter (1890) 25 QBD 194
Murphy v Murphy [1999] 1 WLR 282
National Employers Mutual General Association Ltd v Waind [1978] 1 NSWLR 372
P v T Ltd [1997] 1 WLR 1309
Vandyke v Vandyke (1976) 12 ALR 621DECISION: See paras 15 and 27.
THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
PROBATE LIST
YOUNG J
MONDAY 16 OCTOBER 2000
109217/98 - LORD v FIRNS; ESTATE OF RONALD DOUGLAS FIRNS
JUDGMENT
1 HIS HONOUR: I have before me four applications in these proceedings, plus an allied application in Equity proceedings 3480/99 which will be the subject of separate reasons. These proceedings were a contested application for probate in the estate of the late Ronald Douglas Firns. The dispute was not as to the validity of the will, but rather as to who should administer the estate. The proceedings terminated in an agreement that two A-List liquidators be appointed administrators of the will cta.
2 In due course, a grant was made on 8 May 2000.
3 The administrators correctly say that they have a duty to get in the assets of the estate. They say that they have made enquiries and they have reasonable grounds to believe that the estate has assets in Papua New Guinea and Hong Kong, at least some of which have been irregularly transferred out of the name of the deceased.
4 In order to obtain these assets, the administrators wish to issue subpoenas. Motion A (filed on 4 September 2000) is an application to authorise subpoenas to be issued to people in Papua New Guinea and Hong Kong. Application B is to call on subpoenas issued locally to get this information.
5 Motion C (filed on 5 October 2000) is a motion by the person served locally with the subpoenas to set aside the subpoenas. Motion D (filed on 9 October 2000) is a motion by the administrators to seek directions. What I will call Motion E is in the Equity proceedings which are Family Provision Act proceedings in relation to the estate.
6 Motions A and C and the subpoenas that are called on in application B really raise the same point. That is, whether it is premature or procedurally bad to have such subpoenas issued in this suit at this time.
7 Mr Bevan, for the administrators, says that there is a duty on the administrators to get in the assets. They have a report from a Mr Richard Hill, who is a former business associate of the deceased. His report states that there are assets of the deceased in Papua New Guinea and particularly that there was a parcel of land in Port Moresby which was transferred out of the name of the deceased to another person after the deceased's death, seemingly by means of a transfer which had been signed before the deceased's death.
8 Assuming the law of Papua New Guinea is the same as the law in New South Wales, that transfer would have ceased to have any validity upon the death of the transferor: see Vandyke v Vandyke (1976) 12 ALR 621.
9 Mr Mackey for the persons subpoenaed, says that whilst the administrators may have the duty to get in the assets, they cannot issue subpoenas in the present suit for two reasons:
(b) because administrators cannot seek to get information about the assets merely by issuing subpoenas in the proceedings which resulted in them getting a grant.
(a) because the suit is at an end, the grant having been made, there is no live issue to contest, and
10 I agree with both submissions.
11 It must be remembered that although there has been some relaxation of the rules regarding the use of subpoenas in the last 20 years or so, subpoenas remain a tool for obtaining documents for forensic use in court proceedings. There must at least be pending the hearing of a motion in proceedings before a subpoena may be issued.
12 Subpoenas are not a substitute for discovery; see for example Elder v Carter (1890) 25 QBD 194 and National Employers Mutual General Association Limited v Waind [1978] 1 NSWLR 372.
13 There is a curial process available for administrators if they find that non-curial enquiries are insufficient, that is, the suit for discovery in equity: see P v T Limited [1997] 1 WLR 1309 and Murphy v Murphy [1999] 1 WLR 282.
14 Mr Bevan cited Arhill Pty Limited v General Terminal Co Pty Limited (1990) 23 NSWLR 545 with respect to Motion A. However, that case, in the current context does not take the matter any further.
15 Accordingly I must dismiss Motion A of the administrators of 4 September 2000. On the defendants’ notice of motion, Motion C filed 5 October 2000, I make orders 1, 2 and 3 setting aside the subpoenas.
16 Motion D raises separate issues. Although it is said to be a motion for directions, it in fact asks for various declarations as to the power of the administrators to sell or mortgage real estate for the purpose of pursuing their inquiries.
17 It must be pointed out that although the administrators were appointed because of their skills as liquidators, the tools available to administrators of estates to get directions of the Court differ from the tools available to liquidators under the Corporations Law.
18 There is no provision in the Wills Probate and Administration Act 1898 for directions to be given to liquidators or administrators, but administrators are within the definition of trustee in s 5 of the Trustee Act 1925. The Court thus may, under s 63 of the Trustee Act, give judicial advice.
19 However, it must be remembered that because most of these applications are made ex parte, the principal role of the Court in giving advice under s 63 of the Trustee Act is not as wide as its role in giving advice to liquidators. The sixth edition of Jacobs Law of Trusts (Butterworths, 1997) at para 2134 says the practice is that:
"… the court has no jurisdiction to advise a trustee on the manner in which he should exercise his discretion in a matter in which the settlor or testator has clearly conferred the discretion on the trustee. But the court will advise a trustee whether he would be justified in exercising his powers or discretions in particular ways even though it does not advise him that he should do so".
20 This statement seems to me to represent the practice to date, though it may need to be revised for the 21st century as judicial advice matters get more complicated. At present it acts as a reminder as to the limited application for directions under section 63.
21 The only known asset of the deceased in New South Wales is the property known as 6 Emmett Street, Crows Nest, which was devised to a child of the deceased, Charles Firns. He is not one of the applicants under the Family Provision Act in Equity proceedings 3480/99. There would seem to be little doubt that there is power to sell this asset for the purpose of administration under s 153 of the Conveyancing Act 1919.
22 The question is whether there can be a sale for the purpose of funding litigation to see whether there are further assets.
23 In my view, it is premature to answer that question at the moment. Litigation in relation to assets is generally part of the administration of the estate, so there would be power in the administrators to sell for the purpose of the litigation. However, the question is whether they should do so.
24 The Court, as Jacobs said in the passage I have quoted, merely advises trustees they might be justified in doing so. It does not take the further step and advise them to do so.
25 Before making the decision whether to use this property as a source of funds for the litigation, the administrators will need to consult Charles Firns and get his views and they will then have to direct their minds to the strength of Mr Hill's report and the other evidence they have and the opposing evidence on the part of the defendants.
26 However, the issue will come up in some form or other in Equity proceedings 3480/99 and the administrators may well think that they should only take conservative action at this stage and that they should take whatever opportunity presents itself in the Equity proceedings to obtain information as cheaply as possible.
27 Accordingly, it seems to me that I should merely stand notice of motion D over to be mentioned at a later date. I will provisionally stand it over to my list on 6 February 2001 at 9.30 am, but that date can be changed by arrangement with my Associate.
28 I will reserve the costs of the motions for the time being.
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