Murdoch and Brown (No. 2)
[2013] FamCA 732
FAMILY COURT OF AUSTRALIA
| MURDOCH & BROWN (NO. 2) | [2013] FamCA 732 |
| FAMILY LAW – LEGAL PERSONAL REPRESENTATIVE – Can a legal personal representative order be made before a grant of probate? – Order made because no challenge to will and executors clearly designated. |
| Family Law Act 1975 (Cth) |
| Byers & Overton Investments Proprietary Limited (2001) 109 FCR 554 Cullen & Cullen [2011] FMCAfam 375 Easton & Carter (1850) 5 Exchequer Reports; 155 E.R. 4 Hawkins & Clayton [1988] HCA 15 Korsky & Bright & Anor [2007] FamCA 245 Midhurst [2008] FamCA 393 Re Cohen [1975] VR 187 Ryan & Davies Bros Limited (1921) 29 CLR 527 Strelys (1988) FLC 91-961 |
| APPLICANT: | Ms Murdoch |
| RESPONDENT: | Mr Savva and Mr Gould as Executors of the Estate of the late Mr Brown |
| FILE NUMBER: | MLC | 9886 | of | 2010 |
| DATE DELIVERED: | 22 July 2013 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 22 July 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Testart |
| SOLICITOR FOR THE APPLICANT: | Kennedy Partners |
| COUNSEL FOR THE RESPONDENT: | Mr Nicholson |
| SOLICITOR FOR THE RESPONDENT: | Schetzer Constantinou |
Orders
That the applications by the wife for orders relating to the solicitors for the estate and the enforcement of extant orders is adjourned to 10.00am on 25 July 2013.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Murdoch & Brown (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 9886 of 2010
| Ms Murdoch |
Applicant
And
| Mr Savva and Mr Gould as Executors of the Estate of the late Mr Brown |
Respondent
REASONS FOR JUDGMENT
Before the Court in the Judicial Duty List on 18 July was the wife’s application for interlocutory orders seeking, inter alia, injunctions against the respondent from engaging a particular legal practitioner from acting for the estate of the husband, and for enforcement of existing orders. The husband died earlier this year, and the respondents were subsequently named as his representatives. Prior to dealing with the interlocutory issues, a preliminary point was taken by counsel for the respondent. Simply put, it was submitted that an order made by a registrar, albeit by consent of all parties, nominating the present executor as the legal personal representatives of the husband, was ultra vires because at that time, no grant of probate had been made by the Supreme Court of Victoria. It was therefore submitted that the Family Law Act 1975 (Cth) (“the Act”) required the husband to be represented by a legal personal representative, and at this time, as a grant of probate had not been made the order could not stand.
The order was made by the Registrar on 15 May 2013. It was common ground that the husband had left a will, and that the respondents are the executors under it. The respondent acknowledged that, in respect of the order subsequently made to that on 15 May, they would fulfil their obligations. The respondent sought to discharge the May order, and said that upon the granting of the probate by the Supreme Court, the May order would be reinstated. It was also common ground that the Supreme Court of Victoria has granted letters of administration ad colligenda bona, and it was submitted that the role to be fulfilled by the respondents in these proceedings was not permitted by that limited order.
Counsel for the wife rejected the argument by the respondent, submitting that it was, as a matter of law, misconceived. For the reasons that follow, I agree with the wife. It was submitted by counsel for the respondent that the authority for the proposition that he was putting came essentially from the judgment of Dawe J, in a case to which I shall now refer. That decision was a case of Midhurst [2008] FamCA 393. In that case, proceedings for property settlement had been commenced, and the wife then died. The husband produced what he asserted was the wife’s last will, naming him as the executor. But the daughter of the parties produced documents said to have been written subsequent to the separation by the wife, which purported to say that the husband should not benefit from her estate. It was on that basis that an application was made by the daughter to be substituted for the wife in property proceedings.
Her Honour looked at the Family Law Act and the Family Law Rules, and in particular, rule 6.15. Her Honour noted that a person could be permitted to be substituted for the deceased party, but that s 79(8) only referred to the legal personal representative. Her Honour emphasised that the word “the” was critical. She ruled that the Court was not in the position to determine who was the legal personal representative, and that the Court could not appoint a person to that particular role. It is not necessary for me to consider that issue, because again, there is no dispute here about who is the executor under the deceased’s will. The Midhurst case was an example of what the authorities – to which I shall now turn – say, that where there is a dispute about the position of the executor, the proceedings should be suspended until the question is determined. The Family Law Rules 2004 do not contain a definition of legal personal representative. Although the explanatory guide to those rules describes the person, relevantly, as the executor. In my view, none of that matters. The estate of a deceased person is administered by a personal representative, of which there are two kinds: the first is the executor, and the second is an administrator. The executor is appointed by the testator, and the administrator by the relevant State Court. Because a court can refuse to accept an executor, or refuse to accept or approve the deceased’s will, the grant of probate becomes the formal order or document that authenticates the role of the executor, whereafter the grant authorises and directs the executor to carry out the terms of the deceased’s will.
In some circumstances, as here, a grant ad colligenda bona may be granted. Translated literally, it means a grant to collect the goods of the deceased for the purposes of preserving property. It is a grant specifically limited until the grant of probate, or general administration, is obtained. See, for example, Re Cohen [1975] VR 187. Thus, the evidence about that limited grant, in this case, does not assist me, or indeed, is perhaps something of a distraction.
An executor derives his power or responsibility not from the grant of probate, but from the will. See Ryan & Davies Bros Limited (1921) 29 CLR 527. Authentication of the will by probate is required if there is some suggestion that the will does not provide the appropriate authority or direction to the named executors. Indeed, because of that requirement of authentication, the rules of Court normally require the executors or another person to be a party to the proceedings. However, the executors always have the power and responsibility from the will, and their joinder is a formality for enforcement purposes or to enable proof of identification to carry out the will. The will creates in the executor a proprietary right of the owner of the estate, as from the death of the testator. See, for example, Hawkins & Clayton [1988] HCA 15.
And there is some State legislation which formalises the arrangements, by what is sometimes described as the relation back doctrine. An executor may commence proceedings in that capacity in relation to the estate, even though a grant of probate has not been made. But if a dispute arises, putting the right to bring the action in issue, or indeed, continue it, the proceedings must be stayed until the grant of probate is made. See, for example, Easton & Carter (1850) 5 Exchequer Reports; 155 E.R. 4. In my respectful view, that is exactly what Dawe J was dealing with.
In Cullen & Cullen [2011] FMCAfam 375, Kemp FM heard a case where, after the evidence had closed, but before judgment was given, the applicant wife died. Thereafter, an application was made by the legal personal representative to intervene. However, at the time his Honour contemplated the application to intervene, probate had not been granted. But the relevant will was in evidence. The surviving husband consented to the substitution of the legal personal representative, notwithstanding the absence of the grant of probate.
His Honour queried whether he could make that order. He observed that, whilst the appointment of the executor was contained within the will, it was ultimately conditional upon the will being proved valid. He referred to s 44 of the Probate and Administration Act 1898 (NSW), which specifically referred to the fact that, upon the granting of probate, all real and personal property of the deceased vests in the executor from the date of the death. This was described by his Honour as the doctrine of relation back, to which I have earlier referred. He referred to cases where an executor did things before obtaining probate, and noted that such intermeddling may mean the person is liable to the rightful representative. I interpolate there, however, that all of those situations are predicated on there being such a dispute. In the case before his Honour, there was no dispute because there was agreement about the appointment and the entitlement of the executor.
His Honour then referred to the decision of Byers & Overton Investments Proprietary Limited (2001) 109 FCR 554 the decision of the Full Court of the Federal Court of Australia. But there, the Court distinguished between a legal personal representative having title to property, and the limited status that comes from the will. His Honour then said that the executor could apply to become a party in his or her own right to the proceedings, as an intervenor, and that the will provided the basis for that. He said that upon the grant of probate, a legal personal representative could seek to be substituted for the deceased party, and then remove himself or herself as a party in their own right. With respect, I think that is an artificial construction. The critical question is whether the will is accepted as the deceased’s final and legitimate testament. If so, and it seems to have been the case before his Honour, as it is indeed here, the relevant issue is not the grant of probate so much as the Court making an order authenticating and legitimising the executor’s position at law to stand in the shoes of the deceased in the proceedings.
This is not the first time this sort of case has come before the Court. In Strelys (1988) FLC 91-961, the Full Court had to deal with a case where, after the proceedings for property settlement had been issued, the husband died. The wife then withdrew her application. A short time after the wife withdrew her application, an application was made by the husband’s legal personal representative, seeking to be substituted as the executor of his estate for the purposes of then seeking orders under s 79(8) of the Family Law Act. The Family Law Rules then provided that after the death of a party, proceedings could be continued “by the estate” or “by the legal personal representative”. Nygh J, although obiter, took the view that the wife’s withdrawal was of no effect, because until a legal personal representative was substituted for the husband, or some other order was made under the rules about the proceedings, the wife was not entitled to “take a step in the proceedings”.
There is a distinction between the procedural terms such as “application” and “proceedings”, which is the term used in the matrimonial cause definition in s 4 of the Act. That is, application is the machinery under which the proceeding begins and proceeds. Nygh J thought that until and unless a legal personal representative was appointed, the proceedings were suspended and no step could be taken. That view is, in my view, not inconsistent with the view that the authorities earlier mentioned take, which is that the executor’s position as legal personal representative commences with the will and continues until challenged, at which time a grant of probate must be obtained and produced. Nothing in any of the authorities suggests that an order made under the machinery provisions of the Family Law Rules is invalidated by the absence of a grant of probate. Indeed, Nygh J said that the proceedings were suspended until the order was made, not the granting of the probate.
Rule 6.15 of the Family Law Rules requires the legal personal representative to ask for procedural orders, and the Court may substitute the legal personal representative for the deceased, as a party. Nothing in that rule alters the legal position of the legal personal representative obtaining his or her rights from the will. Procedural orders are, in effect, an authentication of the legal personal representative’s position. Thus, it is not critical that probate be granted unless a party joins issue with a legal personal representative as to their title under the will. There have been examples of this Court where this Court has adjourned proceedings to await a grant of probate, but they refer to the executors regularising their legal position. See, for example, Korsky & Bright & Anor [2007] FamCA 245, and specifically at paragraph 20.
The suspension of the proceedings, as I have indicated, however, does not obviate the fact that the executor still has the right, the entitlement, and the responsibility from the will, pending the authentication by the probate. As such, nothing I have found suggests that a legal personal representative cannot be appointed before probate is granted, provided there is no suggestion that the other party joins issue with the entitlement under the will. Here, as I understand the evidence, the wife does not dispute that right. Accordingly, there is nothing that I have seen that justifies an order making the May 2013 orders invalidated. Accordingly, I dismiss the application for the stay of the proceedings, as suggested.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 22 July 2013.
Associate:
Date: 23 September 2013
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