Re Banning; Ex Parte Banning
[2018] WASC 313
•16 OCTOBER 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE BANNING; EX PARTE BANNING [2018] WASC 313
CORAM: VAUGHAN J
HEARD: 12 OCTOBER 2018
DELIVERED : 12 OCTOBER 2018
PUBLISHED : 16 OCTOBER 2018
FILE NO/S: CIV 2797 of 2018
MATTER: In the matter of the estate of MARTIN PAUL BANNING
EX PARTE
SANDRA MAY BANNING
Applicant
Catchwords:
Probate - Application for revocation of grant of probate - Where executor has passed away
Legislation:
Administration Act 1903 (WA), s 29
Rules of the Supreme Court 1971 (WA), O 73
Result:
Application granted
Category: B
Representation:
Counsel:
| Applicant | : | T Stephenson |
Solicitors:
| Applicant | : | Eastwood Law |
Case(s) referred to in decision(s):
Drummond v Registrar of Probates (SA) [1918] HCA 58; (1918) 25 CLR 318
Estate of Rogers v Rogers [2009] WASC 358
Kitay v Frigger (No 2) [2018] FCA 1032
Re Gardiner [2016] VSC 541
Re Kilby [2016] NSWSC 1433
Simmons v Ross [2018] VSC 306
Smith v Partridge [2018] WASC 128
VAUGHAN J:
(These reasons were delivered orally at the conclusion of the hearing. They have been edited to correct matters of grammar and infelicity of expression. Authorities and other references have also been footnoted rather than appearing in the body of the reasons.)
Overview
The late Martin Banning passed away on 8 September 2008. Mr Banning's will named Donald Campbell‑Smith as the executor of Mr Banning's estate. On 14 November 2008 probate was granted to Mr Campbell‑Smith.
Sandra Banning, the late Mr Banning's wife, applies in these proceedings to revoke that grant of probate and to appoint herself as administrator of the deceased estate. The application is made in circumstances where Mr Campbell‑Smith passed away on 3 August 2018 having suffered from dementia - the dementia being the original reason for the lodgment of this application on 2 May 2018.
For reasons I now develop I will grant the application to revoke the grant of probate and will appoint Mrs Banning as administrator of the late Mr Banning's estate.
Nature of the application
Mrs Banning applies by motion dated 2 May 2018 to revoke the grant of probate dated 14 November 2008 to Mr Campbell‑Smith and to appoint herself as administrator. Mrs Banning seeks that she be issued with letters of administration with the will annexed.
The motion is supported by affidavit evidence as follows:
(1)an affidavit of Ann Campbell‑Smith sworn 26 April 2018;
(2)an affidavit of Timothy Stephenson sworn 27 April 2018;
(3)an affidavit of Sandra Banning sworn 1 May 2018;
(4)a second affidavit of Ann Campbell‑Smith sworn 10 May 2018;
(5)a third affidavit of Ann Campbell‑Smith sworn 8 October 2018; and
(6)an affidavit of Cameron Eastwood sworn 11 October 2018.
A seventh affidavit has also been filed: the affidavit of Angela Frigger sworn 11 April 2018. Mrs Frigger is a party to litigation involving the estate of Mr Banning. Mrs Frigger deposes to the nature of that litigation and various judgments and related applications including an application to the Federal Circuit Court for the deceased estate to be administered by a trustee under s 244 of the Bankruptcy Act 1966 (Cth). Those proceedings were not brought by Mrs Frigger; they were brought by a Graeme Lean. But it appears from Mr Eastwood's recent affidavit that Mr Lean has sought leave to discontinue the proceedings and Mr and Mrs Frigger have sought leave to be substituted as petitioning creditor. That application for leave was heard on 18 July 2018 and judgment is reserved.
By letter dated 1 August 2018 the solicitors for Mrs Banning notified the court that Mrs Frigger and her husband were made bankrupt on 20 July 2018. Confirmation of the sequestration order is provided in the reasons of Colvin J dated 20 July 2018.[1] Mr Eastwood's affidavit also attaches a copy of the sequestration order which shows that the order was made on 11 July 2018, not 20 July 2018 as said in the letter dated 1 August 2018.
[1] Kitay v Frigger (No 2) [2018] FCA 1032.
In the course of argument Mr Stephenson, counsel for Mrs Banning, informed me that there had been an annulment application made on the part of the Friggers. Mr Stephenson informed me from the bar table that the annulment application had been unsuccessful. However, Mr Stephenson did not have to hand a copy of the orders dealing with the annulment application.
Those orders have been located electronically and are now before me.
Orders were made by Vasta J on 25 September 2018 in the Federal Circuit Court at Perth in proceedings PEG 409 of 2018. I will receive those orders as Exhibit 'A'.
The orders note that certain applications, the nature of which are not identified but are said to have been filed on 31 July 2018, 3 August 2018, 10 August 2018 and 18 September 2018, are dismissed. The orders also note that the costs of the respondent, including the reserved costs, are to be assessed by a registrar and paid from the bankrupt estates of Angela Cecilia Theresa Frigger and Hartrnut Hubert Josef Frigger in accordance with the provisions of the Bankruptcy Act 1966 (Cth).
While the order does not mention the nature of the applications, and I therefore am unable to find that there was an annulment application, I can and do infer that the bankruptcies subsist. I so infer because: (1) the respondent to the application is the Official Trustee in Bankruptcy; and (2) the order itself refers to payment of costs out of the bankrupt estates.
As the Friggers are bankrupt their divisible property - including prima facie any claim against the deceased estate - vests in their respective trustees in bankruptcy. That prima facie includes any claim as a creditor of the deceased estate or as against Mr Campbell‑Smith in his capacity as executor of the deceased estate. Accordingly, for now nothing further need be said about the affidavit of Mrs Frigger. By reason of her bankruptcy Mrs Frigger prima facie no longer has any relevant interest in the disposition of this application. That is also the position with Mr Frigger.
As such, the application of Mrs Banning was essentially unopposed. That is the case even though, pursuant to directions I gave through chambers earlier this week, notice of the application was given to the Friggers, the Friggers' trustee in bankruptcy and Mr Lean.
When the matter was called on this afternoon I ensured that my associate called the matter further outside the courtroom. There was no attendance on behalf of any of the Friggers, the Friggers' trustee in bankruptcy or Mr Lean.
Mrs Banning also provided brief written submissions filed 14 June 2018. The bulk of those submissions is concerned with whether leave to intervene in these proceedings should be granted to Mrs Frigger. Otherwise, because the submissions were prepared before Mr Campbell‑Smith's death, the submissions assert that Mr Campbell‑Smith has become incapable of completing the administration and that the court should therefore exercise its discretion to revoke the grant of probate. It is said to be appropriate that Mrs Banning be appointed as administrator of the deceased estate because she is the sole interested person in the estate as the only residuary beneficiary.
The submissions also state that the primary application in this matter is made pursuant to s 29 of the Administration Act 1903 (WA).
That is incorrect. That section applies to the revocation of a grant of letters of administration as distinct from the revocation of a grant of probate.[2] The court relies on its inherent jurisdiction to revoke a grant of probate rather than s 29 of the Administration Act 1903 (WA). [3]
[2] Estate of Rogers v Rogers [2009] WASC 358 [15] ‑ [16], [34].
[3] Estate of Rogers v Rogers [22], [28] ‑ [29], [31]; Smith v Partridge [2018] WASC 128 [25].
There is another difficulty with the form of the plaintiff's application. The application was made by a motion dated 2 May 2018. However, an application for the revocation of a grant of probate is a 'probate action' within the meaning of O 73 r 1(2) of the Rules of the Supreme Court 1971 (WA). Order 73 r 2(1) provides that a probate action must be begun by writ. Self‑evidently that rule has not been complied with.
Order 73 r 21(2) provides that the court may direct that an application in a probate cause or matter be made by motion. However, no such direction has been given in these proceedings.
Registrar S Boyle, by a letter dated 10 May 2018, informed Mrs Banning's solicitors of the effect of O 73 r 2(1). The letter invited Mrs Banning to reconsider the way she had made the application.
The court did not receive any response to that letter. Mrs Banning has not sought to amend her application. Mrs Banning's written submissions state that the application has been made by motion because 'the ambit of the primary application is so narrow'.
I have determined to hear the matter relying on O 2 r 1(1) and (3) of the Rules of the Supreme Court 1971 (WA). Those orders provide:
1. Non-compliance with rules
(1)Where in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been a failure to comply with the requirements of these rules, whether in respect of time, place, manner, form or content or in any other respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.
…
(3)The Court shall not wholly set aside any proceedings or the writ or other originating process by which they were begun on the ground that the proceedings were required by any of these rules to be begun by an originating process other than the one employed.
I do not consider that the commencement of these proceedings by way of motion, rather than writ, infects the proceedings such that they should not be heard and determined. I note in any case that in Estate of Rogers v Rogers EM Heenan J was prepared to revoke a grant of probate on the court's own motion once the relevant facts had been brought to his attention and established.[4]
Summary of facts
[4] Estate of Rogers v Rogers [29].
As mentioned previously, Mr Banning passed away on 8 September 2008. Mr Banning's will names Donald Campbell‑Smith as the executor of Mr Banning's estate. On 14 November 2008 probate was granted to Mr Campbell‑Smith.
The deceased estate has been bedevilled by a significant amount of litigation. The litigation is ongoing.
In 2015 Mr Campbell‑Smith was diagnosed with fronto‑temporal dementia. Nevertheless, it appears that for some time after that diagnosis he remained capable of decision‑making.
In early 2018 Mrs Campbell‑Smith became aware of the application in the Federal Circuit Court to have the deceased estate administered under Pt XI of the Bankruptcy Act 1966 (Cth). Mr and Mrs Campbell‑Smith subsequently consulted with the solicitors for Mrs Banning. In the course of those consultations a view was formed that Mr Campbell‑Smith was no longer capable of understanding or participating in any legal proceedings on behalf of the deceased estate.
For that reason the present application was brought on 2 May 2018. Subsequently, however, Mr Campbell‑Smith passed away on 3 August 2018.
At present, the deceased estate is involved in an appeal before the Court of Appeal of Western Australia (CACV 2/2017). The deceased estate is also in the process of enforcing various costs orders made in its favour. It is for this reason that Mrs Banning says that the appointment of an administrator is required to finalise the estate.
Applicable principles on an application to revoke a grant of probate and appoint a new administrator
An executor having been granted probate of a testator's will becomes executor not only of that will but also the will of any testator of whom the deceased was the sole or surviving executor.[5] Mrs Campbell‑Smith is named as executor of Mr Campbell‑Smith's will. Accordingly, on becoming executor of Mr Campbell‑Smith's will, Mrs Campbell‑Smith will also become executor of Mr Banning's will.
[5] Drummond v Registrar of Probates (SA) [1918] HCA 58; (1918) 25 CLR 318, 321. See further Re Kilby [2016] NSWSC 1433 [14] ‑ [18]; Simmons v Ross [2018] VSC 306 [104].
At present, however, Mrs Campbell‑Smith has not sought a grant of probate in relation to Mr Campbell‑Smith's estate. In any event, Mrs Campbell‑Smith deposes that she does not want to administer the estate of Mr Banning. It is therefore necessary, despite the passing of Mr Campbell‑Smith, to proceed to determine the application for revocation of the grant of probate.
The power to revoke a grant of probate arises in the court's inherent jurisdiction.[6] The court's broad jurisdiction in respect of probate matters is also grounded in s 18 of the Supreme Court Act 1935 (WA).[7] That section provides:
18. Probate jurisdiction
The Supreme Court shall have voluntary and contentious probate jurisdiction and authority in relation to the granting or revoking of probate of wills and letters of administration of all real and personal estate whatsoever within Western Australia and its dependencies of any deceased person; and all such powers and authorities in respect of such jurisdiction as were given to the Court by the Administration Act 1903, and any other Act in force in Western Australia immediately before the commencement of this Act, with authority to hear and determine all questions relating to testamentary causes and matters.
[6] Smith v Partridge [25]; Estate of Rogers v Rogers [21] ‑ [22], [31], [34].
[7] Smith v Partridge [25].
The revocation of a grant of probate is equivalent to the setting aside of a court order; the power to do so is not exercised as of course or as of right.[8] The purpose of the court's power of revocation is to ensure the due and proper administration of the estate and of the interests of the beneficiaries.[9] But the court is cautious and sparing in the exercise of the power; it is a major step as it includes the removal of the person chosen by the deceased as the person considered suitable.[10]
[8] Re Gardiner [2016] VSC 541 [24].
[9] Smith v Partridge [26].
[10] Estate of Rogers v Rogers [32].
Probate litigation is 'interest litigation'; to commence or to be a party to proceedings relating to an estate a person must be able to show that his or her rights may be affected by the outcome of the proceedings.[11] Generally, an interest sufficient to entitle a person to oppose a grant of probate will also be sufficient to entitle the person to apply for a revocation of a grant.[12]
[11] Re Gardiner [24] - [25].
[12] Re Gardiner [24].
A person seeking to have a grant of probate revoked must be able to show that he or she has:
(1)standing to make the application;
(2)a reasonable explanation for any delay in bringing the application to revoke the grant; and
(3)a prima facie case to challenge the grant of probate.[13]
[13] Re Gardiner [24].
In order to establish that prima facie case an applicant must show a sufficient factual basis for his or her grounds of revocation. In Estate of Rogers v Rogers EM Heenan J described two categories of circumstances that will justify the revocation of a grant of probate. First, where it is discovered that an error has been made in the original grant. Second, where revocation is necessary or desirable to ensure the due administration of the estate, such as where the grantee no longer has capacity to administer the estate.[14]
[14] Estate of Rogers v Rogers [23].
The present application falls within the second category. At present there is no executor. And, so far as Mrs Campbell‑Smith might otherwise occupy that void in due course, she has stated unequivocally that she does not want to do so. It is necessary to revoke the grant so that another may be appointed to administer the deceased estate.
Disposition
I am satisfied, in the circumstances, that the grant of probate to Mr Campbell‑Smith should be revoked.
There is no issue as to Mrs Banning's standing to bring the application. She is the sole beneficiary of the residue of the estate of Mr Banning. Apart from the gift of the residue to Mrs Banning, the will provides for a small specific bequest to another beneficiary. Accordingly, Mrs Banning has a sufficient legal interest - and indeed an overwhelming practical interest - in the due administration of the deceased estate.
There is no need for explanation as to any 'delay' in bringing the application to revoke the grant of probate. Until around early 2018 Mr Campbell‑Smith was carrying out his obligations as executor of the deceased estate. There was no apparent reason to oppose the grant of probate to him in 2008. Upon finding out in March 2018 that Mr Campbell-Smith no longer had capacity to administer the estate, Mrs Banning brought the present application within a reasonable time.
Where it is necessary to revoke a grant of probate, in the interests of the proper administration of the estate, it may be appropriate for the court to issue a new grant. In Estate of Rogers v Rogers EM Heenan J explained the considerations that then arise:
The question which then arises is when an order is made revoking the existing grant what further order, if any, should be made about future representation of the estate. There may be occasions where the application for revocation joins with that application a further application to be appointed as a substitute executor or administrator for the non-administered part of the estate. In that eventuality, the application may entail: giving notice to other persons who may have an equal right to apply for administration; showing the eligibility of the applicant; swearing to readiness to administer the estate according to law; and, otherwise, complying with the requirements of the Non‑Contentious Probate Rules insofar as they may apply to such a new special grant. If that were to be done, there would seem to be no reason why the order revoking the existing grant of probate or letters of administration should not immediately be followed by a new order for a limited grant of probate or letters of administration.[15]
[15] Estate of Rogers v Rogers [35].
I am satisfied that it is appropriate to appoint Mrs Banning as administrator of the deceased estate. If, in 2008, Mr Campbell‑Smith had renounced the position of executor, Mrs Banning was the obvious candidate for the office of administrator. Mrs Banning is the sole residuary beneficiary of the deceased estate. As to fitness to act Mrs Banning has deposed that:
I have no interests which are in conflict with or adverse to the deceased estate, and, if appointed I am willing to administer the deceased estate according to law.
I see no reason not to accept Mrs Banning's affidavit evidence that she intends to administer the deceased estate according to law.
I am conscious that Mrs Frigger's affidavit advances two reasons why there should not be revocation of the current grant and a substituted grant in favour of Mrs Banning. First it is said that Mrs Banning caused an asset of the deceased estate, a share, to be transferred to herself. Second, it is said that there are no assets in the deceased estate, it is insolvent, and the application should await the outcome of the Pt XI Bankruptcy Act 1966 (Cth) proceedings.
The document that Mrs Frigger relies on as constituting a share transfer is in fact an ASIC Form notifying of changes (attachment 'AF‑8') rather than a transfer. If in fact there has been a transfer, which is not certain, it would in any event have been effected by Mr Campbell‑Smith who was the then executor. It does not bespeak unfitness for office on the part of Mrs Banning. As to the second matter, even if the deceased estate is without funds, there should be a person with legal authority to take necessary action on behalf of the estate in respect of its outstanding litigation and recovery of costs. In this regard the appointment of an administrator will not affect or prejudice any action pursuant to Pt XI of the Bankruptcy Act 1966 (Cth). That, in any case, is a matter for a court with jurisdiction in bankruptcy rather than this court. Unless and until the Federal Court or the Federal Circuit Court acts in that regard it is appropriate that someone occupy the office of administrator so that the interests of the deceased estate are appropriately addressed.
Accordingly, I do not accept that the reasons advanced in Mrs Frigger's affidavit mean that I ought not now grant the relief sought in Mrs Banning's application.
For these reasons I will order that the grant of probate to Mr Campbell‑Smith dated 14 November 2008 be revoked. Mrs Banning will be appointed as administrator of the will of the late Mr Banning.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CC
RESEARCH ASSOCIATE TO THE HONOURABLE JUSTICE VAUGHAN16 OCTOBER 2018
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