NSW Trustee and Guardian (Estate of Peter Urso)
[2013] NSWSC 903
•03 July 2013
Supreme Court
New South Wales
Medium Neutral Citation: NSW Trustee and Guardian (Estate of Peter Urso) [2013] NSWSC 903 Hearing dates: 3 July 2013 Decision date: 03 July 2013 Jurisdiction: Equity Division Before: Hallen J Decision: See Paragraph 43
Catchwords: Wills, probate and administration - Will of the deceased - Named beneficiaries, sisters of the deceased predeceased -Determination of matters in doubt - Whether father of deceased predeceased - No issue that mother predeceased - Administrator seeking order giving liberty to distribute the estate on footing that father predeceased the deceased - Next of kin inquiry - Deceased domiciled in New South Wales - Distribution - Benjamin Order Legislation Cited: NSW Trustee and Guardian Act 2009
Public Trustee Act 1913
Uniform Civil Procedure Rules 2005
Wills Probate and Administration Act 1898Cases Cited: Application by NSW Trustee & Guardian (Estate of the late Marko Sijakovic) [2012] NSWSC 1532
Benjamin, Re; Neville v Benjamin [1902] 1 Ch 723
Boyd (No 2), Re (NSWSC, 19 July 1995, unreported)
Clarke v McFarlane [2008] NSWSC 432
Green's Will Trusts, Re [1985] 3 All ER 445
Nolan As Administratrix of the Estate Of Barbara Nolan, deceased v Nolan [2011] WASC 224
NSW Trustee & Guardian v Hull [2011] NSWSC 1106
Public Trustee v Kehagias [2009] NSWSC 972
Public Trustee v Solah [1999] NSWSC 660
Reynolds Trusts (No 2), Re [1942] QWN 40
West v Weston [1998] NSWSC 419Category: Principal judgment Parties: NSW Trustee and Guardian (Plaintiff) Representation: Counsel:
Ms M Pringle (Plaintiff)
Solicitors:
NSW Trustee and Guardian (Plaintiff)
File Number(s): 2013/153232
Judgment - EX TEMPORE
The Proceedings
HIS HONOUR: In a case where there is uncertainty about a factual matter relevant to the distribution of a deceased's estate, the Court may, in certain circumstances, make an order that the executor or administrator is at liberty to distribute on some particular factual basis - e.g. that a missing beneficiary predeceased the deceased with or without issue. It is this type of order that is termed "a Benjamin order". It derives from the case of Re Benjamin; Neville v Benjamin [1902] 1 Ch 723.
This is just such a case and the Plaintiff, the NSW Trustee and Guardian, seeks a declaration and orders relating to the distribution of the estate of Peter Urso ("the deceased").
Probate in common form of the deceased's Will, made on 11 December 1985, was granted to the Public Trustee, the executor appointed in the Will, on 5 September 2007.
(The NSW Trustee and Guardian Act 2009 commenced on 1 July 2009. Section 4 repealed the Public Trustee Act 1913. Section 5 constituted the corporation called the NSW Trustee and Guardian. Under clause 3(1)(d) of Schedule 1 to the NSW Trustee and Guardian Act, any reference in a previous Act to the Public Trustee is to be read as a reference to the NSW Trustee. Under clause 11 of Schedule 1, the NSW Trustee and Guardian is taken, for all purposes, to be a continuation of the former Public Trustee.)
From the date of the grant of Probate, the Plaintiff appears to have been carrying out searches and seeking information concerning the manner in which, and to whom, the deceased's estate should be distributed. These searches have now been completed and the Plaintiff wishes to proceed to complete the administration of the deceased's estate.
The Plaintiff commenced the proceedings by Summons filed on 17 May 2013. At the hearing, it sought to file an amended Summons seeking, relevantly, the following relief:
"1. A declaration that Ivan Nykyforovych (Nikforovich) Ursu is predeceased the deceased
2. In the alternative, an order that the Plaintiff be at liberty to distribute the estate of the late Peter Ursu Urso.
3. In the alternative, the Plaintiff seeks the opinion advice and direction of the Court in respect of the facts set out in the Affidavit of Christina Nicola.
4. An order that the plaintiff's costs be paid out of the estate of Peter Urso on the indemnity basis."
As there was no Defendant in the proceedings, and as the amendments were really matters of form not substance, I granted leave to file the amended Summons and that has been done.
To consider what orders the Court should make, it is necessary to set out the background facts, which are based upon the evidence that the Plaintiff has been able to assemble and adduce in the proceedings.
The Background Facts
I am satisfied that the Plaintiff has carried out the necessary, and proper, investigations to determine the persons who are, or who may be, entitled on intestacy to the deceased's estate. The searches carried out by the Plaintiff, and the affidavit of the Plaintiff's legal officer, who has exhibited, or annexed, a copy of the various certificates (and, where such certificates or other documents are in another language, has obtained translations thereof), substantiate the following facts.
The deceased was born in Szewaniuka, in the province of Bessarabia, Rumania, in December 1922. (That province became part of the Ukraine after World War II.)
The deceased applied for re-settlement in Australia after World War II through the International Refugee Organisation. His Resettlement Registration Form, which appears to have been dated 11 May 1949, shows that he was then single and wished to travel to Australia alone and without any accompanying family members. In the statement attached, the deceased stated that he had unsuccessfully attempted to obtain his original birth certificate.
On 29 July 1949, the deceased was accepted for re-settlement in Australia. However, the precise date of his arrival in Australia is not known.
The deceased did not marry during his lifetime and he had no issue. (This is confirmed by what the deceased told the officer of the Plaintiff who took instructions for the Will and also by other searches conducted in the Registers of Births Deaths and Marriages.)
The deceased's Will, relevantly, provided:
"4. I GIVE DEVISE AND BEQUEATH the whole of my estate both real and personal of whatsoever nature or kind and wheresoever situate unto my Trustee UPON TRUST to pay thereout all my just debts funeral and testamentary expenses Probate Estate Death or any other Duty AND THEREAFTER to hold the residue thereof for such of them my sisters ALEXANDRA JOHN JUKOVSIKOY and ANNA JOHN STEPANENKO who shall be living at my death and if both in equal shares absolutely."
The two named beneficiaries, each of whom was a sister of the deceased, predeceased the deceased. Alexandra John Jukovsikoy died in 2002 and Anna John Stepanenko died in 1997.
(It is clear that there are discrepancies in the spelling of the names of members of the deceased's family that appear to derive from translation into the English language.)
In the Inventory of Property attached to the Probate parchment, the deceased's estate was disclosed as having a gross value of $1,305,475. It consisted of funds held by the Office of the Protective Commissioner ($1,188,975) and the refund of the accommodation bond repayable to the estate ($116,500). (I have omitted the cents and will continue to do so in these reasons.)
In an affidavit sworn 13 May 2013, the balance in the estate account, as at that date, was $1,494,586.
On 18 September 2007, the Plaintiff advertised for claims in the manner required by s 92 Wills Probate & Administration Act 1898 (as it was known then). The period within which claims ought to have been lodged expired on 18 November 2007. No claim, by any next of kin, was received other than as set out in the affidavit of searches. The form of that section makes it clear that the section catches claims to beneficial entitlement on intestacy.
The question that faces the Plaintiff is the identity of the persons to whom the deceased's estate should be distributed.
Since the deceased appears to have been domiciled in New South Wales at the time of his death, it is the law of New South Wales that determines the succession to his intestate estate: Public Trustee v Kehagias [2009] NSWSC 972, per McLaughlin AsJ, at [11].
The scheme of distribution on intestacy as at the date of the deceased's death, in July 2007, was set out in s 61A - s 61F of the (now repealed) Wills Probate and Administration Act 1898. The relevant sections which apply in this case are 61B(1), (5) and (6). Those sections provide:
"(1) Where a person dies wholly intestate, the real and personal estate of that person shall, subject to the payment of all such funeral and administration expenses, debts and other liabilities as are properly payable out of the estate, be distributed or held in trust in the manner specified in this section, and the real estate of that person shall be held as if it had been devised to the persons for whom it is held in trust under this section.
...
(5) If the intestate leaves no spouse and no issue but one or both of the intestate's parents, the estate shall be held:
(a) where both parents survive the intestate, in trust for those parents in equal shares, or
(b) where only one parent survives the intestate, in trust for that parent absolutely.
(6) If the intestate leaves no spouse, no issue and no parents, the estate shall be held for the following persons living at the death of the intestate and in the following order and manner:
(a) firstly, in statutory trust for the brothers and sisters of the whole blood of the intestate; but if there are no such brothers or sisters, then
(b) secondly, in statutory trust for the brothers and sisters of the half blood of the intestate; but if there are no such brothers or sisters, then
(c) thirdly, in trust for the grandparents of the intestate and, if more than one of them survive the intestate, in equal shares; but if there are no such grandparents, then
(d) fourthly, in trust for the uncles and aunts of the intestate (being brothers or sisters of the whole blood of a parent of the intestate) and, if more than one of them survive the intestate, in equal shares; but if there are no such uncles or aunts, then
(e) fifthly, in trust for the uncles and aunts of the intestate (being brothers or sisters of the half blood of a parent of the intestate) and, if more than one of them survive the intestate, in equal shares.
It is clear from the searches that have been obtained that the deceased's mother, Mariya Stepanivna Ursu, predeceased the deceased. A copy of her Death Certificate shows that she died in November 1972, aged 90 years.
A Death Certificate of the deceased's father, Ivan Nykyforovych Ursu, has not been able to be obtained. I am satisfied, however, from what I have otherwise read, that he is likely to have predeceased the deceased, although the date of his death cannot be established.
I then turn to the brothers and sisters of the deceased of the whole blood. Siblings who share both parents are brothers and sisters of the whole blood.
Where the estate, or any part of the estate, is directed to be held on statutory trust for any class of relatives other than issue of the intestate, "that estate or part shall be held in trust corresponding to the statutory trust for the issue of the intestate as if that trust were repeated with the substitution of references to the members, or member of that class for references to the children or child of the intestate": s 61C(3) of the Wills Probate and Administration Act. No issue whose parent was living at the date of death of the intestate and capable of taking, can otherwise take: s 61C(1)(b) of the Wills Probate and Administration Act.
A division of the property that is the subject of the trust, per stirpes (and not per capita) ensues. Thus, for example, the property is divided into shares equal in number to the number of siblings of the deceased who either survived him, or predeceased him leaving issue who survived. Any surviving sibling of the deceased would, thus, be entitled to one of the shares, whereas in the case of a sibling of the deceased who predeceased him leaving issue who survived, the issue would be entitled to share equally one of the shares amongst themselves.
In Re Boyd (No 2) (NSWSC, 19 July 1995, unreported) Young J (as his Honour then was) referred to the meaning of the section as follows:
"... It seems to me that the key words in subs 3 are "in trust corresponding to the statutory trust", which is one composite expression. The work that s61C (3) has to do is to equate all statutory trusts to the statutory trust for issue to save the drafter having to repeat it over and over again.
On this construction, all one does is to see, where there is a brother and sister of the intestate, whether there is a child or more remote issue of that brother or sister alive at the date of death of the intestate. If there is, that person takes the share that the brother or sister of the intestate would have taken had he or she not predeceased the intestate."
The deceased appears to have had two siblings, Alexandra and Anna, each of whom, as stated above, predeceased the deceased.
Researches have found that Alexandra had two children, Mylia (also spelt Milya) and Leonti. Leonti predeceased the deceased, having died in April 1997, aged 63 years. He was not married and had no issue. Mylia, who was born in September 1941, survived the deceased and remains alive.
Researches have found that Anna had only one child, Alexei Alexeevich, who was born in April 1954, and who survived the deceased and remains alive.
The Nature of the Plaintiff's Claim
Uniform Civil Procedure Rules 2005 ("UCPR"), rule 54.3(2) relevantly provides that proceedings may be brought for the determination of any question which could be determined in administration proceedings, including any question arising in the administration of an estate, or in the execution of a trust, or any question as to the composition of any class of persons having a beneficial interest in an estate or any question as to the rights, or interests, of a person who claims to be entitled on the intestacy of a deceased person. On occasion, these types of questions are referred to as "next of kin proceedings".
Master Macready (as his Honour then was) in Public Trustee v Solah [1999] NSWSC 660 at [7], said:
"In the present proceedings it is necessary to make a finding that the next of kin who are entitled on the intestacy of the deceased consists of those persons who have come in and proved their claim. The proper approach in respect of such an enquiry was referred to in Walsh v Weigall [1887] VicLawRp 88; (1887) 13 VLR 449 at 453.
"The object of an administration decree is to enable the estate to be distributed with safety to the executor or administrator who, acting under the direction of the Court, is protected even if other claimants may afterwards come forward and establish their claims. But such distribution, whilst it protects the executor or administrator, in no way precludes the rights of subsequent claimants, who may at any time institute proceedings against the persons amongst whom the estate has been distributed to compel them to refund in whole or in part, as the case may be, what they have received. If the view of the Chief Clerk be correct, then in many cases it would be impossible ever to distribute the estate at all. The mistake into which he has fallen, I think, is that he regards the decree as imposing a duty upon him to report all the possible next-of-kin, and to forbear reporting until it has be demonstrated that there are and can be no others than those he reports; whereas his duty is to take all necessary steps by advertisement or to otherwise to invite claimants, and then to report only such as have proved their claims before him.
... the rights of persons shown by evidence to occupy a certain relationship to the testator or intestate cannot be ignored on the mere surmise that there may possibly be in existence and unheard of, other persons of equal kin or nearer of kin than they. The practice I have stated was that which prevailed before the Judicature Act, and the practice under that Act has not been altered in this respect, ..."
In West v Weston [1998] NSWSC 419, Young J (as his Honour then was) gave the following description of the next of kin procedure:
"24 Essentially, if the evidence adduced by the parties is insufficient to enable the inquiries to be satisfactorily answered, then an advertisement is placed, prepared by the parties and approved by the Master, fixing a time within which each claimant is to come in and prove his or her claim, appointing a day for adjudicating thereon. Unless otherwise ordered, all persons who do not come in and prove their claims within that time will be excluded from the benefit of the order."
More recently, in Clarke v McFarlane [2008] NSWSC 432, in proceedings which, in substance, though not exactly in form, was a next of kin inquiry, to determine who were the next of kin of the deceased entitled upon intestacy, Brereton J wrote:
"[6] Next of kin proceedings traditionally involve strict proof, and I do not think the administrators should be unduly criticised for insisting on strict proof. "
This requirement means that proof should be by means of admissible evidence that is clear and cogent.
I followed these decisions in NSW Trustee & Guardian v Hull [2011] NSWSC 1106 and in Application by NSW Trustee & Guardian (Estate of the late Marko Sijakovic) [2012] NSWSC 1532.
Benjamin Order
In Application by NSW Trustee & Guardian (Estate of the late Marko Sijakovic), I dealt with the nature of a Benjamin Order. I said:
"23 In Williams, Mortimer & Sunnucks, Executors, Administrators and Probate, 17th ed, (1993), at 938, the learned authors state:
"It may happen that distribution is held up because the representatives cannot be sure who is entitled. Thus a person's right to share in the estate may turn on the question whether another predeceased the testator, predeceased him without issue, and it may be uncertain on the facts whether this happened. In these circumstances, the representatives may apply to the court for a "Benjamin" order - Re Benjamin [1902] 1 Ch 723, that is, an order permitting them to distribute the estate on the footing that certain events have or have not happened. The effect of such an order is to relieve the representatives of liability in their capacity as representatives should the hypothesis on which they are to be permitted to distribute turn out to be wrong. Thus, where a beneficiary who was thought to have predeceased a testator subsequently appears, he will not be entitled to bring a claim against the representatives for his share of the estate. He may, however, be entitled to claim in equity against the beneficiaries who have been wrongly paid or perhaps bring a tracing action against the recipients of the share - Re Diplock [1951] AC 251."
24 In Gonzales v Claridades [2003] NSWSC 508; (2003) 58 NSWLR 188, at [75], Campbell J (as his Honour then was) said:
"The Court can, in some circumstances, where there is uncertainty about a factual matter relevant to the distribution of a deceased estate, make an order that the executors are at liberty to distribute on some particular factual basis - eg that a missing beneficiary under the testator's will was unmarried and predeceased the testator without issue (Re Benjamin [1902] 1 Ch 723). Parry & Clark, The Law of Succession, 10th edition (1996) page 471-2 say:
"The particular footing set out in the order is, of course, based on probable inferences from the proved facts, but the order does not constitute a positive declaration of rights (Hansell v Spink [1943] Ch 396, 399; Re Green's Will Trusts [1985] 3 All ER 455 at 462 ("the true view is that a Re Benjamin order does not vary or destroy beneficial interests. It merely enables trust property to be distributed in accordance with the practical probabilities.")) and, according, it does not prevent any missing beneficiary (if he subsequently appears) from pursuing his remedy against a recipient of the deceased's assets. Sometimes a Benjamin Order is made after an inquiry by the court has proved inconclusive, but such an order may be made without any prior inquiry by the court if suitable advertisements for a missing beneficiary produce no claims, or even without any advertisements if the inference from the proved facts is irresistible (as in Re Green's Will Trusts, supra (by her will T, who died in 1976, gave her estate to her son B; B had been a gunner in a bomber which went missing in a raid on Berlin in 1943; nothing ever heard of the bomber or its crew; irresistible inference crew perished, though T believed when she died that B was still alive)."
(Some footnotes omitted) See also Hardingham Neave & Ford, Wills and Intestacy in Australia and New Zealand, 2nd edition, paragraph [3604].
76 The basis for making such orders was explained by Mahoney J in Wilcox v Poole [1974] 2 NSWLR 693. At 697, his Honour quoted from Daniell's Chancery Practice, 8th edition, pages 1539-40,
"There are some cases in which, although the interest of a party in the fund is not absolute, but subject to a contingency, it has been ordered to be paid out at once, the contingency being remote; and formerly the parties receiving the money entered into a recognizance or undertaking to refund it, in the event of the happening of the contingency; but it is no longer the practice, on making orders presuming death, to require security to refund. This has been done when the right of the parties for subject to the contingency of a female who is past the age of child-bearing, having children, or where a person has been presumed to be dead."
Mahoney J at 697 described the principle as,
"a beneficial one which may enable parties to have the early enjoyment of property to which they will, as a matter of practical certainty, ultimately become entitled".
At 699, his Honour said:
"the principle ... does not affect the legal rights of the parties in the strict sense, and concedes that there is no entitlement as of right to the distribution of the property in question. The principle is one which is invoked merely by way of convenience in administration."
25 In Lempens v Reid [2009] SASC 179, Gray J, at [32], said:
"The effect of a Re Benjamin order is to enable the executor to distribute the estate to those members of the class which have been ascertained at the time of distribution, whilst ensuring protection of the executor if a person entitled to a portion of the estate subsequently appears. If such a person does appear, he or she is not entitled to make a claim against the executor for that portion but may claim against beneficiaries who have been paid incorrectly. If a Re Benjamin type order were considered appropriate in the circumstances of these proceedings, it may be necessary for the Court to order that further enquiries be undertaken, to ascertain whether members of the class can be located, prior to any distribution of the gift contained in the subject clause." (Omitting citations)"
Thus, in a case where a trustee is faced with a practical difficulty in establishing the existence of possible beneficiaries or other claimants, the Court will give a direction to the trustee enabling it to distribute the trust property on an assumption of fact that there is no such beneficiary or claimant. In the case where a beneficiary has disappeared in circumstances where the absence leads to an inference of death, an order may be made that the trust estate be distributed on the basis that the beneficiary is dead: Re Reynolds Trusts (No 2) [1942] QWN 40; Nolan As Administratrix of the Estate Of Barbara Nolan, deceased v Nolan [2011] WASC 224 at [33].
As Nourse J explained in Re Green's Will Trusts [1985] 3 All ER 445, at 446:
"The true view is that a Re Benjamin order does not vary or destroy beneficial interests. It merely enables trust property to be distributed in accordance with the practical probabilities..."
At 462, his Lordship added:
"I do not think that the question whether such an order should be made depends on whether or not there will be administrative inconveniences caused by the trustees retaining the fund. I think it depends on whether in all the circumstances the trustees ought to be allowed to distribute and the beneficiaries to enjoy their apparent interests now rather than later."
Result
I am satisfied, in all the circumstances of this case, that neither of his parents survived the deceased. The evidence in relation to the deceased's mother is clear. In relation to the deceased's father, there is an absence of any evidence that he survived the deceased. Accordingly, I am prepared to make a notation to that effect in the order to be made.
Then, applying the sections referred to above, in relation to the deceased's estate, it is the issue of the deceased's siblings, Alexandra and Anna, who will share, equally, the deceased's estate on intestacy, per stirpes, with the result that one half of the intestate estate will pass to the only surviving child of each of the deceased's sisters.
Because one can never be sure that the deceased did not have any children, the proviso in order (a) below has been included.
The Court:
(a) Orders, in the absence of any evidence that the father of the deceased, Ivan Nykyforovych Ursu, survived the deceased, that the Plaintiff is justified in distributing the intestate estate of Peter Urso, on the footing that he predeceased the deceased, and upon the basis that one half of the deceased's estate will be distributed to Milya Tymofiyovna Nenesko, nee Zhukovska, the only surviving issue of the deceased's sister, Alexandra, the other issue, Leonti, having predeceased the deceased without issue; and the other one half of the deceased's estate will be distributed to Alexei Alexeevich Stepanenko, the only surviving issue of the deceased's sister, Anna; but, in each case, without prejudice to the rights of any child, or children, of the deceased, or those claiming through him, her or them, to trace his, her, or their, share into the hands of the recipients if it were ever established that they had survived the deceased or otherwise as the case may be.
(b) Orders that the Plaintiff's costs of the proceedings, calculated on the indemnity basis, be paid out of the deceased's estate.
(c) Orders that the Court Book be returned.
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Decision last updated: 08 July 2013
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