Mullins-Trnovsky v Adams - [2014] SASC 116

SUPREME COURT OF SOUTH AUSTRALIA
(Testamentary Causes Jurisdiction: Civil)
MULLINS-TRNOVSKY v ADAMS
[2014] SASC 116
Reasons for Decision of The Honourable Justice Gray
21 August 2014
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - JURISDICTION AND DISCRETION OF COURT - SOUTH AUSTRALIA
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - ALTERATION AND REVOCATION OF GRANTS - GENERALLY
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - ALTERATION AND REVOCATION OF GRANTS - CIRCUMSTANCES - OTHER CASES
SUCCESSION - PROBATE AND LETTERS OF ADMINISTRATION - PROCEDURE - SOUTH AUSTRALIA - OTHER MATTERS
Application to give effect to the purported resignation of an executor of a deceased estate. The beneficiaries commenced proceedings for the removal of all three executors of the estate, namely Michael Cowan Garrett, Trevor Paul Edmond, and Peter Grant Adams. Mr Garrett purported to resign to address a perceived conflict of interest arising out of the provision of allegedly negligence tax advice to the estate and had refused to take any further part in the administration of the estate. His application to give effect to his resignation was not opposed.
Whether grounds made out to warrant an order for the removal of Mr Garrett. Whether the court can effect the removal of an executor by amending, rather than revoking, the grant of probate. Whether amending, rather than revoking, the grant of probate is the more appropriate form of order.
Held per Gray J (granting the application):
1. Mr Garrett cannot continue to effectively administer the estate given the seriousness of the conflict of interest.
2. Mr Garrett, by refusing to administer the estate, has prevented the grant of probate from functioning on the basis that it was originally intended, namely, that the estate would be administered by three executors.
3. In all the circumstances, it is appropriate to make an order for the removal of Mr Garrett.
4. The court has the power to remove an executor by amending the grant of probate. However, there are compelling reasons to continue with the traditional practice of giving effect to the removal of an executor by revoking the grant of probate.
5. Grant of probate to Michael Cowan Garrett, Trevor Paul Edmond and Peter Grant Adams revoked.
6. Grant of probate issued to Trevor Paul Edmond and Peter Grant Adams.
Income Tax Assessment Act 1936 (Cth) Div 7A; Trustees Act 1936 (SA) s 15; Administration and Probate Act 1919 (SA) s 5 and s 69; Supreme Court Act 1935 (SA) s 18; Supreme Court (Civil) Rules 2006 (SA) r 131 and r 205; Probate Rules 2004 (SA) r 51 and r 88, referred to.
Morgan v MacRae [2001] NSWSC 1017; Tsagouris & Anor v Bellairs & Ors [2010] SASC 147; Estate Kouvakas; Lucas v Konakas [2014] NSWSC 786; Young v Holloway [1895] P 87; Mavrideros v Mack (1998) 45 NSWLR 80; In the Estate of Crane (2005) 93 SASR 198; In the Estate of Potticary [1927] P 202; In the Goods of William Taylor [1892] P 90; In the Goods of Galbraith [1951] P 422; Executor Trustee Australia Ltd v McDougall (2011) 110 SASR 462; In the Estate of Helene Josephine Storch (Deceased) [2013] SASC 129; O'Brien v McCormick [2005] NSWSC 619; Profilio v Profilio [1999] NSWSC 657; Lawless v Donaldson; Estate of Donaldson [2012] NSWSC 570; Re Barraclough [1965] 2 All ER 311; Caldar v Public Trustee & Ors [2003] NSWCA 187; In the Goods of Loveday [1900] P 154; Bates v Messner (1967) 67 SR (NSW) 187; In the Estate of Stuart (2009) 106 SASR 39; In the Estate of S Decd [1968] P 302; In the Estate of Biggs, Decd [1966] P 118; In Re Sawtell (1862) 2 Sw and Tr 448; In the Goods of Atherton [1892] P104; In the Goods of Stewart (1875) LR 3 P and D 244; Gorman v McGuire [2002] NSWSC 1089; Labraga v Pomfret [2005] NSWSC 973; McKerracher v McKerracher [2011] NSWSC 1288; Brown v Wilson [2012] WASC 36; Phelan v Booth (1941) 43 WALR 60, considered.

MULLINS-TRNOVSKY v ADAMS
[2014] SASC 116
Testamentary Causes Jurisdiction
GRAY J.

This is an application to give effect to the purported resignation of an executor of a deceased estate.
Background
By her will dated 15 February 2012, Barbara Wanda Mullins appointed Peter Grant Adams, Michael Cowan Garrett and Trevor Paul Edmond as her executors and trustees. Ms Mullins died on 20 February 2012 and a grant of probate in common form was made on 13 June 2012 in favour of the named executors.
A majority of the residuary beneficiaries of Ms Mullins’ estate have commenced proceedings in this Court seeking to have the executors removed and replaced by a professional administrator. The plaintiffs allege, inter alia, that they have been prejudiced by the “inordinate and inexcusable delay” of the executors in the administration of the estate. The plaintiffs further allege that the executors, by their poor administration of the estate, have potentially exposed the estate to a significant tax liability under Division 7A of the Income Tax Assessment Act 1936 (Cth).[1] Ms Mullins’ estate is substantial and includes a share portfolio, loans and real property in a number of States. The plaintiffs’ complaints, which are outlined in voluminous affidavits, primarily concern the alleged delay of the executors in dealing with the various assets of the estate, the amount of information the executors have provided in relation to the administration of the estate and their failure to make interim distributions.
[1] Division 7A of the Income Tax Assessment Act 1936 (Cth) is an anti-avoidance measure intended to prevent tax avoidance arising from private companies providing loans to their shareholders or their “associates”, as defined in section 318 of the Act. The provisions impose strict liability, subject to section 109RB of the Act.
Insofar as Mr Garrett and his accounting firm, BDO, were responsible for the provision of tax advice concerning the administration of the estate, and were allegedly negligent in the provision of that advice, the plaintiffs claim that Mr Garrett cannot now continue to act as an executor due to a conflict between his duty, as executor, to investigate a potential claim for negligence and his personal interest in defending any such claim against him or BDO.
Mr Garrett purported to resign as an executor of Ms Mullins’ estate and a trustee of her will trust on 17 December 2013 and has taken no part in the administration of the estate since that time. Mr Garrett has indicated that he does not intend to take any further part in the administration of the estate. In his affidavit of 7 May 2014, Mr Garrett denies the plaintiffs’ allegations against him and explains that he resigned as an executor of the estate to avoid the perception of a conflict of interest.
Mr Garrett’s resignation as a trustee is evidenced by a deed dated 17 December 2013 pursuant to section 15(1) of the Trustees Act 1936 (SA). Mr Garrett’s application to be removed as an executor is not opposed.
Power to Remove an Executor
Jurisdiction and Procedure
The Court has jurisdiction over probate matters and a court order is generally required to approve the removal of an executor of a deceased estate.[2] It has been the long-established practice of this Court to give effect to the removal of an executor of a deceased estate by making an order for the revocation of the grant of probate and the issue of a new grant.
[2] Administration and Probate Act 1919 (SA) section 5; Supreme Court Act 1935 (SA) section 18; Supreme Court (Civil) Rules 2006 (SA) rule 205; Morgan v MacRae [2001] NSWSC 1017, [23].
In Tsagouris v Bellairs, I explained the difference between grants of probate in common and solemn form in the following terms:[3]
... A grant is a judicial act, and becomes an order of the Court. A grant of probate in common form, or a non-contentious grant, is usually made by the Registrar of Probates, and provides a valid authority to the executor who is named in the document to deal with the assets of the estate as directed, and to exercise the powers of that office. It is, however, inherently revocable. The grant in this respect is not conclusive, and any person whose interest is adversely affected by the grant will remain entitled to have the will proved in solemn form.
On the other hand, a grant of probate in solemn form, or a contentious grant, seeks to decide finally, and as against the whole world, whether a particular will is the last valid will of the deceased. If that is achieved, the grant is not revocable, and has the same legal status as a judgment. The grant is usually made in circumstances where the validity of the will is challenged on the grounds that the testator lacked testamentary capacity, the will was not duly executed, or that it was not the last will of the deceased.   Established exceptions exist to the finality of a grant in solemn form. There is no need to set out those exceptions, save to say that in cases of a grant in solemn form, there is a particular concern in ensuring that every possible person with an interest in the outcome of the proceedings has been notified and been given an opportunity to be heard.
[Footnotes omitted. Emphasis added.]
The doctrine of res judicata applies to grants in solemn form, but not to grants in common form.[4]
[3]    Tsagouris & Anor v Bellairs & Ors[2010] SASC 147 [35]-[36]; see also Estate Kouvakas; Lucas v Konakas [2014] NSWSC 786, [218].
[4]    Young v Holloway [1895] P 87; Re Barraclough [1965] 2 All ER 311; Caldar v Public Trustee & Ors [2003] NSWCA 187, [5], though it should be noted that this decision concerned grants of administration in common form as opposed to grants of probate in common form.
As noted earlier in these reasons, the grant in the present case was made in common form. There is therefore no jurisdictional impediment to the application to remove Mr Garrett.
Part II of the Probate Rules 2004 (SA) addresses “non-contentious probate matters”. Rule 51 provides:
51.01An application for an order to amend or revoke a grant may be made to the Registrar by affidavit setting out the grounds of the application.
51.02If the Registrar is satisfied that a grant should be amended or revoked, the Registrar may make an order accordingly:
Provided that -
(a) a grant may be revoked without being called in if it cannot be called in;
(b) except in special circumstances no grant shall be revoked or amended under this Rule unless it is on the application or by the consent of the person to whom the grant was made.
[Emphasis added.]
An executor may apply to the Court for directions and orders relating to the administration of an estate under section 69 of the Administration and Probate Act 1919 (SA), which provides:
(1)The Public Trustee shall, and any trustee, executor, or administrator may, when in difficulty or doubt, apply to a Judge for advice or direction as to matters connected with the administration of any estate, or the construction of any will, deed, or document.
(2)Such application may be made either without notice to or upon summons served upon any of the parties interested.
(3)Any person interested in any estate, who is dissatisfied with the conduct of the Public Trustee in any matter connected with the management or administration thereof, may apply to a Judge by summons to be served upon the Public Trustee to review such conduct.
(4)A Judge may, upon the hearing of an application under this section, make any order, declaratory or otherwise, that he sees fit as to the administration of the estate, or the construction of the will, deed, or document, which is the subject of the application, and also as to the costs of the application.
(5)Any such order made in the absence of an interested party shall have the same effect, or be of the same force or validity, so far as regards protection to the Public Trustee, or other trustee, or the executor, or administrator, as if the same had been a decree or order made in an action where all parties concerned were represented.
(6)The Judge may refer any question of law arising on an application under this section for the opinion of the Supreme Court, or may direct an issue to be tried by, or an action to be instituted in, the Supreme Court.
[Emphasis added.]
An application under section 69 would be made pursuant to rule 88 of the Probate Rules.
In this proceeding, however, Mr Garrett sought an order giving effect to his resignation by way of an interlocutory application pursuant to rule 131 of the Supreme Court (Civil) Rules 2006 (SA). This approach was appropriate as the removal of Mr Garrett formed an essential part of the relief sought by the plaintiffs.
Removal of an Executor – General Principles
In In the Goods of Loveday, Jeune P identified the object of the court’s power over the administration of an estate:[5]
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. If the court has in certain circumstances made a grant in the belief and hope that the person appointed will properly and fully administer the estate, and if it turns out that the person so appointed will not or cannot administer, I do not see why the court should not revoke an inoperative grant and make a fresh grant.
[5] In the Goods of Loveday [1900] P 154, 156.
These remarks were adopted by the New South Wales Court of Appeal in Bates v Messner.[6] In that case, Asprey JA considered the circumstances in which the court may revoke a grant of probate:[7]
... The essential basis of the exercise of the court's inherent jurisdiction to revoke a grant of probate is that emphasised by Jeune P, namely, that the real object which the court must always keep in view is the due and proper administration of the estate in the interests of the parties beneficially entitled thereto on the part of the person to whom and by whose oath as to the faithful performance of his duties the court has been induced to entrust the office of executor. The terms used in some of the previously decided cases with relation to the circumstances which have given rise to the exercise of the jurisdiction of revocation, such as ‘abortive’, ‘inefficient’, ‘useless’ or ‘ineffectual’, are simply descriptive of a situation in which the court has been persuaded to the view that its grant, which was predicated on the oath of the executor named in the will that ‘he will pay all the just debts and legacies of the said deceased so far as the estate of the said deceased will extend and the law shall bind him, and that he will otherwise well and faithfully administer the said estate according to law; and that he will render a just and true account of his administration’ has been circumvented by a breach of that oath which is in effect an undertaking to the court making the grant. 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.
These statements of principle were cited with approval by the New South Wales Court of Appeal in Mavrideros v Mack.[8]
[6]    Bates v Messner (1967) 67 SR (NSW) 187.
[7]    Bates v Messner (1967) 67 SR (NSW) 187, 191.
[8]    Mavrideros v Mack (1998) 45 NSWLR 80.
I considered the court’s power to revoke a grant of probate for the purpose of removing an executor in In the Estate of Stewart:[9]
... Where the proper administration of the estate is frustrated by, in effect, the dereliction in the duty to administer the estate, the revocation is warranted. This is particularly so where there is consent of all the parties to that course. Accordingly, a grant of probate may be revoked on the application of the executors who took the grant in order to allow for the due and proper administration of the estate, where, as in this case, there exists a near impossibility of that eventuating by virtue of the relationship of the executors.
[9] In the Estate of Stuart (2009) 106 SASR 39, 46-47.
The courts have identified several circumstances in which it is appropriate to revoke a grant of probate or pass over an executor.[10] The executors who were the subject of those decisions were variously in prison,[11] in neglect of their duties,[12] had refused to take a grant of probate,[13] had disappeared or were otherwise absent abroad,[14] or were otherwise not physically or mentally capable of taking probate.[15]
[10] See the review of the authorities conducted by Besanko J in In the Estate of Crane (2005) 93 SASR 198.
[11] In the Estate of S Decd [1968] P 302.
[12] In the Estate of Potticary [1927] P 202.
[13] In the Estate of Biggs, Decd [1966] P 118.
[14] In the Goods of William Taylor [1892] P 90; In Re Sawtell (1862) 2 Sw and Tr 448.
[15] In the Goods of Galbraith [1951] P 422; In the Goods of Atherton [1892] P104; In the Goods of Stewart (1875) LR 3 P and D 244.
In Executor Trustee Australia Ltd v McDougall, Kourakis J, as he then was, considered whether the existence of a conflict of interest provided a sufficient basis to revoke a grant of probate:[16]
Neither the mere desire of the executor nor the consent of all interested parties is a sufficient basis to revoke a grant of probate. It is necessary to show that the grant has become ineffective and useless or that it obstructs the proper administration of the estate.
...
The existence of a conflict of interest may be a sufficient basis on which to revoke a grant of probate, but only “as a very last resort when there is no other appropriate method of dealing with a problem that may have emerged”. Revocation will only be ordered where it is clear “that the due and proper administration is put in jeopardy or has in fact been prevented or frustrated by the executor”.
It is relatively common for an executor to be burdened by a conflict between his duty as an executor and his interest as a beneficiary. However, generally, that will not be a sufficient basis upon which to revoke probate if the conflict results from the very terms of the will by which the executor was appointed. The appointment of a particular executor by a testator must not be lightly set aside.
[Footnotes removed.]
[16] Executor Trustee Australia Ltd v McDougall (2011) 110 SASR 462, [19]-[23].
The authorities extracted above make it clear that the guiding principle in determining whether to revoke a grant of probate is ensuring the due and proper administration of the estate and the interests of the parties beneficially entitled thereto.[17]
[17] See also, In the Estate of Helene Josephine Storch (Deceased) [2013] SASC 129, [9].
Removal of Mr Garrett
In my view, Mr Garrett’s recognition that his position is compromised and his consequential resignation is entirely appropriate. Mr Garrett’s duties as executor to investigate a potential claim against himself and his firm, BDO, directly conflict with his duties as a director of BDO and his personal interests. This conflict is irreconcilable. This conflict has arisen in the course of administering the estate – it is not a conflict that the testator was aware of at the time of making her will. Mr Garrett cannot continue to effectively administer the estate under the spectre of litigation in relation to the incurring of a potentially sizeable tax liability as a result of his and BDO’s conduct.

As noted earlier in these reasons, Mr Garrett has ceased to administer the estate. By ceasing to act as an executor, Mr Garrett has prevented the grant of probate functioning on the basis it was originally granted, namely, that the estate would be administered by three executors.
In these circumstances, it is appropriate to make an order for Mr Garrett’s removal as an executor for the proper administration of the estate. It would be undesirable for Mr Garrett to continue as an executor given the seriousness of his conflict of interest.
Power to Amend a Grant of Probate
It was submitted that there is no authority in South Australia for the court giving effect to the resignation of an executor by the amendment of a grant of probate.
Several decisions in New South Wales have addressed the matter of removing an executor in circumstances where a grant of probate has been issued to multiple executors.
In Gorman v McGuire, Palmer J said:[18]
Where probate of a will has been granted to more than one executor and one of the executors is to be removed voluntarily or involuntarily for proper reasons, the Court recalls and revokes the original grant itself and makes a fresh grant of probate to the remaining executor or executors. The revocation is a revocation in toto, not a partial revocation, and the fresh grant to the remaining executor or executors entirely supplants the former grant. That this is the appropriate procedure for the removal of one of a number of executors is established by cases such as In the Estate of George Shaw [1905] P.92 and Shaw v Thomas [1954] NZLR 585, the latter case having been approved by the New South Wales Court of Appeal in Bates v Messner (1967) 67 SR(NSW) 187.
This approach has been adopted in a number of subsequent cases.[19]
[18] Gorman v McGuire [2002] NSWSC 1089, [6].
[19] See O'Brien v McCormick [2005] NSWSC 619; Labraga v Pomfret [2005] NSWSC 973.
However, in estates with multiple executors, the courts have more recently taken the approach of amending the grant of probate to remove an individual executor, rather than revoking the grant of probate in its entirety and making a new grant in favour of the remaining executors. In Profilio v Profilio,[20] the testator appointed his wife and brother as executors. After payment of duties and debts, the balance of the estate was to be held on trust to provide income for the testator’s wife, and following her death or remarriage, the testator’s children. The estate consisted of a series of investments in which the testator and his brother were joint venture partners, giving rise to a conflict of interest on the part of the testator’s brother. After considering Mavrideros v Mack,[21] Bryson J said:[22]
... The object of the power is the leading consideration in its exercise: that is, the due and proper administration of the estate and the interests of parties beneficially entitled. An order which attains that object is authorised by the inherent power, and there is nothing in the nature of the inherent power which limits the form which such an order may take. There is no expression of any limit on the power of the Court to remove an executor, and the Court's attention is not restricted to cases where the executor himself is in some way impeached or shown to have misconducted himself, although in the nature of things most instances which occur involve some such element.
Attaining the real object referred to appears to me to mean that the power can be exercised in cases where a grant of probate and the responsibility conferred on the executors are not effectual for a reason such as exists in this case, where there is simply an incapacity to achieve cooperation, and long continuance of discussion about what course should be taken without effectual outcomes...
...
It is not known to me that there has ever been a case in which the Court's power to remove an executor has been applied to a grant of probate which was first made to two executors, so that one of them is to be removed while the other is to continue under the earlier grant of probate. Counsel have not been able to refer to any case in which that has been done. Discussion in texts and judgments tends to fall into dealing with the matter in hand as the revocation of the grant of probate, and revocation of the grant has been the outcome in the case law which I have seen. It seems to me however that revocation of the grant of probate is not the essential subject matter. The essential subject matter is the removal of an executor. Where the Court's inherent power is brought to bear on a grant which was originally made to more than one executor there is no departure from the real object of the inherent power, but rather a fulfilment of it if one executor is removed while the other is left to act under the earlier grant.
[Emphasis added.]
[20] Profilio v Profilio [1999] NSWSC 657.
[21] Mavrideros v Mack (1998) 45 NSWLR 80.
[22] Profilio v Profilio [1999] NSWSC 657 [28]-[29], [33].
The decision in Profilio v Profilio[23] was criticised by Young CJ in Eq. in Morgan v MacRae:[24]
The only way one can remove an executor is by revocation of the grant and the making of a fresh grant. I note there is a decision of Bryson J in Profilio v Profilio [1999] NSWSC 657 which appears to go to the contrary, but, with respect, it must have been decided per incuriam. In Mavrideros v Mack (16 June 1997, unreported) I decided this point. Although my decision was reversed in the Court of Appeal, see (1998) 45 NSWLR 80, the present point was in no way questioned by the Court of Appeal.
The position in Victoria may be different because of statute. There, s 34 of the Victorian Administration & Probate Act 1958 is in different terms to the New South Wales Wills Probate & Administration Act 1898. The New South Wales Act by s 66(c) limits jurisdiction to removal of administrators. The Victorian Act, section 34 is wider. In any event, it should be noted that the fate of the Victorian case of Monty Financial Services Limited v Delmo [1996] 1 VR 65 has already not been a particularly happy one; see the judgment of Crispin J in the Supreme Court of the ACT in Titterton v Oates (1998) 143 FLR 467.
One cannot, in New South Wales, simply strike out the name of one executor from a grant and continue on without revoking the grant. This is for a number of very, very basic reasons. First, one cannot even renounce an executorship once probate has been granted. The Court has relaxed this rule to a very slight extent by allowing people to renounce who have taken probate under pressure, or by some sort of mistake, and who have not administered the estate at all.
Generally speaking, the proposition is clear. Even if an executor is removed there needs to be a consequential order which requires the filing of accounts, and deals with the transfer of the property from the old executor to the new executor. It may be that the power to vest property from one trustee to another is not sufficient to cover the situation. In any event, the order is only made as a very last resort when there is no other appropriate method of dealing with a problem that may have emerged. That is why it is not made on motion except in the clearest case. The clearest case is as in Re Hardy [1967] 1 NSWR 638 where the executor had disappeared, I think, with the money.
The present case is merely a dispute between the beneficiaries, or possible conflict of interest and duty. As said in the leading commentary on the New South Wales Probate and Administration Act by Geddes and others Wills, Probate and Administration Law in New South Wales (LBC, Sydney, 1996) at page 330:
“A mere conflict of interest and duty will not result in restraint or removal of a personal representative. It must be shown that the personal representative prefers interest to duty, and intends to neglect duty.”
[23] Profilio v Profilio [1999] NSWSC 657.
[24] Morgan v MacRae [2001] NSWSC 1017, [21]-[25].
In McKerracher v McKerracher, White J considered the conflicting New South Wales decisions and said:[25]
With respect, Young CJ in Eq did not decide this point in Mavrideros v Mack. The point was not in issue in that case. His Honour's reasons contain no discussion of the question whether the Court in its inherent jurisdiction can make an order for the removal of one of two executors. I think it clear that Bryson J's decision in Profilio v Profilio was not made per incuriam. I agree with Bryson J's observations that in such cases the revocation of the grant of probate is not the essential subject matter. The essential subject matter is the removal of the executor.
[25] McKerracher v McKerracher [2011] NSWSC 1288, [13].
White J also considered the appropriate form of order for an application to remove an executor in Lawless v Donaldson; Estate of Donaldson.[26] The Judge reasoned:[27]
A question was raised as to whether the appropriate order is for the revocation of the existing grant and the making of a fresh grant of probate to the plaintiff alone, or whether an order should be made for the removal of the defendant as executor. This is not a matter of substance. It will make no difference which form of order is made. The relief sought in the statement of claim is for the revocation of the existing grant and for the making of a new grant of probate to the plaintiff alone. Counsel for the defendant submitted that if the plaintiff was entitled to the substantive relief sought, that would be the appropriate form of order. I will proceed accordingly.
[26] Lawless v Donaldson; Estate of Donaldson [2012] NSWSC 570.
[27] Lawless v Donaldson; Estate of Donaldson [2012] NSWSC 570.
In Brown v Milson,[28] E M Heenan J took a slightly different approach, ordering that the grant of probate be amended by revoking the grant to the absent executor but confirming the grant so that it took effect from the date of the order as being a grant solely to the remaining executor.
[28] Brown v Wilson [2012] WASC 36.
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.[29] 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.
[29] It is to be noted that the court also has the power to suspend a grant of probate, see Phelan v Booth (1941) 43 WALR 60.
The authorities following Bates v Messner[30] 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.[31]
[30] Bates v Messner (1967) 67 SR (NSW) 187.
[31] Morgan v MacRae [2001] NSWSC 1017.
Form of Order to Effect the Removal of Mr Garrett
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.
Conclusion
I allow the application to remove Michael Cowan Garrett as an executor. I revoke the grant of probate and direct that a new grant of probate be issued to Peter Grant Adams and Trevor Paul Edmond.