Metherell v Public Trustee in its Capacity as Executor of the Estate of the late Patricia Helen Peek [No 2]

[2011] WASC 48

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   METHERELL -v- PUBLIC TRUSTEE in its Capacity as Executor of the Estate of the late PATRICIA HELEN PEEK [No 2] [2011] WASC 48

CORAM:   EM HEENAN J

HEARD:   16 FEBRUARY 2011

DELIVERED          :   16 FEBRUARY 2011

PUBLISHED           :  25 FEBRUARY 2011

FILE NO/S:   CIV 1443 of 2010

BETWEEN:   GLEN EDWARD METHERELL

First Plaintiff

KELLIE ANNE SINGH
Second Plaintiff

HAYLEY JANE PEEK
Third Plaintiff

WARREN DANIEL PEEK
Fourth Plaintiff

AND

PUBLIC TRUSTEE in its Capacity as Executor of the Estate of the late PATRICIA HELEN PEEK
First Defendant

BRETT RICHARD HARRISON in his Capacity as Trustee in Bankruptcy for the Bankrupt Estate of DENNIS HOWARD PEEK
Second Defendant

Catchwords:

Inheritance - Family provision - Bankruptcy of principal beneficiary - Discharge from bankruptcy - No reassignment of bankrupt's property from trustee in bankruptcy - Change of parties - Removal of former trustee and appointment of new Trustee in Bankruptcy - Consent of trustee in bankruptcy

Legislation:

Bankruptcy Act 1966 (Cth)
Inheritance (Family and Dependants Provision) Act 1972 (WA)

Result:

Official Trustee in Bankruptcy replaced as second defendant by the new Trustee in Bankruptcy of the estate of Dennis Howard Peek
By consent and except for $10,000 of the estate of the deceased, to which the second defendant is entitled, the whole of the residuary estate of the deceased Patricia Helen Peek, after the payment of all just debts, funeral and testamentary expenses by the first defendant, be distributed equally between the plaintiffs
A certified copy of these orders be annexed to the grant of probate dated 24 November 2009 and the first defendant produce the grant for that purpose

Category:    B

Representation:

Counsel:

First Plaintiff                :     Mr I R Freeman

Second Plaintiff            :     Mr I R Freeman

Third Plaintiff              :     Mr I R Freeman

Fourth Plaintiff            :     Mr I R Freeman

First Defendant            :     Ms E T Nixon

Second Defendant        :     Mr A F Carles

Solicitors:

First Plaintiff                :     Lavan Legal

Second Plaintiff            :     Lavan Legal

Third Plaintiff              :     Lavan Legal

Fourth Plaintiff            :     Lavan Legal

First Defendant            :     Public Trustee (WA)

Second Defendant        :     Carles Solicitors

Case(s) referred to in judgment(s):

Metherall v Public Trustee [2010] WASC 205

Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 190 CLR 306

1. EM HEENAN J:  This is the adjourned hearing of an application by the plaintiffs for orders under the Inheritance (Family and Dependants Provision) Act 1972 (WA) for provision for each of them out of the estate of their late mother, Mrs Patricia Helen Peek. They are all over the age of 18 years and are the only children of the deceased. The earlier history of the application is set out in Metherall v Public Trustee [2010] WASC 205, a decision which I gave on 21 June 2010 and reasons for which were published on 9 August last. Some short recapitulation of the events is, nevertheless, convenient.

2. The Public Trustee is the executor named in a will dated 28 November 1980 made by Mrs Patricia Helen Peek.  She died on 31 January 2009 and the Public Trustee subsequently obtained a grant of probate of that will on 24 November 2009.  By that will Mrs Peek left the whole of her estate to her former husband, Dennis Howard Peek.  He had been made bankrupt on 1 March 2007, before his former wife's death, with the result that the whole of his entitlement under that will passed to his trustee in bankruptcy, who was then the Official Trustee in Bankruptcy.  Later, on 2 March 2010, Dennis Howard Peek was discharged from that bankruptcy but his discharge did not transfer or revest the title to any part of the bankrupt estate in him because that remained vested in the trustee in bankruptcy notwithstanding the discharge:  Official Receiver in Bankruptcy v Schultz [1990] HCA 45; (1990) 190 CLR 306.

3. Previously, the Official Trustee in Bankruptcy evincing no interest in asserting his claim to the interest of Mr Peek in distribution under his former wife's will, and Mr Peek himself making no efforts to seek a transfer or revesting in himself of any part of the bankrupt estate, the plaintiffs asserted that the will of their late mother failed to make any or any adequate provision from her estate for their proper maintenance, support, education or advancement in life (Inheritance(Family and Dependants Provision) Act 1972 (WA) s 6(1)) and being eligible applicants (s 7(1)(c)), sought orders making provision for them out of her estate. In the circumstances, and in the absence of any apparent opposition, they sought orders that the whole of their mother's estate, after the payment of all just debts, funeral and testamentary expenses, should be distributed by the Public Trustee equally between them.

4. For the reasons set out in my earlier decision ([2010] WASC 205), I decided that this should not be ordered unless and until the interests of the trustee in bankruptcy of Mr Dennis Howard Peek had been properly identified, considered and dealt with. In my earlier reasons I canvassed the possibilities that where property of the bankrupt remained vested in the trustee in bankruptcy, notwithstanding a later discharge from bankruptcy, it is possible for proceedings under this Act to continue and for orders to be made, the effect of which would modify the rights to distribution under the will and in the bankruptcy and diminish or remove any entitlement which the bankrupt trustee might have to the distribution. Another possibility was that the trustee in bankruptcy might be prepared to reassign the interests of the bankrupt to the bankrupt himself, either absolutely, partially or on conditions whereupon the former bankrupt, Mr Peek, could consent to such orders being made in the proceedings as might affect his entitlement under the will. A third possibility was that the trustee in bankruptcy may, without any reassignment of the interest of the former bankrupt, Mr Peek, be prepared to consent to an order or orders making provision for some or all of the estate to be distributed to the plaintiffs. In June 2010 the proceedings were, accordingly, adjourned for these possibilities to be investigated and, if thought advisable, pursued.

5. Now the application has been relisted for final hearing.  There is new evidence in an affidavit from Mr Brett Richard Geoffrey Harrison sworn 7 February 2011 that on 1 September 2010 he was appointed as the trustee of the estate of the bankrupt, Dennis Howard Peek, in place of the Official Trustee.  A copy of the certificate of his appointment in this respect was annexed.  Mr Harrison has continued to be the trustee of the former bankrupt since 1 September 2010 and remains trustee of the estate of the former bankrupt, his appointment not having been revoked or terminated. 

6. In these circumstances, the plaintiffs applied for an order that Mr Harrison should be joined and substituted as second defendant for the Official Trustee in Bankruptcy who was formerly the trustee in bankruptcy of Mr Dennis Howard Peek.  All parties, including counsel for Mr Harrison, support that application and, accordingly, I made an order removing the Official Trustee in Bankruptcy as second defendant.  I appointed Mr Harrison in his capacity as trustee in bankruptcy of the estate of the former bankrupt as second defendant in his place, and directed that service of that order and any further process should be dispensed with, Mr Harrison having received prior notice of all process in this matter and appearing by counsel and consenting to this course.

7. Next, it appeared from Mr Harrisons affidavit that he had reached agreement with the plaintiffs and with the Public Trustee that, save as for an amount of $10,000 which was accepted as being due payment for Mr Harrison's fees and legal costs associated with his role as trustee in bankruptcy of the deceased's former husband and in attending to these proceedings, no other claim would be made on behalf of the bankrupt estate to any of the entitlements in distribution of the estate of the bankrupt under the will of the deceased.  In other words, apart from this claim for $10,000 for professional fees, costs and disbursements, the trustee of the estate of the former bankrupt made no claim to further distribution from the estate of the deceased, nor did he otherwise oppose the claims being made by the plaintiffs under the Inheritance Act.

8. In these circumstances, being satisfied that the disposition of the deceased's estate effected by her will was not such as to make adequate provision from her estate for the proper maintenance, support, education or advancement in life of any of the four plaintiffs, I was satisfied that orders should be made under the Act directing provision for each of them out of their late mother's estate. 

9. There being no other claims, save as for the $10,000 already mentioned, no opposition to the course proposed and consents of the plaintiffs, I was satisfied that an order sought should be made, namely that except for the sum of $10,000 from the estate of the deceased, which devolves upon the second defendant in his capacity as trustee of the bankrupt estate and the sole beneficiary named in the will, the whole of the residue of the estate of Patricia Helen Peek disposed of by her last will, dated 28 November 1980, should, after the payment of all just debts, funeral and testamentary expenses by the first defendant as executor, be distributed equally between each of the four plaintiffs.  I further directed that a certified copy of these orders should be annexed to the grant of probate made by this court on 24 November 2009 and that the first defendant should produce the grant of probate to the registry to enable it to be endorsed accordingly.

10. No parties sought any order for the costs of these proceedings and, accordingly, there will be no such order.