Pacella v Sherborne - [2009] WASC 58

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: PACELLA -v- SHERBORNE [2009] WASC 58

CORAM: MASTER SANDERSON

HEARD: 5 MARCH 2009

DELIVERED : 19 MARCH 2009

FILE NO/S: CIV 2496 of 2008

BETWEEN: EMIDIO VINCENZO PACELLA
Plaintiff
AND
MARY ELISE SHERBORNE
Defendant

Catchwords:

Practice and procedure - Beneficiary of estate seeking direction under s 45 of Administration Act - Whether or not beneficiary can apply under section

Legislation:

Nil

Result:

Application to strike out for want of jurisdiction dismissed

Category: A

Representation:

Counsel:

Plaintiff: Mr M S Macdonald
Defendant: Mr A P Hershowitz

Solicitors:

Plaintiff: Macdonald Rudder
Defendant: Paiker & Overmeire

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

Hudson v Gray (1927) 39 CLR 473
In re Giles; Real and Personal Advance Co v Michell (1890) 43 Ch D 391

MASTER SANDERSON: The plaintiff is a beneficiary under the will of the late Edda Bernadette Pacella. The defendant is the executor of the deceased estate. The plaintiff says there are difficulties in understanding the will. As a result, the plaintiff has issued an originating summons seeking directions from the court as to the proper interpretation of the will and seeking consequent directions as to how the defendant, as executor, should administer the estate. The plaintiff purports to bring the application under s 45 of the Administration Act 1903 (WA).
The defendant has applied to strike out the originating summons. She claims there is a want of jurisdiction. She says that s 45 of the Administration Act does not authorise a beneficiary to seek directions from the court as to the administration of the estate. What is not raised by this application is the question of whether an originating summons procedure is appropriate, or whether the matters the plaintiff would have the court determine can be the subject of a direction by the court. What I am asked to determine is a simple matter of jurisdiction - is s 45 of the Administration Act available to the plaintiff in the circumstances of this case.
Section 45 appears under the heading 'Court may settle all questions arising in administration'. The section reads:
(1)The Court may make such order with reference to any question arising in respect of any will or administration, or with reference to the distribution or application of any real and personal estate which an executor or administrator or Public Trustee may have in hand, or as to the residue of the estate, as the circumstances of the case may require.
(2)Such order shall bind all persons whether sui juris or not.
(3)No final order for distribution shall be made except upon notice to all the parties interested, or as the Court may direct.
In support of its application, the defendant raises two main arguments. The first, it is said that administration proceedings, which include an application under s 45 of the Administration Act, are designed to deal with problems arising within the administration of the estate and are not to be used in actions between the estate and persons claiming adversely to the estate. In making this submission, counsel relied upon the High Court decision in Hudson v Gray (1927) 39 CLR 473. The facts of that case, taken from the head note, are as follows:
In 1879 a husband settled certain real and personal property on such trusts as his wife, with his consent during his life and at her uncontrolled discretion after his death, might by deed or will appoint. In 1914, pursuant to an arrangement made between them, the husband and the wife on the same day made wills identical in terms to the extent that each left his or her property to the other for life with remainder to the children and grandchildren of the marriage. The will of the husband contained a statement that the property of which he was disposing included the property over which he had a power of appointment under the settlement of 1879. The will of the wife contained a statement that she expressly refrained from exercising her power of appointment under the settlement of 1879. The husband died in 1915 without having revoked his will, and he left property valued at over £9,000 apart from any interest under the settlement. The wife died in 1923, having shortly before her death made another will by which she left all her property to one of her daughters. Up to the time of her death the wife received the income of the settled property and also of the other property left by the husband.
On an originating summons in the Supreme Court of New South Wales taken out by the trustee of the settlement (who also was executor of the husband's will, was appointed executor of the wife's will of 1914 and was administrator with the will annexed of the wife's will of 1923) Harvey CJ in Eq made a decretal order declaring that the trustee held the property comprised in the settlement upon the same trusts as those upon which that property would have been held if the wife had died without having revoked or altered the will made by her in 1914 (473 ‑ 474).
On those facts then, it is clear that what really was at issue in this case was the competing interests of beneficiaries, or potential beneficiaries, under the wife's will. Although the action was brought by the executor, the executor had no real interest in the outcome.
Counsel for the defendant relied upon the decision of Higgins J. His Honour considered (501 ‑ 504), at some length, the appropriateness of an originating summons procedure in these circumstances. Relying on a number of English cases, in particular In re Giles; Real and Personal Advance Co v Michell (1890) 43 Ch D 391, his Honour expressed the view that the originating summons procedure was only to be used to determine questions arising in the administration of an estate as between trustees or executors and beneficiaries. In other words, the procedure was not appropriate where the real dispute was between beneficiaries. His Honour went on to say:
What I do say is that nothing has been shown that gives to the Judge on an originating summons jurisdiction to decide such a question as the present, between defendants - between the sole beneficiary under the last will of Mrs Hargrave and those who would be beneficiaries if the last will had not been revoked, and had been proved. The true situation is obscured by the fact that the Perpetual Trustee Co holds the position of trustee of the settlement, executor of Mr Hargrave's will, named executor of Mrs Hargrave's will of 29th October 1914, and administrator cum testamento annexoof Mrs Hargrave's will of 1923. This is not the fault of the Company; but it affords no ground for the Company to take out as plaintiff a summons to have all its difficulties under conflicting instruments summarily adjusted. If the daughters other than Mrs Hudson, and their children, think that they have a good cause of suit against Mrs Hudson, they could bring an action against her claiming, in one aspect, specific performance of the alleged contract, or, in another aspect (as they are not parties to the contract), a declaration of trust, and making the Company a co‑defendant. It is the duty of a Court to be all the more vigilant as to jurisdiction if the parties and their counsel have no interest in disputing the jurisdiction in the particular case before the Court (503 ‑ 504).
It is worthy of note that in the passage quoted, Higgins J makes no mention of any legislation. What he is dealing with is a question of procedure and the way in which a particular jurisdiction - in that case New South Wales - dealt with administration disputes. Other parts of his judgment seem to indicate that Higgins J was particularly concerned that the use of the originating summons procedure in the circumstances of the case was not appropriate. It is well accepted that, when there are disputes of fact, the use of an originating summons is not appropriate. But it must be acknowledged that his Honour's conclusion was that there was a want of jurisdiction on the part of the judge at first instance to deal with the matter. Higgins J then was not simply drawing attention to a procedural failure in relation to the application. His conclusion was that, given the way the action originated, it simply could not be heard by the judge.
Not all of the judges comprising the court took such a strict view of the jurisdictional question. Knox CJ did not deal with the issue at all. Isaacs J thought the procedure appropriate:
Some discussion took place as to the procedure adopted and as to whether the more cumbrous and stately method of a regular full administration suit should not have been adopted. If the Supreme Court of New South Wales thinks it sufficient to come to a decision in a case of this nature in the more expeditious and less costly fashion and if the parties are content, I see no reason against that course being adopted. So far as it is within my province to express an opinion on the point, I strongly support the course taken by Harvey J. Procedure to‑day in all departments of life is regarded as of secondary importance. The result is the main thing. In Courts it tends more and more to discard the trappings that often cause Justice to stumble on the way, and it moves towards simplicity, directness and economy of time and money, that leave the tribunal freer to concentrate on the real problem before it. The procedure in this case was a matter for Harvey J himself to consider, but, as the matter has been the subject of discussion and it may affect the future course of practice, I have thought it fair to the learned Judge to express my entire concurrence with the view he held (483).
Rich J did not deal with the jurisdiction question at all. At least by implication then, his Honour was of the view that the procedure adopted was appropriate.
Starke J also appears not to have directly considered the question. His Honour does say:
Such a claim is not contemplated by, nor is it within the ambit of, the originating summons and might be shortly disposed of on this ground … (514).
It is not entirely clear from a reading of his Honour's judgment precisely what he is referring to when he speaks of a 'claim'. My reading of the passage suggests that his Honour is referring to a claim which was not actually put or contemplated by the way the originating summons was drafted. I do not take his Honour to be saying the originating summons procedure was not appropriate in the circumstances of the case.
At best then, the position that emerges from the various judgments in Hudson v Gray is unclear. For my part, I am very much drawn to what was said by Isaacs J, about the need to resolve the issues between the parties without becoming obsessed with what are, essentially, matters of procedure. Moreover, there appears to be nothing in s 45 which would prevent an application to the court by a beneficiary. This observation feeds into the second limb of the defendant's submissions. It is said that on a proper construction of s 45 of the Administration Act a beneficiary cannot be said to be an 'executor, an administrator or Public Trustee' and therefore cannot apply under the section.
With respect, that is not the way that I read s 45. It is true that much of the Administration Act is concerned with how an administrator is to deal with a deceased estate. But s 45 is in broad and general terms. It refers to 'any question arising in respect of any will or administration'. That phrase is entirely open‑ended. It clearly shows the legislature was intending to provide the court with the widest possible discretion to deal with problems which arise in relation to the estate. The reference is to questions arising in respect of 'any will' or 'administration'.
The interpretation that the defendant would place on the section qualifies the reference to 'will or administration' with the phrase 'which an executor or administrator or Public Trustee may have in hand'. In my view, that is not a proper reading of the section. I favour a general interpretation of the section which gives the court maximum flexibility to deal with problems which may arise in the course of an administration.
In the course of his submissions, counsel for the defendant did raise the question of whether or not the present form of the originating summons was such that the questions posed would be answered by the court. However, as I understood the broad thrust of counsel's submissions, it was what might be called the jurisdictional issue which was raised by this summons. Counsel for the plaintiff certainly did not respond to any criticism of the form of the originating summons. I have not dealt with this issue and I express no view as to whether the questions posed by the summons can properly be answered by the court. That can await another day. In the circumstances, however, I am satisfied that the originating summons can stand and that the court has jurisdiction to deal with this question. I would dismiss the summons. I will hear the parties as to costs.